SERVICE
STATION GOODWILL
A service station's goodwill consists largely of the public's image of
the oil company and is determined by the success or not of the current
marketing/advertising campaign. A particular oil company may have a
market edge in the short run, but in the long run the market tends to
even itself out. Except for the handful of private service stations
(where car repairs may be the most important source of income),
personal goodwill generated by the operator, is swamped by the oil
companies advertising and promotional campaigns and therefore, can be
ignored.
To reduce the effect of temporary aberrations in turnover caused by
ephemeral company goodwill the valuer should use turnover figures over
a number of years.
There is no site
goodwill, as any intrinsic advantage of the site for service stations
purposes is in reality, part of the land value (assuming that the
station is the highest and best use of the site).