iFuel eyes expansion through franchising

iFuel-eyes-expansion

New oil player iFuel is eyeing to launch a franchising option to help reach 100 stations next year despite warning from the Securities and Exchange Commission (SEC) about these kinds of investments.

In a virtual media briefing yesterday, iFuel president and CEO Krizzia Ann Loyang said the oil company, which was established in 2018, would end this year with 30 company owned stations under iFranchise Business Services Corp.

To expand its footprint, the company will open its stations to franchise starting next year with an aim to reach 100 branches.

“We want to maintain 30 percent of the stations under company owned,” Loyang said.

iFuel is offering a franchise package of as low as P6.5 million for its smallest gas station and as high as P11.5 million for its biggest station.

The company will push through with its franchising option despite the warning from the SEC of small oil companies with investment offers.

In August this year, the SEC issued an advisory to the investing public against fuel companies offering investment options in the guise of a franchise agreement, co-franchisee agreement, partnership agreement, co-ownership contract and/or other forms of contract that offer to the public an opportunity to invest in their company and earn profit “hassle free.”

Under these offers, the corporate watchdog said the companies will deal with the construction, management, and operation of the gas stations, while investors would just need to pour in funds and wait for their profits.

“The Commission reminds the public that these kinds of contracts or investment schemes, no matter how they are called, would squarely fall under the definition of an ‘investment contract’ and/or subscription of ‘shares of stocks.’ Therefore, in the eyes of the law they are considered as securities under the regulatory jurisdiction of the Commission. The public solicitation of securities is mandated by Republic Act 8799 or the Securities Regulation Code to be registered with the Commission. Thus, any issuance of unregistered securities is illegal,” the SEC said.

iFuel’s Facebook page claimed that iFuel is duly registered with the SEC and is a bearer of a secondary license.

A secondary license is the registration which gives a ‘corporation’ a license or authority to engage in regulated activities like being a securities broker, dealer, stock exchange, investment houses, financing companies, lending companies.

The SEC has yet to confirm whether iFuel is registered or has a secondary license.

But of its 30 gas stations scheduled to be opened this year, iFuel has only applied for the registration of one station with the Department of Energy (DOE), Oil Industry Management Bureau (OIMB) director Rino Abad said in a text message.

Abad said all gas stations need to secure certificate of compliance with the DOE to ensure that the minimum facility standards would be strictly followed.

Source: https://www.philstar.com/business/2021/12/08/2146361/ifuel-expand-through-franchising

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