Fuel moves the traffic; inside sales make the money. The study has to model both economies and the canopy-count competition between them.
Fuel retail is two businesses sharing a parcel: a high-volume, thin-margin fuel operation whose cents-per-gallon economics are set regionally, and an inside-sales operation — convenience, food service, car wash add-ons — where the actual margin lives. Underwriting the combined credit means modeling each separately: gallons from traffic counts and competitive canopy positions, inside sales from the conversion rate fuel customers actually exhibit, with EIA data anchoring the price and margin environment.
The competitive question is corner-specific. Fuel demand is captured at the intersection level — signal position, ingress and egress, brand recognition, diesel access for the truck-adjacent sites — and a new entrant a half mile up the traffic stream rewrites the gallons forecast. Our studies map the canopy set with pipeline awareness, and treat branded-supply agreements as the financing collateral they effectively are: the jobber contract’s terms frequently decide whether the fuel margin assumption is contractual or hopeful.
Wert-Berater has produced fuel-retail studies from a $1,450,000 rural Phillips 66 expansion to a $14,568,092 ground-up travel center, including component-financed structures where the fuel business and co-located retail were sized and covenanted separately — one recent engagement carrying standalone fuel coverage of 8.38x beside a 1.50x retail strip. Special-purpose treatment under SOP 50 10 8 applies throughout: liquidation analysis, environmental status as a stated condition, and equipment budgets carried inside the eligible cost basis.
The accepted methodology for fuel demand is traffic-count capture analysis. Definition: gallons are derived from the vehicles physically passing the site, not from population or spending statistics, because fuel is purchased in transit. Purpose: to convert an observable, state-published figure — annual average daily traffic — into a defensible volume forecast through coefficients an underwriter can test individually. Application proceeds in four steps: obtain directional AADT from state DOT counts; apply a stop rate calibrated to access quality, signalization, and competitive position; apply transaction size; and adjust for seasonal and growth factors.
The mathematics: Annual gallons = AADT × 365 × stop rate × average gallons per fill. A corridor site at 28,000 AADT, a 1.6 percent stop rate, and 9.5 gallons per transaction yields 28,000 × 365 × 0.016 × 9.5 ≈ 1,553,000 gallons. Inside sales follow the companion ratio: merchandise revenue = gallons × conversion rate × average basket, benchmarked against NACS data. The rationale for committee acceptance is auditability: every coefficient is observable — the count is published, the stop rate is benchmarked against operating comparables, and the analyst’s judgment is confined to adjustments that must be defended in writing. A study that cannot reproduce its gallons from this arithmetic is asserting, not analyzing.
The red flags in fuel-retail files repeat with remarkable consistency. Gallons forecasts derived from national averages rather than the corner’s actual traffic and turning movements. Inside-sales ratios copied from top-quartile operators onto a first-time owner. A jobber agreement presented as signed when it is a term sheet, with the margin assumption riding on terms that do not yet exist. Environmental status treated as a formality — the expired Phase I, the undocumented tank history, the monitoring well nobody mentions until the lender’s counsel asks. And the pipeline blind spot: a permitted competitor a half mile up the traffic stream that the sponsor knew about and the borrower-prepared market study somehow did not.
The subtler flags live in the expense build: credit-card interchange understated against today’s outdoor-payment mix, labor scheduled below what a 24-hour or extended-hour operation actually staffs, and maintenance reserves that ignore dispenser, canopy, and tank-system replacement cycles entirely.
When these surface, the engagement does not end — it gets specific. We re-derive gallons from the DOT counts and a physical competitive survey, then sit with the sponsor and lender on what the defensible number supports: sometimes a smaller fuel facility, sometimes a stronger inside program to carry the coverage, sometimes a phased buildout. Environmental items convert into enumerated conditions precedent with the curing path stated — a current Phase I, a tank-closure record, a state-fund eligibility confirmation — so the determination can be conditionally favorable rather than stalled. Where the jobber terms are unsettled, we model the margin band across the realistic contract range and state which outcomes clear coverage, giving the sponsor a negotiating target instead of a rejection.
The pattern is constant across our practice: weaknesses identified early become structure — reserves, conditions, phasing — while weaknesses discovered in committee become declines.
Sponsors who fare best arrive with the corner’s evidence already assembled: the traffic study, the executed or near-final supply agreement, the environmental record complete, and an inside-sales plan grounded in a named foodservice program rather than a category average. Order the study before the appraisal so the income analysis feeds the appraiser. Budget honestly for payment infrastructure and compliance — EMV, tank monitoring, vapor recovery where applicable — because underwriters notice their absence faster than their cost. And if the site needs a car wash or QSR to pencil, let the study size those components on their own economics from day one rather than bolting them on after coverage falls short.
The category’s underwriting climate is being reshaped by three forces. Fuel demand is flattening in mature markets while vehicles grow more efficient, pushing credit weight further onto inside sales and foodservice — the operators winning are effectively restaurants with canopies. EV charging has moved from novelty to expected site amenity on corridor locations, and our studies now model it as a component profit center with utilization math rather than a line in the site plan. And consolidation continues: regional chains with fuel-supply leverage are the competitive set new entrants actually face, which raises the bar on site quality and inside execution that a credible study must apply.
Engagements are typically initiated by the borrower, with lender or CDC confirmation obtained before work begins — institutions apply differing rules, so sponsors should confirm the required path with their lending contact — and are delivered in 10 to 15 business days from complete project data, and built to the program framework that governs the credit — SBA SOP 50 10 8 coverage minimums of 1.15x operating and 1.00x global, the 37-factor structure of USDA RD Instruction 5001, or the 1.20x convention of conventional credit policy — with a ten-year pro forma, sensitivity at ±5/10/15 percent, rate stress to +3.0 percent, and Monte Carlo analysis as standard equipment.
President, Wert-Berater, Inc. — independent feasibility study consultants since 1998. More than 4,000 feasibility studies completed across all 50 states and internationally, evaluating $40.2 billion in project value for SBA, USDA, EB-5, conventional, and institutional financing decisions. Fiduciary duty runs to the lender and agency in every engagement.
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Schedule a ConversationIndependent feasibility studies since 1998 — 4,000+ engagements, $40.2 billion in evaluated project value. Standard delivery in 10 to 15 business days. Fiduciary duty to the lender and agency.