Racing toward the national wash
McDonald's and Burger King have cornered the market on burgers and succeeded in turning a $2 food purchase into multi-million dollar corporations recognized on a global scale.
The question at hand for the carwash industry is: How can a national carwash chain attain the same success?Inevitable attempts
The idea of a national carwash chain is not new. It seems that every few years when a well-known carwash chain begins to add more sites, they gain the spotlight and the industry questions whether this company may be the first.
As of late, the growth of the express exterior segment of carwashing has made it easier for carwash chains and franchises to open new sites with fewer concerns about labor.
In turn, the industry has begun to see several carwash chains and franchises expanding their number of locations; some of them converting sites to express, opening new express sites, or developing sites with a combination of service offers.
This express trend and the growth of several regionally strong chains has again pushed the idea of a national carwash chain to the forefront — bringing with it questions about who will be the first, how many sites they'll need for recognition, and if or when the first national carwash may attain success.700 to success
It's easy for a carwash chain to say they will become or are on their way to becoming a national chain, however it's very different for a chain to actually gain that recognition from the public.
So, what is the magic number? Con-sensus from industry veterans and owners indicates that 700 to 1,000 sites will bring with it the national brand recognition needed to succeed.
It is undoubtedly a hefty number to strive for, but a large and unmistakable presence across the US is key to attaining nationwide success.Place your bets
Several larger regional carwash chain and franchise names come to mind when discussing the possibility of a national chain.
Professional Carwashing & Detailing® spoke with the owners and leaders of some chains to help confirm, deny, and update the industry on whether or not they may be in the running to becoming the first national carwash group.
Slow but steady
Mike's Express Wash
Site count: 31
Within the next five years, Bill Dahm, president of Mike's Express Wash, said he can not foresee a carwash chain or franchise attaining national success.
Operating a carwash chain at a national level involves a great deal of difficulty. Someone could attempt it, Dahm said, but could they execute it with operational excellence? Doubtful.Mike's growth
With 31 operational sites and three in the works, it's no wonder that Mike's Express Wash is one of the first names brought up by other operators when discussing the possibility of the first national carwash.
Unfortunately, Dahm will attest to the fact that Mike's will not be striving for a national goal. They are very comfortable opening three to four new sites a year.
According to Dahm, if a carwash chain grows much faster than that, they risk the chance of damaging their reputation by operating at a less than exceptional level.
Dahm also noted that Mike's currently has no plans to branch out into any states other than Indiana and Ohio.The biggest competitor
If someone could "pull off" a national franchise, as Dahm put it, and be successful, he thinks it would benefit the industry in the long run.
Dahm believes that the home-washer is probably still the biggest competitor the industry has. If a national wash was established, it would build credibility and foster acceptance from consumers.
According to Dahm, a chain would be much better off attempting what Mike's is working on: a smart, deliberate planned growth.Future attempts
Strong success on a regional basis is something Dahm said he can see happening within the next five years, but he does not see it reaching a national level.
Dahm doesn't think any of the other carwash owners and individuals that he networks with now will become national within the next five to 10 years, although there will probably be some consolidation in an attempt to create a national chain. From his experience, he thinks that an independent carwash chain would be the most likely candidate to attain success.
Dahm sees full-serve, express exterior or self-serve as the ideal types of washing to succeed as a national chain because there are a sufficient number of customers for each segment of the market.
An unlikely candidate
Autobell Car Wash
Site count: 43
Chuck Howard, president and CEO of Autobell Car Washes, said he believes that in five to 10 years a national carwash chain is a definite possibility; however, to dispel any rumors — it won't be Autobell.
According to Howard, there are carwash owners out there now that have announced or insinuated their national goals. A few that stick out in his mind as contenders are Rápido Rabbit®, Wash Depot and Car Spa, but he won't speculate as to who is the most likely to succeed.What it takes
To succeed in that respect, the national carwash of the future will need a great deal of financial backing. According to Howard, this may even be accomplished by franchising or opening stock options up to the public.
Howard added that to become a nationally successful chain, the carwash would have to have an excellent training and communication system in place.
Training of employees and managers for a national carwash chain would need to be uniformed and standardized. The national chain would need handbooks, operating manuals, documented training procedures, and a well-organized training effort.Recipe for success
According to Howard, offering an express option might help the national carwash chain of the future appeal to more consumers. If the wash is trying to attract all segments of the market than it's an option they will at least need to consider.
Howard thinks that future consolidation of carwash sites will probably happen and is probably happening at the moment. Chains that aim to go national will need to both build and buy.Eventual success
Although, at the moment Autobell has no intentions of going national, Howard thinks that the success of the first national carwash chain would be beneficial for the industry.
"According to the ICA's last survey, they announced that 30 percent of the motoring public still says they wash their car in their driveway," Howard said. "That is a huge potential for expanding the market."
