Many convenience store owners will eventually want to sell their locations and assets.

But what’s the best way to proceed?

It’s a task at which many owners have no experience. After all, they’ve been in the business of owning, not selling.

For Arens Oil, Inc. a 21-store chain based in Montgomery City, Missouri, the answer was a public auction. The company’s leadership wanted to sell its stores that it had owned and operated since the late 1970s.

An auction? Isn’t that for a company that’s in trouble?

Not necessarily. Jeff Arens, president for Arens Oil, Inc. explains, “We attempted over a period of three months to package our stores and sell them on our own and were not very successful. We would generate interest in certain locations, but not others. We couldn’t put together a package that would meet our needs.”

During this timeframe, the company was approached by only 15 potential buyers, none of which submitted acceptable offers. That’s when Arens began exploring other alternatives. Through contacts in the industry, he had heard about Tranzon Fox, a nationwide auction company specializing in the auction of businesses. After hearing a presentation from the company and conducting research into it, Arens hired Tranzon Fox to conduct a live auction supplemented by a sealed-bid auction prior to the event.

In six weeks, the auction generated 307 inquiries, representing 29 states and one foreign country. “This process brought more buyers to the table and higher sale prices,” Arens reports. However, he acknowledges that he did have to deal with certain perception issues. “One of the problems is the word ‘auction’ has a stigma attached to it,” he observes. “As soon as people heard we were auctioning the stores, we had a strong reaction from employees and vendors. After we explained it, including the fact that we retained the right to decline bids, they were more comfortable.”

The company worked to minimize the impact on employees and the community, and pointed out that the new owners would need experienced employees in each location-just as Arens did – which provided a measure of confidence for nervous employees. In fact, a number of employees were hired during the auction process.

A 90-minute live auction in the ballroom of a St. Louis hotel capped the six-week auction process that included intensive marketing conducted through print media advertising, direct mail, the Web, and an e-mail promotional campaign.

The focal point for prospective buyers during the process was Tranzon’s Web site, www.tranzon.com, which provided online access to more than 2,500 pages of due diligence information on the properties. Several locations were sold before the live auction through a sealed-bid process, and other contracts were signed immediately after the live auction. Most of the sales closed in the weeks following the auction.

For two stores that didn’t sell at the live auction, Tranzon continued to search for buyers, and subsequently sold one of these stores “for double what we would have received” earlier, according to Arens.

(December 2002)