The increase in vehicle ownership in the Philippines as attested by growth in car dealership sales has brought opportunities among gas stations. Remember the time when Caltex, Shell and Petron gasoline stations were the only ones in the country? Now, players like Phoenix, Unioil, SeaOil and Eastern Petroleum have joined the market.
But let’s focus on franchising on one of them: Pilipinas Shell.
The company started out in the Philippines as kerosene distributor in 1897. By 1940, it grew extensively as products were sold in more areas. In the 1960s, Pilipinas Shell built its first crude refinery in Batangas, making it an established manufacturer and refiner of petroleum products. In 1986, it acquired a majority stake of the Philippine Petroleum Company, the only lube refinery in the country.
Currently, Pilipinas Shell has over 1,000 retail stations.
Pilipinas Shell retail stations not only feature fuel dealership. There are also convenience stores (Shell Select) that sell refreshments, snacks, groceries, phone cards, cold drinks and periodicals. There are also stations that feature ATM booths, and fast food outlets like KFC, Pizza Hut and Starbucks Coffee are found within Shell station premises. So there’s a reason patrons choose Shell for their next refueling trip.
Once you become a Shell retail station dealer, upon approval of franchise application, you will enjoy the following dealer benefits:
- Ongoing support and guidance to ensure safe operations
- Use of Shell company-owned premises and equipment
- Maintenance of certain items specified in the Franchise Agreement
- Supply of Shell oil products, lubricants, and others
- Retail Visual Identity (Signage and Branding)
- Stock on consignment and vendor managed inventory to ensure sufficient stock levels
- Global Site System solutions for real time updates to assist in managing your business
- Regular training of Quality Marshall/Forecourt Supervisors
- Participation in Fuels and Lubricants Marketing campaigns
- Regular Territory Manager site visits for guidance and assistance
- Access to the Customer Service Centre for assistance on various queries and updates on important information
- Association with Shell technical partner Scuderia Ferrari
- Consultation on optimal layout and merchandising standards
- Promotional campaign materials and applicable supplier discounts
- Convenience Retail Offers (Shell Select and Sell, fast food, and coffee shop)
Franchise Fees
One salient feature about franchising in a Pilipinas Shell gas station is that the company does not charge a franchise fees.
However, the following fees need to be paid to acquire rights and operate a Pilipinas Shell dealership.
- Processing fee
- Monthly royalty fee
- Retailer fee
Investment cost
An initial investment of P3 million to P5 million is expected, and other fees agreed on the business plan.
This initial cost will cover the following:
- fuels inventory (2-3 day stock cover)
- lubricants inventory (1 month stock cover)
- merchandise in the Shell Shop/Select
- lube/wash-bay equipment
- initial operating expense (salaries, utilities, uniforms, business permit, and others)
- power generator (varies on location).
To become a franchisee of a Pilipinas Shell retail station, an investor can choose whether the shop is company-owned or dealer-owned. For both packages, the franchise includes the following features:
- Shell Brand and other trademarks
- Location and market study
- Layout and fitting out of service station
- Building and equipment
- Operating standards
- Training for retailer and staff
- Procurement programs
- Pre-opening assistance
- Grand opening assistance
- Marketing strategies
- Research and development
- Business counseling
For the convenience store and automotive shop, these are applied separately from the franchise.
Basic Qualifications for a Franchisee
A franchise is awarded initially only to individual applicants. Once the franchise application is approved, the individual may then organize a “closed corporation” provided that he or she can prove that he/she owns majority share of the corporation.
Other “pre-screening checklist” required by Pilipinas Shell include these qualifying criteria:
- Can motivate his or her people towards agreed business targets
- Willing to devote time to oversee day-to-day operations of the business
- Willing to undergo full time training on service station operations
- Able to fund the investment requirements
- Earnings and Return on Investment
A 3-year Retailer Agreement will be signed by the franchisee (retailer/dealer) with Shell and its renewal will be based on the business performance.
Return on investment is expected to be between 30% and 40% as average time to reach break even is around two to three years.
Shell Franchising Contact Details
In case you are interested to be a Shell retail station dealer, send your application or contact the company directly for more details:
Rob Donesa
Landline: +632 2264328
Mobile: +63 9959912875
Email: rob.donesa@shell.com