The success of a national chain would help facilitate education for the public, Howard stated. A recognizable carwash name might help bring the rest of the public to a professional carwash.
Howard believes that a national carwash chain will eventually obtain success as the market grows and expands. His wash is a strong regional force, and although he said they have no plans to go national, he also said, "anything's possible. We do have a good system and certain things in place."
An optimistic approach
Site count: 15
Bruce Arnett Sr. is the CEO of Carnett's, a carwash chain with 15 total sites — eight franchises owned by individual owners, and seven owned by the company.
When asked if he could foresee a national carwash chain in the next five to ten years Arnett said "yes". In fact, he said Carnett's has most of the tools needed to run an operation that could be successfully replicated and managed nationwide.
Of course, it will take an enormous amount of money, and that is where the opportunity for financial expertise and operational skill need to come together.
According to Arnett, the financial backing needed to launch a successful carwash chain is vital, however, what's equally important is the organizational system a nationwide wash will need.
Supervising several locations in one state is difficult, but successfully managing wash sites throughout the US is going to take a highly-developed system of training and accountability for each location.
According to Arnett, the Carnett's franchise is approved in all 50 states and has already been approached by different parties who would like to explore the possibility of working cooperatively.Adding express
Arnett said that he could see almost any sector of the carwash industry, be it self-serve, full-serve, or express exterior, succeeding as a national chain. However, he thinks full-serve might have the advantage.
According to Arnett, the revenue that a full-service wash generates will make it easier for a national breakthrough.
Carnett's has begun building megaplexes for its franchisees, including two that will open this year, offering several service options including full-service, self-service, express, oil changes, detail services and lobby merchandising.Chain of communication
Why does Bruce Arnett believe Carnett's carwash chain could run a nationwide operation? Because he feels his company has a communication and management system that is economically scalable and skillfully designed.
As an example, Carnett's uses an advanced system called information mapping to teach and train their managers. They have designed an interactive website to help keep the chains connected.
According to Arnett, Carnett's ad-vanced systems helps Carnett's provide a consistent performance at locations 30 miles apart or 3,000 miles apart.
Afterall, isn't it McDonald's consistency and standard service that ensures customers expect and receive the same quality at any location they visit? Being reliable, dependable, and even at times, predictable has helped these burger joints reach the pinnacle of success.
Branding the express concept
Site count: 5
It was in the beginning of 2004 when Rápido Rabbit® franchise President Steve Gaudreau announced that there was a new franchise in town, and now with an established name in Okalahoma and Arkansas, Gaudreau points out the fundamentals that are required before a company can even announce national roll-out plans.
Conceptually speaking, a national carwash company is a chain that has the intention of being one and in turn its executives create a corporate model that can be appealing throughout various parts of the country and incorporate:
- A familiar concept;
- Experienced management;
- A strong branding and marketing program;
- Well-developed training, equipment and marketing systems; and
- A good business plan.
A chain can become nationally recognized long before it is national in scope, according to Gaudreau. Starbucks is an example that comes to mind, since they were known across the country even when they were principally based on the west coast.
"In addition to good public relations, recognition usually comes because that chain is doing something different or distinctive that calls attention to itself, and because all of its operations deliver on the promise of uniformity," Gaudreau said.
In retail, for a business like ours, a chain is usually considered "national" if it has several hundred locations, and has stores in most of the top markets in the US.
"Obviously, I think the exterior conveyorized segment has the best chance of going national first," said Gaudreau.
However, there are many segments of the industry, and I think customers want different services, so every segment is going to be challenged to focus on what it is that customers want from their particular type of wash.
The name says it all
National Car Wash
Site count: 45
As the vice president of operations for the National Car Wash franchise brand, Tim Jones has worked with a broad range of investors, developers and managers who've signed on under the chain's name, which has become synonymous with self-serve carwashing in parts of the southern US market, specifically in Nashville and Kentucky.Territorial rights
Financing aside, it's going to be very hard for a national chain to compete against the regional names who dominate some of the core carwash markets in the country, according to Jones, who added that his chain is growing regionally first rather than setting its sights any further.
Jones points out that if a company wants to grow nationally, they're going to have to steer clear of those powers and look for other fertile carwash ground.
"A lot of it depends on what type of business there is," said Jones. "With the advent of the express wash concept, it really makes it hard on the self-serves and the in-bays to compete in some parts of the country."
In fact, National Car Wash, which traditionally serves as a franchise for self-serve carwash operators/owners, recently converted one of its sites to an express tunnel concept last spring.Adapting to the market
According to Jones, the company recognized a changing marketplace in that area, and decided to adapt to the change in customer demand.
