Service station due diligence checklist

Use this checklist with your accountant, lawyer and an environmental consultant. Ask for documents through the listing's data room so there's a record of what you were given.

Financial

• Profit and loss statements and BAS for at least the last 2–3 years
• Monthly fuel volumes by grade, and commission or margin statements from the fuel company
• Shop sales and gross margin by category (tobacco, drinks, food, car wash, services)
• Wages report and roster, including the owner's own hours
• Stock levels and how stock will be valued at settlement

Agreements

• The site lease or licence: term, options, rent and reviews, outgoings, make-good and assignment conditions
• Fuel supply, commission agency or franchise agreement: term, renewal, how commission or margins can change, minimum volumes, and the fuel company's approval rights on transfer
• Equipment leases, car wash and EFTPOS contracts, and any third-party tenancies (QSR, ATM, post office)

Fuel supply relationships are governed by the Oilcode, a mandatory industry code under the Competition and Consumer Act. Franchise sites are also covered by the Franchising Code. Ask your lawyer how each applies to the agreement you'd be taking on.

Environmental and tanks

• Age, construction (single or double wall) and location of underground tanks and lines
• Tank and line integrity testing records and wet-stock loss monitoring results
• Any previous contamination reports, environmental site assessments or audits
• Notices, clean-up directions or complaints from the state EPA or council
• Who is responsible for tanks and remediation: the landlord, the fuel company or you

Underground petroleum storage systems (UPSS) are regulated by each state's EPA. For freehold purchases in particular, consider commissioning your own environmental site assessment.

Operations and equipment

• Condition and age of bowsers, canopy, signage, POS, refrigeration and car wash
• Licences and permits: dangerous goods, food, liquor, tobacco, trading hours
• Staff entitlements that transfer with the business
• Traffic counts, nearby competitors and planned roadworks or developments