skills/cim-teardown/references/overlay-fuel-convenience-site-retail.md

# Overlay: Fuel / Convenience / Site Retail

Use for convenience stores, fuel stations, truck stops, small format site retail, and single-site retail assets where POS mix, fuel gallons, category margin, inventory/fuel true-up, site control, environmental exposure, and owner replacement cost drive value.

## Table of contents
1. Decision lens
2. Driver tree
3. Mandatory denominators
4. Typical gating items
5. Kill criteria examples
6. Evidence asks
7. Owner mapping
8. External triangulation when thin
9. Red flags

## Decision lens
- Are earnings real after separating inside sales, fuel economics, inventory/fuel true-up, rent/site cost, and owner labor?
- Does the buyer control the site through owned real estate, a durable lease, or a financeable occupancy arrangement?
- Are tanks, environmental records, permits, fuel supply, brand agreements, and maintenance clean enough to own?
- Is the growth story supported by gallons, ticket count, traffic, competition, and category-level gross profit rather than narrative?

## Driver tree
Default equation:

`inside sales x category margin + fuel gallons x cents per gallon + ancillary income - labor - rent/site cost - utilities - shrink - card fees - repairs/maintenance - owner replacement cost - environmental/capex reserve`

## Mandatory denominators
- inside sales, fuel sales, fuel gallons, cents per gallon, and category margin by period
- ticket count, average ticket, basket mix, and payment/card-fee burden
- inventory count, valuation method, fuel in tanks, shrink, spoilage, and lottery/ATM/commission treatment
- rent, lease term, renewals, CAM, property taxes, insurance, and real-estate inclusion/exclusion
- fuel supply / branding agreement, rebates, image funds, minimum volumes, and termination/change-of-control rights
- UST/tank age, leak tests, inspections, releases, remediation, environmental insurance, and compliance history
- owner duties, manager replacement cost, payroll, hours, and vendor dependence
- capex/maintenance for pumps, tanks, canopy, POS, coolers, signage, and building

## Typical gating items
- EBITDA, SDE, adjusted EBITDA, and normalized cash flow are used interchangeably.
- Price excludes inventory/fuel, making true cash-to-close and yield unknown.
- Real estate is separate, optional, or undefined, so site economics are incomplete.
- Environmental "none" is asserted without UST, inspection, and release records.
- 2025 or latest-period earnings step-up is not reconciled to POS, fuel gallons, category margin, or owner addbacks.

## Kill criteria examples
- `hard pass`: environmental / UST records show open release, unresolved remediation, or uninsurable exposure.
- `hard pass`: buyer cannot secure durable site control or fuel supply rights on workable terms.
- `price reset`: inventory/fuel, market rent, owner replacement cost, or maintenance capex reduces buyer earnings below required yield.
- `pause`: POS, bank, tax, and fuel settlement data cannot reconcile revenue and gross profit.

## Evidence asks
- daily POS export by department/category, ticket, tender, tax, voids, discounts, and refunds
- fuel reports with gallons, grade, rack/wholesale cost, retail price, cents per gallon, shrink, and settlement
- inventory count, fuel-in-tank valuation, shrink/spoilage records, and working-capital convention
- tax returns, monthly P&L, GL/TB, bank statements, merchant deposits, and sales-tax filings
- lease/deed, rent schedule, renewal options, CAM, property taxes, insurance, and real-estate purchase/lease terms
- fuel supply and brand agreements with change-of-control, minimum volume, rebate, and termination terms
- tank registrations, leak tests, inspection records, spill/remediation history, permits, and environmental insurance
- payroll register, owner duties, manager role, replacement labor cost, and SOPs
- capex/maintenance log for tanks, pumps, canopy, coolers, POS, signage, and building

## Owner mapping
- owner/operator or store manager
- bookkeeper / CPA / controller
- fuel supplier or brand representative
- environmental consultant / UST compliance contact
- landlord / property owner / broker
- equipment maintenance vendor

## External triangulation when thin
- county assessor, recorder, and parcel records
- state UST / environmental databases and inspection portals
- DOT traffic counts and municipal planning / zoning portals
- fuel brand locator and nearby competitor map
- court, UCC, lien, tax, and business registration searches
- reviews and imagery only as lower-confidence operational context

## Red flags
- Summary page and financial pages show different earnings metrics.
- "Source: tax returns" conflicts with unaudited P&L or broker-normalized figures.
- Inventory/fuel is excluded from price but not quantified.
- Real estate may be available separately but no rent or lease economics are disclosed.
- "No environmental issues" appears without tank records and inspection history.