Rizwan Shuja
Gas Station
Due Diligence Checklist
The Complete Buyer's Playbook for Buying an Existing Gas Station
Who made this checklist — and why you should trust it
My name is Rizwan Shuja. I bought my first gas station in Austin, Texas in November 2004 with $140,000 in savings and a background in electrical engineering. I had no mentor, no checklist, and I made costly mistakes.
Today I own 20+ gas stations across Central Texas. Over the past two decades I have personally evaluated hundreds of deals, closed dozens of acquisitions, and coached 18+ first-time buyers through the process.
This checklist is the document I wish I had on Day 1. Every item on it comes from a real deal — either something I caught in time, or something I paid for the hard way.
Use it on every single deal. No exceptions.
— Rizwan Shuja, RizwanShuja.com
| Figure | What it means | Source |
|---|---|---|
| $615K | Median sold price for a US gas station (796 transactions, 2021–2025) | BizBuySell |
| 3.76× SDE | Average acquisition multiple buyers pay on seller’s discretionary earnings | BizBuySell |
| $185K | Median annual SDE (seller’s discretionary earnings) at acquisition | BizBuySell |
| $130K–$300K | Average UST cleanup cost per EPA data (groundwater: $1M+) | EPA Clu-In |
| $3K–$8K | Phase 1 ESA cost — must be ASTM E1527-21; 180-day shelf life for SBA | FundMySBA/A3E |
| 2.35% | Average convenience store credit card swipe fee in 2024 — #2 expense after labor | NACS 2025 |
| 10–15 yrs | Typical fuel jobber (supply) contract lock-in period — transfers with the sale | Industry standard |
| $826K | Median sold price in 2025 vs $399K in 2021 — this asset class is appreciating | BizBuySell |
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 1.1 Tax Returns — The Ground Truth | |||
| Obtain 3 full years of federal business tax returns (Form 1065 / 1120S / Schedule C) | Harder to fabricate than P&L | HIGH | |
| Cross-reference reported gross revenue on tax returns vs seller’s P&L — flag any gap > 5% | Common red flag | HIGH | |
| Check owner compensation add-backs for legitimacy (one-time vs recurring) | SDE must be recalculated | MED | |
| Verify depreciation schedules — identify any accelerated write-offs affecting reported income | Affects true EBITDA | MED | |
| Confirm business entity type and any related-party transactions (family rent, management fees) | Common manipulation vector | HIGH | |
| 1.2 State Sales Tax Filings — Third-Party Verification | |||
| Request 3 years of state sales tax returns — cross-reference to reported inside-store revenue | State records = no lying | HIGH | |
| Verify monthly sales tax filings match P&L revenue seasonality pattern | Spikes reveal true volume | MED | |
| Check for any state tax liens, delinquencies, or payment plans outstanding | Transfers as liability | HIGH | |
| 1.3 Fuel Jobber Delivery Statements — The Unfakeable Number | |||
| Request 24–36 months of fuel jobber (supplier) delivery records showing gallons delivered per month | Cannot be fabricated | HIGH | |
| Calculate implied fuel revenue: gallons × posted retail price — compare to seller’s fuel revenue claim | Reveals unreported cash sales | HIGH | |
| Identify any months with unusual volume drop (equipment failure, construction, lost card network) | Normalize for trending | MED | |
| Review fuel margin per gallon historically — understand brand cap vs street price flexibility | Branded stations have limits | MED | |
| Confirm fuel jobber contract terms: length remaining, minimum volume take-or-pay, price escalation clauses | Could be $0.03/gal penalty | HIGH | |
| 1.4 Inside-Store (C-Store) Revenue Verification | |||
| Request POS system transaction reports for 24 months (Verifone, Gilbarco, Wayne, Toshiba, etc.) | Lottery—reconcile to state | HIGH | |
| Verify lottery commissions from state lottery authority — cross-check to POS and P&L | State sends 1099s | MED | |
| Obtain ATM transaction reports if store has ATM — verify surcharge income reported | Often unreported | LOW | |
| Review category-level margins: tobacco, beer/wine, packaged foods, prepared foods, car wash | Margin profile tells story | MED | |
| Ask: does reported inventory shrinkage match industry norms? (typical: 1–2% of c-store revenue) | High shrink = theft issue | MED | |
| 1.5 Expense Verification | |||
| Verify payroll records / W-2s / 1099s for all employees against headcount and P&L labor line | Family on books? Unreported? | HIGH | |
