- A jobber fuel supply agreement sets your wholesale source, brand, term length, volume commitment, and image obligations. It is a value driver, not paperwork, and lenders and 1031 buyers price it directly.
- Branded supply brings signage, loyalty programs, and traffic, but locks you into multi-year volume minimums and image upgrade clauses that can cost tens of thousands per site. Unbranded gives margin flexibility with weaker street pull.
- Supply margin is measured in cents. Jobbers commonly mark up the rack by roughly 0.05 to 0.30 dollars per gallon of monthly throughput, and net fuel profit is only a few cents per gallon, so contract pricing matters.
- Image obligations such as canopy rebrands, dispenser upgrades, and EMV compliance are often tied to brand consent on a sale. An unfunded image deadline transfers to the buyer and reduces what they will pay.
- On real-estate-inclusive sales, branded stations trade tighter. Branded-tenant cap rates run roughly 4.83% to 5.65% depending on the flag, against a national average near 5.6%, so the supply brand is part of the cap rate.
- A long branded term with assignable terms and no looming image spend supports value. A short, expiring, or personally guaranteed contract with a pending rebrand is a discount you negotiate at the table.
A jobber fuel supply agreement is the contract that decides where a station buys fuel, what brand goes on the canopy, and how long that arrangement runs. It is also one of the most underread documents in any C-store deal. Buyers chase the cap rate and the inside sales, then discover at the eleventh hour that the supply contract carries a 10-year term, an image upgrade clause, and a personal guaranty that follows them past closing. A jobber is the middleman between major refiners and the retail site, and the agreement they hold can either protect your fuel margin or quietly cap it. This guide explains what these contracts actually contain, how branding and image obligations change the math, and how supply terms move value. Net fuel profit is only a few cents per gallon after costs, so a contract that adds half a cent in rack markup is a real number. Read the agreement before you read the financials.
What a jobber is and what the supply agreement actually controls
A jobber, also called a distributor or wholesaler, sits between the major refiner and the retail station. The jobber buys fuel at the rack, marks it up, and delivers it to sites under a fuel supply agreement. That contract is the spine of the fuel side of the business, and it controls far more than price.
A typical agreement fixes five things. Source and brand: which refiner's product you sell and which flag flies on the canopy. Term: how many years you are bound, commonly 5 to 15 on branded deals. Volume commitment: minimum gallons you agree to buy, often with penalties if you fall short. Pricing formula: rack plus a per-gallon markup, frequently 0.05 to 0.30 dollars per gallon of monthly throughput. Image and equipment: signage, dispenser, and canopy standards you must maintain.
For context, a busy urban station moves 100,000 to 150,000 gallons a month while the US average site runs near 4,000 gallons a day. At those volumes a fraction of a cent in markup is real money, which is why the contract belongs in your due diligence checklist from day one.
Branded vs unbranded supply: the core tradeoff
The first decision a supply agreement forces is brand. A branded contract puts a major flag on the site, which brings loyalty programs, credit-card networks, advertising, and street recognition that pulls traffic. The cost is commitment. You accept the brand's term length, volume minimums, and image standards, and you generally cannot shop the rack for a better wholesale price mid-contract.
An unbranded site buys from whatever jobber offers the best price that week. That flexibility can widen fuel margin, but the station loses the brand's draw and any co-op marketing. 2025 fuel gross margins averaged over 40 cents per gallon, yet net fuel profit lands at only a few cents per gallon after card fees, freight, and shrink, so where you source matters at the margin.
Neither path is universally better. High-traffic interstate and urban corners often justify a brand. Rural and price-sensitive markets frequently run better unbranded. We break the full comparison down in branded vs unbranded C-stores and franchise vs independent.
Image and branding obligations that quietly cost money
Image obligations are where supply agreements bite buyers who skim the contract. To keep the brand, a site must meet the refiner's current visual standard. That can mean a canopy rebrand, new dispenser graphics, LED price signs, updated pump skins, and EMV-compliant card readers. These programs run on the brand's schedule, not yours.
