3 Things To Consider Before You Buy a Gas Station Franchise
Both essential retail and the oil and gas industry have been high return investments for the last decade or more, so it’s not surprising that a lot of investors and entrepreneurs alike are putting money into gas station franchises. Whether you intend to be a hands-on business owner or an investor who focuses more on your portfolio, there’s a lot to consider when buying into a gas station. Here are a few important decisions you should make before you commit because they can really affect your bottom line down the road.
Which Franchise Chain Is Best?
There’s no one right answer to this question, because different chains dominate in different states and regions. To figure out what works for you, look at the geographic area you’re planning to service. Then, consider which chains are dominant in the area, how close other franchise operations are to your location, and what features you will be offering. For example, if you are adding a large convenience store or a full service truck stop to your gas station build, you might not mind being fairly close to another branch of the same franchise with different features and options. On the other hand, if you’re building an efficiency station with minimal retail beyond fuel and automotive supplies, you probably want to be somewhere close to a major traffic artery and a little distant from your closest on-brand competition.
What Are Your Long-Term Goals?
Is your investment in the oil and gas industry part of a larger plan to develop a web of retail businesses? Or is this a retail franchise you’re adding to a petroleum-heavy portfolio? Perhaps you’re thinking of specializing in gas stations for your next few investments or you’re looking to buy in with a group of investors who will defer to a managing partner. Whatever it is you want to get out of your long-term investment strategy, your choice of gas station features, location, and management strategies will have a lot of impact on your end result.
What Differences Do You See in Franchise Agreements?
The different requirements, benefits, and costs for franchise membership have a huge impact on your experience as an investor, so you’ll want to make sure you understand the requirements and buy-in costs for the brands you are considering. In some cases, comparing the two or three top brands in the area you’re planning on putting your operation is a good way to assess the final choice between them, because the differences in cost between franchise fees and supplies, as well as other considerations like construction and leasing, can help you see your way to the best profits you can get from the oil and gas industry.