| Request utility bills (electric, water, gas) for 24 months — flag any abnormal spikes | HVAC failure indicator | MED | |
| Review insurance policy (general liability + workers’ comp) — confirm coverage is current and transferable | Lapse = deal breaker | HIGH | |
| Review all vendor contracts: cleaning, security, ATM, car wash maintenance, waste removal | Some auto-renew, non-assignable | MED | |
| Obtain 12 months of credit card processing statements — verify swipe fee rate (average: 2.35%) | NACS 2025 benchmark | MED | |
| 1.6 Normalization & Valuation | |||
| Reconstruct EBITDA with proper add-backs (owner salary above market, personal expenses, one-time items) | Core of your offer price | HIGH | |
| Apply 3.5–4.5× EBITDA multiple range — know what justifies premium vs discount | Market: avg 3.76× SDE | HIGH | |
| Build a 3-year normalized P&L showing realistic Year 1 performance under your ownership | Required for SBA approval | MED | |
| Stress-test the deal at −20% revenue — can you still service the debt? | Lenders run this test | HIGH | |
Rizwan’s Rule: Never skip environmental. Never.
Average UST cleanup: $130,000–$300,000 per EPA data. Groundwater contamination: routinely exceeds $1,000,000.
I have personally seen buyers lose their entire down payment because they skipped Phase 1 or trusted a seller’s verbal assurance. Environmental liability follows the property, not the seller.
Every underground storage tank is a potential Recognized Environmental Condition (REC). Treat it that way.
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 2.1 Phase 1 Environmental Site Assessment (ESA) | |||
| Commission a Phase 1 ESA from an accredited environmental consultant (ASTM E1527-21 standard only) | $3K–$8K | 2–4 weeks | HIGH | |
| Verify the Phase 1 is dated within 180 days of closing (SBA requirement — expired = redo it) | SBA SOP 50 10 8 | HIGH | |
| Review all Recognized Environmental Conditions (RECs) identified — understand each one before proceeding | Any REC triggers Phase 2 | HIGH | |
| Check historical ASTM records: prior gas stations, dry cleaners, auto shops, or industrial uses on the site | Historical use matters | HIGH | |
| Verify the consultant carries adequate E&O and general liability insurance | Protects you if they miss it | MED | |
| 2.2 Phase 2 ESA (Required if Any REC Found) | |||
| If Phase 1 identifies any REC: immediately order Phase 2 soil and groundwater sampling | $5K–$25K+ | SBA-required | HIGH | |
| Understand the difference between soil contamination (manageable) vs groundwater plume (potentially catastrophic) | Groundwater = $1M+ | HIGH | |
| If Phase 2 finds contamination: obtain written cleanup cost estimate before revising your offer or walking away | Walk if seller won’t escrow | HIGH | |
| Ask: has any prior cleanup been done on the site? Request all historical environmental reports | Sellers must disclose | HIGH | |
| 2.3 Underground Storage Tanks (USTs) | |||
| Confirm the number, age, size, and material of all USTs (fiberglass preferred; steel = risk after 20 yrs) | Steel tanks corrode | HIGH | |
| Request all EPA UST registration documents and state compliance certificates | Required by every lender | HIGH | |
| Verify all leak detection systems are functional and in compliance with state regulations | Non-compliance = fines | HIGH | |
| Request the last 3 annual UST compliance inspection reports from the state environmental agency | Look for any NOVs | HIGH | |
| Hire a certified fuel equipment technician to physically inspect UST sumps, dispenser pans, and overfill equipment | $500–$2K inspection | HIGH | |
| Check for any Notices of Violation (NOVs), compliance orders, or open enforcement actions | Deal-breaker if unresolved | HIGH | |
| Verify UST financial assurance fund participation (many states have cleanup trust funds that offset your risk) | Varies by state | MED | |
| 2.4 Environmental Liability Protection | |||
| Negotiate environmental indemnification clause into purchase agreement (seller responsible for pre-close contamination) | Non-negotiable | HIGH | |
| Consider environmental liability insurance (Pollution Legal Liability policy) — get a quote before closing | $3K–$10K/yr typical | MED | |
| Confirm seller has no outstanding environmental liens or third-party claims on the property | Title search reveals this | HIGH | |
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 3.1 Real Estate Structure | |||
| Determine: is real estate included in the purchase, or is this a leasehold business sale only? | Changes valuation model entirely | HIGH | |
