Sales generated per month with respect to Petrol, Diesel and Shop turnovers etc. (Last 12 months trading at least)
Required proof: Seller provide Oil Company delivery statistics which must correlate with the Sales Statistics
Petrol Station Acquisition • Due Diligence
Petrol Station Due Diligence Checklist
A practical buyer-focused checklist for verifying the trading performance, fuel and shop turnover, margins, operating expenses, employees, assets, contracts, licences and statutory compliance of a petrol station.
1
Validate Turnover
Reconcile fuel, diesel and shop sales to supplier delivery statistics, point-of-sale reports and disclosed monthly trading results.
2
Confirm Margins
Check the actual gross profit margins on petrol, diesel, shop and other income streams against the seller's presentation.
3
Verify Expenses
Obtain proof of rental, wages, franchise costs, utilities, insurance, banking fees, security and other operating expenses.
4
Check Compliance
Confirm site and dealer licences, MIBCO obligations, statutory returns and any contracts that the purchaser may have to assume.
Key Distinction
Running Concern vs Legal Entity Acquisition
The due diligence focus changes depending on whether the purchaser acquires the business as a running concern or purchases shares in the legal entity. A share purchase usually carries wider historical exposure, including tax, VAT, statutory and balance-sheet risks.
Purchasing the running concern
Focus on verifying the business performance, assets, operating expenses, staff obligations, contracts and licences that will transfer with the business.
Purchasing the legal entity
In addition to trading due diligence, the purchaser must investigate historical SARS, VAT, financial-statement, creditor, debtor and legal exposures inside the company.
Running Concern
When Purchasing the Running Concern (Not Legal Entity)
This section focuses on the trading performance, operating costs, assets, employees, supplier records, contracts and licensing information required before purchasing the operating business as a going concern.
| No. | Item | Description | Seller Action / Required Proof |
|---|---|---|---|
| 1 | Sales | Sales generated per month with respect to Petrol, Diesel and Shop turnovers etc. (Last 12 months trading at least) | Seller provide Oil Company delivery statistics which must correlate with the Sales Statistics |
| 2 | Purchases | Purchases of Fuel (Petrol, Diesel litres) and Shop (Rands) from the Oil company. (Last 12 months trading at least) | Seller to provide written proof in the form of Invoices / purchase slips for the purchases made in the Business This should correlate both in timing and magnitude with the Sales statistics and Business presentation annexed to the Memorandum of Agreement. |
| 3 | Margins | Margins for the different facets of the Business | Seller to supply written proof of the Margins as was presented in the Business presentation. For example, the Gross profit margin for every facet of the Business, etc. |
| 4 | Actual Expenses | Expenses of the business as annexed to the Memorandum of Agreement | Seller to provide written proof of all the actual Expenses as detailed in the Business presentation. The major ones being rental, franchise fees, (if applicable), water and electricity, wages, salaries, banking fees, insurance, security, telephone, security and money collection, etc. |
| 5 | Personnel | Personnel (names, salary and years in service) regarding forecourt, cashiers, admin and shop. | Seller to provide a list of names, positions, breakdown of the wages / salary for the last three months of operation. A list of personnel has been provided and is annexed to the Memorandum of Agreement |
| 6 | Assets | Assets in the Business detailed in Annexure "A" of the agreement | Seller to provide proof that all the assets are paid for and if there are any lease or Hire purchase agreements in place for any of the items, these agreements must be provided to the Purchaser |
| 7 | Debtors / Creditors | Level of Debtors & Pre Paid Fuel Account Deposits together with any Creditors | Seller to supply a list of all the Debtors together with an age analysis and also all the Creditors together with negotiated terms of payment. Also stipulate the value of the prepaid deposits held by the seller at present |
| 8 | Contractual Agreements | Lease, Hire Purchase, Rental, Franchise, or any other that are to be taken over by the Purchasers | Seller to provide copies of all the agreements, where after discussions will be held with the Landlord, Franchisor etc. |
| 9 | Licenses | Site & Dealer Licences | Seller to supply proof that there is a valid Dealer Licence in place issued by the Department of Energy |
| 10 | MIBCO Levies | Motor Industry Bargaining Council returns | Seller to supply a statement of the different facets of MIBCO summarised for the personnel. A typical statement is needed indicating every element for example UIF / Pension etc. for the personnel. The period could be for the last three months. |
Legal Entity / Share Purchase
When Purchasing Shareholding in Legal Entity
This section becomes critical where the purchaser is considering taking over the shares in the legal entity, because historic tax, VAT and financial-statement exposure may remain inside the company.
| No. | Item | Description | Seller Action / Required Proof |
|---|---|---|---|
| 1 | TAX payments | TAX returns & Dues | Seller to supply proof that the Business TAX returns are up to date and that there are no outstanding payments due to SARS |
| 2 | VAT payments | VAT Returns | Seller to supply the Business VAT returns for the last 12 months of trading |
| 3 | Financial Statements | Latest Financial Statement | Seller to supply Financial Statements mainly for any form of loan application. |
Process Roadmap
Recommended Due Diligence Workflow
Use the checklist in a disciplined sequence. The objective is not only to collect documents, but to confirm that the business presentation, seller representations and actual records all reconcile.
