TravelCenters of America Inc. operates or franchises travel centers, standalone truck service facilities, and standalone restaurants.
The company’s customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists and casual diners. The company also collects rents, royalties and other fees from its tenants and franchisees.
The company’s business includes travel centers in 44 states in the United States, primarily along the U.S. interstate highway syste...
TravelCenters of America Inc. operates or franchises travel centers, standalone truck service facilities, and standalone restaurants.
The company’s customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists and casual diners. The company also collects rents, royalties and other fees from its tenants and franchisees.
The company’s business includes travel centers in 44 states in the United States, primarily along the U.S. interstate highway system, operated primarily under the ‘TravelCenters of America,’ ‘TA,’ ‘TA Express,’ ‘Petro Stopping Centers’ and ‘Petro’ brand names. The company’s travel centers offer a broad range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services, such as a wide range of truck repair and maintenance services, diesel exhaust fluid, or DEF, full service restaurants, or FSRs, quick service restaurants, or QSRs, and various customer amenities.
The company’s business includes standalone truck service facilities operated under the ‘TA Truck Service’ brand name. The company’s standalone truck service facilities offer extensive maintenance and emergency repair and roadside services to large trucks. On April 21, 2021, the company completed the sale of its Quaker Steak & Lube, or QSL, business.
Travel Centers
The company’s typical TA or Petro branded travel center includes over 24 acres of land with parking for approximately 200 tractor trailers and 100 cars; a FSR and one or more QSRs that the company operate as a franchisee under various brands; a truck repair facility and parts shop; multiple diesel and gasoline fueling points, including DEF dispensers at the diesel lanes; and a travel store, game room, lounge and other amenities for professional truck drivers and motorists.
The company’s typical TA Express branded travel center includes approximately 10 acres of land with parking for approximately 70 tractor trailers and 50 cars; one or more QSRs that the company operate as a franchisee under various brands; multiple diesel, gasoline and DEF fueling points; and a travel store and other amenities for professional truck drivers and motorists.
Substantially all of the company’s travel centers are full service sites located on or near an interstate highway exit and offer fuel and nonfuel products and services 24 hours per day, 365 days per year.
The company’s travel center locations offer a broad range of products and services designed to appeal to the company’s customers, including:
Fuel
The company sells unbranded diesel fuel at separate truck fueling lanes and the company sells gasoline and diesel fuel at motorist fuel islands. The company offers branded and unbranded gasoline at its locations and unbranded gasoline at the company’s travel centers operated by its franchisees and its travel centers operated by the company.
Diesel Exhaust Fluid
DEF is an additive that is required by most truck engines manufactured after 2010. As of December 31, 2022, the company offered DEF from dispensers on the diesel fueling island at the company’s travel centers and plans to have DEF dispensers available in all lanes at the company’s travel centers.
FSRs and QSRs
Most of the company’s TA and Petro branded travel centers have both FSRs and QSRs, and the company’s TA Express branded travel centers have one or more QSRs that offer customers a wide variety of nationally recognized branded food choices. The substantial majority of the company’s FSRs within its travel centers are operated under the company’s Iron Skillet and Country Pride brands and offer menu table service. The company recently added the Fork and Compass FSR to its brand portfolio, a new dining experience, at a Petro branded travel center. At certain travel centers, the company has converted the FSR to a franchised brand, such as IHOP, Black Bear Diner, Fuddruckers and Bob Evans. The company is continuing to evaluate other opportunities to drive value within the company’s FSRs, including the conversion of select FSRs to a fast casual concept, which includes The Kitchen, a new proprietary fast food offering located at select TA and Petro locations. The company also operates approximately 62 different brands of QSRs, including Popeye’s Chicken & Biscuits, Subway, Burger King, Taco Bell, Pizza Hut, Dunkin’ and Starbuck’s Coffee.
Truck Service
Most of the company’s travel centers have truck repair and maintenance facilities. The company’s truck repair and maintenance facilities typically have between three and six service bays and are staffed by trained service technicians employed by the company or its franchisees. These shops generally operate 24 hours per day, 365 days per year and offer extensive maintenance and emergency repair and road services, ranging from basic services, such as oil changes, wheel alignments and tire repair or replacement to specialty services, such as diagnostics and repair of air conditioning, brakes and electrical systems. The company’s repair and maintenance services are generally covered by its nationwide warranty. In addition to work the company performs at its facilities, the company provides roadside emergency truck and trailer repair, facilitated by the company’s internal call center and off site Mobile Maintenance repair and maintenance services.
