Three former United Petroleum franchisees are launching legal action against the service station giant, claiming they have been unfairly forced out of their businesses.

Key points: Three former UP franchisees are launching legal action

Three former UP franchisees are launching legal action Franchisees were locked out of service stations in the early hours of the morning after being accused of breaching agreements

Franchisees were locked out of service stations in the early hours of the morning after being accused of breaching agreements One of those franchisees is counter-suing

One of those franchisees is counter-suing Claims UP engaged in 'unconscionable conduct', forced franchisees to stock products above market prices

One of the franchisees is counter-suing the franchisor, claiming it engaged in unconscionable conduct.

Ram Nijhawan and his wife Kirti thought buying a United Petroleum franchise in Melbourne's south-east would set their family up for life.

In 2011 the former NAB employee was struggling to juggle full-time work and care for his wife who was recovering from breast cancer and a mastectomy.

"Kirti was never going to return to work full-time so we needed a stable income and to build security for us," Mr Nijhawan said.

The Nijhawans invested more than $400,000 in a United Petroleum service station franchise at Narre Warren North.

According to court documents, United Petroleum loaned the Nijhawans about half of the purchase price.

But the family's hopes of running a profitable business with the help of their two sons, both university students, ended in February this year.

"We're devastated, totally. Financially, emotionally, physically. We have been ruined. We're finished," Mr Nijhawan said.

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Franchisees locked out by United Petroleum representatives

After buying the franchise, Mr Nijhawan said he struggled to make it profitable.

In addition to the business not doing as well as he had hoped, there was a series of problems at the Narre Warren North site.

The car wash was closed after the Nijhawans found water pouring over electrical sockets and a major refurbishment took two-and-a-half months.

When it re-opened, Mr Nijhawan said the electricity bill increased dramatically after United Petroleum allegedly changed suppliers without consultation.

Mr Nijhawan refused to pay the extra cost.

As the dispute escalated he said he told United Petroleum he was going to India to try and raise money from relatives.

"Until then please do not let the situation worsen," Mr Nijhawan said he told United Petroleum.

While her husband was overseas, on February 20, Kirti Nijhawan was woken up by a phone call at 4:30am by the nightshift worker at the service station.

He told her security guards and United Petroleum representatives had seized the business, locking the franchisees out.

"I just fainted, everything was gone," Mrs Nijhawan said.

Her 23-year-old son Dinesh found her unconscious on the floor.

The family has not set foot in the business since that day, losing their whole investment including $50,000 security bond, all stock, cash and personal belongings.

The Nijhawans are now facing legal action in Victoria's County Court against the national chain of service stations.

"It's a fight between an ordinary man and a giant," Mr Nijhawan said.

"They can crush us."

United Petroleum is suing the Nijhawans for about $100,000 it alleges the family owes.

The Nijhawans are counter-suing, claiming United Petroleum engaged in unconscionable conduct and forced franchisees to stock products like gas bottles and confectionary above market prices.

Court documents also allege a United Petroleum representatives threatened to "breach [Ram Nijhawan] out" of business.

Claims sites intentionally re-sold to reap franchisee fees

Solicitor Tsungai Mukushi represents two other former United Petroleum franchisees who were also locked out of their service stations in the early hours of the morning after being accused of breaching their agreements.

United Petroleum's chief operating officer David Szymczak says terminating a franchise occurs rarely and is a last resort. ( ABC News: Josie Taylor )

Mr Mukushi said his clients were also considering suing the service station company.

Each has lost about $500,000.

"A pattern of behaviour emerged which is very concerning to us and certainly warrants questions being put to the court about great injustices that have occurred," Mr Mukushi said.

He said both his clients were forced from their businesses on the basis of trivial breaches of their franchise agreement that they disputed.

"There's a very gross sense of injustice when someone invests their life savings and such a significant sum and effectively be terminated [like that]," Mr Mukushi said.

He also pointed out that United Petroleum benefited every time it re-sold a franchise site by about $145,000 in fees.

"If you own a site and you sell it to someone for $500,000, and you terminate that franchise agreement without compensating them, and you sell it to someone else for $500,000 ... you stand to make a lot more money than you would from the royalties of selling petrol," Mr Mukushi said.

"It appears based on the instructions that have been given to us that these people aren't interested in selling petroleum but are interested in selling franchises again and again from the same site."

'I am happy I didn't lose everything'

Father-of-two and former United Petroleum franchisee Harpreet Singh sold his Melbourne business at a loss in March and said he was relieved.

"I lost money but I am happy I didn't lose everything," he said.

The former carpenter moved from New Zealand to Melbourne three years ago and admitted he failed to check the business out properly before he bought it.

"I was way too excited to get into this thing, and we were brand new in this country," Mr Singh said.

He said it is culturally prestigious for an Indian family to own a petrol station.

"It's a huge deal and a great thing back in India, to say to your family you are doing this thing because they are also very proud," Mr Singh said.

He said his business struggled because United Petroleum dictated what products its franchisees sold and at what price, including United Petroleum home branded products.

"We threw them. We literally threw them in the bin," he said.

Mr Singh said he felt guilty for selling the franchise on but he had no choice.

United Petroleum's chief operating officer David Szymczak said terminating a franchise occurred rarely and was a last resort.

He said at all times United Petroleum had abided by its legal and statutory obligations.

In the case of the Nijhawins, the franchise agreement allowed United Petroleum to terminate due to their repeated failure to pay electricity bills which totalled $17,000.

Regarding the allegation of forcing franchisees to purchase products above market prices, Mr Szymcsak wrote: "Like many franchise systems ... [United] Is permitted to require franchisees to acquire a designated range of goods from approved suppliers."