When should I tell my fuel supplier I am selling my gas station?
Many sellers read the supply agreement first, then tell the supplier once there is a serious buyer they are ready to name, not at the first enquiry. Suppliers usually want to know who the buyer is before they agree to anything, so build their review into your timeline and ask your lawyer what the agreement requires.
Your fuel supplier is not a bystander in the sale. For most stations the supply relationship is part of what the buyer is acquiring, and the supplier often has a say in who steps into it. That makes timing a real question. Tell them too early and word may travel to staff and customers. Tell them too late and the closing date slips while everyone waits for an answer.
Read the agreement before you speak to anyone
Pull out the supply agreement and every amendment. Look for the parts that deal with a sale, a change of operator, notice periods and what happens to brand signage and equipment. Do not guess what they mean. Ask your lawyer to explain the consent and assignment terms, because the answer decides when the supplier has to be brought in.
Raise it once a buyer is serious
Most sellers wait until a buyer has made a real offer and signed a confidentiality agreement. At that point you can name the buyer and ask the supplier what it needs. A call before then, with no buyer attached, rarely gets a useful answer. Pick one person at the station to hold the conversation, and keep the circle small.
Expect questions about the buyer
A supplier will often want to know about the buyer’s experience running a station, their financing and whether they will keep the brand. Ask the supplier what it will want to see, and let your buyer prepare it early. How to prepare a gas station for handover covers the other handover tasks worth starting at the same time.
Put sign-off on the timeline
Treat the supplier’s approval as a step with its own date, not a formality. Many sellers make it a condition of closing so neither side is stuck if it does not arrive. Ask whether the buyer will sign a new agreement or take over yours, since that changes the paperwork. This checklist for buyers shows what the other side will be reading.
Related reading
15 pages on the same subject, grouped by topic.
Buying
- Expert answerWhat should I check in a gas station’s fuel supply agreement before buying?
- Expert answerDo gas station owners set their own fuel prices?
- Expert answerHow does gas station ownership work when you buy one?
- Expert answerHow do I stop a buyer from asking for too much too early?
- GuideHow to buy a gas station in Canada
- Expert answerWhat should I check when buying a gas station directly from its owner?
Selling
- Expert answerHow do I prepare my gas station for the handover to a buyer?
- GuideSelling a gas station in Canada
- Expert answerCan I change my mind about selling partway through?
- Expert answerWhich gas station equipment do I own, and which belongs to my fuel supplier?
- Expert answerWhat will a buyer’s lender want to know about my gas station?
- Expert answerHow is the fuel in the tanks counted and paid for when a gas station sells?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01EssoCompanyIOL Sale FAQ – Esso™ Customer Questions
- 02Business Development Bank of CanadaGovernmentLetter of intent and confidentiality agreement for a business acquisition: What clauses should be included?
- 03Business Development Bank of CanadaGovernmentHow to minimize negotiations when selling your business
- 04Parkland CorporationCompanyRetail Fuel Stations
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