| If leasehold: obtain and read every page of the ground lease — renewal options, rent escalation, assignment rights | Lease < 10 yrs = unfundable | HIGH | |
| If real estate included: get independent commercial appraisal (SBA requires FIRREA-compliant appraiser) | Required for SBA 7(a) | HIGH | |
| Confirm title is clean — order a title commitment and identify all encumbrances, easements, and liens | Environmental liens hidden here | HIGH | |
| Review zoning: confirm C-2 (or equivalent) commercial zoning with fuel/c-store permitted use | Rezoning risk is real | HIGH | |
| 3.2 Location & Traffic Analysis | |||
| Obtain current AADT (Annual Average Daily Traffic) count from state DOT — minimum 15,000–25,000 vpd viable | State DOT data is free | HIGH | |
| Verify ingress/egress: corner lot with two curb cuts outperforms mid-block 3:1 | Rzwan’s observation | HIGH | |
| Map every gas station within 1-mile radius: brand, volume estimate, store quality, pricing | Know your competition | HIGH | |
| Search county permit database and city planning commission minutes for new gas station permit applications within 2 miles | Buc-ee’s/Wawa expansion zones | HIGH | |
| Check DOT records for any planned road changes, highway realignments, or access modifications near the site | Road change = volume loss | HIGH | |
| Pull 1-mile and 3-mile ring demographics: household income, daytime population, commuter volume | ESRI or SiteZeus data | MED | |
| Identify major demand drivers: nearby employers, schools, interstates, residential developments | Supports c-store thesis | MED | |
| 3.3 Physical Property Inspection | |||
| Commission full commercial property inspection: structure, roof, electrical, plumbing, HVAC, canopy | $1,500–$3,000 | HIGH | |
| Inspect fuel dispensers: age, brand (Gilbarco, Wayne, Bennett), EMV compliance, payment system | Non-EMV = liability | HIGH | |
| Inspect POS system: model, age, integration with fuel dispensers, lottery terminal compatibility | Replacement: $15K–40K | MED | |
| Inspect coolers and refrigeration: age, compressor health, door seals, energy efficiency | Cooler replacement: $20K–60K | MED | |
| Inspect car wash (if applicable): age, condition, chemistry contracts, monthly revenue and expenses | Profitable standalone asset | MED | |
| Inspect canopy and fuel island lighting: LED vs fluorescent, age, compliance with brand standards | Brand image + liability | LOW | |
| Review ADA compliance status — identify any outstanding violations or retrofitting required | Can be negotiated into price | MED | |
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 4.1 Fuel Supply Contract Review | |||
| Obtain the complete fuel supply agreement (jobber contract) and read every clause before signing the LOI | Do not rely on broker summary | HIGH | |
| Identify contract expiration date and renewal terms — how much time is left on the agreement? | Short term = renegotiation risk | HIGH | |
| Identify minimum volume take-or-pay requirements: what is the penalty if you sell fewer gallons than contracted? | $0.01–$0.03/gal penalties common | HIGH | |
| Understand fuel pricing mechanism: rack plus, DTW (dealer tank wagon), or index-based? | Affects your margin | HIGH | |
| Identify any right of first refusal (ROFR) the jobber holds on resale of the business | Can complicate future exit | HIGH | |
| Confirm the agreement is assignable to you as the new buyer — obtain jobber’s written consent to assignment | Non-assignable = new negotiation | HIGH | |
| Identify any brand image / store standards requirements and associated upgrade obligations | Image program cost: $50K–$200K+ | MED | |
| 4.2 Brand Agreement (If Branded Station) | |||
| Confirm station is PMPA-governed (Petroleum Marketing Practices Act) — understand your termination protections | Federal law applies | HIGH | |
| Identify any brand-mandated equipment or image upgrades required within 12–24 months of assignment | Budget separately from purchase price | HIGH | |
| Understand credit card network agreements tied to the brand — who controls the processing rate? | Branded = less flexibility | MED | |
| Review any brand loyalty program obligations (fuel rewards, app integration, signage standards) | Customer retention asset | LOW | |
| If brand is being terminated or station is ‘debranded’: understand impact on volume and financing eligibility | Debranded = SBA complications | HIGH | |
