October 28, 2025|Franchise Frontlines
October 28, 2025 | United States District Court for the Western District of Washington | Order on Motions to Dismiss
Executive Summary
In Can-Am Fuel Distribution LLC v. Sinclair Oil LLC, 2025 WL 3772023 (W.D. Wash. Oct. 28, 2025), Judge David G. Estudillo addressed whether a trademark-only fuel branding arrangement constituted a “franchise” under the Petroleum Marketing Practices Act (“PMPA”) and related Washington statutes. The plaintiff retailer alleged that Sinclair (a refiner and trademark owner) and Glovis (a distributor) wrongfully terminated its rights under a Sinclair trademark sublicense agreement. The court dismissed the PMPA claims against both defendants, holding that the PMPA requires a contractual relationship under which the refiner supplies motor fuel—mere authorization to use a trademark is insufficient. The court likewise dismissed claims under Washington’s Gasoline Dealer Bill of Rights Act (“GDBRA”). However, the court allowed a claim under the Washington Franchise Investment Protection Act (“FIPA”) to proceed against Sinclair based on allegations that Sinclair exercised brand-related control and received direct license fees. The decision underscores the statutory distinction between fuel supply agreements and trademark licensing structures.
Relevant Background
Can-Am operated a motor fuel station in Vancouver, Washington, and used Sinclair’s trademarks, including the DINO MART® mark, pursuant to a Sinclair Trademark Sublicense Agreement (“STSA”) with distributor Glovis. Under the broader contractual structure:
- Sinclair owned the Sinclair trademarks.
- Glovis held a Sinclair Trademark License Agreement (“STLA”) authorizing it to sublicense the marks.
- Can-Am entered into an STSA with Glovis.
- Can-Am paid a monthly “Licensed Location” fee directly to Sinclair for trademark use.
- Sinclair retained approval rights over trademark use and imposed brand standards.
The agreements expressly acknowledged that Sinclair did not supply motor fuel in the relevant geographic region. Fuel was supplied through entities other than Sinclair.
After changes in business relationships and supply arrangements, disputes arose, and Can-Am brought claims under the PMPA, Washington’s FIPA, the GDBRA, and common-law contract and tort theories.
Decision
The court analyzed the statutory claims first.
1. PMPA
The PMPA defines a “franchise” as a contract between specified parties (e.g., refiner and retailer or distributor and retailer) under which a refiner or distributor authorizes use of a trademark “in connection with the sale, consignment, or distribution of motor fuel.” 15 U.S.C. § 2801(1)(A).
The court held that the statutory phrase requires that the refiner supplying the trademark also be involved in supplying motor fuel. Relying on statutory text and legislative history, the court concluded that Congress enacted the PMPA to regulate vertically integrated refiners whose control over fuel supply could impact retailers.
Because the complaint did not plausibly allege that Sinclair supplied motor fuel to Can-Am, the court held there was no PMPA franchise relationship between Sinclair and Can-Am. The PMPA claims against both Sinclair and Glovis were dismissed.
2. Washington Gasoline Dealer Bill of Rights Act (GDBRA)
Similarly, the GDBRA requires a motor fuel franchise under which a “motor fuel refiner-supplier” supplies fuel to a retailer. Wash. Rev. Code § 19.120.010(5). The court concluded that because Sinclair did not supply fuel to Can-Am, and Glovis was not plausibly alleged to be a refiner-supplier within the statutory definition, the GDBRA claims failed as a matter of law.
3. Washington Franchise Investment Protection Act (FIPA)
The analysis differed under FIPA.
FIPA defines a “franchise” more broadly, focusing on whether a party is granted the right to operate a business under a marketing plan prescribed in substantial part by the grantor, where the business is substantially associated with the grantor’s trademark and a franchise fee is paid. Wash. Rev. Code § 19.100.010(6).
The court held that Can-Am plausibly alleged:
- Authorization to use the DINO MART® mark.
- Payment of a license fee directly to Sinclair.
- Participation in Sinclair’s brand standards and secret shopper programs.
- Operational oversight sufficient to suggest a prescribed marketing plan.
At the pleading stage, those allegations were sufficient to state a FIPA franchise claim against Sinclair.
4. Contract and Tort Claims
The court also allowed breach of contract and related claims to proceed where the plaintiff plausibly alleged that Sinclair wrongfully ceased credit card processing and interfered with trademark rights. However, an “inducing breach of contract” claim was dismissed as duplicative and insufficiently defined.
Looking Forward
Although this decision arises in the motor fuel context, it offers practical guidance for franchisors and brand licensors operating in multi-tiered distribution systems.
First, the ruling reinforces that the PMPA is tightly tied to fuel supply relationships. Trademark authorization alone, without supply of motor fuel by the refiner, does not create a PMPA franchise. For refiners and trademark owners operating through independent distributors, that distinction can be significant in structuring exposure.
Second, state franchise statutes may reach beyond federal petroleum marketing law. Even where PMPA and fuel-specific statutes do not apply, a trademark licensing structure that includes brand standards, operational oversight, and direct payment of license fees may support state franchise claims.
Third, the opinion highlights how courts examine the functional reality of the relationship. Direct payment of fees to the trademark owner and active brand enforcement can support a finding of a franchise under broader state statutes, even if fuel supply is handled elsewhere.
Finally, the decision underscores the importance of clearly delineating roles in multi-party fuel branding arrangements. Where a refiner does not supply fuel, agreements and operational practices should reflect that separation consistently.
As always, this is a Rule 12(b)(6) decision, and the ultimate contours of the contractual relationships remain to be determined on a fuller record. Nonetheless, the opinion provides a useful roadmap for analyzing how federal and state franchise statutes interact in trademark-only fuel branding structures.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
