Completing the Circle

Couche-Tard rebranding its new Phoenix-area On the Run stores to Circle K

PHOENIX -- The 43 Exxon Mobil Corp. company-owned and -operated On the Run gas stations in the Phoenix area closed on Friday for rebranding as Circle K stations by new owner Alimentation Couche-Tard Inc., which owns the Circle K brand in the United States, reported The Arizona Republic. Scott Stevenson, Circle K real estate and development director for the region, told the newspaper that "most will be converted in 24 hours."A few will take longer to reopen to replace equipment, he said. Once reopened, the stores will sell Circle K-branded fuel.

There are now 521 [image-nocss] Circle K stations in Arizona, more than any other company, according to the report, citing records from the state Department of Weights & Measures.

In late April, Couche-Tard announced the deal to acquire the On the Run convenience store franchise system from Irving, Texas-based ExxonMobil, as well as the 43 company stores in the Phoenix market. As reported in a CSP Daily News Flash, Couche-Tard will take control of the franchise agreements for approximately 450 On the Run stores currently operated by ExxonMobil-branded fuel dealers and distributors, acquire the land and buildings for 33 of the Arizona locations, and assume or enter leases for the remaining 10 sites.

(Click here for previous coverage of the announcement. Andclick here for further analysis of the deal.)

Couche-Tard has said it does not intend to force On the Run franchisees to rebrand their sites to Circle K, at least not yet. "We don't have any plans on a short-term basis to force people to move from On the Run to [Couche-Tard brand] Circle K," Couche-Tard's vice president and CFO Raymond Pare told CSP Daily News in mid-May.

Could that change in the near future? Maybe, Pare said. "That's a question we're working on. We've already started discussion. The first step is to work with the franchisees in order to determine what will be the next step. This is not a decision that will be made in [the Couche-Tard] office [alone]; it is a decision that we will make together. And it will be what makes sense and what will create more value for the franchisees and us overall."

That does not prevent a franchisee who is interested in rebranding from making the move, however. "If a franchisee at a certain point believes that Circle K would be better for them, it will be his choice, and we will work with them," Pare said. "For sure we don't have any plans on a short-term basis to force people to move from On the Run to Circle K. It's a business relationship we need to establish with these people.... We're not coming in and forcing anybody [to rebrand]."

(Click here to read more.)

Laval, Quebec-based Couche-Tard currently has a network of 5,444 convenience stores, 3,607 of which include motor fuel dispensing, located in 11 large geographic markets, including eight in the United States covering 33 states and three in Canada covering 10 provinces.