BP Looks to Shed Company Ops

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BP Looks to Shed Company Ops

BP plc is working to put more of its company-operated convenience store sites into the hands of franchisees and increase the participation of jobbers in its retail network, while bringing its am/pm franchise east of the Rockies for the first time.

"It's a matter of where we put our resources," said Scott Dean, a BP spokesperson. "The best strategy for continued growth of our retail brand is to put more real estate into the hands of independent jobbers or franchisees."

In Florida, the company is piloting a franchise based on the am/pm convenience model, historically a West Coast fixture. "The am/pm model has a proven international track record and is very strong on the competitive West Coast," Dean said. "We will take the best of BP Connect's Wild Bean Café offer and integrate it into the am/pm offer."

As of year-end 2005, BP had 9,700 jobber-owned sites and 3,100 company-owned and independent dealer sites, about half of which are company-owned and operated. "We are putting an increasing number of the company-owned sites in the hands of franchisees," Dean said. "It allows us to put more capital into more lucrative investment opportunities that one has when one is an integrated Big Oil company with global exploration and production opportunities."

The company intends "to innovate and develop and further improve on the brand and will continue to have company-operated sites, with the increasing use of the am/pm brand," he said. There are no plans, yet, to make all BP locations am/pm-branded.

Coming to the U.S. to head up the company-owned and operated c-store operations is Fiona MacLeod, who has held various positions in both the United States and abroad. The company is reducing its corporate staff, as more stores move out of company hands, Dean said.

NRC Realty Advisors, with offices in Chicago and Scottsdale, Ariz., is handling the sale of sites as surplus properties and franchise opportunities. The sites, according to the NRC website, include the 14 am/pm stores in the South Florida metro area; eight BP-branded stations in the Atlanta market; 16 BP Connect and 26 other BP-branded stores in Illinois, Indiana, Ohio and Pennsylvania; 18 BP stations (14 with c-stores) in New Jersey and New York; and more than 100 am/pm stores in Arizona, California, Oregon, Washington and Las Vegas.

In the view of one former BP c-store corporate employee who did not wish to be identified, "All of the oil companies benchmark off each other. They know what their overhead costs are and how they are doing. They look at ExxonMobil, Shell and Hess and compare how they are doing in almost every facet of business.

"Everyone in Big Oil is more or less envious that Shell has been able to lop off all of its company-ops and have multi-site operators, getting rid of overhead and liability issues. The only problem, no one has said, publicly anyway, how successful or unsuccessful the MSO program has been."