Professional Carwashing & Detailing

Rápido Rabbit rumors put to rest

October 11, 2010

Everyone has a theory about Rápido Rabbit; why it failed, the “real” story about the issues behind the scenes or the inside scoop about what the head honcho did wrong.

Well, Professional Carwashing & Detailing® decided to address these questions, stipulations and rumors head on — we went to the man himself, Steve Gaudreau, and asked him to explain what happened to the franchise that promised to be the first truly national carwash chain in the industry.

Gaudreau laid it all on the line. So, it’s time to satisfy the industry’s hunger for information about the Rabbit’s downfall and determine if another mighty entrepreneur will rise up from its ashes to strive for the title of first national wash chain again, or if the national concept has been left in ruins.

A baby bunny is born
Gaudreau has been in the carwash industry for years; most prominently known for his co-ownership of POWER Inc.’s CarWash Institute® with his wife and business partner, Jackie Bridge.

The carwash industry benefited immensely from Gaudreau’s consulting services and extensive management knowledge, a fact that many in the industry seem to have swiftly forgotten following Rápido’s demise.

According to Gaudreau, the idea for Rápido Rabbit grew out of people’s persistent curiosity regarding franchising possibilities.

“We were providing a lot of initial training and consulting for people that were going into the business — a franchise seemed like a natural evolution; the next step,” Gaudreau said.

Paul Fazio, president of Sonny’s Enterprises, a manufacturer/supplier of carwash equipment, and longtime personal and professional friend of Gaudreau’s, said that POWER Inc. was instrumental in helping many in the industry grow, including his own company.

“When my brother and I had the carwash company, Fazio Enterprises, we had 12 locations in three different states and we used his [Gaudreau’s] services for well over 10 years, probably closer to 20,” Fazio said.

It appeared obvious to many, even Gaudreau himself, that his success with consulting could potentially spill over to the creation of a carwash company.

“If you ask people, they will tell you that he [Gaudreau] was by far the most legitimate and premier trainer, the best trainer we’ve seen in our industry,” Fazio said.

Bunny hops
Initially, Gaudreau and Bridge were the principal investors in Rápido Rabbit, according to Gaudreau. They took their 18 years of experience and began compiling a group of people to help get their franchise hopping.

Edward Owens was one of the individuals who signed on to work with Gaudreau on his national endeavor. He saw a Rápido advertisement online seeking a field trainer.

Owens’ 12 years of technical training in the Navy made him a perfect candidate for Rápido.

“When I responded to it [the advertisement], they saw my qualifications and said, ‘We’ve got a director position we need to fill.’”

Owens became the training director for Rápido and worked with the company for approximately one year.

Cindy Lord worked with Gaudreau and Bridge at POWER Inc. for five years and took on a new role at Rápido as director of franchise communications.

“I was supposed to interact with the franchisees and be the liaison for when they needed something; point them in the right direction,” Lord said.

Ed Wackowski was another carryover from POWER Inc. Wackowski served as Chief Operating Officer for Rápido Rabbit, handling all operations and delivery of the company.

As he puts it, “Steve would sell it; I would make sure it happened. My job was to make sure whatever Steve said happened.”

Wackowski would be one of the first employees to become disillusioned with the Rabbit. And in October of 2004, he would leave the company.

Tom Batt was a new recruit who saw promise at Rápido. He signed on as the company’s vice president of technical services in October of 2003. For a while, Batt thought everything was running top-notch.

“On the technical side of it, everything was running smoothly. There wasn’t a problem. We washed cars, we did it very well.”

Arkansas Carwash Systems (ACS) was the first development group, along with investor Keith Gibson, of GN Investment Group, Fort Smith, AR, to successfully launch a Rápido Rabbit site. The wash opened in December 2004.

According to ACS President Paul Stagg, the development company foresaw issues with Rápido from the very beginning.

“We spent well over $100k getting a workable set [of prototype blueprints],” Stagg said in an email to PC&D.

Although the initial bunny hops the Rabbit took seemed to be moving in the right direction, it wasn’t long before everyone involved began to realize that the Rabbit might not be as lucky as expected.

