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Cars are a major source of transport in New Zealand, making petrol stations a well sought after service. If you’re thinking of owning and running your own petrol station (either by starting one from scratch, purchasing a franchise or buying an independent one), there are a few things to know first.
In this article, we’ll go through what you need to consider before you start running your own petrol station, and what New Zealand regulations you need to be aware of.
What Is Fuel Retailing In New Zealand?
Fuel retailing simply refers to the act of selling fuels and oils at a store – this is usually called a petrol station. Individuals can come in and purchase petrol or fill up their cars. It’s often coupled with a few other services – this will depend on the retailer itself.
What Are New Zealand Standards For Petrol Stations?
Petrol stations are largely regulated by national laws. Depending on where you live, it’s important to check out the regulations for your area. Local government rules can also impact your business through factors such as environmental plans, so it’s wise to be on top of this as well.
In New Zealand, the standards for fuel retailing cover matters such as price display, biofuel and registration requirements. You can read more about them here.
It’s important to note that the New Zealand Commerce Commission does not regulate fuel in New Zealand, however, they do monitor it and prepare reports.
What Petrol Station Rules Should I Be Aware Of?
Generally, the rules in petrol stations are pretty uniform as they apply to all people, regardless of location. Common rules in petrol station that you should aware of enforcing include:
- Displaying the correct price for fuel
- Employee safety measures (more on this later)
- Ensuring customer safety such as switched off engines and safe to use pumps
- Potential theft awareness
- Safe driving measures
- Protection from fire hazards i.e no lighters
What Is The Hazardous Substances and New Organisms Act 1996?
The Hazardous Substances and New Organisms Act 1996 is New Zealand legislation that addresses how hazardous substances such as petrol should be handled, covering matters such as:
- Transportation of the goods
- Licences
- Safety management documentation
- Assessment of harm
- Duty to report
It’s important to be aware and compliant of the regulations. More information can be found in the Hazardous Substances and New Organisms Act 1996. The document lists all materials that can be considered dangerous and the regulations while transporting them.
How To Start A Petrol Station Business
Starting your own petrol station business will require registering your business and getting a New Zealand Business Number (NZBN) as well, depending on your business structure.
You will need to get all your legal documents sorted, as well as any licences and permits. We can help with any legal documents you may be in need of, such as:
Contact our legal consultants today for more information regarding the legal documents you will need to start your petrol business.
Can I Buy Into A Petrol Business Franchise?
Yes, it is possible to buy into a petrol station franchise. Business owners tend to like the idea of buying into a franchise as it can offer more support from the head office. Plus, there’s the additional factor of knowing that this particular business model has had success in the past.
However, buying into a franchise can be a complex process. There are a number of rules to follow and documents to sort out with your franchisor.
What Should Potential Franchisees Know For Petrol Stations?
Potential franchisees for a petrol business (or any business for that matter) should be aware of the standards to expect when engaging in a possible deal. The New Zealand Franchising Guide sets out the behaviour and conduct you can expect from a franchisor, as well as more legal requirements.
Potential franchisees should also do their due diligence on any businesses they’re looking to buy into. It’s advisable to search for the disclosure documents of the franchise you are interested in as it will contain any important financial and legal matters you will need to be aware of so you can make an informed decision.
Work Health And Safety For Petrol Businesses
Handling petrol can be dangerous, therefore, Work Health and Safety for a petrol business is exceptionally important. Work health and safety refers to the responsibility of employers to make sure they are running a workplace that is free of harm for all employees.
Generally, it involves creating a workplace that is safe and minimises the risks to the health and safety of employees.
There are a number of occupational hazards in a petrol station. As a result, safety measures are highly regulated. WorkSafe New Zealand has created a comprehensive list of all the compliance and safety measures expected of petrol station owners. This includes matters such as:
- Spill control plans
- Storage and handling
- Risks assessments
- Safety signs
- Pump controls
- Safety extinguishers
Petrol Station Business For Sale
Another way to get into the petrol station business is to purchase an independent petrol station from the owner. When purchasing a petrol station, you will be taking over the business from the previous owner. Once you run the business, you are essentially free to run it as you please.
This is different from a franchise, where franchisees are expected to follow the business plan, rules and procedures of the franchisor. Buying a petrol business that is not under a franchise gives you a little more flexibility and control.
When it comes to buying any business, you should always ask yourself a number of questions to ensure you’re making the right decision.
What Should I Know About Business Sales For Petrol Stations?
One of the most important things to understand about a business sale is that a business can be sold in two main ways, either through asset sale or share sale – it’s important to understand the difference between the two.
A share sale transfers the shares of the company to a new owner. An asset sale, on the other hand, allows the buyers to purchase all the possessions of the business. This includes any property, domain names, contracts and equipment owned by the business.
Whichever route you choose, it’s important to have the details down in a legally binding contract to make sure all interests are protected.
What Is A Business Sale Agreement?
A Business Sale Agreement is a contract between the buyer and the seller of a business. The business sale agreement hashes out all the most important details of the sale and ensures that both parties have clearly communicated everything regarding the sale prior to signing so the transaction can go smoothly.
Matters covered in a Business Sale Agreement includes:
- The payment amount, date and method
- Date the sale is to occur
- The assets or shares included in the sale
- Termination or dispute resolution
- Warranties
- Pre-sale and post sale terms
Want To Start Your Own Petrol Station?
If you’ve decided to buy a petrol station and you’re not too sure where to start, get in contact with our partner Dan Armes at ServoPro.
Dan provides a range of services, solutions and support to over 2,000 independently owned petrol stations and would be happy to provide you with expert guidance using his 15 years of industry experience.
You can contact Dan on 0490 415 063 or [email protected]. For more information on ServoPro, visit the website at servopro.com.au.
Key Takeaways
Starting a petrol station business can be a profitable venture, however, it’s important to make sure you’re compliant with the relevant legislation and have all the right legal documents in place. To summarise what we’ve discussed:
- You can enter the petrol station business by buying a franchise, starting your own petrol station or purchasing a independently owned station
- A petrol station is essentially fuel retailing
- The exact regulations for a petrol station will vary depending on the state
- To start a petrol business, you will need to register your business and have the right legal documents in place
- You can also buy into a petrol franchise, it’s important to do any relevant research and take a looking at the New Zealand Franchising Guide to be aware of what to expect
- Work health and safety obligations are particularly strict for petrol stations, as it involves the handling of dangerous goods
- If you are purchasing a petrol business, have a business sale agreement in place
If you would like a consultation on starting a petrol station business, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.
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