The failure of business format franchising in British forecourt retailing: a case study of the rebranding of Shell Retail’s forecourts

Abstract

As a result of an increasingly competitive petrol retailing environment and the rise of convenience stores in the food retailing sector, oil companies in Britain in the 1980s began to diversity into food retailing and convert their petrol stations into forecourt convenience stores. Drawing on case study evidence of Shell Retail, the paper examines how the company attempted to build its organisation into a strong brand by rebranding its forecourt outlets and introducing business format franchising to manage them. Utilising franchising, branding and food retailing literatures, the work investigates not only why Shell Retail believed business format franchising was more appropriate than traditional franchising or in‐company management for its rebranded forecourts but also the factors that eventually caused the arrangement to fail. In particular, the paper analyses the problems relating to business format franchising that Shell Retail encountered in order to provide guidance for other retailers who may be considering using it as an instrument in the rebranding process.

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