Initial investment required
Unlike a franchise, this business
opportunity does not require a significant up-front capital investment . The
property, buildings, fixtures, signage, and equipment are all owned by
Imperial Oil; hence “company-owned”. Instead of a sizable up-front capital
investment, you are required to make an initial investment that covers the
following:
-
A letter of credit (protection for Imperial Oil in case of missed payments, to
cover any damages to the site or damages to Imperial Oil due to breach of
contract)
-
Purchase of convenience store inventory and car wash supplies inventory.
-
Training – the National Retailer Development Program
-
A personal computer for use in managing your business at the site
-
Cash flow for payroll and operating expenses
Size of investment
The initial investment varies by site,
depending on the size of the site, the range of offers delivered at the site,
and its location. Typically, the initial investment begins around $50,000 and
can range up to $120,000+ for a large On The Run site.
At the
end of the contract period, you do not have to worry about selling the
business, except for the inventory associated with the convenience store,
branded-food offer and/or car wash, which can usually be sold to the incoming
Esso Retailer.
Financial return
The size of
your financial return relates to the size and complexity of your site … and of
course, to the size of initial investment required.
A Business-to-Business relationship
The Esso Retailer business
opportunity for company-owned sites is an independent contractor
(business-to-business) relationship between you and Imperial Oil. The
relationship is based upon two key components.
1. Contract: A one-year, fixed-term contract with Imperial Oil that defines
the terms, standards and obligations of the parties. The one-year term gives
both you and Imperial Oil the opportunity annually to terminate the
contractual relationship if the business-to-business relationship is not
deemed to be mutually beneficial. If both you and Imperial Oil are happy with
the relationship, then the contract is renewed for the next year. The contract
provides standards for such areas as:
-
Customer service
-
Motor fuels safe handling and sales
-
Business process excellence
-
Safety and environmental protection
Upon termination of your
contract, you do not have to worry about selling the business, except for the
inventory associated with the convenience store and car wash, which can
usually be sold to the incoming Esso Retailer
2. Financial terms of the relationship. There are two elements to the
Financial terms model:
-
Motor fuels business (selling fuel products to customers as an agent of
Imperial Oil) – essentially, a fixed business opportunity
-
Licensed business for the backcourt (operating a convenience store,
branded-food operation and/or car wash as principal for your own account) – a
variable business opportunity
Motor fuels business
Imperial Oil is responsible for the costs
of operating the fuel business, and Esso Retailers receive a fixed motor fuels
agency commission for selling fuel, based on the productivity of the site and
complexity of the fuels offer (such as self-serve versus full-serve, number of
pumps).
Esso Retailers also receive a motor fuels commission to cover such expenses as
labor at the site, and uniforms.
Licensed business
As part of the site offer, Esso Retailers may operate a convenience store,
branded-food offer and/or a car wash. Esso Retailers are responsible for
continuously delivering Imperial Oil’s applicable operating standards and
growing the business.
Esso Retailers purchase the inventory required to operate these offers, and
pay a license fee. This fee consists of two elements: the ‘System Fee’
covering the license of the Esso System, and a backcourt premises fee. For
convenience stores, the license fee is structured as a percentage of margins.
For car washes, the license fee is structured as a percentage of gross sales.
Esso Retailers are responsible for site operating expenses associated with the
licensed business, such as labor and supplies.
Esso Retailers can grow the business by increasing their sales volume through
the licensed components of the site offer.
Facility management commission
Esso Retailers receive a
commission for maintenance and repairs to the site for most components of the
business.
Information/Application Form
To download an
Information/Application Form please
click here.
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