A not-so-lucky Rabbit’s foot
Gaudreau will be the first to admit his most fatal mistake; he didn’t have a company-owned test site.

“We did not build company stores first — we should have done that — build company stores, test sites first. In retrospect, it’s obvious.” Gaudreau said.

“But, we were successful helping people in the business before without company stores, so we didn’t figure that we needed company stores going into franchising,” Gaudreau acknowledged.

His second big mistake: Gaudreau confesses that Rápido’s venture was grossly under-funded.

Slowly but surely, things started to go awry at Rápido.

“The problems that I think we ran into were that I think a lot of our systems weren’t tried and true,” Owens said. “They hadn’t been tried at a location yet.”

According to Owens, starting with company-owned stores would have allowed Rápido to test their processes first.

“So, in fine tuning them [the processes], I think maybe some of the franchisees got a little discouraged in the fact that they felt like this maybe wasn’t a ready product,” Owens said.

Even if the franchisees didn’t express discontent from the start, ACS did.

“Early on we discovered that there were deficiencies, but we wanted to make it work,” Stagg stated.

If ACS had discovered deficiencies or problems early on, they weren’t alone for long; Rápido employees gradually began to recognize financial issues.

In October of 2004, approximately one year before the franchise would announce bankruptcy, three top-tier employees stepped down: Tom Wycoff, CFO; Mark Haynes, director of marketing, and Wackowski.

According to Wackowski, the group had become uncomfortable with the direction the Rabbit was taking.

Most-middle management employees were still unaware of any potential problems.

“All of us were pretty much in the dark, we were under the impression there was plenty of money, the way the money was being spent.”

However, Lord said that eventually people began to recognize that the quantities of money Rápido spent didn’t equal out to what they were making.

“The problem was money was spent too fast and foolishly,” Lord said. “There was no income coming in except for the occasional franchise fee. They had no company stores to back them up.”

The Rabbit reaches ruins
The Rabbit was undercapitalized and Gaudreau was slowly realizing it.

“…we did not anticipate some of the expenses that we incurred as a franchise,” Gaudreau said. “Our legal bills in our last year were close to $400,000. We just didn’t realize — we had not planned on that.”

With bills piling up, one would assume Gaudreau would throw in the towel and jump ship. However, Owens said that Gaudreau had a difficult time letting go.

“I think he should have known; the signs were there,” Owens said. “But, from talking to him, I’ve found that he’s personally never failed at anything, and he just had this rose-colored vision of everything working. He just never allowed himself to think that it wasn’t going to work. Even though all the signs were there, he just chose to ignore them.”

It seemed to many around Gaudreau and Bridge that the walls were starting to crumble.

“You could just sense it, because you knew all the bills were coming in, and you didn’t see any checks coming in,” Lord said. “And you could see the stress on Jackie and Steve.”

Even when Gaudreau acknowledged the financial problems, he always thought that somehow his golden dream would survive.

“I mean, you could see that there was a problem,” Batt said. “There was some casting about for a white knight to come and save us, you know, buy the company out or buy portions of it. People were paraded through the offices at various times; nothing came out of that direction, clearly.”

Gaudreau held out his hopes for a savior until the bitter end and he held off on breaking the news to his employees as well.

“We ran short of cash. We had several groups that were looking to invest in us when we ran into the capital problem,” Gaudreau said. “And that looked like a very certain thing, but at the last minute it didn’t, for many reasons.”

In the end, ACS decided to part ways with the Rápido franchise in late September 2005.

According to Lord, everyone knew once ACS left Rápido, it was only a matter of days before it was all over.

Indeed, the announcement to the carwash industry was made on Oct. 4, 2005 that Rápido Rabbit, LLC voluntarily filed for bankruptcy on Sept. 30.

Rage at the Rabbit
For the middle management at Rápido, it was as though the Rabbit had disappeared over night. As quickly as the company had risen, it now dismantled before their very eyes.

Employees were given little notice, and there is still ongoing litigation over compensation for their pay. Gaudreau and Bridge also disappeared, leaving their former employees confused and alone.

