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How to Buy a Petrol Station in South Africa

Isebell Gauche
Copyright 2006©

Although the petrol price keeps rising, fill stations or better known as petrol stations, still make enormous profits. The South African public is used to driving to their destinations and thus need petrol to get there; no matter what the cost is! If you want to buy a petrol station in South Africa, you need to follow a guideline that is slightly different from the one that you will use to shop for a retail business in South Africa.

How to locate the fill stations for sale

Locate the fill stations in the suburb you want to operate in or province for instance, Gauteng and the city Pretoria. You can make use of business brokers to find suitable businesses or you can enquire from Realtors that specialize in fuel station franchises for sale. There are several places on the Internet where you search for such. As is the case with any commercial property you need to view the business, examine the financial records, enquire about the reasons for selling, and about the traffic flow in the area.

Look for additional services

Search for a service station that has other services such as a convenience store or quick shop, carwash facility, tyre repair services, autobank, and sells cellphone cards, since these services not only bring additional customers, but also ensure higher profits that are still market related for the petrol industry.

Franchise regulations

  • The next step is to examine the franchise royalty fees, penalty clauses, support, training, and requirements. You, as the business owner, will be marketing and offering a certain name brand of petrol related products, which are subject to the rules and regulations of the franchisor. It is sometimes called brand name association. You don't need to sell the present brand, but if you want to change brand names, it might become very expensive. Consult with a business broker on the procedures before you change brand names.
  • The franchisor will conduct an interview with you to establish whether you qualify as a franchisee or need additional funding or training.
  • To safeguard your investment, you should make the transferring of the contract a precondition in the offer to purchase the fill station.
  • Make sure that all licenses, agreements, and permissions are in place for instanc,e the liquor license, food permit, right to sell lottery tickets, site and retail licenses - which will need to be converted, etc. These should also be preconditions in the purchase offer. Don't take the owner's word. Ask your broker to make enquiries at the local authorities on the conditions, requirements and the present state of permits held by the owner. It is also important to check on the price structure and regulations of all the items.
  • Find out where the competition is located, what services they offer, prices, years established, potential, and what their reputations are. It is better to have little competition in you immediate area. Evaluate your chances of competing and consider how you can out perform the competition.
  • When you plan on getting into the fuel forecourt business make sure that you locate one that is situated in an area where there is enough traffic to sustain the fill station.
  • Check with the city planning division of for instance, Pretoria to find out if any large road changes are planned, and what building plans have been approved in the area. You can make use of a business broker for this purpose.

    The last step is to draw up a comprehensive business plan for the fill station. Make use of a professional business plan writer or broker since the plan should include all the necessary details for financial institutions.

Learn more on how to buy a petrol station in our Complete Petrol Station Guide For South Africa 2017