The risk in a sale is timing. If the seller knew a rebrand was due and did not fund it, that capital expense lands on the buyer right after closing. A pending image upgrade can run tens of thousands of dollars per site, which directly lowers what a buyer will pay. Always ask three questions in diligence. When was the last image program completed? Is another one scheduled or required at transfer? Does brand consent to the sale trigger a forced upgrade?
Image obligations also interact with equipment you inherit. Tank and line standards from the supply or environmental side can stack on top, so cross-check against your underground storage tank review and confirm what is funded before you sign. Use these findings to negotiate price or a seller credit, covered in our value playbook.
How supply terms move cap rate and sale price
On a real-estate-inclusive sale, the supply agreement is part of how the property is priced. A long, assignable branded contract with steady volume reads as durable income, which supports a tighter cap rate. A short or expiring contract reads as risk, which widens the cap rate and cuts price.
The brand itself sets a baseline. Against a national average near 5.6%, branded-tenant cap rates run roughly 4.83% to 5.20% for Wawa, 5.00% to 5.40% for 7-Eleven, around 5.13% for Murphy USA, and 5.35% to 5.65% for Circle K. A stronger flag with a longer commitment trades tighter, all else equal.
Multiples follow the same logic. A business-only sale runs 2.5x to 4.0x EBITDA, a combined operating and real estate deal runs 4.0x to 7.0x, and a stabilized fee-simple site with strong supply runs near 8x EBITDA, up to 9x in premium markets. The supply contract sits inside every one of those numbers. Model your own with the cap rate calculator and the valuation calculator.
Assignment, consent, and the personal guaranty
Three contract clauses decide whether a supply agreement helps or hurts your transaction. The first is assignment. A clean deal lets the seller assign the contract to you without the brand killing terms or restarting the clock. If the agreement is not assignable, the buyer may have to sign a fresh, longer commitment, which changes the value of what they are buying.
The second is brand consent. Most branded agreements require the refiner or jobber to approve a new operator. That approval can come with conditions, including a forced image upgrade or a new term. Build consent into your timeline because it can stretch a closing past the typical 30 to 90 day window.
The third is the personal guaranty. Many jobber contracts carry a guaranty on volume shortfalls or unamortized image incentives. A seller who took brand money for a rebrand may owe a clawback if the contract ends early, and you need to know who carries that. Pin all three down before closing, and fold them into the broader closing process.
What financing and 1031 buyers look for in a supply contract
Lenders read the supply agreement as part of the credit file. For an SBA 7(a) loan, C-stores are special-purpose properties that require a 15% minimum equity injection, so most buyers put 10% to 15% down with real estate terms up to 25 years. June 2026 SBA rates run roughly 9% to 11.5% APR variable, and an SBA fuel deal requires a Phase I ESA to ASTM E1527-21 standard that costs 1,800 to 3,500 dollars. A stable, assignable supply contract makes that underwriting cleaner. Conventional lenders ask for 30% to 40% down and many avoid sites with tank liability under CERCLA, so a brand-backed contract can help the story.
For a 1031 exchange buyer, the supply term is the income. These buyers want absolute NNN structures with 15 to 20 year terms as ideal replacements, and they have only 45 days to identify and 180 days to close. A short or expiring supply agreement undercuts the durability they are buying. See SBA 7(a) for C-stores and NNN C-store investing for how the contract feeds each path.
Reading the agreement before you read the financials
The financials tell you what a station earned under its current contract. The contract tells you whether those earnings survive a sale. Read it first. Pull the full executed agreement with every amendment, the volume history against the minimum, the image program records, and any incentive or loan agreement tied to a past rebrand.
Then map the economics. Confirm the rack-plus markup, check whether volume is comfortably above the minimum, and price any image work that is due. A station that nets 70K to 100K dollars a year for a small-to-medium owner can swing meaningfully on a half-cent markup change or one unfunded canopy rebrand. The C-store side carries the profit anyway, near 70% of profit on roughly 30% of revenue with 20% to 40% in-store margins, but the fuel contract is what brings the cars that buy the snacks.
Whether you are buying, selling, or refinancing, the supply agreement deserves a line-by-line read. Buyers negotiate price against its risks, and sellers who clean up term, assignment, and image issues before listing protect their number.