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 5.1 Licenses & Permits | |||
| Verify fuel dispensing license is current and confirm transfer/re-issuance process and timeline in your state | Some states: 60–90 day wait | HIGH | |
| Verify food service / health department permit (if selling prepared food, hot dogs, roller grill) | Inspection required for transfer | HIGH | |
| Verify tobacco retail license — confirm it is transferable and no violations on record | Violations restrict beer/wine | HIGH | |
| Verify beer and wine (or spirits) license: type, transferability, local quota availability | Quota licenses: high value & scarce | HIGH | |
| Verify lottery retailer license — confirm good standing with state lottery authority | Lottery = high-margin category | MED | |
| Verify ATM registration and compliance with FinCEN BSA requirements if ATM on premises | Often overlooked | MED | |
| Confirm all permits are in the name of the business entity being acquired (not seller personally) | Personal licenses don’t transfer | HIGH | |
| 5.2 Legal & Litigation Review | |||
| Run UCC lien search on the business entity — identify any secured creditors or equipment financing | Liens transfer with business | HIGH | |
| Search federal and state courts for any pending or historical litigation involving the business or the real estate | Slip-and-fall pattern = red flag | HIGH | |
| Review all existing vendor, service, and equipment contracts for assignment restrictions or early termination penalties | Car wash chemistry lock-ins common | MED | |
| Confirm business is current on all local, county, state, and federal tax obligations (request tax clearance letters) | Tax liens transfer | HIGH | |
| Review any franchise or brand agreements for default clauses or change-of-control provisions | Protects your assignment right | HIGH | |
| 5.3 Employment & Labor | |||
| Review all employment files: I-9s, W-4s, workers’ comp claims, any EEOC complaints | Undocumented workers = ICE risk | HIGH | |
| Identify which employees are essential to operations and discuss retention plans before closing | Manager departure = month 1 crisis | HIGH | |
| Confirm no union agreements or collective bargaining obligations attach to the business | Rare but verify | MED | |
| Review workers’ compensation claim history for the past 3 years — elevated claims raise premiums at transfer | Affects Year 1 insurance cost | MED | |
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 6.1 Operational Assessment | |||
| Conduct unannounced visits at multiple times of day — observe staff behavior, customer volume, cleanliness | What you see on 3 visits = what you get | HIGH | |
| Review security camera system: coverage, resolution, storage duration, remote access capability | Minimum: 30-day cloud storage | HIGH | |
| Review robbery and incident report history for the past 3 years (police reports via FOIA if needed) | High-crime area affects insurance | HIGH | |
| Assess staffing model: how many employees, what are their hours, what is the owner’s current daily involvement? | Absentee owner hides labor gaps | HIGH | |
| Understand shift change and cash management procedures: where is cash counted, who handles deposits? | Cash handling = theft vector | HIGH | |
| Review inventory ordering system: is it manual or automated (Scan Data / EDI)? Who does the ordering? | Loss if ordering stops at close | MED | |
| 6.2 Internal Theft & Loss Assessment | |||
| Request 12-month inventory count records — calculate actual vs theoretical shrink using POS data | Industry norm: 1–2% of c-store revenue | HIGH | |
| Review fuel reconciliation reports (ATG vs meter vs delivery) — identify any consistent short reads | Fuel skimming: hard to detect | HIGH | |
| Ask seller directly: have there been any employee terminations for theft in the past 3 years? | Verify with police reports | HIGH | |
| Assess loyalty to key employees: long-tenure employees may leave post-sale taking customer relationships | Loyalty card data mitigates this | MED | |
| 6.3 Supplier & Vendor Relationships | |||
| Identify all key vendors: beer/wine distributors, snack/tobacco distributors, dairy, bread, lottery terminal provider | Some are relationship-dependent | MED | |
| Confirm vendor accounts are current — no COD-only status that signals creditworthiness issues | COD = cash flow red flag | MED | |
| Understand promotional programs: are there slotting fees or brand-funded promotions in the c-store? Are they transferable? | Adds to c-store profitability | LOW | |
