To add or not to add
It’s happening all over the country. Businesses are adding on other businesses. Target stores are putting in Starbucks coffee shops; Wal-Marts are opening Subway sandwich shops and Dunkin’ Donuts. The two don’t necessarily go hand in hand, but they’re working out. Even the Homestead Lanes Bowling Center in Cupertino, CA, is adding on a carwash.
So it is no surprise that quick lubes are adding on carwashes, especially as the economy forces operators to consider diverse opportunities. For fast lube/carwash operators, the choice is obvious: They both involve cars, they both involve customers trying to maintain their cars, and they both involve employees who know about cars. But, if a quick lube is already established and successful, should a carwash be added on?
In Tower, MN, The Y Express Lube spent $1.8 million last spring to add a carwash and pet wash. Manager Robert Perreault told the Bois Forte News last summer that the business “got a lot of comments about how convenient it’ll be,” in reference to the c-store establishment.
First comes the quick lube, now comes the…
It’s a risk and one that will cost a lot to start up. Money, property upheaval, zoning laws, new advertising and marketing campaigning all play a factor. So, the question is, if it is not broken, should you add a carwash?
“The advantages … are numerous for both sides of the equation. As an existing entrepreneur, you get another profit center with far less risk and work than what would normally be involved in starting a new business,” Jeff Elgin, then CEO of FranChoice Inc., wrote in an article that appeared in Entrepreneur Magazine. “Often, the franchise companies already have a strong brand presence in the market and a turnkey operation set up for new franchisees. …This strategy is often a true win-win scenario for both parties and a wonderful example of the adaptive nature of the American entrepreneurial spirit!”
Grease Monkey gets a wash
Chuck Paramo, a former Grease Monkey employee, recently opened the fourth fast lube/carwash combination in Wildomar, CA, for Colorado-based Grease Monkey International and carwash franchisor Monkey Shine. His establishment has a three-bay quick lube and a 100-foot express exterior tunnel.
Paramo purchased his fast lube with a carwash already attached, but as a former Grease Monkey employee, he knew the fast lube business fairly well. It was the carwash that he had to learn about.
“There’s two reasons we put the two together. Basically for the customer convenience, so they can get the oil changed and the carwash at the same time. Also, we wanted to generate more income than just with the quick lube. The way it would have been structured with just a quick lube, the rent would have been real high and we needed another source of income,” Paramo said.
For Paramo, his establishment had to add another clarifier. “We basically had to redo the carwash and we had to make sure we would be recycling our water,” a requirement that is big throughout the state of California and Paramo said it’s something they would have done anyway to help conserve water.
“I can see the potential in the carwash,” he said, “We’re not quite there now, but I can see it generating a nice profit. I would definitely recommend it, but you have to do a lot of research.
“Look at your competition,” Paramo said. “Out here, there aren’t a lot of express washes. …There’s been a big learning curve, too, with teaching our customers about our wash and how it works.”
Don’t let the numbers scare you
The price of a quick lube is usually higher than the price of a carwash, so the numbers won’t be the same. “The numbers are growing,” Paramo said. “But, the quick lube makes way more. Our average ticket is quite a big higher [for the fast lube business]… it’s roughly between $45 and $50 and the carwash gets between $7 and $8.”
A carwash also requires a lot more maintenance and upkeep thanks to the equipment involved. “Maintenance wise, [the carwash] definitely needs a lot more attention,” Paramo said. “There’s so much equipment, the hydraulic lines, the chemicals, we have to do a lot of greasing and have to clean the pit out…” The equipment is also expensive. “I knew that going in, but I didn’t realize how much maintenance it would be.”
The great thing about Paramo’s express exterior wash, though, is that it doesn’t require a lot of employees. Paramo did choose to have a greeter, but that’s not something every carwash out there has.
“I chose to have a greeter. I wanted the personal touch and logistically I couldn’t put a gate at the entrance of the carwash with the automated machine, it wouldn’t have worked and would have cut the angle too close,” Paramo explained. “I talked to a bunch of people and it was about half and half and some would rather have a machine do it and eliminate the greeter altogether.”
Keep an eye on the local laws
Opening a carwash means you’ll be using a lot of water, so make sure you’re aware of any local or statewide laws that may prohibit or protect water usage. You also have to make sure you’re not breaking any wastewater disposal laws.
For instance in Carlsbad, NM, self-serve carwash owners don’t have a place to dump their waste due to a lack of sludge disposal sites and some may have to go out of business. An August article in local newspaper the Current Argus said that washes, including Cliff’s Carwash, Jim’s Carwash and the Southside Carwash, were using Controlled Recovery Inc. (CRI), based in Hobbs, NM, to dump the waste, using an pumping service to transport it, but in March CRI said it would no longer take non-oilfield waste.
“We’re a little concerned about the drought in California and whether they’ll restrict the water usage or charge higher rates,” Paramo said. But building it, he said, was the biggest headache.
Paramo said that in terms of the regulations involved they do have to register once a year and have the clarifiers pumped out twice a year.
The benefit of having a carwash is that a steady carwash customer may get an oil change instead if the meteorologist was off and the customer is already on site.
“Absolutely, that is a benefit,” said Paramo, “to get that extra business.”