According to Owens, the employees were told a week before Rápido closed that money was short, but “if we held on till the next week, they were closing on a deal that would give the money/capital to pay everybody and all that.”

Staff at the Rabbit stayed tight for a week, and then the news came that Rápido was shutting its doors.

According to Owens, employees didn’t seem angry at the time.

“Everybody just kind of picked up their stuff and left. Didn’t say a whole lot,” Owens said.

But Owens admitted that most employees did blame their fearless leader, even under the silence.

“Everybody, I think, felt it was mostly his [Gaudreau’s] fault,” Owens said.

“One of the things that disappointed me,” Lord said, “is that they [Gaudreau and Bridge] were smart enough to put the right people in place, but then they really didn’t listen to them. They listened to other people instead.”

“They kept changing their minds,” Lord explained. “…when some of the investors made a suggestion…they said ‘Oh, okay,’ instead of sticking to their guns.”

According to Batt, ignoring the sensible advice of an extremely knowledgeable middle management is what got the Rabbit in trouble.

“They made mistakes when they [Gaudreau and Bridge] walked away from the model [at the insistence of people outside the organization]; from that platform that we knew worked,” Batt stated. “That was the failure part.”

What the Rabbit did right
Anyone from the middle management team at Rápido Rabbit will be the first to tell you, though — what worked, worked well.

“We did a ton of stuff right,” Batt stated. “I really think that our manuals were outstanding, our training — we had a three week program to train people.”

“The classroom alone was the best idea that the carwash industry could have,” Lord echoed. “Having that kind of training, on-hands in the classroom, was just a great concept.”

When Owens talked about what the Rabbit did right, he emphasized the importance of consistency.

“Every location that we opened was going to be run consistently the same way. Same equipment.

I think that’s what’s going to have to been done to have a carwash succeed on a national level. It’s just like Burger King; they do it the same way everywhere they do it.”

Mark Paulino, a developer who was working with Rápido to set up three franchise locations, said that the training program Gaudreau had in place was concrete.

“He had a very good program, and it’s something that the industry needs,” Paulino said. “The industry needs to train its people in more than one facet of the business.”

Paulino’s franchise pursuits with Rápido were halted during permitting stages, but he said despite the obvious problems, he worked very well with Gaudreau and had faith in his programs.

Batt emphasized the connection between Rápido and confidence.

“…more important than in the manuals, the manuals were good — but all the manuals in the world won’t do anything until the person that is being trained has confidence in the equipment. Has confidence that he can do it. And that’s what Rápido Rabbit really taught, more than anything else, was confidence.”

Confidence and consistency were just two of the byproducts of Rápido Rabbit’s training and management program, which has been touted by many as exceptional.

“What we were trying to accomplish was to offer people coming into the business a standardized program; standardized equipment, comprehensive training and a marketing program,” Gaudreau explained.

Industry reaction to the Rabbit
There were many in the carwash industry that expressed their concerns and skepticism about Rápido’s national goal from the start; for them, the news of the company’s demise did not seem to come as much of a surprise.

“I wouldn’t say I was surprised,” Lamar Beck, co-owner of Goo Goo Car Wash, Columbus, GA, said. “I didn’t particularly understand how his concept would work, with what little I knew about it.”

“I felt like he needed to have a couple of washes open that were operating and he never was able to achieve that,” Beck said.

On the other hand, there were people in the industry that were shocked by Rápdio’s failure.

“I was very surprised,” Fazio said. “I’m on the outside looking in, but it’s my impression that the company went under because of reasons unrelated to whether or not the idea was a good idea.”

According to Fazio, who deals with various sectors of the carwash industry, reaction to the news of the Rabbit’s downfall was mixed.

“There are a lot of people out there that were very happy that they failed,” Fazio stated. “And I think it’s because of the fear factor. What I’m seeing out there is that the new people coming into the market are really embracing this [the express model] — it’s the existing operators that have full-serves that, I don’t know if they’re afraid of it [express exterior model] or just haven’t really looked into it deep enough or they’re used to their model.”

