Transparent, seamless and quick opportunity

Essar Oil has a huge franchise network.  Madhur Taneja, CEO Retail, Essar Oil, throws more light on brand’s expansion plans and its offerings in an interview with Franchise India.

Tell us about Essar Oil.

Essar Oil owns India’s second largest single site refinery at Vadinar, Gujarat, having a capacity of 20 MMTPA, or 405,000 barrels per day. The refinery is capable of processing some of the toughest crudes and produces high quality Euro IV and V grade products. Essar Oil has a strong retail presence, through its franchise network.

What are your expansion plans?

In retail marketing, we are definitely looking at expansion. We have over 1,550 operational outlets and another 1600+ are in various stages of implementation. In the next two years, we are looking at an operational network of 5,000 retail outlets nationwide.

What business model do you follow for expansion?

The retail business unit of Essar Oil is oriented towards delivering better and faster service to its customers. Essar pioneered the concept of setting up retail outlets using the Franchisee-Owned Franchisee-Operated (FOFO) model whereby the franchisee leases his land to Essar for a period of 30 years and invests in setting up the infrastructure of the outlet. Essar, on the other hand focuses on enhancing the franchisee’s business by supplying high quality petrol and diesel and adding other profitable business lines including a lease rental on the land and sales commission, non-fuel retail options, and performance-based returns on our dealer’s investment made to construct the fuel station to keep our franchisee’s business viable at all times.

What opportunities do you offer to franchisees?

Apart from providing our franchisees with high quality petrol and diesel, Essar partners with them across every step, right from commissioning to smooth operations of the retail outlet. We provide technical and engineering guidance as per industry mandates to set-up the retail outlet, design and branding support to enhance the visibility and look and feel of the outlet as per Essar retail guidelines, introduce robust technology initiatives such as retail automation, consumer and dealer mobile apps, detailed training for forecourt sales staff to ensure smooth operations at the retail outlet and periodic promotional activities and schemes to create awareness and increase their business.

In return, we expect clear title/undisputed land ideally in the name of the prospect, a land that is road-touching, levelled and developed, capacity to invest, required area and their commitment to operate a profitable business which not only delivers short term gains but long term business growth as well.  

Share your views on the present state of oil market?

We expect 5-6% per annum sustained growth in India’s petro product demand. Hence, there is a huge retail marketing opportunity in meeting this demand. Essar Oil invites entrepreneurs to become partners in this exciting and long term business opportunity.

What is the USP of your company?

Our enrolment and commissioning process is extremely transparent, seamless and quick. We do not have a tender-led selection process. If the land meets our requirements, we issue the interested franchisee a letter of appointment in less than a month for them to go ahead with the remaining formalities and clearances for commissioning the retail outlet.

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