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$3 Carwash Anyone?

October 11, 2010
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When I mention $3 in the same breath as carwash, as in express exterior, the reactions often range from keenly interested to frowns and shrugged shoulders.

Some folks believe that this is the next attempt to create a chain of carwashes that has a nationally recognized brand name.

What's the mystery all about? Why does this express concept seem so hot? Is this a trend? If so, is it sustainable?

Express vs. traditional

Most readers are already familiar with the concept. The express exterior model is often described as a professional carwash that includes:

  • A ride-through conveyor system that is capable of producing a clean and dry vehicle with a minimal amount of manual labor;
  • Gated auto-cashiers instead of personal selling;
  • Free use of vacuums (central or individual units); and
  • A short-list of car-care services where the basic wash is offered at a low price ($3).

This is the configuration that is serving as the platform for rolling-out the Rápido Rabbit® carwash franchise.

Is there any mystery associated with express exterior? Not really when you consider that this service is a lot like other products in this country that have been re-engineered, re-packaged and then re-marketed.

For example, a traditional exterior-only carwash includes:

  • A ride-through conveyor;
  • Customer service advisors for selling;
  • Attendants to prepare and then assist in drying vehicles;
  • A bank of coin-operated vacuum units; and
  • Services and prices that are usually consistent with industry and regional averages and local market conditions.

Perhaps any mystery that surrounds this concept is the number of investors that seem willing to buy into this through a franchise agreement.

The investors

According to Professional Car Care Online, the Rápido franchise has nine area development agreements in seven states with 72 locations committed.

This is well short of the nucleus for an IPO but it does seem to be a good jump start. The company's value proposition is to provide consumers with fast, high-quality service at a low base price.

The general strategy is building new facilities through the franchise model where investors pay a license fee and monthly royalties for the right to operate under the franchise name.

To the portfolio investor or absentee owner, this might seem like a good way to turn water into money; they build it for us, show us how to operate it and we only need a couple of guys to run it.

To the investor that wants a regional operation, the franchise may provide the organizational structure or model that is nimble and flexible enough to deal with the challenges related to market leadership, stability, quality, consistency and logistics.

To the veteran operator, the franchise may provide the way to minimize rising operating expenses and a lot of the drama that is associated with operating a labor intensive business that offers value-added services.

Although there is a lot more to it, express exterior seems to be based on the premise that fast, high-quality, low price and free vacuums is enough to wash more cars than the next guy down the street.

Arguably, it will not be an easy chore for new carwashes to sell something that is basically an old commodity that has been dressed-up, so to speak.

Customer acceptance

Although it will be some time before we can even begin to judge the success of this franchise roll-out and brand name, it does seem that exterior carwashing has gained more traction in general.

This is evident from the information that appears in the industry benchmarking reports, studies of consumer attitudes and habits, news stories, public forums, investor trends and many other sources.

The real trend at play may be the consumers' tendency to use an automated exterior carwash.

This includes in-bay automatics at gas/c-stores and self-service locations, conveyor exterior-only, flex-serve and full-service with express lane, stand-alone single and multiple in-bay automatic, and, now, the express exterior carwash.

Judging success

In the final analysis, one can judge the success of any carwash business by how well the company addresses the fundamental elements like location, segmentation and competition.

Companies that do a good job of this will provide the foundation for individual units to have a greater chance for success.

For those that do not, the chances will always be less likely.

Robert Roman is a former carwash, express lube and detail shop operator and is president of RJR Enterprises, a leading consultant to the carwash industry. Robert is a member of International Carwash Association and PC&D's Honorary Advisory Board. Contact Bob at roman427@verizon.net or visit the company's website at www.carwashplan.com.

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