Are you considering owning a gas station franchise, and Shell is one of the top companies on your list? Shell is one of the biggest gas station brands in the world, with tens of thousands of stations across the globe.
That’s why it is definitely a great idea to own a Shell franchise, but do they offer franchising, or do they have another system? Most gas stations don’t offer franchising but may offer partnership opportunities, and Shell is also one of them.
In this article, we will talk about Shell, whether they offer franchising, what system they have in place for those who want to own a Shell, and every other detail.
About Shell And Shell History
Shell is a British multinational public oil and gas company, and it is the second largest investor-owned oil and gas company in the globe by revenue. The company was formed in 1907 with the merger of two companies, Royal Dutch Petroleum Company and The Shell Transport and Trading Company.
They grew quickly and became the largest oil producer in the world by 1920. Currently, Shell has over 40,000 gas stations around the world. Despite the high number of stores, they do not franchise.
In some regions and countries, they give out partnership or licensing opportunities for individuals who can operate a handful of Shell gas stations.
Even with that agreement type, the management of the station still belongs to Shell, and the individual is only responsible for the daily operations, so they don’t offer traditional franchising.
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How Much Does It Cost To Open A Shell Franchise?
Since Shell is not technically a direct, traditional franchise, there are no costs associated with opening a Shell franchise.
There are certain fees for institutional companies or individuals looking to own the rights through licensing to a region or a country, but they vary depending on a lot of factors. These fees are also not accessible to the public.
There may also be partnership agreements available where you only manage a Shell gas station. The fees there will be based on percentages or specific numbers from your revenue or profit. Again, this depends on location, size, and many other factors.
Why Doesn’t Shell Offer Franchising?
The company didn’t make any public announcement about the reason behind why they are not franchising. Shell manages most of its own stations, and this is probably a company policy.
However, in some regions, they do employ partners or give out licensing for a region or a country so that independent operators can use the Shell brand.
Even in these stores, the management and operations frequently remain under Shell’s control, giving them complete autonomy under the stations due to the structure of the licensing agreements.
Profit & Revenue Of Shell
According to the latest published data, Shell’s 2023 revenue for twelve months ending on September 30, 2023, was $344,247 billion. This shows an 8.26% decline from the previous year’s $386,201 billion.
For the same period ending on September 30, 2023, Shell’s net income was $29,297 billion. This is an even bigger decline of 32.43% from the previous year. In 2022, their net income was $42 billion. This means Shell had about 8% of its profit margin in 2023.
What Are Some Alternatives To Shell?
Finding a franchising opportunity among the gas operators is tough as most of them either don’t operate or only give licensing rights to individual operators who can manage a region or a country like Shell.
However, some of them franchise their convenience store brands, that are generally attached to their gas stations. This might also come with the right to operate a gas station sometimes. Here are some of the alternatives:
AMPM is essentially a convenience store chain that frequently operates on the gas stations as a store. The brand is owned by the oil and gas giant BP Company, and the AMPM stores are generally attached to either a BP or an ARCO-branded gas station. AMPM offers franchising only for the convenience store section and not for the gas station.
The total cost to open an AMPM store is between $1.7 million and $7.6 million. This includes the initial franchise fee of between $35,000 and $70,000.
2. Circle K
Similar to AMPM, Circle K is also a convenience store, but it is not generally attached to a gas station. They are a store on their own, and the brand is owned by Alimentation Couche-Tard, Inc. However, what makes them a part of the fuel business is that they sell oil in their stores from various brands like Shell, BP, and others.
About 13% of Circle K stores do not sell fuel worldwide. The estimated cost for a Circle K franchise is between $2.4 million and $6.9 million.
3. BP Connect
A part of the oil and gas giant BP, BP Connect is the convenience store brand that is attached to the BP gas stations most of the time. The brand has been franchising for over two decades and has more than 200 units around the globe. For those who want to become a part of the BP brand can franchise with BP Connect to own a piece of BP.
The expected initial investment for one BP Connect franchise convenience store is between $2.5 million and $6.6 million. The initial franchise fee is $30,000, which is included in this expected initial investment.
|$1.5 million-$2.5 million
In conclusion, Shell is one of the biggest brands in the world and the second biggest oil and gas company by revenue right after ExxonMobil.
Despite having over 40,000 gas stations worldwide, the company doesn’t franchise in the traditional sense. They own most of their gas stations and run them themselves or sometimes give out partnership or licensing agreements to individuals who can operate several stations in a region.
Even with that, Shell still has the capacity to decide and manage the station, and the individual only operates the stations.
There are some alternative brands franchises like Dash In, Chevron, and AMPM that are part of the oil and gas industry but not directly a gas station brand. If you are interested in the industry, you can franchise with these brands.
Does Shell do franchising?
Shell doesn’t do franchising in the traditional sense. They own and operate most of their stores, but sometimes, they might do licensing or partnership agreements. These agreements generally allow for the individual to run a Shell gas station where Shell owns the management power.
How much does it cost to open a Shell?
Since Shell is not a franchise, there is also no cost associated with opening a Shell franchise. Different licensing or partnership agreements will have varying pricing structures as they generally combine several stations in different locations.
How profitable is Shell?
Shell’s profit for 2023 was a little over $29 billion. This is about a 32% decline from the previous year in 2022.