Can I become a Franchisee/Dealer/Operator of Essar Oil?

Any Indian National who has a suitable plot of land and is willing to Lease it to Essar Oil is eligible. In case the applicant does not have a plot of land, but is interested either in buying or taking land on lease and further leasing it to Essar Oil for the fuel station, can also be considered to be appointed as a franchisee.

What is the Selection process?

The Identified plot of land is assessed for its fuel potential by Essar Oil. The applicant is also screened for financial capability & business acumen. The necessary documents about the land and personal information is submitted to EOL. Once the land as well as the applicant is found to be suitable, a letter of appointment is issued (LOA).

Is there any application fee for becoming a dealer/franchisee?

Yes.  A non-refundable amount of INR 3 Lakhs is submitted as an application fee.

Is the Application fee refundable?

The Application fee is non-refundable once the LOA is issued.  The application fee may be refunded in exceptional cases if there is a valid justification; like in the instance of statutory approval being denied by a Government agency. It will be at the discretion of Essar Oil.

Who will invest in the retail outlet construction? How much is the investment by the franchisee select?

Apart from the land, the selected franchisee invests in the construction and day-to-day operations of the fuel station. The cost of construction of a retail outlet is approx. INR 70 Lakhs – 1CR.

Who will get the Government permissions for the Retail Outlet?

The applicant has to obtain all statutory approvals and licenses from the government to set up the retail outlet. Due help will be provided by our divisions to prepare applications in line with government mandate and requirements.

What is the average investment in developing the retail outlet and the Turnaround Time for completing the construction after approvals?

Apart from the cost of land, the average cost of investment is approx. 50 - 70 lakhs depending on the size of the retail outlet and the amenities/ services provided. After the NOC and statutory clearances are received, the retail outlet can be set up in about 3 months

What are Check lists/Documents that are required with the application form for getting an LOA?

The application form - EOI (Expression of Interest) has to be submitted to Essar Oil along with Land papers and specific Documents required to establish financial and business capability. DD for the application fee is also submitted with the EOI. The Territory Sales Manager and Divisional Manager will guide the applicant.

What is the Pricing policy for Diesel & Petrol?

The prices of both Petrol and Diesel are comparable to market prices. The prices are revised in line with changes made in the market.

Where will the products be supplied from?

Supplies are made from Essar Oil’s refinery and its own depots as well as coastal terminals. We have tied up with over 40 PSU locations to ensure seamless supplies to our franchisee network.

What approvals/Licenses are required for Retail Outlets?

Listed below are some common sets of permissions required. However the list can be different from one state to another:

  • NA (Non- Agricultural) Conversion
  • CCOE (Explosives Department) initial approval
  • District Collector NOC, Police commissioner NOC, approval from PWD, Electricity board, Gram panchayat etc. depending on the requirement by the competent authority.
  • Final CCOE License
  • NH (National Highway) – access road permission. If applicable
  • Forest NOC – In case of  forest land
  • Retail Selling licence wherever applicable
  • Weights and Measures stamping

Does the Land have to be leased to the company? Will any lease rental be paid?

Land identified for the retail outlet has to be leased to the company for a period of 29 years, 11 months, except in Maharashtra and Tamil Nadu (29 years) and Rajasthan (19 years, 11 months) due to regulatory norms in these states.

What will be my earnings and return on my investment?

Our dealership model is not only simple but also lucrative to ensure steady operating profits and returns on your investments. You stand to earn:

  • A mutually agreed lease rental on your land for the period of the lease
  • A performance-based return on investment @ 5% p.a. on the capital expenditure made onsite.
  • Competitive sales commission on the quantity of fuel sold

How are the Payout disbursed to the Franchisee/Operator/Dealer?

The payment of lease rentals and return on investment (ROI) are paid once a quarter. However the sales commission is given in the invoice when the product is billed to your retail outlet

What would be the Period of Lease? Why 30 years/29 Years/19years, 11 months?

Retail Outlet Business is long term and stabilizing takes time. The period is as per our policy. In Maharashtra & Tamil Nadu the period of Lease would be 29 years and in Rajasthan it is 19 years and 11 months due to local regulatory norms. In the balance states lease period is 30 years.

Any exit/Land de-leasing if price of the land or the product go high?

There is no exit policy and de-leasing of land is not permitted. Individual cases are reviewed by the management and the best possible solution is suggested to each dealer

Is there a termination clause in the agreement? If yes, when does it apply?

Yes, there is a termination clause which applies when the dealer compromises on company standards and/or violates rules applicable to the petroleum industry.

Are there any approved Contractors for petrol pump construction?

For engineering requirements such as fuel tanks, dispensing units etc., we have a set of appointed vendors and orders need to be placed with them. In case of civil contractors, the Franchisee is free to appoint a contractor of his choice. However, he has to ensure that all branding and construction guidelines for the retail outlet are adhered during construction.

Will Essar oil extend any assistance/help in the construction of the petrol pump?

We have dedicated team of Engineers and representatives across our divisional officers who extend their complete support in the construction of the petrol pump to ensure it is being setup as per company mandate.

If I am making all the investments, what is the role of Essar Oil?

Our business model is different. We believe in your ability to construct the retail outlet economically and in a short period of time.  From Essar Oil’s side, we will provide all technical and networking guidance during the construction, training of you and your staff on retail operations and offer attractive commission and incentives to perform better. The model ensures that the control and ownership of the RO remains with you. Essar Oil also gives you a return @ 5 % p.a. on the normative cost of investment made for constructing the outlet. This pay-out is unique in the oil industry and makes the proposition more lucrative for you.

What will be the quality of fuel supplied to me by Essar Oil?

Our products always meet the relevant BIS specifications. In our refinery we produce high quality Euro IV and V grade products keeping in mind best-in-class global standards.

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