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US Fuel Secures Franchise, Bank Card Agreements.

US Fuel International Inc. of Austin, Ark, cemented a deal with Concord EFS National Bank of Memphis to handle credit card, processing for all US Fuel distributors and shored up a licensing agreement with T&P Distributing Co. of Rector.

Since its start in 1990 as a fleet fuel and credit card business, US Fuel has developed a base of 160 service stations that accept the US fuel card and established fleet fuel agreements with commercial entities. There are currently 120 stations in Arkansas that accept the US Fuel card and 40 outside the state.

"One of our overall plans was for US Fuel to grow through a franchising method outside of Arkansas," US Fuel president Toby Troutman said. "We are a franchiser and solicit for franchisees to develop regional fleet fueling businesses." Troutman also runs Troutman Oil Co. of Austin, a petroleum distributor.

But US Fuel expanded enough to realize that it could be more than "just a credit card, " Troutman said. "We actually went back and started branding some of our Troutman Oil Distributor locations -- we started developing US Fuel into a brand. We had other distributors express interest in the US Fuel brand and realized that US Fuel needs to develop into a supplier like Citgo or Exxon."

US Fuel set up refinery agreements with 22 petroleum terminals in eight states and entered the supplier side of the industry. "US Fuel is actually buying product from refineries and sending it through pipelines to terminals," Troutman said. "Then we make deals with petroleum distributors in the 10-state region and they brand their locations with the US Fuel name."

Troutman noted the US Fuel card is not brand conscious and is accepted at other service stations.

And brand consciousness, or lack of it, is a boon to distributors who have, to pay brand prices at terminals for petroleum products.

"We don't charge the brand rack price to distributors at the terminal and that is giving distributors incentive to switch over to us," Troutman said.

Further incentive to distributors is the lower bank card processing rates US Fuel negotiated with Concord EFS on behalf of its distributors.

"We used to use Heartland Bank out of St. Louis [for credit card processing] and some of our distributors were with EFS," Troutman said. "We came to this agreement for [Concord EFS] to handle all of our bank card processing for our distributors. It is better all around for our distributors because with our growth over the last two or three years we were able to negotiate a better rate for all of our distributors."

The Partnership with Concord EFS will further separate US Fuel from its competition by providing the best branding programs and credit card programs in the industry, Troutman said. "US Fuel's goal is to fill a void created in the industry by all the recent mergers and acquisitions of suppliers and the apathy of suppliers towards independent petroleum distributors."
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Author:O'Reilly, Brendan
Publication:Arkansas Business
Date:Jul 17, 2000
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