"Our transition has been good so far, but there has been a little bit of a learning curve," said Jones. "Anytime you convert one location, there's a little time that you need to allow for it to become popular."
The fact that the carwashing markets are so fragmented becomes a major hurdle for a company looking to go national and service customers the same way nationwide.
As far as the benefits go for a franchise system, Jones said a good franchise carwash company ultimately:
- Allows those entering the business to benefit from what the company learned in the past; and
- The success of a franchise can be determined by how closely a franchisee works with the site they invest in, thus ensuring better quality control and consistency.
"There's nothing like an owner being involved with the business, because that owner is going to be taking better care of the equipment, and the customers," Jones said. "That's another problem a national chain is going to face — tough management of workers when you're distanced from all of the locations."
Danny's Family Car Wash
Site count: 12
Major carwash owners know the key to expansion is developing a strong core business in areas where the demand for car-care is plentiful. Danny Hendon, owner of Danny's Family Car Wash, has been able to do just that in Arizona.
In fact, it was just this past August that Hendon announced his plans for a $100 million expansion spanning two to three years, which will add 17 new sites to his 12 currently in operation throughout the state.
And even though Hendon said he doesn't foresee his chain ever going national, he does believe he's cornering one of the strongest carwashing markets in America, and may eventually consider sites in either southern California or parts of Texas.Racing alongside retail
Hendon's forward-thinking business plans seem to follow alongside the Vestar Development Co. that is working to develop multiple sites and shopping centers with non-competing business.
Hendon said each of his new sites costs at least $6 million to build from scratch, but expects to carry through with a boost in revenue generated not only through carwashing, but his c-store and Shell-branded fuel services.
"Right now we pump about 2 million gallons-per-month," Hendon said. "We'll take it up to 60 to 80 million gallons-per -year when the new sites are up."
As of press time, three of the new Danny's sites had broken ground with three more of the 17 to begin construction in October or November of this year.
While Hendon notes Danny's strength in the southwest region, he's quick to point out that various weather conditions throughout the nation often make carwash companies struggle with just one way of washing when moving to a new region. A chain needs to adapt to that new customer and the conditions their cars face.
As labor intensive as carwashing is, it's a service that requires more than just one rigid treatment considering the different vehicle models on the road and the effects of harsh weather conditions on a vehicle's surface.
Hendon told PC&D he can foresee a franchise deal having a much easier time spreading nationwide since each franchisee would have to be directly in-volved with the business, but that there can't be just one cookie cutter model.
A combination of services and offerings that will work from region to region will work best to supply a targeted demand.
Eyes on the prize
Creating a brand name like Mc-Donald's for the carwash industry won't be a small task.
With a large portion of the public still washing their vehicles in the driveway, education and acceptance of professional carwashing needs to progress further to build a following close to that of the burger-tycoons.
"I've always believed, conceptually, that the emergence of a truly national chain of carwashes was going to happen," Mark Thorsby, executive director of the International Carwash Association said." The question is when and under what conditions."Is the time right?
Although Thorsby believes that the emergence of a national carwash chain is a distinct possibility, he concedes that he doesn't think the industry conditions have changed enough in the last eight or nine years to make this the optimal time for such a move.
According to Thorsby, the industry needs to come further equipment-wise and with training programs before any chain or franchise will successfully branch out to the national level.
Carwashing in New York is very different than carwashing in Mississippi, Georgia or California. According to Thorsby, equipment and chemicals will need advancement to provide the same quality wash in various areas of the country before a chain will see nationwide success.
If Thorsby had to predict a timeframe for a carwash chain reaching success on a national scale, it would be in 12-15 years down the road.
However, he also said that he doesn't believe that the name of the future national chain is out there yet.
"These individuals may combine forces, or their current attempts won't be successful and they'll learn from it and launch another attempt in a few years," Thorsby said.
Thorsby is certain on one point: the successful national carwash chain of the future will need to operate over an extended period of time during the day, if not 24-hours-a-day.
Of course, this theory stipulates that a carwash with fewer employees would be the operation of choice — more specifically, the express exterior segment.The road ahead
The varied washing service sectors, regional weather factors, a lack of considerable capital, as well as management and labor challenges have served as obstacles in obtaining a national status.
Obviously, it is going to take a lot of money to create a national carwash company, but many believe that even if venture capital were offered on the table, one carwash brand name could never be accepted by the majority of the public the same way in opposite ends of the country.
Is the American motoring public ready for the first national carwash? Will a successful national chain draw those remaining home washers out of their driveways? Is it conceivable that a carwash chain could ever attain the name recognition and acceptance that a McDonald's or Burger King has?
The first successful national carwash will have to deal with and answer these questions and more. Whether it's five, 10, or even 15 years down the road, whoever earns the title of first successful national chain will no doubt pave the way for many followers and competitors.