Driving Growth and Innovation: The Success Story of Gilligan Oil Co.
Gilligan Oil Co. has a total of 46 quick-serve restaurants (QSRs), of which 14 are free-standing and the rest are in the company’s convenience stores at its gasoline stations. “We put a QSR in all our convenience stores, but we also have franchisor requirements to build QSRs that are free-standers,” Gilligan says. “We’re fine doing either – they work as free-standers and as convenience stores.”
Gilligan Oil Co.’s locations are mainly in the Columbus, Cincinnati and Dayton, Ohio, markets. “Every year we build more locations,” Gilligan says. “We have a development agreement with Dunkin’. We build between three and five Dunkin’s each year.” Car washes are located at 14 of the company’s gas stations in Cincinnati. The company also provides 45 dealers with approximately 40 million gallons of diesel and gasoline fuel wholesale under the Exxon, Shell and Sunoco brands.
Rebuilding C-Stores
Approximately 10 percent of Gilligan Oil Co.’s revenue is from its QSRs. “We have been expanding since 2010 in food more than fuel,” Gilligan says. “We’ve been developing QSRs in gas stations along with our convenience store brand, Goco. We didn’t build any new convenience stores, but we are renovating and tearing down a 1,000-square-foot building and turning it into a 4,500-square-foot convenience store.”
When they are modernized, Goco convenience stores are totally rebuilt. “In the last year, we have taken two older sites, leveled them, rebuilt them from scratch, installed all-new tanks, pumps and the convenience store and added on a QSR,” Zimmerman says. “We found that our convenience store sales go up and our fuel sales go up. We only sell one thing, and that’s convenience. When we put in new pumps and a new facility, we attract more people – they can get in quicker and easier. Over the last four years, we’ve invested $7 million in our c-stores and $12 million to $13 million in our QSR business.” The company’s average size for a QSR is 2,000 square feet and 4,500 for a convenience store.
Commercial Sales
Gilligan Oil Co. began supplying dealers with diesel fuel and gasoline in 2003 when Senior Vice President Matt “Howie” Howland joined the company. “I’ve known him since high school,” Gilligan says. “We were a wholesaler for Exxon and Sunoco, and when we had the opportunity to sell to dealers, we leveraged that opportunity. Once Howie grew the business, he started a transportation company. We have our own fleet and diversified into the transportation sector. We haul our own fuel now. We have a pretty extensive wholesale company, and as a common carrier, we haul over 100 million gallons of product that we do not supply.”
The company has 14 tractors and an equal number of tankers operated by 26 drivers. Gilligan Oil obtains its fuel products from two terminals, one in Dayton and one in Columbus. “We are expanding the oil business through our dealers and through reinvesting in our facilities,” Howland says. “That is growing our local business.”
An advantage when recruiting drivers is that the company’s longest run is within 100 miles so they are home every night. “We look for experienced drivers and top petroleum haulers in the area,” Howland says. “Then for those with commercial drivers licenses but without petroleum experience, we have a training program and train them how to safely haul petroleum.”
Business Challenges
Competition and wages for retail workers are two of the challenges facing Gilligan Oil Co. “There’s a lot of competition, so certain franchises are doing better than others,” Gilligan says. “We’ve got our costs escalating from health insurance and employee benefits. We’ve also got a real wage strain in trying to get people to work for $8.50 to $8.75 an hour, which is the general starting wage in Cincinnati. There’s a lot of wage pressure on that hourly rate so we’re looking at ways to be able to drive more sales per unit and get more sales per employee hour, so we can end up with a higher hourly wage rate.”
The company has been marketing its c-stores aggressively. “We’ve implemented a category management approach to our convenience store marketing, and we’ve seen growth in margin and dollar sales increases in our c-stores by doing that,” Howland says.
Retail employees for the c-stores are recruited using a sourcing platform called PeopleMatter that includes an online application and aptitude test. “We look for leadership skills in our folks out there,” Gilligan says of management positions. “We have a real good culture of entrepreneurial opportunity in the company, and we’re a little decentralized. We need people to be able to make good decisions and operate within corporate standards, but also use their individual skills to be able to perform on the job.”
Gilligan Oil Co. has several competitive advantages. “We own and operate convenience stores,” Howland says. “We are in the same marketplaces, so we understand the challenges and opportunities that face our dealers. By having our own fleet, we are able to get a competitive advantage for our dealers’ stores as well as our co-operated stores when it comes to types of allocation on a product or price advantage.”
Gilligan attributes his company’s success to the people working with him. “We’ve got about 900 employees, and a number of our middle and upper managers have been around for all 22 years of the company or at least 12 years or more,” he says. “We’ve been able to grow really good operations people working in the company and all the people under them. We’ve also had really good brand partners. Our relationships with three fuel suppliers and three QSR brands have been instrumental in our growth.”