Gas Station Due Diligence Checklist for Buyers
By the time a buyer signs a letter of intent on a gas station, they have usually seen summary financials, walked the store and watched the pumps on a busy afternoon. Gas station due diligence is the stage where those impressions are tested against records, contracts and inspections. It is where a buyer confirms whether fuel and store sales are real, whether the supply agreement works for them, whether licenses will transfer and what the equipment and building will need.
This checklist covers the broad acquisition review. Environmental matters, including underground storage tanks and contamination, deserve their own detailed review; see our guide to gas station environmental due diligence. For the overall process, see our guide on how to buy a gas station. This is general information, not legal advice.
1. Financial Records
- Several years of business tax returns and financial statements
- Monthly profit and loss statements for the current and prior years
- Bank deposits reconciled to reported sales
- Owner compensation, family labor and personal expenses run through the business
- Payroll records and staffing levels
- Existing debt, leases and obligations
2. Fuel Sales
- Fuel volume by grade and by month for several years
- Fuel purchase invoices and delivery records
- Reconciliation of fuel purchased with fuel sold
- Pricing practices and how the station responds to nearby competitors
- Card processing costs related to fuel sales
3. Inside Sales
- Point-of-sale reports by category
- Purchase invoices from wholesale suppliers
- Gross margin by major category
- Inventory levels and shrink
- Prepared food or other services, if offered
4. Other Income
- Lottery commission statements
- ATM, car wash, air and vacuum or other ancillary income
- Rent from tenants on the property, with copies of leases
- Supplier incentives and any conditions or repayment obligations tied to them
5. Fuel Supply Agreement
- The full supply agreement and any amendments
- Remaining term, volume commitments and pricing terms
- Whether the agreement can be assigned, and the supplier’s approval process
- Image or equipment requirements imposed by the supplier
- Obligations if the agreement ends early
Supplier approval is determined by the supplier and is not guaranteed. See our guide to branded vs unbranded gas stations.
6. Licenses and Permits
- Business licenses and fuel-related permits
- Tobacco, lottery and beer or wine licenses, where applicable
- Weights and measures inspections for pumps
- Health permits for food service, if applicable
- Signage and zoning approvals
Whether and how each license transfers varies by state and locality. Confirm requirements and timing with the appropriate agencies and qualified advisors.
7. Property and Equipment
- Building condition, roof and mechanical systems
- Canopy, lighting and paving
- Dispensers, point-of-sale systems and payment terminals
- Refrigeration, coolers and food equipment
- Security systems
- Upcoming required upgrades or replacements
8. Lease, if Applicable
- Remaining term and renewal options
- Rent and escalations
- Responsibility for environmental conditions and repairs
- Landlord consent to assignment
9. People and Operations
- Store manager and key employees
- Hours of operation and staffing patterns
- Vendor relationships and delivery schedules
- Security incidents and loss prevention practices
Convenience Stores Without Fuel
Buyers looking at stores that do not sell fuel will focus on many of the same items without the fuel and tank sections. See our guide to buying a convenience store.
How Findings Affect Price and Financing
Diligence findings may lead to price adjustments, seller repairs, escrows or changes to deal structure. Lenders review many of the same records, so organized diligence also helps financing. Our guide to gas station loan requirements lists what lenders typically request.
US Professional Funding works with buyers acquiring existing gas stations and convenience stores. Learn more about our gas station and c-store acquisition financing.