“It appears there were a lot more people that were glad to see them [Rápido] go than were disappointed that he [Gaudreau] failed,” Fazio said.

Fazio said he was “flabbergasted” by some of the comments he saw posted online about Rápido and questioning the express exterior model and its legitimacy and capacity.

According to Fazio, a national chain is more of a possibility today because of the advent of the express exterior model. The failure of Rápido isn’t indicative of the failure of the express exterior model at all.

The national idea lives on
Although Gaudreau explicitly stated that he has no interest in pursuing a national franchise such as Rápido ever again, there are those in the industry that believe a national express exterior carwash is on the horizon.

According to Gaudreau, for a chain to attain national success and recognition, several things will need to fall into place. For one, the company’s training program will need to be extremely proficient.

Whether the national chain of the future is a franchise or independently run, the owner/operator will need a large amount of capital to support such an extensive endeavor, Gaudreau explained.

Gaudreau also said that to be successful nationally, there must be a long-term strategy, the wash will need manufacturers and suppliers that can properly support it, it will need strong management training and it will need a good marketing approach with a brand that can be expanded, developed and built upon.

Gaudreau and others in the industry have also acknowledged that they think Big Boxes will become more involved in the carwash industry in the future.

According to Fazio, a smart move by the Big Box stores would be to combine efforts with a current carwash chain that is already established and growing.

However, at this time, all sources in contact with Big Box groups such as Sam’s Club have indicated that the groups seems to be focusing solely on in-bay automatics.

“If they’re [Big Box groups] going to leave the in-bay and move into conveyorized then I think the only one [model] that will be viable for them would be the express model,” Fazio said. “I think if they try to do full-serve, it will be almost impossible.”

Where’s Steve?
For months after the Rápido break-down the carwash industry searched for Steve Gaudreau. Everyone wanted to know where he was, what he was doing, how he was doing and his version of what went wrong.

Gaudreau laid low for a while and let the industry buzz slowly fade away. However, he hasn’t left the industry; in fact, he’s gone back to doing what he does best: training.

Gaudreau has signed on with Sonny’s Enterprises as the President of their new CarWash College™. He will once again be training members of the carwash industry to attain peak performance at their sites.

Fazio said he approached Gaudreau about heading up the new college because of his longtime history and knowledge of Gaudreau’s expertise.

“When I went to him [Gaudreau] what I said was: ‘I know how good you are in training and because POWER is no longer out there, there is such a hole,’” Fazio said. “‘Will you develop the training that the industry needs? Will you recreate what you had done in the past?’”

“We are opening up the program to anyone coming into the industry, or that’s in the industry,” Fazio stated.

Fazio said there’s been a great response from the industry already, without Sonny’s really even promoting the program. Word of mouth seems to be filling the courses on its own.

Gaudreau sounds like he’s doing well. He’s picking up the pieces and slowly stepping back into the spotlight. He said he’s been very grateful for the general response he’s received from the industry following Rápido’s demise.

The Rabbits of the future
Will the industry ever see another Rápido Rabbit-like endeavor? It’s a distinct possibility.

With carwash chains like Goo Goo continuing to stretch their reach, obtaining rights to franchise in 47 states, the potential for growth seems huge and inevitable.

For more on Goo Goo’s growth and goals, check out the sidebar above.

“One thing Rápido Rabbit proved to me — you can sell Big Macs or you can sell filet mignon,” Batt said. “You’ve got to sell a lot of Big Macs to equal one filet mignon, but there’s somebody that wants a Big Mac too.

“It’s cheaper, it’s faster. And people have that expectation of that Big Mac, it’s not a filet mignon, they know it’s not. They’re happy with it, they’re okay with it. They’ll go get 10 Big Macs to one filet mignon.”

Whether people are seeking steak or burger-standard carwashes, one thing that is certain is that the carwash market is expanding and transforming.

Customers enjoy having options and the express exterior model is now offering them a discounted choice that they seem to appreciate.

Will people stop eating steak? No. But, no matter how much a person likes steak, every now and then that person will line-up at the drive-thru hankering for a Big Mac.