Buyer's Guide · Gas Stations
The due-diligence checklist for buying a gas station
Before you sign on a gas station, verify six things: the financials (against the tax returns and bank statements), the lease (term and assignability), the underground tanks (age and compliance), the environmental record, the location's traffic, and the inventory at closing. Here's the full checklist, with the exact records and public sources to check each one.
The seller hands you a tidy spreadsheet. What they don't volunteer is in the tax returns they didn't share, the tank records they “forgot,” and the lease clause that says the brand agreement can't transfer. Due diligence is where those things surface. It's where a good deal proves it's good, or a bad one quietly falls apart. Work the list below before you're emotionally committed.
1.Financials: verify the money is real
- Match the P&L against the federal tax returns and the bank statements. All three should agree within a few percent. The gaps are where stories fall apart.
- Recompute SDE yourself: net profit + the owner's salary + defensible add-backs. Never take the seller's SDE on faith.
- Cross-check claimed fuel volume against the supplier's delivery records: gallons sold should match what was actually delivered.
- Confirm lottery commission (typically 5 to 7% of lottery sales) and ATM income ($200 to $500/month) are real, not padded.
- Find the branded-dealer fees. They're per-gallon and small (~$1,500 to $5,000/year for a typical station), so they often hide inside “Miscellaneous.”
2.Lease & legal: confirm you can actually take over
- Get the lease term remaining and confirm it's assignable to you. A long lease (10+ years) adds value; a short or expiring one is a real risk.
- Read the branded fuel agreement: is it assignable, what's the remaining term, and is a required image refresh coming (typically $30,000 to $60,000 every 8 to 12 years)?
- Search county records for liens, judgments, and UCC filings against the business.
- Confirm the business is active and in good standing on the state business registry.
3.Underground tanks & physical condition: the hidden six-figure risks
- Pull the underground storage tank (UST) inspection certificates, leak-detection records, and proof of EPA/state compliance.
- Get the tank age. Tanks over 20 years old are high-risk: replacement runs $100,000 to $300,000, and it becomes your bill the day you close.
- Inspect the canopy and pumps, the commercial coolers/freezers ($5,000 to $15,000 each to replace), and the building's HVAC, roof, and electrical.
- Confirm a current annual fire-marshal inspection and ADA compliance (restrooms, parking, access).
4.Environmental: check the public record before you fall in love
- Check the EPA's ECHO database for the site's compliance and violation history.
- Check the state environmental agency for UST registration, leak reports, and any open cleanup sites.
5.Location: the thing that drives every future dollar
- Pull traffic counts from the state DOT (free).
- Map the competition within a 1- and 2-mile radius (GasBuddy shows every nearby station).
- Check the area's demographics and income trend (Census.gov).
- Note the lot: a corner with a traffic light is a premium, mid-block is a discount, and highway-exit proximity drives fuel volume.
6.Inventory: verify at closing, not before
- Count merchandise inventory at closing (typically $20,000 to $60,000), not weeks before.
- Deduct stale or expired stock.
- Verify the fuel in the tanks: gallons on hand and the current wholesale price.
Want the hardest half done automatically?
The financial reconciliation (P&L vs. tax returns vs. bank statements, SDE recomputed, the gaps flagged) is exactly what BizScore does in minutes, with the evidence behind every finding.
Frequently asked
- How long should due diligence take?
- Most buyers negotiate a 30 to 60 day due-diligence window in the LOI. Don't let a seller rush you below ~30 days. Speed is how things get missed.
- What documents should I ask the seller for?
- Three years of P&Ls, federal tax returns, bank statements, the lease, the branded-dealer agreement, UST inspection and leak-detection records, supplier delivery records, and an equipment list.
- What's the single biggest hidden cost?
- Aging underground tanks. Over 20 years old means $100,000 to $300,000 to replace, and it's yours the day you close, whether or not the seller mentioned it.
- Can I do this myself, or do I need help?
- You can do a lot with free public records. The financial reconciliation (P&L vs. tax returns vs. bank statements) is where first-time buyers miss the most, which is exactly the part BizScore automates.
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About this guide
BizScore is built by first-time business buyers — people who watched someone close to them lose their life savings on a deal that looked clean on a spreadsheet and fell apart in the documents the seller never volunteered. That experience is why these guides exist, and why every BizScore report cites the exact document behind each finding.
Where the numbers come from: the benchmark ranges in our guides — SDE multiples, expense ratios, typical timelines — are widely-used industry rules of thumb, cross-checked against the analytical benchmarks BizScore applies inside its reports. Dollar figures such as a ~$15,000 quality-of-earnings review or a $5,000 deal attorney are representative of what buyers typically pay, not quotes; actual costs and multiples vary by deal. We review these figures periodically — last updated June 2026.
BizScore is an information service — think of it as a Carfax for a small business — not a CPA, an attorney, or financial advice. Use it to decide where to spend your professional dollars, and bring in a qualified professional before you sign anything.
This guide is general education, not a formal business appraisal or financial, legal, or tax advice. Every deal is different. Verify against the actual documents and talk to a qualified professional before you sign anything.