In a little over a year, Mt. Pleasant, S.C.-based Refuel has grown from a five-store chain to a fleet of 84 convenience stores across three states, and its aggressive growth trajectory is only picking up steam.
In April, Refuel, a portfolio company of private equity firm First Reserve, closed on the acquisition of Indianola, Miss.-based Double Quick, expanding its footprint beyond South Carolina to Mississippi and Arkansas. The acquisition included 48 c-stores — 41 in Mississippi and seven in Arkansas — more than doubling the company’s c-store count to 84 locations. The transaction represents the fifth acquisition for Refuel since establishing its partnership with First Reserve in May 2019.
Flash back to the beginning of January 2019, and Refuel was a small chain of five c-stores in South Carolina.Then in May 2019 it closed two acquisitions alongside First Reserve, immediately increasing its store count more than sixfold — from five to 33 c-stores. Those acquisitions were of Hartsville, S.C.-based West Oil and Bishopville, S.C.-based Bishopville Petroleum.
Last fall, Refuel also announced plans to invest $50 million in new-to-industry c-stores throughout the Charleston, S.C., market, with a goal of becoming a 100-plus-store chain in less than two years through acquisitions and new builds. With the addition of Double Quick, it’s already well on its way to that goal.
“We’re an acquisitions company now, and a lot of deals are presented to us, and we look at them all. But this one really caught our eye,” said Mark Jordan, founder of Refuel. “We visited the (Double Quick) stores. They’re very food-forward in their thinking, and the stores really fit us well.”
Refuel’s business model today remains focused on growth. “We originally had a 100-store plan, and we hit almost to that in less than a year,” said Travis Smith, chief administrative officer and general counsel of Refuel. “And now we’re going to grow bigger than that.”
When the COVID-19 pandemic began, Refuel saw consumer demand spike for big package items like beer, as well as a big increase in demand for tobacco products. Sales of toilet paper, paper towels and hand sanitizer also skyrocketed. The chain has been seeing strong sales on the items it’s known for like cigarettes, snacks, cold beverages and beer.
“We’ve been able to source enormous quantities of hand sanitizers since the beginning, which we sold,” said Mark Jordan, founder of Refuel. It also provided hand sanitizer for employees to take home and use at work. The chain also installed plexiglass barriers between customers and store associates and has been disinfecting stores throughout the day.
Double Quick appealed to Refuel because it had scale within its market areas. Plus it featured a strong back-office department and a quality foodservice operation — two areas where Refuel was seeking further development. Some 34 of the Double Quick stores offer a proprietary fried chicken concept. The acquisition also included 12 Church’s Chicken franchises, five of which are stand-alone quick-service restaurants, and two Krystal burger franchises.
Jordan was impressed by Double Quick’s foodservice operations. “They execute well on it,” he said. “They’ve got good products. They’ve got good procedures. They understand food very well. We’ve been working on food for a long time, and we found a chain that thought a lot like we did.”
Refuel rolled out its own proprietary fried chicken program in fall of 2019. Jordan recognized that Double Quick’s fried chicken program, including its side offerings and breakfast program, provided a more refined foodservice package compared to Refuel, which was dabbling in chicken and pizza. Refuel now has the opportunity to draw on Double Quick’s expertise to further improve its chicken program.
“Double Quick focuses very hard on chicken, almost to the exclusion of everything else, and we liked that,” Jordan said. “We liked the results that they’ve gotten out of that, and that’s the direction we’re going to go.”
Now that the company is also a franchisee of both Church’s and Krystal, it may leverage those food programs in Refuel highway locations to better appeal to interstate travelers. “We’re looking at opportunities like that right now,” Jordan said.
Refuel also continues to prioritize its coffee offering. The chain introduced bean-to-cup coffee dispensers in late 2019 and immediately saw positive results. “We tested in the Charleston stores, and we started looking at rolling it out everywhere,” Jordan said. “But we did hit pause on that because of COVID-19.”
The chain plans to continue with the program when the pandemic is over and self-service coffee returns.
Integrating Double Quick
The West Oil and Bishop Petroleum sites acquired last year were reimaged to the Refuel design and converted to the Exxon gas brand last fall.
“In stores that we build from the ground up, we have a trademark canopy that kind of looks like two airplane wings fit together,” explained Jordan. Refuel had the added challenge of rebuilding the canopies of the West Oil and Bishop Petroleum sites to also look like the Exxon canopy.
But the newly acquired Double Quick stores won’t be converted to the Refuel brand.
“Double Quick has an incredible brand presence in the Delta, and in Mississippi and Arkansas, and an incredibly loyal customer base,” Smith said. “We just felt that it was not the right move to come in here and change everything to Refuel.”
“We’ll probably change their signage a little bit,” added Jordan. “But they’ve got a great brand down here, and for the most part it’s going to look the same.”
All Double Quick employees who wish to remain have been retained, including office and store-level employees.
“For the most part, even customers didn’t know there was a difference as best as I can tell,” Jordan said. “Overnight the switch happened, and they just switched to our ownership.”
As Refuel looks forward, it’s keeping an eye on technology. It launched its new smartphone app in the middle of the COVID-19 crisis this spring, pulling back on its original plan to include mobile payment and loyalty with the initial rollout.
“We decided to pivot with our app and focus it more on curbside pickup — which we’ve rolled out in all locations in South Carolina — and delivery, which is in a few locations already,” Jordan said.
So far, the pilot is bringing good results. Refuel still plans to add mobile payment to its app in the future but has put that step on hold while it first navigates the pickup and delivery launch.
Refuel is also continuing to innovate with its car wash program. The chain operates seven single-bay automatic car washes under the Refuel brand.
“We’re rolling out license plate recognition and payment stations so that customers can join a car wash club at one location and go to any other location. It just knows who they are by their license plate,” Jordan said.
Refuel plans to continue to innovate on the technology front where and when it makes sense for the chain. “Contactless payments may make more sense in the not-so-distant future, and we’re spending a lot of time and energy on tech,” Jordan said.
Despite the COVID-19 pandemic, Refuel is proceeding with plans for expansion. Navigating the red tape of acquiring permits in a municipality that is locked down due to the pandemic is just another challenge to overcome.
“It’s not impossible, but it has slowed some things down,” Jordan said. “We’ve closed on a lot of the sites that we had already planned to close on. Still, it’s business as usual for new growth opportunities. It’s something we did our homework on upfront, and we still stand by it. I think that you’ll see us roll out the same amount of stores we already planned to. It just may go a little bit slower.”