Petrol Station franchise - good idea...?

Petrol Station franchise - good idea...?

Author
Discussion

astroarcadia

Original Poster:

1,710 posts

199 months

Saturday 13th February 2016
quotequote all
Following on from the McDonald's thread I was thinking about petrol stations today.

Who has knowledge of how they are operated/managed. Who owns what?

How can one compete with the supermarkets now?

I often notice MFG on my fuel receipts.






Wacky Racer

38,099 posts

246 months

Saturday 13th February 2016
quotequote all
You'll be up the creek without a paddle when everyone is driving electric cars in twenty years.

astroarcadia

Original Poster:

1,710 posts

199 months

Saturday 13th February 2016
quotequote all
Unlike McDonald's you see plenty of forecourts closed and turned into hand car wash places.

What will become of these well positioned forecourts if the underground tanks make ground up development prohibitive?

technodup

7,576 posts

129 months

Saturday 13th February 2016
quotequote all
astroarcadia said:
Unlike McDonald's you see plenty of forecourts closed and turned into hand car wash places.
I think you've answered your own question there.

In the case of the one next to me it was sold to Sainsbury's. Good for me because rather than a vacant plot or a scabby car wash I have a quite expensive mini supermarket next door.

davepoth

29,395 posts

198 months

Saturday 13th February 2016
quotequote all
astroarcadia said:
Unlike McDonald's you see plenty of forecourts closed and turned into hand car wash places.

What will become of these well positioned forecourts if the underground tanks make ground up development prohibitive?
If it's prohibitive, hand car wash. If not, a mini supermarket with flats above.

markcoznottz

7,155 posts

223 months

Sunday 14th February 2016
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Is this back to the future week again? Let's recycle some 15 year old business models with wafer thin profits?

dingg

3,974 posts

218 months

Sunday 14th February 2016
quotequote all
just buy a corner shop instead - thats where they make money NOT off the petrol sales

Driver101

14,376 posts

120 months

Sunday 14th February 2016
quotequote all
It was asked in the McDonald's thread about how many have closed, just look how many petrol stations have closed.

McDonald's seems a safer option.

I can think of far more petrol stations that haven't lasted than McDonald's.

PF62

3,575 posts

172 months

Sunday 14th February 2016
quotequote all
40,000 petrol stations in the 60s, down to 20,000 by the start of the 90s, and around 8,500 now.

The major oil companies own and operate all the nicest and most profitable sites.

The next tranche of sites are operated by groups like MFG (Motor Fuel Group) who operate them under major oil company brand names (they have lots of BP sites). They buy the fuel from the oil company and retail it themselves at a price they choose, and they obviously have all the non-fuel sales as well.

The next tranche of sites are operated by smaller groups or individuals, and again under the major oil company brand. The site itself is usually owned by the oil company. The fuel on site is owned and sold by the oil company, and the operator gets a small commission for collecting the payment for the fuel and paying it over to the oil company. They also keep the profits from the shop and non-fuel sales, but often must use the oil company wholesalers to buy stock.

The next tranche of sites are again operated by smaller groups or individuals, and again under the major oil company brand. The site itself might be leased from the oil company or owned by the operator. This time the oil company sells the fuel to the operator for them to sell on. The fuel is usually sold on a fuel supply agreement that guarantees the operator they will make a specific amount per litre, provided they don't sell the fuel above or below an average local price. Again all the profits from the shop and non-fuel sales fall to the operator, but they are not usually tied to wholesalers.

The next tranche are the sites operated by smaller groups or individuals, but not under any brand. They just buy the cheapest fuel on the spot market.

Finally there are the operating agreement sites. These are major oil company sites where the operator is paid a fixed fee to staff and run the site for the oil company. All the sales of fuel and non-fuel belong to the oil company.


Edited by PF62 on Sunday 14th February 08:56


Edited by PF62 on Sunday 14th February 08:57

Si1295

362 posts

140 months

Tuesday 16th February 2016
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We had one at our old site with a Bargain Booze store. To sum it up:

The margins on fuel were terrible,
Potentially £30,000+ in the tanks of which some evaporated,
You had to be open long hours which sometimes necessitated having 2 members of staff on for insurance purposes,
A drive-off/non payment would wipe out your profit from a weeks petrol sales quite easily,
A lot of customers complained that we were too expensive compared to the supermarkets/oil company owned sites.

It was profitable (and worthwhile due to the site we were on), but probably not worth the hassle if you were to run it just as a petrol station/shop

Blakeatron

2,514 posts

172 months

Thursday 18th February 2016
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My dad had a lot of petrol stations in the late 80's upto mix 90's.

He was very succesful but the fuel made little profit, he had off licences, post offices, car washes etc - basically anything he could put in the shop made a better return than the fuel.

He sold up complete to a single putchaser and still says today it was the best thing he did.

As a child we never saw him - out before we got up and back when we were asleep, 7 days. It will take a lot to make one pay!

What about a petrol station with a mcdonalds?

sideways sid

1,371 posts

214 months

Friday 19th February 2016
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Petrol looks like a difficult market to make money from as an independent operator.

Just wondering - i.e. with no knowledge or wisdom - but if the OP is considering a fuel station, and depending on location, would it be better to think forward a bit?

Perhaps operate a hydrogen filling station if there is confidence that hydrogen will take off, or do things a bit differently with a charging station for Teslas and other EVs with something to occupy drivers for the time that they wait for charging. Coffee / lunch / haircut / workout / I'm sure others will have more nefarious suggestions on how to charge money to a captive affluent market with half an hour to spare!

To summarise, whoever can forecast how we will purchase consumables for transport, beyond fossil fuels, and commercialise that without the legacy of a portfolio of forecourts could do very well.