Convenience Store Agreement Issues (Gas Pumps Credit Cards)

[RockyMountain]

I am in the process of putting together an agreement with the convenience store next to our wash. It is owned by a parent company, which may make this more difficult. Here are the questions I need answered. Anyone with a similar situation or ideas, please share!

What is the easiest way to structure it so that it is easy for store employees? (one of their concerns)

How often would the convenience store pay the car wash?

How are credit card fees handled?

When the wash is unmanned, how are unhappy customer issues resolved?

Finally, we would like to go with a 10 cent per gallon discount. If the wash agrees to pay for this cost, should the convenience store get anything else? What other ways are there to structure a $/gallon savings?

Thanks and any other thoughts are welcomed.

 

[robert roman]

Your issues,

1) Agreement with a major oil company to co-join businesses
2) Structure deal to minimize involvement of store employees
3) Account for sales at pump and counter, auditing and how to split proceeds
4) Account for card fees (pay-at-the-pump and counter), audit and expense card fees
5) Customer dispute resolution policy, how and who enforces it
6) Gas price discount scheme, how many cents off per gallon based on type of wash, minimum amount purchased, how to expense improvements

I would begin by hiring a local attorney with small business and contract experience to help hammer out a deal. This would resonate with the oil company.

I know several attorneys in Cheyenne that may know someone in Casper.

I would also see if any distributors in the region have experience with gas station profit sharing and get one of them involved and/or hire a carwash consultant.

Big oil is generally not as easy to work with as compared to an independently owned and operated chain.

BTW, you may want to consider $0.20 off a gallon to get more traction.

 

[sprocket]

I had a simalar deal with a friend of mine in 1997. I didn't have anything in writing just a good faith deal between friends. They got 25% off and were suppose to sell them with a minimum of 8 gallon gas purchase. At first it was pretty good untill people realized that they could pull in line at the automatic and run next door buy a token and save 25% and not purchase any gas. The second problem was I let them purchase the tokens and I just returned the tokens I recieved in my paystation for cash. Well that didn't work because the help give them to all there friends and there was never enough money to cover the tokens I tried to redeem. After they were in to me for almost 10,000 dollars I changed the way it was done. I had hamilton make another batch of tokens and the only way they got them was pay up front. That lasted about 2 months and he told me it just wasn't going to work out because he was going in the hole on them. I never got payed for the first money I went in hole on and once the only way for him to get them was pay up front that didn't work for him. The new owner wanted to do the same thing but I figured if I was going to give car washes away I would just do it my self.

 

[RockyMountain]

I would also see if any distributors in the region have experience with gas station profit sharing and get one of them involved and/or hire a carwash consultant.

BTW, you may want to consider $0.20 off a gallon to get more traction.

Thanks for the post. I have distributors working on it, but in months they still haven't gotten back to me with anything.

How can you make money with a $0.20 off per gallon. For example, if a truck pulls up and puts in 25 gallons, which I frequently do, they save $5. If they purchase the $6 wash and the convenience store wants to regain their $5 plus credit card fees, I get about $0.90 for that wash. Sounds like a good way to go broke...

 

[lag]

KISS.. Keep it simple

First location. They sell the wash at face value. They get a set amount per sell. We invoice monthly , and deduct their share. Up and running for 4 months now ,and they are averaging 15% of total sells. NO issues getting paid.

Second location. Same company. They sell wash with 50 cents off face value. ($11.00 wash sells for $10.50). They gave up .25 per sale ,we give the other .25 ,and for our .25 they promote our wash. We will agian invoice monthly. (not running yet ,just ironed out the details).

At the pump ,or register they sell code for our auto bays ,we supplied POS between our equipment ,and their pump controller ,and registers. They only need to add few more lines on the reciept to print the code. We installed our equipment ,and they supplied a phone line ,and outlet for our equipment.

Feel free to PM contact info , if i could explain things better

 

[lag]

I should have added we handle customer issues( they insisted on that) ,and I would rather handle it anyway.