Entrepreneurs who seek to invest in the retail fuel sector may have stepped into a right direction. Based on Absa findings found by South African Petroleum Industry Association (SAIPA), I learnt that the sector contributes in excess of 6% to the country’s GDP
However, According to ABSA it is absolutely imperative to take a note of three business opportunities that the service station entails,
1. investing in the physical building, land and associated assets (prop-co);
2. purchase of the business operation only (op-co),
3. purchase of both (prop-co / op-co).
It continuously notes that the asking price of service station business vary from R1 million to R35 million and developing the service from ground plan could range approximately R10 million to R100 million.
There are existing pros and cons that you need to familiarise yourself with when choosing to be either independent or franchise under a major company oil brand, even though it comes down to personal choice.
With regards to franchising, the sector is reportedly providing back-up and security of working with an established brand, buying support, marketing and mentorship to name a few.