SBA note: Gas stations are classified as environmentally sensitive industries
Under SBA SOP 50 10 8 (effective June 1, 2025), gas stations are listed as environmentally sensitive industries in the Appendix. This means your lender WILL require a Phase 1 ESA — and if any REC is found, a Phase 2 before loan approval.
Environmental issues kill more SBA gas station deals than credit scores. Get the environmental done early. Do not wait until you are 30 days from closing.
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 7.1 SBA 7(a) Loan Readiness | |||
| Confirm the deal structure: are you buying the business assets, the real estate, or both? (affects loan program) | SBA 7(a) for business; 504 for RE | HIGH | |
| Verify you meet SBA 7(a) equity injection requirement: minimum 10% of total project cost from buyer’s own funds | Seller notes can count (max 50% of equity) | HIGH | |
| Assemble personal financial statement (SBA Form 413) and 3 years of personal tax returns | Required at lender’s LOI stage | HIGH | |
| Ensure personal credit score is above 680 (most gas station SBA lenders want 700+) | Below 650 = likely decline | HIGH | |
| Prepare a written business plan with 3-year financial projections — include market analysis and management resume | Required for SBA approval | HIGH | |
| Select a lender with proven gas station SBA closing experience — not a generalist bank learning on your deal | Environmental = expertise required | HIGH | |
| Budget for SBA guarantee fee (typically 2–3.5% of guaranteed portion) in your deal economics | Often financed into loan | MED | |
| Understand full SBA timeline: environmental + appraisal + underwriting = 60–90 days minimum | Plan your LOI expiration accordingly | HIGH | |
| 7.2 Deal Structure Negotiation | |||
| Negotiate seller financing (seller note) as part of the deal structure — reduces cash at close, signals seller confidence | SBA allows up to 50% of equity injection | MED | |
| Negotiate a training and transition period: minimum 30–60 days with seller on-site post-close | Operational continuity | HIGH | |
| Include a non-compete agreement covering: geography (3–5 mile radius), duration (3–5 years), and business type | Protects your investment | HIGH | |
| Negotiate environmental escrow or indemnification if Phase 1 reveals any historical RECs | 10–15% of purchase price typical | HIGH | |
| Identify all working capital needs post-close: fuel inventory, c-store inventory, first-month expenses | Estimate $80K–$150K | HIGH | |
| Due diligence item | Rizwan's insider note | Risk | |
|---|---|---|---|
| 8.1 Competitive Threat Analysis | |||
| Search city and county planning records for any gas station permit applications within a 2-mile radius | I walked from 2 Texas sites over this | HIGH | |
| Monitor Buc-ee’s, Wawa, Casey’s, and Sheetz announced expansion zones in your target market | Destroys volume at smaller stores | HIGH | |
| Check DOT planning records for highway expansions, new interchanges, or access road changes near the site | Road change ended 3 stations I know of | HIGH | |
| Evaluate nearby residential development: growing area vs declining area (10-year population trend) | Use census data | MED | |
| 8.2 EV & Fuel Volume Risk | |||
| Research EV adoption rate in the target zip code (use DOE Alternative Fuels Station Locator + state DMV data) | Urban TX markets showing shift | MED | |
| Assess whether c-store revenue is strong enough to sustain the business if fuel volume declines 10–20% over 10 years | Inside store is the hedge | MED | |
| Evaluate feasibility of adding EV charging infrastructure (utility capacity, lot space, permitting) | Proactive future-proofing | LOW | |
| 8.3 Why Is the Seller Really Selling? | |||
| Ask seller directly: retirement, health, partnership dispute, or financial difficulty? Verify the answer independently | Sellers lie. Data confirms. | HIGH | |
| Check if the seller has other stations — are they keeping the good ones and selling this one? | Huge red flag if pattern | HIGH | |
| Review how long the seller has owned this station — short hold period post-acquisition = investigate why | < 3 years = something happened | HIGH | |
| Ask the broker for a list of all price reductions on this listing — how long has it been on the market? | Long DOM = informed negotiation | MED | |
YOUR GO / NO-GO DECISION FRAMEWORK
Before you sign the LOI — answer these 6 questions honestly.
