The male-dominated world of fuel retailing is facing major change as key industry players ramp up their plans to attract black women as franchisees, says Thabiso Ramasike, Head of Franchising at Standard Bank.
“The fuel retail sector remains a growth area in South Africa. While traditional fuel retailing in towns and cities already has fairly high penetration, we should bear in mind that the South African economy will continue to grow especially in previously under-served areas.
“We therefore believe that the granting of franchises in the fuel retail sector will remain a major opportunity to introduce a new dynamic to this business,” says Mr Ramasike.
He says black women in particular are being targeted by certain key fuel industry players, which are trying to increase the number of PDI franchisees from the current 15% level. There are about 4 500 fuel retailers in South Africa and Mr Ramasike says there is pressure to transform the sector in line with black economic empowerment requirements.
The fuel retail sector is one of the five sectors that Standard Bank believes need financial, entrepreneurial and mentoring support in order to improve the success rate of franchisees and growth in employment opportunities. Telecommunications, fast-foods, restaurants and retail are the other four sectors with strong franchising and job creation potential.
“Whilst the fuel sector is still very much a man’s world, there are moves to change the status quo. The fuel sector will continue to target black entrepreneurs, particularly black females, in a bid to fast-track the change in the profile of the sector. We expect transformation to be a major trend going forward,” says Mr Ramasike.
He says Standard Bank, which is a major financier in the franchising sector, will continue to facilitate the successful packaging of deals between franchisors and potential franchisees.
Mr Ramasike advises potential fuel franchisees to have a close look at what an opportunity offers. “Yes, the brand is important, along with the structure of the site and the operating practices of the franchise. But by far the most important thing in fuel retail will always be location.
“This means that you must understand local town planning dynamics and how to draw traffic to the business. The most successful fuel retailers are still those positioned in lucrative locations that have high volumes of traffic,” says Mr Ramasike.
Another important consideration for potential fuel franchisees is collaboration or partnerships with retailers from other sectors such as fast foods, food retailers and restaurants. This collaboration trend is already taking root.
“Partnerships and collaborations are the way to go if fuel retailers are to generate more business these days. Collaborations between fuel and other retailers have been shown to increase traffic by up to 40%,” he says.