The fuel supply agreement is often the most consequential contract in a station purchase, and on owner-direct deals it is the one most likely to be handed over incomplete, unsigned, or amended verbally.
This article explains how to verify a station's supply contracts and how they transfer at closing. See also assessing fuel supply contracts.
Verifying What Actually Exists
Request the executed supply agreement plus every amendment, side letter, and incentive schedule, then confirm directly with the supplier that the copy you hold is the operative document and that no defaults or arrears exist. Sellers commonly produce an old version.
Verify the remaining term, minimum volume commitments and current compliance, price basis and differential, freight, payment and EFT terms, image and upgrade obligations with deadlines, exclusivity, and any equipment or improvement loan amortizing against continued purchases.
How Transfer Actually Works
Most supply agreements do not transfer automatically. Typically the supplier must consent and the buyer must be approved as a new dealer — credit application, personal guarantee, training or brand certification, and a new or assumed agreement. Some suppliers require a fresh multi-year term rather than assuming the remaining one.
Where a franchise relationship exists, statutory protections in the petroleum marketing framework can affect termination and non-renewal, which is exactly why counsel should read the document. Get supplier consent in writing before closing, not as a post-closing task.
Deal Structure and Traps
Make supplier approval a condition of closing. If approval fails after you close, you own a branded site you cannot supply on the assumed terms. Also confirm who repays any outstanding image or equipment loan — unpaid balances frequently accelerate on transfer and land on the buyer.
Finally, compare the assumed terms against what you could negotiate independently. Sometimes converting to another brand or unbranded supply is worth the debranding cost. Read branded versus unbranded and fuel supply advisory.
Frequently Asked Questions
Speak With a Florida Gas Station Specialist
Request a confidential consultation or off-market opportunities and pricing through our contact page, or call +1-305-518-1545. The Gas Station Group is headquartered at 8603 S Dixie Hwy, Miami, FL 33143. Principal: Bobby Berrido.