We Sell Stations - McCallen & Sons, Inc

Our industry has it's own unique terms and lingo. This informal list will help you understand the business. If you encounter terms, which are not here, let us know

* All words in italics are found elsewhere in this Terms of the Trade list.

• Amortization or "am" money: The up front cash contribution offered by an oil company as an inducement for an independent dealer to brand with an oil company. Although it is a loan, as long as the dealer continues to purchase product from that company, and pumps the required gallons the money does not need to be paid back. It is amortized over the term of the contract, which is usually ten-year agreement.
• ASAP: BP ARCO acronym for ARCO Streamlined Assignment Process. The term implies a rapid transfer process. Actually, it is the slowest transfer process among oil companies.
• ARCO ampm: Atlantic Richfield Company. One of the four majors in our marketplace. They have the image as the company offering the lowest cost fuel of the majors. Bought out in 2000 by BP Amoco, but still branded ARCO.
• ATM: Automated Teller Machine. Growing in popularity, most C-stores have them. Typically lease cost is $150-$200per month. Tends to be very profitable.
• AUTO: Automotive United Trades Publication. Organization serving gas station dealers. Their publication is the AUTO Bulletin. Strong advocate for dealers.
• Backroom: Term used for the service bays where cars can be repaired. For example, "How much backroom business do you do?"
• Bays: See Service Bays.
• Canopy: The structure covering the pump islands.
• Capitalization Rate (Cap Rate): The percentage rate of return estimated from the net income of a piece of  property. In CBA the cap rate is calculated based on the NOI (Net Operating Income) divided by List Price. Rarely used in gas station/owner operator business valuations.
• Card Lock: Unmanned gas stations typically requiring membership, and a "card" to gain access to pump fuel. Prices are typically lower than traditional major brand stations, however, prices are not posted and can change daily.
• COCO: Primarily an ARCO term, Company Owned, Company Operated (used to be company-op)
• COFO: Primarily an ARCO term, Company Owned, Franchise Operated  (dealer)
• C.F.N. (Commercial Fueling Network) Card lock gas station company.
• Co-Brand: The process of adding fast food franchises to gas station operations, i.e.. McDonalds (only with Chevron) Subway, Taco Bell, Burger King, A&W (primarily withTexaco) etc.
• Contract Dealer (CD): Same as open dealer (OD).
• CPS: Competitive Price Support: See TPA
• CRIND: Card Readers In Dispenser. Originally a Gilbarco (manufacturer) term, now used generically, throughout the industry.
• C-store: Convenience store.
• Direct: As in "Chevron direct": Where a dealer purchases his product directly from the oil company rather than through a jobber.
• DOE: Department of Ecology (DOE also stands for Department of Energy at the Federal Level, but as it relates to the gas stations business, it's the state Department of Ecology that is relevant). The agency charged with overseeing theenvironmental issues. Office located in South Bellevue near I-90 and I-405 interchange.
• DOFO: Primarily an ARCO term, DOFO stands for Dealer Owned Franchise Operated.
• DTW: Dealer Tank Wagon. The term used for the wholesale price of fuel charged to the dealer. For example a dealer might complain that his "DTW had been too high recently."
• Downstream Operations: Operation concerned with oil refining, transportation and gasoline marketing.
• Environmental Remediation: The process by which contaminated soil is treated. Various methods are "pumping and treating", "air sparging", "surfactant washing", XK Hyper-Proton Blasting", and "natural attenuation" (doing nothing).
• EPOS: Electronic point of sale.
• Equilon: The company, one of the four majors, which was the result of combining the retail operation of Texaco andShell. Brands have remained the same, but Texaco is being replaced by the Shell brand. This company is no longer involved in Shell or Texaco.
• Equiva: The company which handles real estate accounting and other services for Equilon and Motiva. No longer involved in Texaco or Shell brand.
• Fee Operated: A modified company operated site. Term used primarily by Conoco/76.
• Franchisee: A "franchisee" is a retailer or distributor who is authorized or permitted, under a franchise to use a trademark in connection with the sale, assignment, or distribution of motor fuel.
• Franchisor: A "franchisor" is a refiner or distributor who authorizes or permits, under a franchise, a retailer or distributor to use a trademark in connection with the sale, consignment, or distribution of motor fuel.
• Gondolas: The shelving used in convenience stores.
• Hypermarket: Retailers such as Wal Mart, K-mart, Albertson's, Safeway, and Costco who are now selling gas.
• Independents: Non-branded gasoline suppliers, such as E-Z Gas, Astro and GASCO.
• Independent Marketer: A petroleum retailer not affiliated with a major brand.
• Independent Refiner: A petroleum refining company that is not a major brand.
• Islands: Pump islands typically have one or two MPD's
• Jobber: A middleman used in those cases where the dealer does not purchase his product directly from the oil company. Stations in outlying areas are typically "jobber served."
• L.U.S.T: Acronym for leaking underground storage tank. The DOE maintains a " LUST List" for any property, whichhas recorded a spill or contamination requiring clean-up.
• LCB: Liquor Control Broad. The state licensing agency governing the issuance of liquor licenses. Primary concern fornew license is where did the money come from for the purchase of station.
• Marketer: Any company or person that retails (sells) motor fuels. May or may not sell branded gasoline.
