What is the difference between owning a franchise gas station vs. an independent station?

A franchise (branded) station operates under a major oil company like Shell, BP, or ExxonMobil. You get brand recognition, national advertising, a supply contract, and often financing assistance, but you pay monthly brand fees ($2,000-$5,000), must meet strict image standards, and are locked into buying fuel from your franchisor at their wholesale price. An independent station sets its own fuel supply agreements, branding, and pricing. Startup costs are typically 15-25% lower since you skip franchise fees and brand-mandated upgrades, but you lose the foot traffic that comes with a recognized name. Independents often compete on price and make up the margin difference through higher c-store profit.

How much profit does a gas station actually make?

Fuel margins are notoriously thin — typically $0.05 to $0.15 per gallon after credit card fees. A station pumping 100,000 gallons per month might net only $5,000-$15,000 on fuel alone. The real money is inside the store: convenience items carry 25-50% margins, fountain drinks hit 70-80%, and coffee can reach 85%. A well-run station with a strong c-store operation generates $50,000-$200,000+ in annual net profit. Stations with food service (branded QSR or proprietary) can push even higher.

How do I finance a gas station purchase?

SBA 7(a) loans are the most common route, covering up to 90% of the purchase price with terms up to 25 years on real estate. You typically need 10-20% down, a credit score above 680, and relevant experience or a strong business plan. Seller financing is also common — the existing owner carries 10-30% of the purchase price. Major oil companies sometimes offer dealer financing for branded stations. Expect total project costs of $250,000-$2,500,000, meaning you need $25,000-$500,000 in cash or equity to get started.

What are the environmental risks and regulations for gas stations?

Gas stations are among the most heavily regulated small businesses in the U.S. The EPA requires double-walled underground storage tanks (USTs) with continuous leak detection, overfill prevention, and spill containment. You must register all USTs with your state agency and submit to periodic inspections. A single fuel leak can trigger remediation costs of $100,000 to over $1,000,000, which is why environmental/pollution liability insurance ($5,000-$20,000/year) is essential. Before buying an existing station, always get a Phase I and Phase II environmental site assessment to check for existing contamination — you do not want to inherit someone else's cleanup bill.

How long does it take for a gas station to break even?

Most gas stations break even in 2-4 years, depending on the investment level and location. A leased existing station with low upfront costs can break even in 12-18 months. A ground-up new build at $1.5-$2.5 million typically takes 3-5 years. The speed of breakeven depends heavily on daily traffic count (10,000+ vehicles is the minimum target), fuel volume (80,000+ gallons/month is healthy), and c-store inside sales ($10,000-$30,000/month for a strong operation).

Should I buy branded or unbranded fuel?

Branded fuel (Shell V-Power, BP Amoco, Chevron Techron) costs $0.03-$0.10 more per gallon wholesale but comes with brand trust, loyalty programs, and national advertising. Unbranded fuel is the same base product from the same refineries — the difference is the additive package and brand name. Independent stations buying unbranded fuel enjoy better per-gallon margins and pricing flexibility. In price-sensitive markets, unbranded stations can undercut branded competitors by $0.05-$0.15/gallon and win on volume. In affluent or highway-adjacent locations, the brand premium pays for itself through higher customer trust and willingness to pay.

Home / Gas Station Startup Costs

How Much Does It Cost to Start a Gas Station?

$250,000 – $2,500,000

Opening a gas station can cost anywhere from $250,000 for a bare-bones fuel-only lease to $2.5 million or more for a branded franchise with a full convenience store and food service. The biggest cost drivers are underground storage tank installation, property acquisition vs. leasing, and whether you go with a major oil brand franchise or operate independently.

Last updated Feb 2026 · Based on NACS (National Association of Convenience Stores) State of the Industry Report, Petroleum Equipment Institute (PEI) pricing data, EPA Underground Storage Tank regulations (40 CFR 280)

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Where This Data Comes From

NACS (National Association of Convenience Stores) State of the Industry Report
Petroleum Equipment Institute (PEI) pricing data
EPA Underground Storage Tank regulations (40 CFR 280)
SBA 7(a) loan program data (2024-2025)

All figures are estimates based on publicly available data and industry benchmarks. Actual costs vary by location, timing, and business decisions.

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Car Wash

$50K – $800K

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Vending Machine Business

$3K – $50K

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Convenience Store

$50K – $350K

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