If you own an unbranded gas station, you’ve probably asked yourself at some point:
Would putting a major brand on the canopy actually make a difference?
Maybe it’s Exxon. Shell. Gulf. CITGO. BP.
Would customers notice? Would volume increase? Would the station be worth more? And most importantly—would the benefits outweigh the additional costs and requirements?
The answer is: it depends on the site.
Branding can bring some significant advantages, but it also comes with commitments that an independent operator needs to understand before making the move.
First, What Does “Branded” Actually Mean?
Here’s something many consumers—and even some newer station owners—don’t realize.
Gasoline generally travels through pipelines and terminals as an unbranded product. At the terminal, branded gasoline receives the proprietary detergent and additive package required by that particular brand before it is loaded onto the truck for delivery.
An unbranded station still sells gasoline that must meet federal and local fuel requirements. The difference is that it generally does not receive the same proprietary brand-specific additive package.
So what does an operator gain by becoming branded?
PRO: Name Recognition and Consumer Trust
This is probably the most obvious advantage.
A recognized name on the canopy immediately tells a driver something about the station before they ever pull onto the property.
An independent station might need years to establish that kind of recognition. A major fuel brand already has it.
NACS notes that although price remains the biggest factor when consumers choose where to purchase gasoline, fuel brand itself is still the top consideration for roughly one in ten motorists.
For the right location, that recognition can translate into additional traffic.
PRO: You’re Selling More Than Just Gasoline
Branded fuel gives the operator something besides price to talk about.
Major fuel brands use proprietary detergent and additive packages designed to help protect and clean engines. Some brands also participate in the TOP TIER gasoline program, which requires gasoline to meet enhanced detergency performance standards.
AAA testing found substantially more engine deposits in the non-TOP-TIER gasoline it tested compared with gasoline meeting the TOP TIER standard.
That matters because an unbranded station may find itself competing primarily on one thing:
Price.
A branded operator has another story to tell—fuel quality, additives, engine cleanliness and the reputation behind the name.
PRO: A New Image Can Change the Entire Property
Sometimes the biggest difference isn’t underground. It’s what customers see from the road.
New canopy graphics, signage, pump graphics, lighting and other image improvements can completely change how an older station is perceived.
A location that looked tired or independent can suddenly look modern, recognizable and professionally maintained.
Depending on the agreement, branded programs may also provide marketing assistance, signage, training or financial support for improvements.
For the right property, branding isn’t simply changing a sign.
It’s repositioning the entire business.
PRO: Supply and Brand Support
Branded agreements may also provide greater supply security.
NACS notes that branded contracts can provide fuel-supply advantages when markets become tight because contracted branded locations may receive priority over uncommitted open-market purchasers.
Depending on the brand and agreement, dealers may also gain access to marketing programs, loyalty programs, credit-card programs, training and other operational support.
CON: You Give Up Some Independence
There is a tradeoff.
An unbranded operator generally has greater flexibility to purchase fuel from whichever available supplier offers the best opportunity.
Once branded, the dealer is operating under a supply and brand agreement.
That can mean requirements involving fuel sourcing, signage, appearance, payment systems, operating standards and other aspects of the property.
You gain a brand.
You also agree to protect that brand.
CON: Branded Fuel Can Cost More
Branding isn’t free.
NACS notes that branded retailers typically pay a premium that can include the proprietary additive package, marketing support, signage and other brand-related benefits.
An unbranded dealer may have greater freedom to shop the wholesale market for lower-cost product.
That means the real calculation isn’t simply:
“Is branded fuel more expensive?”
It often is.
The better question is whether increased customer confidence, improved appearance, potential volume and other brand benefits produce enough value to justify that cost.
CON: Brand Standards Come With the Deal
Put a major brand on the canopy and expectations come with it.
Lighting, signage, cleanliness, pumps, image elements and other conditions may be subject to brand standards and inspections.
For customers, that’s one of the advantages of branding.
For dealers, it means the property has to be maintained accordingly.
That requires investment and discipline.
CON: You’re Making a Long-Term Decision
Changing brands isn’t like changing the coffee supplier inside the store.
Fuel supply and branding agreements can involve long-term commitments, capital improvements and significant changes to the property.
Before signing anything, an operator should understand the economics of the location:
How much fuel does the site sell today?
How much additional volume could branding realistically generate?
What improvements are required?
What will the fuel cost?
What support is the brand providing?
And what will the property look like—and potentially be worth—after the conversion?
So, Is Branding Worth It?
There isn’t one answer for every gas station.
Some strong independent locations can thrive as unbranded operators. They have loyal customers, strong volume and the ability to aggressively shop the wholesale market.
Other sites may benefit significantly from the recognition, appearance, fuel quality programs, marketing support and consumer confidence that come with a major brand.
That’s why the decision shouldn’t come down to the cost of the next load of gasoline.
An unbranded dealer can compete largely on price and location.
A branded dealer can compete on price, location, appearance, fuel quality and trust.
So perhaps the question isn’t:
“Will branded fuel cost me more?”
Maybe the better question is:
“What would having a recognizable brand make my station worth?”
Source: National Association of Convenience Stores (NACS), How Branded Gasoline Stations Work. NACS article