When a station and a jobber agree to do business over time, the relationship runs on a jobber contract. It sets the price, the term, the obligations, and the way out. A branded version commonly runs ten years, and federal franchise law shapes how it can end.
What it is
A jobber contract is a supply agreement between a jobber and a station or business that buys fuel from them. It defines the ongoing relationship: pricing, volume expectations, term, branding if any, and each side's obligations.
What it covers
- The pricing formula, often a benchmark plus a differential.
- Volume commitments.
- The term and renewal.
- Branding and image requirements for branded deals.
- Equipment or financing arrangements.
- How either party can exit.
It is a cousin of the broader fuel supply contract, seen from the jobber-to-station angle.
Branded vs unbranded
A branded contract ties the station to a major's brand and the rules that come with it: image standards, required additive packages, and a long commitment. The standard branded term is ten years. Twenty-year deals exist, and renewals after the initial term often run three years at a time. In exchange the station gets the brand's credit card network, advertising, and image money: the supplier or jobber helps pay for the canopy, signage, and dispenser upgrades, and that money is typically earned out over the term through gallons purchased. Leave early and the unearned portion usually comes due. An unbranded deal carries none of that. It is shorter, price-focused, and lighter on obligations, with no brand backing behind it. The trade-offs between the two paths are covered in branded vs unbranded.
The PMPA: the law behind branded deals
Branded contracts sit under the Petroleum Marketing Practices Act, a 1978 federal law that governs franchise relationships built on a refiner's trademark. Under the PMPA, a supplier cannot end or decline to renew a branded relationship at will. It needs a ground the statute lists, such as failure to pay, failure to operate, or a legitimate business change, and it generally must give 90 days' written notice. If the station sits on premises the supplier leases to the dealer, the supplier must also make a bona fide offer to sell the premises to the dealer or grant a right of first refusal during that notice period. Unbranded deals get none of this protection.
What to watch before signing
Four clauses do most of the damage. First, the pricing formula: know the benchmark it keys off, such as the posted rack price or DTW, and how the differential can change. Second, the minimum volume and the penalty for missing it. Third, the true term: a ten-year deal with image money attached can be expensive to exit in year four. Fourth, the renewal and exit language, because a deal that looks fine on day one can bind tighter than expected. The jobber's side of the same problem is applying dozens of these formulas to every load without slipping, which is the work FastDragon's Fuel Jobber automates by holding each customer's contract terms and billing from them. Commissioned-agent arrangements are a different structure entirely, covered in what is a commissioned agent.
Questions we hear a lot
Is a jobber contract the same as a dealer supply agreement?
In practice, yes. "Dealer supply agreement" or "dealer agreement" is the name from the station's seat at the table, and "jobber contract" is the same document from the supplier's seat. If the deal carries a refiner's brand, courts and lawyers may also call it a franchise agreement, which matters because federal franchise protections can attach to it.
Can a station owner sell the business while under a jobber contract?
Usually only with the jobber's consent. Most contracts have an assignment clause that requires the buyer to assume the remaining supply obligation, and many give the jobber a right of first refusal on the sale. Selling without addressing the contract can leave the seller on the hook for the remaining volume commitment.
What happens if a station misses its minimum volume commitment?
Consequences depend on the contract: common ones are a per-gallon shortfall charge, loss of rebates or incentive payments, an extension of the term until the committed gallons are purchased, or grounds for termination if the shortfall persists. Some contracts measure volume monthly and others annually, so when the gallons are counted matters as much as how many.
Does the PMPA apply to unbranded supply contracts?
No. The Petroleum Marketing Practices Act protects franchise relationships built on a refiner's trademark, so a station selling unbranded fuel generally falls outside it. An unbranded supply deal is governed by its own written terms and ordinary state contract law, which is one reason the exit language in an unbranded contract deserves a close read.