Petrol Station Franchise

Petrol station franchise is an obvious choice for many immigrants who come from small-business backgrounds. The main idea behind running the gas station franchise is not petrol. Those who believe that petrol on its own will pay the bills are wrong. Generally, the petrol station franchisees get a very small cut for the petrol sale. This may range between 1%-3% depending on the franchisor.

You should never use the petrol sale percentage as a decisive element to choose the franchise (unless the site you are getting is very busy). The main idea behind the petrol station franchise is to sell the stock. Milk, cool drinks, pies, coffee, fast food, cigarettes and confectionaries are the products which will decide on the success of the business.

Petrol Station Franchise Strategy

The main items which will qualify your income are confectionaries and cooldrinks. Cigarettes, though popular and expensive, carry a high tax. Thus, large sales of cigarettes do not guarantee fantastic returns. Fast food warmer products offer better returns but these have limited due dates. The same applies to sandwiches, eggs and milk.

Confectionaries, chips and cooldrinks provide the best profit. Thus, chocolate bars, candies, chips and cooldrinks are the main strategic items to sell. In lesser degree are: coffee and milk products. Therefore, it is important to understand that the petrol station franchise is all about the location. The internet marketing, pamphlets, local directories and handouts will not help you much.

Petrol Station Franchise Location

What location should I seek? This is a million dollar question. Generally, the gas station franchise located in busy roads has a higher chance to succeed. This is at least the marketing science. In reality, the situation is far more complex. Most people driving to work do not have time to purchase pies, coffee or confectioneries - they want petrol and go!

The location of petrol station franchise next to shopping centers will also drug profits down. Shopping centers have the higher buying power and their prices will always be lower. Ideally, you need a station on the main road far from the major retail outlets. You should be located on the returning-from-work road-side to maximise the sale of food items.

The convenient location of petrol station franchise for people coming from the city or major industrial complexes is the preferred choice. It is true, that many tradesmen visit convenience stores on the way to work. However, the tradesmen do not work in major industrial clusters. Thus, these customers are not a good indication for the optimal position of your outlet.

Petrol Station Franchise Investment

There are number of independent franchisors who succeeded in the business. There are also options with petrol giants which equally survived well in the industry. Alternatives are private petrol stations which are sold as properties. However, these are not franchises but one-man businesses.

United is currently on the fore-front as the independent gas station franchise. The company was successful to promote many petrol products and is regarded as a strong player. Currently, you must dedicate $450K-$1 million for the initial investment of the United franchise. In addition you need a budget for:

  • Initial stock
  • Fuel bond security
  • Cash flow

Apco is another gas station franchise with a built-in reputation. The company provides a good training and facilities. However, it is not clear that they offer a percentage on the fuel sale. What's more, there is no guideline about the investment requirements. Most likely, the price will be about the same as for United. The start-up costs will also follow.

Caltex and BP gas station franchises are probably the most visible petrol distributors. Caltex has a very well established buying power and the franchise network. The initial investment ranges between $150K-$800K. Again, the cost of the initial stock, fuel bond and the cash flow are separate expenses.

How To Choose and Apply for Petrol Station Franchise

First, you should fill-in the online application forms to a number of franchisors. Generally, you must choose those businesses which you can afford.

Secondly, make appointment with the franchisor. Prepare at least 20 questions to ask about the terms and conditions (we dealt with the issue in another page of this website).

Once the locations of the petrol stations are known, visit them in the role of a customer. You must check these stations at various times to determine the capability of the outlet.

Once ready, let your lawyer recheck the contract before you sign it. Remember to interview franchisees about the working conditions in the chosen gas station franchise.