The franchise model will no longer be something supported by Caltex.

Caltex Australia has revealed its plans to buy back its petrol stations from franchisees.

The company will buy out its network of franchisee-owned petrol stations, ending a long line of franchisee business and the franchise model along with it.

The plan is to then to elevate the convenience and petrol retailing to equal strategic billing with fuel marketing The Australian reported.

The buy back is expected to cost up to $120 million, to take control of the remaining franchise sites and company leased sites by mid-2020.

Caltex chief executive Julian Segal said operating the core of the business was the best way to achieve the company’s strategic objectives.

“We have a set of very important assets,” he said.

“We realise there is an opportunity to reinvent convenience. That is a very wise decision but a complex one.”

Caltex’s FY2017 Results media release stated that:

Company operation of this core business is key to accelerating the changes required to:

  • provide a more consistent customer experience;
  • roll out new platforms;
  • standardise services; and
  • simplify supply arrangements.

“As at 31 December 2017, a total of 314 sites within the 810 Caltex retail consumer network were company operated,” the release said.

“This compares with 152 sites at 31 December 2016, and 233 as at 30 June 2017. Caltex franchisees operate 433 sites. Caltex aims to transition all retail franchise sites to company operations by mid-2020.

“Franchising has been an integral part of growing the retail business. Caltex appreciates that this is a significant decision and it will affect many of our franchisees. Caltex will work with our franchisees to manage the impact of this change, including by offering franchisees transition support and offering employment to all franchisee employees.”

 

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