N.Y. Getty Dealers Cry Foul
QUEENS, N.Y. -- Getty gas station owners and operators from Queens and the tristate area gathered at the World's Fair Marina Restaurant this week to tell the petroleum company that franchise owners are being pumped dry. At a meeting of the recently formed Getty Independent Owner-Operators' Association, a group of about two dozen Getty franchise owners said their stations had become less and less profitable since the Russian oil company LukOil bought Getty Petroleum in 2001.
The independent owners and operators, who still deal with Getty in the day-to-day operation of their businesses, said their rents are skyrocketing even as Getty loses customers to better-marketed chains, and they said they are forced to absorb costly maintenance fees formerly assumed by Getty, according to the Times (Pa.) Ledger.
"Two years ago it was very fair. Now they get all the profits," said Inder Parmar, organizer of the 300-member group, which is lobbying Getty to change its treatment of dealers.
About 20 Getty gas station owners from Queens are part of the group, said Parmar, a New Hyde Park resident who operates one station in Flushing and one in Long Island City. A.R. Charnes, vice president of marketing for Getty Petroleum Marketing Inc., said the company was aware of the franchisees' concerns. "We're having an ongoing dialogue with the dealers on these points," he said, adding that he preferred not to debate the issues through the press
A memo by gas station owners from a June 19 meeting with Getty officials asks that Getty invest in modern digital pumps, canopies and advertising to be able to compete with other chains such as Amoco, Mobil, Shell and Exxon. The memo also said that some Getty dealers are being compensated at just 6.5 cents for each gallon they sell while competitors such as Amoco receive 10 cents a gallon and pay low rent.
Owners interviewed at the meeting said compensation for some was as low as 5.5 cents a gallon. T.J. Singh, who has owned a Long Island City station since 1995, said his monthly rent was originally $3,500. It is now $7,300, but instead of receiving a commission of 10.5 cents a gallon for premium and 7.5 cents for regular gas, as he did eight years ago, he now receives a flat rate of 7 cents for all grades. Between paying his employees and paying rent, insurance and bills, Singh has been forced to rely on his yellow cab business to stay afloat. "If I don't have the cabs, I have to get out of the business," he said.
Forest Hills attorney Richard Golden, a commercial litigator consulting for the group, said even though gas prices were rising, Getty franchisees were still receiving a flat rate instead of a more desirable percentage commission.
"As they get additional revenue, the station owners should get additional revenue," Golden said.
Golden said he knew of at least one gas station owner who had filed for Chapter 13 bankruptcy protection as a result of Getty's policies. He added that as individuals, the station owners did not stand much of a chance against the big oil company, but "if they get together, they could change the policy."
Parmar said "suing and going on strike are possibilities" if Getty executives do not resolve at least some of his group's complaints.
The independent owners and operators, who still deal with Getty in the day-to-day operation of their businesses, said their rents are skyrocketing even as Getty loses customers to better-marketed chains, and they said they are forced to absorb costly maintenance fees formerly assumed by Getty, according to the Times (Pa.) Ledger.
"Two years ago it was very fair. Now they get all the profits," said Inder Parmar, organizer of the 300-member group, which is lobbying Getty to change its treatment of dealers.
About 20 Getty gas station owners from Queens are part of the group, said Parmar, a New Hyde Park resident who operates one station in Flushing and one in Long Island City. A.R. Charnes, vice president of marketing for Getty Petroleum Marketing Inc., said the company was aware of the franchisees' concerns. "We're having an ongoing dialogue with the dealers on these points," he said, adding that he preferred not to debate the issues through the press
A memo by gas station owners from a June 19 meeting with Getty officials asks that Getty invest in modern digital pumps, canopies and advertising to be able to compete with other chains such as Amoco, Mobil, Shell and Exxon. The memo also said that some Getty dealers are being compensated at just 6.5 cents for each gallon they sell while competitors such as Amoco receive 10 cents a gallon and pay low rent.
Owners interviewed at the meeting said compensation for some was as low as 5.5 cents a gallon. T.J. Singh, who has owned a Long Island City station since 1995, said his monthly rent was originally $3,500. It is now $7,300, but instead of receiving a commission of 10.5 cents a gallon for premium and 7.5 cents for regular gas, as he did eight years ago, he now receives a flat rate of 7 cents for all grades. Between paying his employees and paying rent, insurance and bills, Singh has been forced to rely on his yellow cab business to stay afloat. "If I don't have the cabs, I have to get out of the business," he said.
Forest Hills attorney Richard Golden, a commercial litigator consulting for the group, said even though gas prices were rising, Getty franchisees were still receiving a flat rate instead of a more desirable percentage commission.
"As they get additional revenue, the station owners should get additional revenue," Golden said.
Golden said he knew of at least one gas station owner who had filed for Chapter 13 bankruptcy protection as a result of Getty's policies. He added that as individuals, the station owners did not stand much of a chance against the big oil company, but "if they get together, they could change the policy."
Parmar said "suing and going on strike are possibilities" if Getty executives do not resolve at least some of his group's complaints.