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Is It a Franchise | Contract Manager

Contract Manager

Providing insights into the forecourt world

Is It a Franchise

Is It a Franchise

In a word NO!

There are few similarities between the structure of fuel forecourt management by Contract Manager/Commission Operator and that of a genuine Franchise.

MRH Retail/Malthurst do not refer to their operating structure as a Franchise. However MFG and Rontec and a few others do.

They are wrong to do so. It is misleading.

Franchises are far more secure. The most fundamental feature is they have a defined period of contract; normally a minimum five year contract rising to longer contracts which can be up to 25 years and more. In most cases they have renewal options and conditions which can add to the security.

In almost all cases a franchise is an asset which you buy and you have rights to sell it at a market rate although there maybe conditions attached.

Your deal with the fuel forecourt company will have a notice period similar to an employment contract of something like 3 months. If the fuel company decides to change its management policy to direct managed sites, officially employing their site managers then they simply give you all 3 months notice and you’re gone. A franchisor cannot do this. They would have to buy you out.

A few years ago TOTAL and ESSO did this leaving a lot of business persons high and dry.

We say “officially employing their site managers”. Well in our opinion and that of many of MFG’s managers, is that the arrangement between Murco as it was (now MFG) and its contract managers is “direct management by any other name” (a quote from Andy Edwards an Area manager at the time).

As Alister McGill wrote in his case study Judge Christopher Camp told Murco management their site operation is NOT a franchise.

If you follow the link to the British Franchise Association www.thebfa.org. Go to About franchising you will see they support our comments.

In one area these forecourt companies are very similar to a Franchisor in so much they tell you all about the benefits of operating as a manager in their team, they talk of partnership and working together. Legal companies advise them to avoid the negatives ensuring you the prospect (the victim we prefer to call you) are not given any discouraging information to put you off.

This is why the most important advice we can give is that you ask to speak to existing contract managers/commission operators to get the real picture of life as a manager/operator. Do this before you sign up and make sure you select the ones to talk to.

In our opinion the most honest operator of the big 3, that gives the most accurate impression of working as one of their commission operators is MRH Retail or Malthurst as they are also known.

However our question for MRH site managers is; are the indications of earning expectations of £20 to £35k accurate?

They state their deal is “STRUCTURED” to provide these earnings.

Why are earning potentials not greater? After all it is supposed to be your business. The phrase structured tells us all enough about the degree of control they hold over “your” business.

What they really mean is if the site has greater earning potential that extra profit is theirs.

They will make extra out of your success.

Who’s business is that?

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