Market relations that came to our country in the nineties of the twentieth century, and even based on the latest technologies of the last decades, constantly lead to new methods of economic development. Nowadays, the franchise has gained particular popularity all over the world, including in Russia.
A franchise is a method of commercial agreement between two parties (companies, businessmen), when one side provides experience, own business under a well-known brand. When buying a franchise, the other side starts an almost ready, commercially profitable project, including receiving an absolute list of goods and trade support. At first, this provides a great help to a novice entrepreneur. The first company receives financial preferences as part of the entrepreneur’s income.
Oil and gas franchise
This form of cooperation was also developed in the mining and processing industries. It is very difficult, even almost impossible to form your oil business from a zero foundation: passing drivers prefer to refuel at long-running gas stations. And fuel for the businessman will cost more due to modest volumes of procurement, which will create additional difficulties and financial burden on an unstable business.
These reflections suggest that the most suitable way out of the current impasse will be the acquisition of a ready-made franchise of a popular company for the extraction, processing and sale of oil and oil products in our country. Thus, it will be possible to attract drivers and at the same time get good fuel cheaper, at wholesale cost. In addition, the main company will help the novice entrepreneur organize the business correctly, conduct employee training, and organize activities.
Options exist here. Various firms are engaged in such business, especially large, having resources.
Lukoil
One of the most famous companies in the field of oil, gas production, refining and exploitation, Lukoil has been engaged in franchising for more than ten years. During this time, a whole franchise network of Lukoil filling stations was formed, numbering 250 stations. Gas stations contain, including about 60 independent partner companies.
The Lukoil franchise is granted on the basis of commercial subconcession rights and means the right to apply a number of exclusive privileges of the company for sale at independent gas stations for commercial activities under the Lukoil trademark. An entrepreneur pays royalties on a monthly basis in return for working under a well-known brand.
Benefits of the Lukoil franchise
Francois-owned Lukoil gas stations have many advantages. Among the advantages of the Lukoil franchise are the following:
- A large number of Russians are already familiar with this fuel due to the presence of a common structure of gas stations throughout the country.
- Under the terms of the Lukoil franchise agreement, the businessman receives a guarantee for the regular supply of fuel for its sale.With already tested operating standards, Lukoil presents excellent prospects for forming its own business and even acquiring large profits.
- There are good conditions for earning - you can significantly increase the turnover of trade and increase profits.
- The Lukoil refueling franchise delivers excellent fuel and motor lubricants under an agreement; all products are manufactured in accordance with all requirements of the state standard.
- When making the initial contribution amount, it is possible to take a staff development course. Thanks to this, you will have all the necessary documentation and instructions for the management of gas stations. You will get the opportunity to study the details of the work and will be able to use qualified assistance in the process.
- Selling fuel at the most cost-effective price, which will allow franchise refueling to open Lukoil gas station in the most favorable environment. Of course, this will start a successful business.
Franchise Issues
It should be borne in mind that the Lukoil franchise (conditions are negotiated additionally) is a commercial enterprise with strict rules and restrictions, therefore, along with benefits and privileges, the future partner is subject to rather stringent conditions:
- The cost of the down payment and other funds in the aggregate for becoming in the oil commerce is quite significant.
- To minimize the business before the completion of the indicated action of the agreement will have to return significant funds to the company.
- Company rules must be followed strictly within their framework, including product sales growth can only be organized in accordance with the company's general strategy.
- We will have to spend large sums for the modernization of gas stations under the general look of the Lukoil brand.
Franchise Transfer Terms
The Lukoil franchise is transferred on the condition that the businessman disposes of his gas stations, and also received state permission to sell fuel. In this case, he is allowed to write an application on the official website for permission to start working under the Lukoil brand. The application must indicate the number of gas stations available, their level of profitability for the previous months of activity, and the organization. To the material sent, you need to add photographs of production facilities so that the employees of the company determine the external and internal state of the gas station.
Own
The franchise of Lukoil filling stations allows you to arrange and stabilize commercial activities under a well-known brand. This will be easier to do for those who have previously purchased a gas station. But those who do not have the required property, but who wish to become a businessman in this area, are given a chance. True, we need a solid capital to start a business from the very beginning. In this case, you can also write an application for the purchase of a franchise on the official website of Lukoil.
The requirements for a gas station franchise that will guide the parent company may diverge due to the economic and logistical conditions of the region where the businessman is planning to develop the project.
Contract signing process
It should be noted that Lukoil employees will definitely need a set of official diverse documents from the company sending the application for the purchase of a franchise. The chances of getting a positive decision will increase if there are qualified employees in the staff, as well as the possibility of additional trading at the gas station. The application must be sent to the company at the location of the proposed location of the station or complex. A response letter can be received in a month. In this case, company employees will be sent to the site to research and confirm the information available. After the audit, Lukoil employees will send proposals for the restructuring of your gas station in the corporate identity of the company, as well as a set of documents that are necessary to sign the agreement.The signed agreement is sent to Rospatent for registration, after which it becomes valid.
Opt out option
Despite the relatively favorable requests of the parent company, not all franchisees are seeking a positive solution. And often the main circumstance of a negative answer is, as a rule, a monetary problem. In fact, often the businessman himself is to blame for such a turn. Most banks do not mind considering the possible amount of the loan, because the franchise agreement will be the guarantor of the loan agreement, especially the franchise from a company such as LUKOIL.
Financial questions
The businessman will need to spend about 6 million rubles to open the franchise of the Lukoil gas station. Of these, 400 thousand is a lump-sum payment, the rest of the costs are the establishment of the structure of a gas station. Royalty reaches 220-400 thousand rubles. per year, depending on the size of the city in which the branch is represented.
In addition, every month a businessman is obliged to pay for the lease of land on which the Lukoil gas station is located under a franchise (a list of such gas stations, by the way, is not published in open sources), pay salaries to his employees, and make money for the purchase of fuel. According to the practical experience of many franchisees, the net profit from one gas station reaches 250-400 thousand rubles. The payback of a business project is thus carried out over a period of 2-2.5 years. For production, this is a fairly quick period, which is determined by the oil and gas sector.
Development prospects
Although significant competition remains among modern gas stations and complexes in modern Russia, the emergence of the LUKOIL franchise will help to implement a business project and get stable profits and a quick payback. Due to the fame of the brand and the low cost of fuel, the franchise holder will quickly receive regular customers and achieve a good monthly income. The support of the management company and the high level of oil products received a positive response from a considerable part of Russian businessmen. So, becoming a partner of LUKOIL, an entrepreneur invests in a rather promising project.
Franchise Reviews
The profitability of the franchise leads to the great popularity of projects and the mass of entrepreneurs in this area. Because of this, the Lukoil franchise (reviews are presented in the article) receives a lot of feedback. Among the negative, mainly, censures of the inability to find relevant and complete information about the franchise stand out. Information in open sources is catastrophically small. But businessmen who own franchise gas stations Lukoil write only positive reviews. They talk about the reliability of the project, its profitability and high income.
