Convenience store, fuel and postal franchises in Australia: margins, hours and leases

• The Oil Code requires a disclosure document and a copy of the code at least 14 days before you sign, a minimum 5-year agreement in most cases, and a 7-day cooling-off period.
• In 2024, the ACCC's measure of gross retail margins on petrol averaged 16.3 cents a litre across the five largest cities, covering both operating costs and profit.
• Convenience stores can't sell vapes: since 1 July 2024 only pharmacies can supply them, and penalties reach $21.91 million per contravention for a company.
• Fuel franchising is a large slice of the sector's headline size: in the Franchise Council of Australia's 2023 figures, reproducing IBISWorld, fuel made up 24% of the $174 billion total and car retailing 30%.
• Wages are the biggest controllable cost, and a franchisor can be held responsible for a franchisee's underpayments in some circumstances.

Each model earns money differently, so test the numbers for the model you are actually buying.

• Shop margins: the gap between what you pay for stock and what you sell it for. Nominated suppliers and set promotions can narrow it, so ask for supplier price lists and the rebates the franchisor receives, which the disclosure document must describe.
• Fuel margins: the ACCC's gross indicative retail difference, a broad indicator of gross retail margins that includes operating costs and profit, averaged 16.3 cents a litre for petrol across the five largest cities in 2024.
• Margins vary by city and through the price cycle. In the December quarter 2024 they ranged from 9.6 cents a litre in Perth to 24.1 cents in Brisbane.
• Commission agency: you earn a commission instead of buying fuel to resell. It still counts as a fuel re-selling agreement under the Oil Code if the other conditions are met.
• Postal income: licensees earn fees and commissions for the work they perform, on a structure Australia Post revises each year, plus discounts on Australia Post products.
• Card fees, theft, waste and cash handling come straight out of thin margins, so ask current franchisees for their real figures.

• If you sign a franchise agreement and resell fuel under it, the Oil Code of Conduct covers you, not the Franchising Code.
• An agreement is a fuel re-selling agreement if the supplier grants you the right to run a fuel re-selling business under its system or marketing plan, associated with its brand, and you pay or agree to pay a fee. Commission agency agreements count even without a fee.
• The code doesn't apply if the supplier reasonably believes you will sell less than 30,000 litres a month on average and gives you written reasons at least 3 days before you enter the agreement.
• The supplier must give you the code and a disclosure document, with the proposed agreement attached, at least 14 days before you enter the agreement or pay money you can't get back.
• Agreements must run for at least 5 years, with a renewal option to 9 years in total where the supplier owns or leases the site and you must buy its fuel, subject to limited exceptions.
• You can cool off within 7 days of signing the agreement or paying money under it, whichever comes first, and get your money back less the supplier's reasonable expenses.
• The supplier can refuse to renew only if it plans to use the site for something other than selling fuel or to dispose of it, and must give you notice and a chance to fix a breach before terminating for it.
• Unfair contract terms laws also apply if the agreement is a standard form contract.

• There are about 2,900 Licensed Post Offices, around two-thirds of Australia Post's outlet network, and many run alongside another business such as a newsagency or convenience store.
• You get a licence to use Australia Post's systems, manuals, trademarks and image. It has no fixed term and can be assigned or transferred with Australia Post's approval.
• LPOs must offer core services, including mail acceptance and processing, postage stamps, money orders, bill payment and banking.
• You are responsible for the premises, the fit-out (subject to approval), maintenance and operating costs, and you may pay a point-of-sale technology fee.
• Typical hours are 9am to 5pm on weekdays and 9am to 12pm on Saturday, with extended trading in some locations.
• Most licensees buy an existing LPO. Australia Post's assignment process covers an information request, a selection interview, training and signing, and is expected to take about 90 days.
• Australia Post may ask for cash flow projections, a site business plan, referees, a personal assets and liabilities statement and your financing plan, and you pay your own travel and accommodation for training.

• Shop staff such as sales assistants and store managers are generally covered by the General Retail Industry Award, which doesn't cover motor vehicle fuel retailing, so check which award applies to fuel staff.
• Junior pay is changing: under the Retail Award, employees aged 18 to 20 employed for more than 6 months will be entitled to adult rates, and the Fair Work Commission has said changes could start from 1 December 2026.
• Long opening hours bring weekend, public holiday and overnight penalty rates, so build rosters at award rates before you commit.
• A franchisor can be held responsible for a franchisee's underpayments if its brand is a major part of the business, it has significant influence or control, it knew or could reasonably have known, and it didn't take reasonable steps to prevent them.
• In June 2024 the 85 Degrees franchisor was penalised $1.44 million, the first court use of the responsible franchisor rules, over underpayments totalling $32,321 to 9 workers.
• Vapes: since 1 July 2024 it has been illegal for tobacconists, vape shops and convenience stores to supply any vapes, even with a prescription, with maximum penalties of up to 7 years' jail per offence and $2.191 million per contravention for an individual.

• Sales or margin figures you can't trace to real trading records, or earnings claims outside the disclosure document.
• Rosters that only work if staff are paid below award rates, or a franchisor that shows no interest in your payroll.
• Nominated supplier prices well above the market, with rebates the franchisor won't explain.
• A fuel agreement shorter than 5 years without a clear reason, or a low-volume statement that takes it outside the Oil Code.
• A lease that ends before your franchise or fuel agreement, or make-good terms you can't afford.
• An LPO sale price that doesn't match the fee and commission income in the licensee's records.
• Pressure to sign quickly. Under the Franchising Code the franchisor can't sign until 14 days after you receive the disclosure document, a copy of the Code and the agreement in its final form, and must refund any payment made in that window within 14 days of your written request.

• Confirm which code applies: the Franchising Code, the Oil Code, or an Australia Post licence.
• Get at least 12 months of sales, gross margin and wage records, and check them with an accountant.
• Model rosters for your trading hours at award rates, including penalty rates and upcoming junior pay changes.
• Read the supplier and rebate sections of the disclosure document, or the Oil Code disclosure document for fuel.
• Check tobacco, liquor and food licensing rules with your state or territory and council before relying on those sales.
• Read the lease with the franchise, fuel or LPO agreement, including terms, renewal and make-good.
• Talk to current and former operators about hours, staffing, theft and support.
• Get independent legal and accounting advice before you sign.