Request the full document pack
Ask the seller for the records listed in the checklist, preferably indexed and arranged by category.
Reconcile sales, purchases and margins
Compare sales statistics, oil company deliveries, fuel purchases, shop purchases, POS data and the claimed gross profit margins.
Normalize the expense base
Confirm the recurring cost structure and identify expenses that may change after takeover, including rent, salaries, finance, franchise and owner-related items.
Investigate liabilities and obligations
Review debtors, creditors, prepaid fuel accounts, HP/lease agreements, personnel obligations and all contracts to be assumed by the purchaser.
Close out red flags before final commitment
Any mismatch in turnover, unexplained margins, unpaid statutory liabilities, licence weakness or undisclosed encumbrance should be resolved before conclusion.
Red Flag: Turnover mismatch
Fuel deliveries, purchase invoices, POS data and disclosed sales should correlate in timing and magnitude. Material differences must be explained.
Red Flag: Hidden obligations
Hire purchase agreements, leases, creditors, prepaid fuel deposits, MIBCO levies or staff claims can affect the true purchase risk.
Red Flag: Licence or SARS weakness
Dealer/site licence issues or outstanding tax and VAT matters can delay or materially undermine a transaction.
Interactive Checklist
Working Due Diligence Tracker
Tick items off, change the status and add notes while working through the acquisition review. The progress is saved in this browser on this device.
When Purchasing the Running Concern (Not Legal Entity)
Purchases of Fuel (Petrol, Diesel litres) and Shop (Rands) from the Oil company. (Last 12 months trading at least)
Required proof: Seller to provide written proof in the form of Invoices / purchase slips for the purchases made in the Business This should correlate both in timing and magnitude with the Sales statistics and Business presentation annexed to the Memorandum of Agreement.
Margins for the different facets of the Business
Required proof: Seller to supply written proof of the Margins as was presented in the Business presentation. For example, the Gross profit margin for every facet of the Business, etc.
Expenses of the business as annexed to the Memorandum of Agreement
Required proof: Seller to provide written proof of all the actual Expenses as detailed in the Business presentation. The major ones being rental, franchise fees, (if applicable), water and electricity, wages, salaries, banking fees, insurance, security, telephone, security and money collection, etc.
Personnel (names, salary and years in service) regarding forecourt, cashiers, admin and shop.
Required proof: Seller to provide a list of names, positions, breakdown of the wages / salary for the last three months of operation. A list of personnel has been provided and is annexed to the Memorandum of Agreement
Assets in the Business detailed in Annexure "A" of the agreement
Required proof: Seller to provide proof that all the assets are paid for and if there are any lease or Hire purchase agreements in place for any of the items, these agreements must be provided to the Purchaser
Level of Debtors & Pre Paid Fuel Account Deposits together with any Creditors
Required proof: Seller to supply a list of all the Debtors together with an age analysis and also all the Creditors together with negotiated terms of payment. Also stipulate the value of the prepaid deposits held by the seller at present
Lease, Hire Purchase, Rental, Franchise, or any other that are to be taken over by the Purchasers
Required proof: Seller to provide copies of all the agreements, where after discussions will be held with the Landlord, Franchisor etc.
Site & Dealer Licences
Required proof: Seller to supply proof that there is a valid Dealer Licence in place issued by the Department of Energy
Motor Industry Bargaining Council returns
Required proof: Seller to supply a statement of the different facets of MIBCO summarised for the personnel. A typical statement is needed indicating every element for example UIF / Pension etc. for the personnel. The period could be for the last three months.
When Purchasing Shareholding in Legal Entity
TAX returns & Dues
Required proof: Seller to supply proof that the Business TAX returns are up to date and that there are no outstanding payments due to SARS
VAT Returns
Required proof: Seller to supply the Business VAT returns for the last 12 months of trading
Latest Financial Statement
Required proof: Seller to supply Financial Statements mainly for any form of loan application.