The Lessee Dealer Who Are They? A lessee dealer does not actually own the real estate or the equipment. They lease or rent the space and absorb the costs of operating the station. Usually – but not always – the lessee dealer gets into the brand relationship via a branded distributor, what is known in the business as a branded jobber. Essentially, the lessee dealer leases the real estate and, through the jobber, pays a fee back to use the brand name. They are usually locked into long-term contracts with the branded jobber and, by default, with the major oil company. How Do They Buy Their Fuel? The lessee dealer typically buys fuel directly from the major via the branded jobber. The price they pay is still the same basic formula: rack price + transportation to deliver into the station. Here’s a big advantage for these guys – the lessee dealers often receive benefits from their major in the form of rebates and incentives – especially in markets that feature tight margins and stiff competition. These benefits often come in the form of “temporary voluntary allowances” or TVAs, which incentivize the dealer to push the fuel in times of oversupply. Fuel Buying 101, Part 3: Retail Markets | Oil Price Information Service (OPIS) © 2020, all rights reserved 22