• Majors: The primary oil and gas suppliers in a given market. For example, in the Northwest, the top 4 branded oil suppliers are (in no particular order) ARCO, Chevron, 76/Conoco - Phillips and Shell. There are several more "branded" suppliers such as Texaco, Mobil and Exxon.
• MPD's: Multi-Product Dispenser: People erroneously refer to these as "pumps." Most MPD's have 6 hoses with 3 on each side and dispense all three grades of fuel.
• OPEC: Organization of Petroleum Exporting Countries-oil producing and exporting countries that have organized for the purpose of negotiating with oil companies on matters of oil production, prices, and future concession rights. Current members are Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela.
• Open dealer (OD):  - dealer who signs a supply contract and either owns his property or leases it from someone other than the oil company. Term primarily used by Texaco and Shell.
• Pacific Pride:  Card Lock gas station company. Operates like a franchise.
• PIC Machine: Pay Island Cashier Machine. Term used primarily at ARCO.
• Phase I: A preliminary inspection of a property by an environmental engineer to determine the likelihood of contamination at a given site. Price range $1200-$2200. Often required by the lender.
• Phase II: The next level of inspection where soil and or water samples are extracted and tested for contaminants. Price range $3000 on up.
• PMPA: Petroleum Marketing Practices Act. Federal law offers dealers certain protections, somewhat similar to franchisee protection laws. Keep in mind that some oil companies are technically franchises, such as, ARCO AM/PM, Texaco Star Mart and Jackpot Convenience Stores. Franchises must comply with state and federal franchise laws as well as the PMPA.
• Pooled (or pool) margin: This is the weighted average profit margin given in cents per gallon from all fuel grades, usually with the exception of diesel.  For example, a dealer may pump 160,000 gallon with a 10.3-cent pool.
• PSI: Prestige Stations Inc. This is the term used by ARCO for their company operated stations.
• Pump Island: See "Island".
• Rack Price: Price at which the major s and independent refineries sell branded or unbranded gasoline to jobber/wholesalers. It is related to the commodity spot price, but adjusted for transportation, overhead, and profit.
• RVI: Retail Visual Identity. This is the term used by Shell for their "new" image.
• Service bays: Where auto repair is done at a service station, i.e.. "How many bays does it have?"
• Shell: One of the 4 majors in this marketplace. Most of the Texaco stations have been converted to Shell in 2002 and 2003. See "Equilon".
• Shrink: The loss of product due to theft, spoilage, short deliveries, etc.
• SLEP Test: Secondary Level English Proficiency test, used by BP ARCO for qualifying new dealers. Administered in Federal Way.
• Slotting Fees: The cigarette and beer supplies will pay a "slotting fee" or bonus for promoting their particular brand.
• Spot Price: Petroleum price on the commodity market. Rack Price is based on the spot price.
• SSCS: Service Station Computer System. Refers to the computerized accounting system used by gas stations.
• Starting gate: A modern design of positioning pump islands so that cars are facing the c-store while refueling.
• Stock Keeping Unit (SKU): A number given to each item (by category and brand) stocked in a retail outlet for inventory and tracking purposes.
• Store margin: Profit margin in convenience stores. Typically it ranges from 28%-34%.
• Supply contract: The agreement a dealer makes with a supplier to secure fuel.
• TBA: Tires, batteries and accessories. For example, "Who is your TBA rep?"
• Terminal: A physical storage facility for petroleum products, typically supplied through a pipeline from a refinery, where jobbers/wholesalers purchase and obtain gasoline at the rack price.
• Texaco: See Shell and Equilon.
• Three Party: Where the dealer operates a station or property owned by the oil company. Term used primarily by Chevron.
• Trade Dress: The image and signing of a particular oil company, i.e. color scheme, logo, fascia, etc.
• Triple Net (NNN): A lease requiring the tenant to pay in addition to a fixed rent, the expenses of the property leases, such as taxes, insurance, maintenance, utilities, cleaning etc.
• Throughput: Refers to the sale of gasoline or other petroleum products, and is usually measured in gallons.
• TOSCO: One of the 4 majors, using the 76 brand. Bought out by Phillips 66 in 2001.
• TPA: Temporary Price Allowance. This is a cents per gallon rebate given by the oil companies in exchange for committingto a long term supply contract. Term used primarily by Chevron.
• TVA: Temporary Voluntary Allowance. Same as TPA
• TCA: Temporary Competitive Allowance. Same as TPA.
• Two Party: Where the dealer gets a supply contract for fuel and either owns or leases property from someone other than the oil company. Term used primarily by Chevron.
• Unbranded Fuel: Retail fuel not sold under a major brand name. Typically sold by an independent marketer under the marketers private label or with no name attached.
• Underlying Ground Lease: While the 3 year oil company lease is typically treated as a long term lease, because of the provisions in the PMPA, if the oil company does not own the land, a buyer must look to who owns the land and what the terms of the "underlying ground lease" are. The oil company may have only 5 years left on their's and therefore, have no obligation to the dealer beyond that 5 years.
• Unihose: The style of MPD where one hose and nozzle is used for all 3 grades of fuel. Texaco has promoted this more than the other oil companies.
• Upstream Operations: Operations concerned with oil exploration and production.
• UST: Underground Storage Tanks. Term is frequently used in environmental protection.
• UST Insurance: Regional insurance against leaking tanks. Oil Companies self insure and don't need UST insurance. Typical cost is $1500-$2200 per year.