Two Convenience Stores & Gas Station
Gas Stations & Convenience Stores
The owners of two convenience stores and a gas station had contacted BayState Business Broker Brian Labonte several years ago about selling their businesses, New Corner Variety and Prime Food and Fuel in Chicopee, MA. The convenience stores included a robust lottery business with significant lottery commissions. At the time they decided not to sell but reached out to Business Broker Labonte years later when they decided to get out of the convenience store business and focus on buying liquor stores.
BayState Business Brokers’ Approach
Brian Labonte was getting ready to put both businesses on the market when he was speaking with a potential buyer for another business. The prospect had a vast background with experience in gas-related businesses. Brian shared that he was about to bring to market two convenience stores and a gas station, and the prospective buyer expressed interest. This interest led to further discussions. Ultimately, Labonte never had to formally market the businesses as the interested party signed an offer to purchase both.
Hurdles to Make the Deal Happen
Business Broker Labonte navigated many challenges to help the sellers achieve their goals to shift their business interest to liquor stores and to enable the buyer (who ended up being the prospective buyer’s son) to purchase the business:
- Change in Buyer: the initial prospective buyer (the father) signed the offer to purchase the business and was initially involved in negotiations. He then removed himself from the deal, wanting his son to buy the businesses on his own, resulting in the offer having one party’s signature and the signed P&S having another party’s signature.
- Due diligence process: information was not readily available for the buyer to complete the due diligence process. Timelines were elongated as a result.
- Financing: Labonte introduced the prospective buyer to two banks to assist in securing financing. The prospective buyer opted for another bank and would be purchasing solely without a co-signer. Financing terms included the gas station and associated tanks to be compliant with Massachusetts laws and required the landlord to sign a waiver.
- Attribution of valuation to each component of the transaction (e.g., convenience store #1, convenience store #2 and the gas station) was not straight forward and took many iterations.
- Landlord – the deal was further complicated by the seller’s lease terms with the landlord of the building where the first convenience store was located. To secure financing, the bank required the landlord sign a waiver which the landlord refused to do.
Given the many hurdles, Labonte had a second buyer ready in case the deal fell through at any point.
Quarterbacking the Process to Get the Deal Done
To facilitate the sale of the business, Labonte established weekly meetings with both parties to define priorities and have clear accountability among the parties of what had to get done and in what timeframe. When the landlord refused to sign the waiver required by the bank, Labonte led a meeting to include the prospective buyer, seller and landlord to present alternative terms of the agreement to avoid the deal falling through. Such terms included the prospective buyer agreeing to pay more in monthly rent and to have first right of refusal should the landlord ever decide to sell the building in which convenience store #1 was located. While lease negotiations are usually led by real estate attorneys, Labonte led the meeting to bring the deal terms to an agreement between the landlord and the prospective buyer as the sellers pleaded with the landlord to agree to the terms and let them sell their business.
At the end of the day, the deal closed, the sellers achieved their goals of exiting the convenience store business, the father of the buyer achieved his goal of his son buying a business and the buyer bought New Corner Variety and Prime Food and Fuel. The change in Massachusetts Lottery accounts was seamless and the landlord accepted new lease terms. While the deal took a while, all hurdles were overcome led by BayState Business Broker Brian Labonte quarterbacking the effort.