Described as a phenomenon and hottest trend in the carwash industry, the express exterior carwash continues to march forward by converting water into money. According to Professional Carwashing & Detailing magazine, 60 percent of the Top 50 conveyor carwash chains have exterior carwash outlets. By most accounts, the numbers are only expected to grow.
What is an express exterior carwash? Start with a full-service conveyor and peel away all of the stuff that today’s new investors aren’t interested in, including interior cleaning, lobby and detail shop. Doing so lowers average start-up expense and annual operating expense by about $700,000 and $300,000, respectively. What you are left with is a business that washes faster, better and cheaper than any other form.
Is it a good investment?
With the right location, you have the potential to make a lot of money. Based on an average price of $8, and per unit variable cost of $3.88, 100,000 washes would produce an NOI of about $400,000. Depending on the cost to build, this could provide an ROI of over 90 percent.
Moreover, modular buildings and integrated equipment packages can provide a huge depreciation tax shield to fatten up your cash flow.
How much does it cost? Express exterior has the characteristics of a low-variable cost plant; high volume; low-priced product that is easy to produce; and low labor content and skill requirements. Technical requirements are a priority. This means investing money mostly in land, buildings and equipment.
Although construction costs can vary considerably, the typical cost including land is about $1.8 to $2.4 million.
Why does it work? Express exterior represents a trend towards rationalization where low price, free vacuums and faster process speed eliminates or blurs traditional market segments. This allows operators to target the bottom 60-70 percent of families and win on a transaction volume per location basis like Wal-Mart does.
With a strong image and reputation for high quality and service, operators can create a tiny monopoly and have some control over price.
Is it hard to manage? Express exterior requires less management attention that most other forms. Centrally-operated vacuums eliminate the need for unskilled labor. The automated pay station reduces the operator’s learning curve, eliminates customer confusion and eliminates the need for sales personnel.
With the proper equipment, it is now possible to wash 110 cars per hour with a site manager and one employee. If the operator installs surveillance cameras and internet enabled telemetry devices, it is possible to monitor and manage multiple sites from a remote location on a 24-hour basis.
Is it hard to build? For those who want a turnkey approach, there are franchise opportunities available like Goo Goo’s Carwash chain based out of Alabama and the Boomerang Carwash chain based out of Arkansas.
For those who desire the traditional approach, there are manufacturers like Sonny’s Car Wash Factory that will engineer and provide a complete solution specific to your land and market demographics. One advantage of this approach is that Sonny’s charges nothing for these services, they are including with any equipment package.
What are the keys to success?
- A strong entrepreneurial spirit;
- A good location
- A knowledgeable vendor and durable equipment;
- Building inexpensively but not cheaply; and
- Community involvement.
Bob Roman is a former carwash, express lube and detail shop operator and is president of RJR Enterprises (www.carwashplan.com
), a leading consultant to the carwash industry. Bob is a member of International Carwash Association and PC&D’s Honorary Advisory Board. He can be contacted at: email@example.com