Dealers Making a Difference

Pride, hard work and HOPE. These are the three principles that drive Levent Sertbas every day.

As president of Sertbas Inc. in Paramus, N.J., Sertbas has had to deal with a number of concerns while operating his two New Jersey On the Run convenience stores, but the two most pressing issues he’s been dealing with lately had little to do with serving the customers. Instead, as a member of the New Jersey Gasoline Convenience Store and Automotive Association (NJGCA) and the United Dealers of New Jersey (UDNJ), he has been pushing for legislation that would allow him to control his destiny as an Exxon dealer following the Big Oil company’s decision to exit direct store operations. “Combined with credit card fees, it’s been an interesting year,” Sertbas said in his typical understated tone.

As a founder of UDNJ, Sertbas was instrumental in rallying Exxon dealers in New Jersey to seek a legal remedy to the potential ownership issues surrounding thousands of ExxonMobil dealers across the U.S. The oil company last year expressed a desire to sell off its store operations to large regional jobbers and focus mainly on the refining business, which offers better fuel margins without the hassle of being a landlord and the day-to-day minutiae that goes into running convenience stores.

Sertbas and the UDNJ scored a major victory last month when New Jersey Governor Jon Corzine signed into law the state’s First Right of Refusal Act, which prevents the sale of gas stations to mega distributors without first offering the operating franchisees the opportunity to purchase the property. Similar legislation is now pending in Maryland and New York and several other state associations have reached out to UDNJ to plant the seeds for comparable laws.

UDNJ successfully argued to state lawmakers that Exxon’s plan to bundle multiple gas station properties together and sell them in a single package would deny current lessees the chance to own the site their businesses were built on.

The group also alleged that, a few years ago, Exxon dealers in South Jersey faced the same situation when a mega-distributor purchased a package of 60 locations from Exxon, only to see their rents dramatically increased and the properties sold at uncompetitive prices, making it nearly impossible for them to remain profitable and forcing several of them to turn in their keys. NJGCA intervened and asked the government to take action so the same situation did not occur.

The First Right of Refusal Act gives franchisees the right to purchase their own stations in any assignment, transfer or sale of a franchised location. Franchisees will not have any special rights under a sale, any special discount for equity invested in the premise or any other tool, which can be used to make franchisees the preferred purchaser. The legislation only states that the premise at an amount equal to or greater than any other offer must be offered to the owner of the franchise premise first.

The bill overwhelmingly passed both houses of the Legislature on May 21.

“It took a lot of hard work by the dealers and NJGCA, but this is the best possible outcome for all of us,” said Sertbas, who is putting together a plan to acquire one or both of his units, which average about 3.5 million gallons sold annually. “As a dealer of a great brand like Exxon, all we want to do is provide customers with great service and the products they need every day. We have so much invested in these sites that it became increasingly frustrating when our efforts were taken away from the customers.”

He added, “the end is in sight and we’re all hopeful that we’ll be operating these stores under the Exxon banner for years to come.”

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