It could go either way. Rikki Hunt could soon be putting the finishing touches to his plans for Fuelforce Mark 2. Or he could decide he’s had enough of the industry for now, and pursue the many offers he’s had for non-executive directorships. The decision is hanging in the balance as parts of the original Fuelforce network are sold off. Fifty seven sites have been sold to Murco Petroleum and its US-based parent company, Murphy Oil Corporation; another 22 are in line to go to Somerfield; and 25 to Malthurst, one of the companies behind Pace Petroleum, which acquired Kuwait Petroleum last year.

Meanwhile Rikki is negotiating to buy the remainder of the network – about 60 sites – from which to create Fuelforce Mark 2.

But talking to Rikki – who founded Fuelforce in 2001 with the £75m purchase of ConocoPhillip’s Jet-branded company-owned network – one gets the feeling that if the negotiations are too protracted, he may just bail out completely and head for the nearest mountain to climb. But then he also has an office full of staff to think about…

It wasn’t quite the dilemma Rikki had envisaged as the bells tolled for 2005. At that stage, he was looking forward to enjoying the fruits of his labour in moving the Fuelforce network closer to where he wanted it to be, with plans in place for the next stage of development – a new shop format for three types of store format under the brand name Kestrel.

But by the end of April Rikki had resigned from his post as chairman of Fuelforce following moves by one of his investors – the Royal Bank of Scotland – to sell up and realise its interests in the company.

However, he is keen to stress that the move was not prompted by financial difficulties – which could easily have been the impression gained from the outside. He cites a recent Mintel report that listed Fuelforce as the 120th most profitable retailer in Europe.

“The redundancies made at Christmas, when 14 of about 60 staff went, were to do with our move to direct-managed operations,” stresses Rikki. “The company simply didn’t need as many people. The network was working very well under direct management. However people have linked the redundancies with the current sell-offs and come to the wrong conclusions.

“What’s important to realise is that investors always have their exit from a deal at the forefront of their minds,” he explains. “What’s happened in the marketplace in terms of property prices has prompted thoughts about exiting. My investor has said ‘great market Rikki, look at the prices’. It’s about the bird in the hand – the market now may not be the market in the future…

While disappointed with the situation, Rikki can’t disagree with what’s happening because it’s the right decision for the investors.

“We were having offers for our company almost from day one. It’s one of the dilemmas. When you are big you become a prime target for people. Releasing cash from assets has been a move in our industry for a while at the top end, it’s only now it’s becoming more relevant in the middle.”

Before the move to break it up, Fuelforce was 12-18 months behind where Rikki wanted it to be: “If I go backwards to year one, my plan was to get on with the business and find out what I’d bought. Year two I was going to convert to direct managed operation. Year three we would push the business forward.

“But in year one I was quite surprised, on acquisition, at the lack of computer systems that existed in the company. So I wasted the first year identifying the systems needed and then raising the money – £3.5m – to put the systems in and it wasn’t until half way through year two it was installed. I believe the only way to grow our business is through direct management. The key is the systems you’re using to control it. You can’t drive the business forward if you don’t have the information – you’re guessing. And a lot of people in our industry are guessing. It frightens me to death about how people think they’re doing. I am a detail freak and want to know everything everyday.

“When we got to the end of year two I decided I was going to go direct managed in year three. We’d had accountants Price Waterhouse Cooper and business strategists Accenture crawling all over us to reassure our investors we were doing the right thing in going for direct management, even though the industry was going the other way. We started the conversions in February 2004. It took us until January 2005 to complete and any of the fears people had around direct management were all proved wrong. We lost four or five franchisees out of 170 – it was the least of my problems. In fact the biggest problem I had converting to direct managed was that it pushed the business back in the first period because – understandably, but frustratingly – the franchisee would run the stocks very low up to conversion. But from three months on the business grew.

“Direct management had a positive effect on fuel sales and a massive effect on the shops. In Scotland, for example, after a year of trading, sales were 12% up in the shops, 4% up on valeting and 2% up on fuel. And costs have gone down. Control is the key.”

While all this was going on Fuelforce also had a fuel distribution nightmare. The contract set up with P&O and then Wincanton to do its distribution didn’t work: “We had out-of-stocks all over the place and various other problems. And when you run out of fuel people think you’ve got no money. The problem was only solved, ironically in April this year, when we signed up with Sucklings.”

Come January this year, with the final conversion to direct management out of the way, Rikki was feeling good: “We had developed our own Kestrel brand and launched it at a conference in January – all supported by the banks. Then I went off climbing to the Andes for a few weeks. While out there I got an email that said there was something very interesting I needed to talk about when I was back. When I heard of the interest my only response could be, ‘we’ve got to take it’. We are emotional about it, clearly, but we have to go with the business. It looked serious and has progressed ever since.

“I’m seriously disappointed because I was there ready to roll, and I loved the idea of converting the shops and showing everybody how wrong they were about direct management.”

Rikki stepped out of the company at the end of April – although he is still in the Swindon office everyday – so he could concentrate on creating Fuelforce 2.

“Today it looks very encouraging that I will do the deal, but only on the basis that I, as an individual, control all, if not the vast majority, of the shares. It’s the only way I can stop people diverting. I’m always clear about what I want to achieve but you can’t if you’ve got a major shareholder and they want to go somewhere else.

“My focus is always the shop and convenience retailing is a great market. Since the hypermarkets went out of town and killed the high street butchers and bakers, our shopping habits have changed.

“Very rarely do we plan our week’s shop, never mind our month’s shop which was the original plan for the hypers. We now decide today – this afternoon – what we eat for tea. That, by definition means customers are staying local.”

Fuelforce 2 would be smaller, obviously, than before, but the focus would stay the same, stresses Rikki. “My plan involves a lot of investment in the shop in year one and two, and of course direct management. The stores would be micro managed. We have done a lot of research on sites and customers and have outlined three types of site under the brand name Kestrel – convenience store, kiosk and on the move.

“We have also identified our customers using film and TV programmes, so our people could understand who they were marketing for. We have the Royle family – basically working class. Then there’s Mrs Bucket – if this was your predominant customer base you would sell Jacob’s Creek rather than Reisling. The third customer is someone who we identify by picturing Michael Caine in the Italian job – someone who’s in a hurry and whatever he buys he’s going to eat or drink in an hour and do it in the car.

“In the old Fuelforce we would have set up six test sites in February with a roll-out in March. With Fuelforce 2, as soon as we get the deal we’ll get as many done as possible. We’re talking £30-£40,000 investment per site.”

Rikki’s part of the deal is the only bit with any doubt hanging over it. “It’s more about me, than it is about the deal. It’s about getting the right financial structure to the deal and having the right control. As we sit here today it looks very good. I’m 90% certain I’ll do it.

“It’s not a question of needing to do this – I’ve got so many offers and opportunities and other projects such as Swindon FM radio station, and the Kestrel – Creating Thinkers’ organisation. But I want to do it because I love retail and I love the fuel market.”