Circle of Partnership

DAVID DELRAHIM HAS ROOTS
all over the globe, coming to
America before college and settling
in Philadelphia. He then
moved out West to finish his education
at the University of Southern California.
Always fascinated with old service stations,
he bought his fi rst site in 1983 and
continued to operate multiple stores over
the years. Then, in 1996, Delrahim, president
of Golden State Petroleum, took a
chance and branched out to start his own
development company.

In 2002, Delrahim was in the process
of developing a site in Chino Hills,
Calif. when development executives
approached him to consider branding the
store Circle K. Since then, Delrahim has
continued with the Circle K banner, currently
operating four stores that span the
southwestern tip of California.

Circle K began its franchise program
in 1999 and has grown to more than 6,000
operators in the U.S. and 10 other countries.
When Couche-Tard, Convenience
Store Decisions’ 2007 Chain of the Year,
acquired the chain in 2003, the same partnership
was kept between franchisees and
the parent company.

"The strong retailing and business policies
of Couche-Tard trickle down to our
relationship with Circle K," said Delrahim.
"I’m able to speak from fi rst-hand experience
that their franchise program works.
I really don’t see myself growing in the
absence of Circle K."

FINDING THE RIGHT BALANCE
Delrahim opened three stores over the
past four years, with the fourth Circle K
currently in the construction phases in
Redlands, Calif. He is aiming to have the
new store opened by March as long as all
the profi t centers can be ready in time.

To offset the cost of construction and
land development in Southern California,
Delrahim is relying on a full-service car
wash, gas station and express lube to
bring in additional revenue.

"The nice thing about having multiple
profi t centers is that it brings in extra business
and volume," said Delrahim. "It also
drives people to the c-store and makes
us an attractive destination for different
customers."

Whether he is converting an existing
site or constructing a new one, Delrahim
now turns to the Circle K concept to create
the perfect blend of local culture and
c-store staples.

"The franchise program has been a perfect
fi t for what we’ve done in the past and
what we will continue doing in the future,"
said Delrahim. "Our projections turn into
reality in such a short time and I credit
that to the wonderful people at Circle K."

Delrahim gets to focus on running the
development side of his business, while
merchandising specialists at Circle K
tend to the products. They use their merchandising
skills to recommend brand
extensions, reorganize displays and build
new categories to optimize the store’s selling
potential.

"It’s great to have Circle K’s merchandising
support. I need a partner I can rely
on to make the right product decisions if
I’m focusing on other aspects of the job,"
said Delrahim. "I’m partnering with people
that give me the vital tools needed to
grow my business."

In today’s market, some operators
need more than an acre of land to successfully
run a multi-profi t center c-store site.
However, with the increasing cost of land
and construction, it’s understandable that converting an existing
facility seems like the more favorable option. Delrahim works with
Circle K to explore the dynamics of each location and balance all the
factors before deciding to remodel an existing location or build from
the ground up.

"If we can fi nd a synergy between the amount of land needed
and the ability to sustain several profi t centers, we prefer to use an
old facility and extend the capital to update the site," said Delrahim.
"The only draw back is that, historically, old service stations were
built on small properties."

Delrahim’s current project, the Redlands Circle K store, broke
ground in October on a brand new site. He leased a spacious property
on a major intersection adjacent to a busy retail center.
"Normally, I prefer to own my land, but we bent the rules for this
site because it’s in such a powerful location in terms of high growth
and high traffi c," said Delrahim."

When Delrahim decides its time to open a new Circle K store, he
goes to the head of the franchise group to review the new development
plan. He has found that the Circle K franchise team works
diligently to get the ball rolling, sometimes
in a matter of weeks. The quick turnaround
allows Delrahim to begin the project
in a timely manner and not fall behind
schedule.

In terms of financing, after Delrahim
made the switch over to the Circle K banner,
he has consistently exceeded his business
projections by 20 – 25%.

"Creating a new site is faster with Circle
K than other chains," said Delrahim. "The
concept is already established and it works.
The model has allowed me to beat my performance
projections."

EMBRACING THE LOCALS
As Delrahim moves forward with the
Circle K brand, he continues to embrace the
local communities where he sets up shop.
Before designing a new store, he will talk
to residents to get a feel for the neighborhood
and indigenous culture. The standard
Circle K model is loosely followed to maintain
uniformity between the locations,
while allowing for custom-designed interiors
to shine through.

"Our customers want stores to fi t their
communities," said Delrahim. "We start
with the tried-and-true Circle K concept
and build a high-end design based on the
local culture and history."

Delrahim tries to balance the exterior
store amenities by keeping consistent food
offerings for his customers. He has stayed
away from branded foodservice programs
because he believes the southern California
market is already oversaturated. Instead,
his Circle K stores borrow inspiration from
the neighborhood food trends, offering customers
fresh food from local growers.

The Santa Paula, Calif. area is widely
known for its abundance of citrus and avocado
growth. Delrahim has incorporated
that cultural aspect into this location, displaying
fresh farm-produced fruit, drawing
inspiration from the city’s farming history.

"We are still a c-store, but we try to have
some touches of a fresh food store," said
Delrahim. "It’s all about creating a familiar
perception for people."

Employees are plucked from the local
community to further establish a sense of
camaraderie between the staff and customers.
For example, shoppers in the Santa
Paula store will notice a gallery of historical
photos documenting the city’s rich history
and culture. These personal touches add to
the interior of the store and cultivate loyalty
from customers.

"We pick up characteristics of each city
and incorporate it in the store design,"
said Delrahim. "Whether it’s some ethnic
uniqueness of the community or it’s a historic
pictorial, it makes our customers and
employees feel that the store belongs to
them."

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