WESTLAKE, Ohio — With its current focus on growth, TravelCenters of America Inc. (TA) is expanding its travel center network, while also exploring new opportunities in the areas of foodservice and fuels.
TA is making progress in its restaurant pact with IHOP Restaurants. The retailer is currently converting five full-service restaurants at its travel center locations to the IHOP brand, and could begin 10 more conversions this year.
TA and IHOP Restaurants entered into a franchise development agreement in the fall of 2019 to open up to 94 IHOP locations inside TA and Petro branded locations across the United States over a five-year span.
"These conversions, conservatively, are expected to require an average investment of $1.4 million per site, and generally require six to eight months to complete," TA President and CEO Jonathan Pertchik explained during the company's fourth-quarter 2020 earnings call, held Feb. 26.
The IHOP conversions come as TA decided to "strategically divest" its standalone restaurant brand, Quaker Steak & Lube, as Convenience Store News previously reported. The $5-million transaction is expected to close this quarter.
As for expanding its travel center network, TA has signed 33 new franchise agreements since the beginning of 2019. Four began operations during 2019, 10 opened in 2020, and one has opened in 2021 to date, according to Pertchik.
"We anticipate the remaining 18 franchise travel centers will begin operations by the end of the 2022 first quarter," he reported. "Of the 33 franchise agreements, 21 were signed in 2020, which has nearly doubled the pace from that of 2019. We continue to have active discussions with current and potential franchisees with the goal of accelerating the pace of signings in 2021."
During the Q4 earnings call, the chief executive also announced that TA is also exploring opportunities around alternative energy.
"We are extremely excited about the unique opportunities TA has to leverage its large, well-located sites and pure supplier business model to embrace changes that non-fossil fuel energy presents, particularly under the new administration," Pertchik said.
"We are focused on carefully evaluating these opportunities to best position ourselves as the market evolves and hope to be able to provide more formal announcements in the upcoming quarters," he added.
The company is in the process of developing internal resources and leadership with the intention of leading the process of transformation.
"TA's unusually large sites provide the unique ability to develop a meaningful transition plan and to accommodate a wide range of fossil and non-fossil fuel offerings and the infrastructure to support them to coexist at the same time," the CEO explained.
"This broad range of potential offerings is a simple extension of TA's core competency of having the widest range of non-fuel offerings within its highly amenitized c-store, restaurant and truck service ecosystem," he continued. "These simple facts provide TA a unique opportunity — one we intend to carefully monetize."
Westlake-based TravelCenters of America's nationwide business includes travel centers located in 44 U.S. states and Canada, standalone truck service facilities located in three states, and standalone restaurants located in 12 states. TA's travel centers operate under the TravelCenters of America, TA, TA Express, Petro Stopping Centers and Petro brand names, and offer diesel fuel and gasoline, restaurants, truck repair services, travel/convenience stores and other services designed to provide attractive and efficient travel experiences to professional drivers and other motorists. TA's standalone truck service facilities operate under the TA Truck Service brand name.