| # | Question | Yes | No |
|---|---|---|---|
| 1 | Does the fuel jobber data independently confirm the revenue the seller is claiming? | ||
| 2 | Has a Phase 1 ESA been completed (ASTM E1527-21) and returned clean or with manageable RECs? | ||
| 3 | Can the business service all debt (SBA loan + any seller note) at 1.25× DSCR at 80% of projected revenue? | ||
| 4 | Are all critical licenses (fuel, tobacco, alcohol) confirmed transferable without a gap in operations? | ||
| 5 | Have you done unannounced site visits and feel confident about the staff, operations, and theft controls? | ||
| 6 | Are you fully comfortable with the fuel supply contract terms, remaining duration, and volume commitments? |
If you answered NO to any of the above, stop — and understand exactly why before you proceed. A deal with unresolved NO answers is a deal where you are paying for a problem you haven’t identified yet.
Ready to Go Deeper?
This checklist is your starting point. What comes next requires a conversation.
BOOK A 45-MINUTE STRATEGY CALL WITH RIZWAN
Still unsure about a deal? Something on this checklist you don’t fully understand?
Want Rizwan to walk through the actual financials on a specific station with you?
Here’s what the 45-minute call covers:
✓ We review the deal you’re looking at — financials, location, brand, and structure
✓ I tell you what’s missing from what the seller or broker has given you
✓ I give you a straight answer: is this worth pursuing, or should you walk?
✓ We map out your next 3 steps if the deal is worth proceeding with
First 15 minutes are diagnostic. If it’s not a fit, I’ll tell you and refund you. No pressure.
» Book Your Strategy Call: https://calendly.com/rizwan-investments/45min
Need More Than a Call?
Rizwan also offers a Full Business Feasibility Study & Due Diligence Review
For serious buyers who want Rizwan to do a complete analysis of a specific station — financials, environmental risk, location scoring, deal structure, and SBA readiness — Rizwan offers a comprehensive feasibility and due diligence engagement.
What a Full Feasibility Study Includes:
✓ Complete financial normalization and EBITDA reconstruction from raw documents
✓ Fuel jobber statement analysis and revenue verification
✓ Location scoring: traffic, competition, incoming threat assessment
✓ Environmental risk summary and Phase 1/2 guidance
✓ Fuel supply contract review and key clause flagging
✓ SBA lender readiness assessment
✓ Written deal recommendation: Buy, Negotiate, or Walk
Start with the 45-minute call — and if a full feasibility study is the right next step, Rizwan will tell you.
Disclaimer
Everything in this checklist reflects Rizwan Shuja’s personal experience as a gas station operator and coach. It is not investment advice, legal advice, tax advice, or a guarantee of any financial result. Your outcome depends on your capital, the deal you buy, your market, and your execution. Consult qualified legal, financial, and environmental professionals before purchasing any business.