Travel Stores
Travel stores located in the company’s travel centers have a broad merchandise selection of more than 25,000 items. The General Merchandise selection is designated to support the professional driver’s lifestyle while on the road. It includes the latest electronics, oil and additives, hardware and tools, clothing, and cab and bunk supplies. The Convenience offering includes cold beverages, candy, salty snacks, sweet treats, and traditional grocery items, such as meal solutions, pet supplies, and health and beauty products. Each store has fresh food, pre-packaged meal solutions, snacks to grab, freshly brewed coffee, and cold fountain drinks. Each store has unique gifts for guests to buy for family or friends, whether it’s a holiday or moment to celebrate. Guests can also purchase regional souvenirs to remember their trip by.
Parking
The company has tractor trailer parking spaces and car parking spaces. Many of the company’s travel centers offer the Reserve-It! parking program, which allows drivers to reserve for a fee a parking space in advance of arriving at a travel center. As of December 31, 2022, the company offered the Reserve-It! parking program at the company’s travel centers.
Additional Driver Services
The company offers commercial trucker and other customer loyalty programs, the principal program being the UltraOne Program, that are similar to frequent shopper programs offered by other retailers. Under the company’s loyalty programs, drivers receive points for diesel fuel purchases and for selected nonfuel products and services. These points may be redeemed for discounts on nonfuel products and services at the company’s travel centers. Some of the company’s travel centers offer casino gaming. The company strives to provide a consistently high level of service and amenities to professional truck drivers at all of the company’s travel centers, which make its travel centers an attractive choice for trucking fleets. Most of the company’s travel centers provide truck drivers amenities including specialized business services, including an information center where drivers can send and receive faxes, overnight mail and other communications; a banking desk where drivers can cash checks and receive funds transfers from fleet operators; wi-fi internet access; a laundry area with washers and dryers; private showers; free exercise facilities; areas designated for truck drivers only, including a theater or big screen television room with a video player and comfortable seating; and ample parking including Reserve-It! parking.
Operations
Fuel
The company sells fuel to its customers at prices that the company establishes daily or are indexed to market prices and reset daily. The company has numerous sources for its diesel fuel and gasoline supply, including nearly all of the large oil companies operating in the United States. The company purchases diesel fuel from various suppliers at rates that fluctuate with market prices and generally are reset daily. The company has single sources of supply for gasoline at each of its locations. The company offers biodiesel at a number of its travel centers and has a limited number of suppliers for this product at those sites.
A large majority of truck drivers use a payment method known as truck ‘fuel cards’ that allow truck drivers to purchase fuel and other products and services, and permits trucking companies to track fuel and other purchases made by their drivers throughout the United States. Most of the company’s trucking customers transact business with the company by use of these fuel cards, most of which are issued by third party fuel card companies. The fuel card industry has only two significant participants, FleetCor Technologies, Inc., the parent of Comdata Inc., or Comdata, and its subsidiaries, or FleetCor, and WEX Inc., and its subsidiaries, or WEX. During 2022, the company entered into an agreement with WEX and launched a new private label fuel card as an one card solution for diesel, DEF, gasoline, repairs, scales and other services. The card program is underwritten and managed by WEX and offers loyalty perks to cardholders for transactions at TA sites.
The company’s fuel purchases are delivered directly from suppliers’ terminals to the company’s locations and the company does not contract to purchase substantial quantities of fuel to hold as inventory, however, the company may do so in the future. The company generally has only a few days of diesel fuel and gasoline inventory at the company’s travel centers.
Non-Fossil Fuel and Alternative Energy
In the anticipation of the possible changes that may eventually affect the company’s industry regarding fuel and energy use, the company is evaluating its long term strategies to position itself to efficiently and successfully adapt to these changes. These industry changes may include increasing adoption of the use of non-fossil fuel and alternative energy. Among these changes may be the use of electric vehicle, or EV, technologies, which have been led initially by the automotive and light duty truck industries and more recently followed by leaders in commercial trucking, as well as hydrogen fuel, natural gas and other possible sources. The company is actively participating with states in their EV infrastructure rollout to support the expected increase in electric vehicles on the road. In the medium and heavy duty truck space, the company is preparing to offer hydrogen fuel and high speed EV charging at one of the company’s sites. The company recently announced a non-exclusive agreement with Eletrify America, provider of the largest open direct current fast-charging network in the United States, to expand electric vehicle fast-charging infrastructure at the company’s sites nationwide. The company continues to actively explore other opportunities regarding alternative fuels and energy.
