About a week after acquiring nearly 400 SQRL Service Stations in April, Jamal Hizam, CEO of Gas Hub LLC, held a meeting in Chicago with several of his new landlords to discuss what the future of their convenience stores would look like. Over the past several months, most of these locations shut down for largely unknown reasons.
“We asked [the landlords] for a few weeks to assess the status of stores and the path forward, which they agreed to,” Hizam said in a statement to C-Store Dive. “We provided the info to them about closed stores, red-tagged fuel tanks and permitting and labor issues.”
According to two landlords who were at the April meeting, Hizam’s plan was murky. One of those landlords recalled that he assumed Hizam would say that he was working with fuel suppliers to get dealers into their locations to help them start operating once more.
But that wasn’t the case. Instead, Hizam told his landlords that he planned to revitalize all of SQRL’s convenience stores on his own in about a month’s time, according to one of the landlords, who owned about 10 SQRL c-stores across multiple states but has since terminated the leases.
“[Hizam] said, ‘No, I’m going to operate all 400 stores myself — it’s going to be me and my family, and we’re going to come in and operate them and to get it all done in 30 days,” the landlord said.
The CEO didn’t offer any details of his financial situation or how he would open so many stores in such a short amount of time, the landlord said. Hizam did not respond by press time when asked to corroborate these details from the meeting.
“If Chevron came in here and told us they could run and stand up 400 stores in two weeks or a month or six months, we would be somewhat skeptical and nervous,” the landlord said.
SQRL Holdings made waves in the c-store industry when it acquired 210 locations last October from Blue Owl Capital that were leased to bankrupt retailer Mountain Express Oil. SQRL’s founder, Blake Smith, publicly touted plans for the company to reach 500 locations by the end of 2024.
But over the past several months, SQRL Holdings has faced numerous legal disputes with its vendors, laid off hundreds of full- and part-time employees and was investigated by the Department of Labor for wage-related issues.
Things seemed to be looking up when Smith sold SQRL Service Stations to Hizam to “resolve liquidity issues,” the company said at the time.
But in mid May, Hizam filed for a petition for involuntary bankruptcy, seeking to force SQRL Holdings into Chapter 7 due to “breach of membership unit purchase agreement” over millions of dollars in late rent payments.
C-Store Dive spoke with six landlords for this story — each of whom owned between one and 20 locations — about their experiences over the past few months. Their names have been kept anonymous to avoid retaliation.
The landlords for the convenience stores in question say they remain in the dark about what’s happening with the company and their locations, which they’ve invested millions into.
As the saga with SQRL continues to unfold, many of these landlords don’t know what to do next. Some even blame themselves.
“I take full responsibility for this — I’ve been running businesses for a long time, and I took my eye off the ball,” a single-store landlord in Arkansas said.
Early signs of trouble
SQRL’s landlords were experiencing headaches with company leadership long before the retailer sold its locations to Gas Hub.
One common problem was that SQRL’s stores rarely had fuel. Multiple landlords said that early on, Smith was adamant that these sites would soon offer gas, but some never did.
“They told me that my gas station was fully remodeled, that my pump was up and running and good,” a single-store owner in Arkansas said. “I found out I don’t even have gas pumps that work, [that] they were red-tagged from the beginning.”
A 20-location landlord who was in the meeting with Hizam also said that Smith told him his stores would eventually have gasoline, which didn’t happen.
“He’d say one thing, and then it just wouldn't happen,” the landlord said. “And then we’d follow up and be like, ‘What the hell is going on here?’”
A single-store landlord in Florida referred to SQRL’s lack of response to any issues she was experiencing as “the SQRL way.” She noted that whenever she had problems, it was “impossible” to get SQRL team members to her store to deal with them.
“And then the people in the company were disappearing — they were dropping like flies,” she said. “You would talk to somebody and two weeks later, they’re not with the company anymore.”
Several landlords noted issues with rent payments from SQRL. A single-store owner in Arkansas said that since acquiring her store in March 2023, SQRL was frequently late on monthly rent payments.
