The fuel supply agreement
Branded, unbranded and jobber supply, and how the supply contract changes what a C-store is worth and who can buy it.
The contract that puts fuel in your tanks is often the document that decides who can buy your store and how much they will pay. It can outlast the owner who signed it. It can hold a repayment bill for money spent on the canopy years ago. And a buyer's lender will read it closely.
Here are the questions we get most often about supply agreements when a store changes hands.
Why does the supply contract matter so much?
Because fuel is most of the volume and a real share of the profit. NACS reported in April 2026 that convenience stores sell an estimated 80% of the fuel bought in the U.S., and that in 2025 fuel made up 65.0% of their sales dollars and 38.8% of gross profit dollars. The supply agreement sets what you pay for that fuel, what sign you fly, what you must sell, and for how long. A buyer is buying into those terms, or paying to get out of them.
The per-gallon money is thin, which is why the terms matter. OPIS put the average rack-to-retail gasoline margin at nearly 40 cents a gallon in 2025, roughly the same as 2024's 39.7 cents. NACS's explainer on who makes money selling gas estimates that a 35-cent gross margin nets about 13 cents a gallon after operating costs, using a 2020 average. A cent or two of difference in supply pricing is a meaningful slice of that.
What is the difference between branded, unbranded and jobber supply?
Branded supply means the store sells a major oil company's fuel under its sign, card program and image standards. You get a recognized name, often a payment network that drivers trust, and sometimes money to rebuild the image. In exchange you sign a long contract with volume commitments and strict rules on how the site looks.
Unbranded supply means you buy fuel without a brand's sign, usually priced off the rack, and fly your own name or none. Pricing flexibility is higher and the contract is usually shorter or looser. You give up the brand's draw and its incentive money.
Jobber or distributor supply sits in between, and in practice it is how most independent stores buy. A jobber holds the supply contract with the refiner, then supplies a group of stores, branded or unbranded. Your contract is with the jobber, not the oil company. That matters in a sale because the jobber, not the refiner, is usually the one who approves a new owner, and jobber contracts vary a great deal.
Which terms do buyers read first?
When we put a store on the market, these are the terms buyers and their lenders turn to:
- Time left. A buyer who wants to switch suppliers or go unbranded will discount for every year remaining. A buyer happy with the brand may see a long term as stability.
- Volume minimums. If the store must buy a set number of gallons each year and has been falling short, the buyer inherits a shortfall penalty. Compare the minimum to actual gallons. NACS puts the typical store at about 1.5 million gallons a year (February 2025), and OPIS estimated national same-store gasoline volumes fell about 3.3% in 2025, so a minimum set years ago may be harder to hit now.
- Incentive and image money. Suppliers often pay for canopy, signs and dispensers, or pay a per-gallon rebate, with the unearned part to be paid back if the contract ends early. Find the repayment schedule and the current balance. That number almost always comes up in price talks.
- Assignment and consent. Most agreements need the supplier's consent to transfer. Some let the supplier approve the buyer's credit and experience, require new image work, or reset terms on transfer.
- Exclusivity and first refusal. Some contracts give the supplier a right to match any offer for the property, or to supply any future owner of the site. Those clauses can survive a sale.
- Rebranding rules. If the brand is changing its image, who pays, and by when?
How does each choice change who can buy?
A branded store with years left and a clean consent process suits buyers who want that brand. Some buyers already supply through the same jobber and can get approved quickly. A buyer who wants to run unbranded, or bring their own supply relationship, has to price in the exit cost.
An unbranded store with a short contract has the widest buyer pool, because nobody is locked in. Whether that brings a better price depends on the street: in some markets the brand is worth more than flexibility.
A store with a big unamortized incentive balance narrows the pool sharply. Either the buyer assumes the balance and keeps the contract, or someone pays it off at closing, and the payment usually comes from the seller's side.
Who pays when the contract has to go?
Usually the seller, in one way or another. Either the payoff is a line item at closing, or it shows up as a lower price. We negotiate that early so it does not surprise anyone in the final week. Sometimes the supplier will agree to roll the balance into a new agreement with the buyer, which can be the cleanest result for everyone. It is worth asking.
Can a sale wait on supplier approval?
Yes, and it often does. Supplier consent is one of the slower items in a closing, along with the lender and the environmental review. Get the buyer's package to the supplier as early as the contract allows. For the full sequence, read getting a store ready to sell and the buyer side in your first store checklist.
What should a seller do now?
Find the agreement and every amendment. Ask your supplier or jobber in writing for the end date, the current incentive balance and the transfer requirements. Do it quietly and as routine business, well before you mention a sale. Then let us show you how buyers will read it, as part of how buyers price a store.
Your attorney should review the agreement before you sign anything that depends on it. When you are ready, start on the sell page, or see what is listed on the buy page.