Nonfuel Products
The company has many sources for the large variety of nonfuel products that the company sells. The company has developed supply relationships with several suppliers of certain nonfuel products and maintains two distribution centers to distribute certain nonfuel products to the company’s locations using a combination of contract carriers. These distribution centers allow the company to purchase, maintain and transport inventory and supplies at lower costs.
TA Truck Service
In addition to the truck repair and maintenance services provided at the company’s travel centers, the company provides customers a wide variety of ‘off site’ repair and maintenance services, as described below.
TA Truck Service Emergency Roadside Assistance is a roadside truck service program that operates 24 hours per day, seven days per week. As of December 31, 2022, this program included a fleet of heavy duty professionally maintained emergency vehicles equipped with GPS technology at the company’s travel centers and other sites and third party roadside service providers in 49 U.S. states and 10 Canadian provinces. The company centrally dispatches its service trucks and third party service providers from the company’s call center to assist customers with comprehensive repair services when they are unable to bring their trucks to the company’s travel centers due to a break down.
TA Truck Service Mobile Maintenance offers truck and trailer mobile maintenance and repair services performed by certified technicians at customer facilities, with a fleet of trucks in service. TA Truck Service Mobile Maintenance is designed to be a ‘bay on wheels’ fully stocked with standard and specialty parts and state of the art technology that offers various services, such as pre-trip truck inspections, the U.S. Department of Transportation required inspections, tire repair and replacement, electric systems checks, brake inspections, used truck inspections and complete lubrication services.
TA Commercial Tire Network is a commercial tire program the company began in late 2016 through which the company sells a variety of branded tires at its truck repair and maintenance facilities, on customers’ lots, distribution centers, through direct sales and under tire manufacturers’ national fleet account programs. The TA Commercial Tire Network includes a tire retread facility that is part of the Goodyear Authorized Retread Network, providing a full line of Goodyear commercial tire retread products to fleets, local industries and tire dealers within a 150 mile radius of its location in Bowling Green, Ohio. Many of the company’s truck service facilities have access to the retread tires produced at this plant. The TA Commercial Tire Network is the most comprehensive commercial tire purchasing, monitoring and maintenance program in the United States.
Growth Strategies
The company continues to prioritize and focus on key initiatives across its organization, including top-line growth through high return capital investments, bottom-line growth through process improvement and cost discipline, continued introduction of efficient technology and systems and defining the future of on-highway mobility through a commitment to energy alternatives, all in the support of the company’s core mission to return every traveler to the road better than they came.
Acquiring high quality existing travel centers and viable truck services facilities are key aspects of the company’s strategic network growth plan. The company’s active acquisition pipeline may enable the company to add independent and franchised sites along active corridors to strengthen the geographic coverage of the company’s network and expand its scope of products and services and customer segments through investments of capital and human resources in the company’s truck service business, particularly the company’s TA Truck Service Emergency Roadside Assistance, TA Truck Service Mobile Maintenance and TA Commercial Tire Network programs.
Regulatory Environment
Subject to certain exemptions, the Federal Trade Commission regulations require that the company makes extensive disclosure to prospective franchisees and some states require state registration and delivery of specified disclosure documentation to potential franchisees.
The company has a Gaming Compliance Plan, or the Compliance Plan, as required by the Nevada Gaming Commission in connection with the company’s gaming operations at certain of its travel center locations.
Seasonality
The company’s sales volumes are generally lower in the first and fourth quarters (year ended December 2022) than the second and third quarters of each year. In the first quarter, the movement of freight by professional truck drivers, as well as motorist travel are usually at their lowest levels of the calendar year. In the fourth quarter, freight movement is typically lower due to the holiday season.
Intellectual Property
The company owns the ‘Petro Stopping Center’ name and related trademarks and various trade names used in its business, including ‘TA Truck Service Emergency Roadside Assistance’, ‘TA Truck Service Mobile Maintenance’, ‘UltraOne’, ‘Iron Skillet’, ‘Reserve-It!’, ‘eShop’ and others. The company has the right to use the ‘TA’, ‘TA Express’, ‘TravelCenters of America’, ‘TA Commercial Tire Network’, ‘Country Pride’ and certain other trademarks, which are owned by SVC, during the term of each TA Lease. The company also licenses certain trademarks used in the operation of certain of its restaurants. The company sold the ‘Quaker Steak & Lube’ name and trademark as part of the sale of its QSL business on April 21, 2021.
Competition
The company’s principal competitors are Pilot and Love’s.
History
TravelCenters of America Inc. was founded in 1972.
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