“They always had an excuse why rent was late — they switched operators. They switched accounts,” the landlord said.
The single-store landlord in Florida said that SQRL initially paid its rent on time after she bought the store, but then the company started missing payments after about six months. By that time, she said she “had to start chasing them for the rent all the time.”
“At one point they were switching banks, and that was the reason [given for the late payment]," she said.
Every landlord interviewed for this story said they haven’t received rent payments since March.
“To my knowledge, nobody’s received rent for April, which is a default under just about everybody's lease,” the landlord of 10 since-terminated SQRL locations said.
SQRL Holdings’ CEO Blake Smith did not respond by press time when asked to comment on allegations of late rent payments or false promises to the company’s landlords.
Gas Hub and store closures
Every landlord interviewed for this story said since the Gas Hub acquisition, they’ve either terminated most of their leases with SQRL Service Stations or are looking to do so.
Not only do the late rent payments count as breach of contract in many landlords cases, but so do several other factors
“They breached the contract by not holding insurance. They did not pay property taxes. They did not maintain the gas station,” a single-store landlord in Arkansas said.
As of early May, this same landlord said she’s hoping she can terminate her lease soon.
“I think after we listened to Jamal and Gas Hub’s lack of a coherent plan, most of the landlords started terminating leases,” the former landlord for 10 locations said.
Blue Owl — one of SQRL’s largest landlords — terminated its leases with the convenience retailer in April after SQRL missed that month’s rent payments, in violation of its lease agreements.
Blue Owl also alleged that SQRL breached its lease agreements by misusing $20 million provided to make capital improvements to the properties.
“We sent [Blue Owl] a letter from our attorneys and told them we are not going to surrender.”
Jamal Hizam
CEO of SQRL Service Stations and Gas Hub LLC
While Hizam did not respond to C-Store Dive when asked about numerous landlords terminating their leases amid the company’s uncertainty, he shared that when it comes to the Blue Owl stores, he’s refusing to vacate those properties without an official court order.
Hizam also said that since he wasn’t officially the owner of SQRL’s c-stores until April 5, those rent payments were not his responsibility, but should have been covered by the former owners.
“We sent [Blue Owl] a letter from our attorneys and told them we are not going to surrender,” Hizam said during a phone interview. “We are not willing to back off on our lease. We will fight… we will stay… and they never replied.”
Blue Owl did not respond to several requests to comment.
Left in the dark
For now, it appears the only thing landlords can do is try to terminate their leases if they haven’t already done so. Once that’s finished, they have to figure out what to do with their stores — which continue to cause emotional turmoil for some.
A single-store landlord in Wisconsin said she didn’t pay enough attention to what she was getting into when she acquired her location. Specifically, she said she never even saw the store before buying it and wasn’t involved at all in the day-to-day operations once it was up and running.
Since the store’s manager contacted her in early April saying that the store had closed suddenly and its inventory was stripped overnight, the landlord has been trying to figure out the next steps.
“I should have known better,” she said. “I should have gone and inspected the space.”
A single-store landlord in Arkansas said that when she acquired her location for more than $1 million, she thought she was investing in another source of steady income that would allow her to retire within the next decade.
Like other landlords interviewed for this story, she has sent several questions to SQRL over the past month. Company representatives relay her to Hizam, who she said hasn’t responded to her.
“They won’t return my emails. They won't talk to me. They won't call me,” she said.
At press time, it was still unclear how many SQRL c-stores are open. On May 16, Hizam said in a text message to C-Store Dive that there are 76 SQRL locations up and running.
The landlord who formerly owned 20 SQRL locations said he wants to find an operator who can properly run his convenience stores. As of mid May, this landlord said he recently sold half of his stores and has 10 left.
But finding a new operator for these locations hasn’t been easy, he noted, as he’s struggled to bring gasoline to his fuel pumps in light of everything that’s happened with the SQRL stores.
“I called the gas guy in Arkansas to see if he could fill them up, and he said, ‘I don’t want to touch this. Call me when it’s over.’”
