Dive Brief:

• SQRL Holdings has laid off more than 100 full- and part-time employees since the beginning of January, founder and CEO Blake Smith said in an interview on Thursday.
• The layoffs come as SQRL transitions its business to an operator model, meaning that its store managers now have a “vested interest” in the locations they run, Smith said. This also means those managers control their stores’ staff and payroll “like a franchisee,” which is the foremost reason for the layoffs, Smith noted.
• Although Smith declined to provide the specific number of employees impacted by layoffs, he confirmed that SQRL’s recent transition has resulted in the termination of most of the company’s full-time, store-level employees.

Dive Insight:

About a week ago, two former SQRL employees who were part of the layoffs separately said that the staff reductions included 30 to 40 individuals. In recent days, two different former employees individually said that the layoffs have so far included at least 200 team members, with most of the terminations having taken place on Jan. 26.

While Smith noted that the layoffs are ongoing, he also said that SQRL has “done the bulk” of the staff reductions. As more stores get up and running with the new operating model, he expects a hiring spree to come.

“I'm not the kind of person that likes to do that,” Smith said of the layoffs. “It's a necessity for the business and the ultimate vision and where we want to go going forward.”

SQRL’s transition to its new operator model comes just a few months after the company acquired 210 convenience stores from Blue Owl Capital, which had previously leased those locations to bankrupt retailer Mountain Express Oil. Several of the impacted SQRL team members formerly worked for Mountain Express and were let go during that company’s liquidation process last August.

Smith said that SQRL’s new business model was his goal for SQRL all along, but the company did not have the infrastructure to implement it until recently. It instead ran company-operated c-stores. 

Making the Blue Owl deal opened up the resources for SQRL to take on the new model, Smith said.

“This model puts it in place where the person who's running the store is in a basic ownership position,” Smith said. “We beta tested this — those people take care of the store better, they take care of their customers better, they take care of their employees better, they treat it like an owner instead of just a job.”

SQRL currently has “several” locations that are already operating under the new business model, Smith said. Within three months, he expects all 400-plus locations in SQRL’s network to operate under the new structure.

Chick-fil-A is a well-known company that uses this same operating model, and its success inspired SQRL to use it, Smith said.

Little Rock, Arkansas-based SQRL Holdings operates more than 400 convenience stores across 20 states.