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KBA Form 1

KBA Form 1

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Atlantic Richfield Company, or ARCO, signed franchise agreements with members of the AM/PM Franchise Association for gas stations and AM/PM Mini Markets. Under these agreements, franchisees could sell only ARCO gasoline. When ARCO’s gas proved harmful to its customers’ engines, the association sued. In AM/PM Franchise Association versus Atlantic Richfield, the court considered what damages the association could recover. The franchisees operated ARCO gas stations with minimarts over three and a half years. During that time, ARCO experimented with its unleaded gasoline formula. Franchisees could only buy ARCO’s experimental unleaded gas to sell to their customers. The experimental gas caused poor performance and fuel system damage. As word of these problems spread, the franchisees experienced a drop in business volume and profits. The association sued ARCO on behalf of a class of franchisees, alleging breach of warranty. The association requested lost profits and consequential dama

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