Petrol stations are a popular franchise option for those looking to run a business in South Africa – with potential annual earnings running into the millions.
Depending on location and revenue estimates, becoming a petrol station franchisee can cost up to R40 million, with estimated earnings of around R390,000 per month or R4.68 million a year.At the lower end of the spectrum, a service stop located in Randburg, Gauteng, is currently on the market for R3 million.
A service station’s value largely depends on its location, which determines its number of competitors and potential income. The buyer of this station is required to purchase a minimum 51% stake as stipulated by the supplying oil company, and the deal does not include property rights. The purchase agreement includes the property, franchised shop, restaurant/takeaway businesses, and a 10-year supply agreement with an oil company with an option to extend it for another 12 years.
Firstly, the country’s robust demand for fuel, driven by a large population reliant on motor vehicles, ensures a steady stream of customers. Government-regulated fuel prices also play a significant role. While these regulations cap the maximum selling price, they often allow for a consistent profit margin, providing a degree of financial stability.
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