When it comes to selecting a location for a new carwash, owners should look at a potential site the way a consumer would — there is no substitute in committing to a property and building a $2 million facility. For the purpose of this article, we will discuss critical components of site selection for carwashes.
Many variables should be used to determine if a property is feasible and will perform at a high volume. At the top of your checklist should be reviewing the current demographics of a one-, three- and five-mile radius of the property. In my opinion, this is the most important step.
You need rooftops (lots of them) which will create a steady stream of traffic in the community that will patronize and support your carwash. Also, average household income, median income, average age, amount of vehicles in the area, what percentage is under the poverty line and the breakdown of the population are all factors to consider when reviewing this report.
What is the current zoning? Is it presently commercial, or will rezoning be required?
It is difficult, time-consuming and expensive to get a property rezoned from residential to commercial. Usually, the city or county will not consider re-zoning a property for the use of a carwash.
The property size is extremely important. You want to determine the acreage and actual dimensions. The ideal size for a tunnel carwash is approximately one acre. Additionally, a minimum of 225 feet will be required in one direction to allow for at least a 125-foot conveyor.
If the plan is to build an express exterior model, you need sufficient room for vacuum pads, queuing lanes and turning radiuses. If you want to build a flex-service, room is required for the post-vacuum and finishing area(s).
Building on less than an acre is certainly possible; however, everything will be reduced in size, and it becomes more difficult to perform at a high volume.
The proposed length of the tunnel is also important because the longer the tunnel and conveyor, the more equipment can be installed with proper, required spacing between the components.
With express exterior washes, you need space for required motors in the drying area to ensure a dry car. And, it has been determined in this wash type: The more vacuum pads, the better the operation.
Visibility and exposure are critical. If it’s out of sight, it’s out of mind. You may not want to build behind a service station or another type of business; for example, you do not see a McDonald’s or a major gas station out of view. Having the building out in front and built parallel to the main street is ideal.
If dimensions require the tunnel to be built perpendicular to the street, try to get the building (entrance or exit) close to the street for visibility.
Traffic counts are something investors and developers put too much emphasis on. Even though we would rather have higher traffic counts than lower traffic counts, this variable is not nearly as vital as demographics. Keep in mind traffic is coming and going — usually heading to work or returning home — and many drivers do not want to get off of the highway to get their cars washed.
I have seen carwashes with extremely high traffic counts not performing the required volume because they did not have the population; and, I have also witnessed lower traffic counts with sufficient population performing high-volume counts.
Sometimes, real estate brokers and parties selling their products/services will put importance only on high traffic counts and do not have the experience or know how to advise if a property should really be considered.
Traffic speed, on the other hand, is important; for instance, if the traffic is going 50 miles or more per hour, drivers are usually going too fast to view the facility or to even want to turn in. It is also difficult for vehicles to exit the property into fast-moving traffic.
Entrance and exit points
The ingress/egress, which is the entrance/exit for the property, has to contribute to producing high volume. Is there a center median where vehicles have to go to the next intersection and make a U-turn? This will reduce the amount of customers who will consider patronizing your business.
Is the property on a service road where the vehicle has to leave the main street to enter a service road and then repeat the process getting back on the main street? All of this should be taken into consideration in analyzing the ingress/egress.
Adjacent surroundings and communities are also noteworthy considerations. You should drive around and observe the businesses, shopping centers, strip malls, office buildings and residential areas.
Bear in mind if the property is in an industrial area, you may only be privileged to the existing traffic on weekdays; and, on weekends when you project your highest volume, streets could be bare and empty of any vehicles.
When driving around the residential areas, you want to view the housing, apartments versus homes, and the types of vehicles parked on the streets. Is the neighborhood deteriorating? Are vehicles so dirty you cannot clearly see their color? Is the neighborhood low-income where consumers may not be able to afford a carwash regardless of price?
Competing carwashes in a three-mile radius must be seriously considered. Visit local washes that are not service stations or self-serve washes.
If your plan is to build an express exterior wash, can existing full-serves have the possibility of converting to an express or flex-serve? Are there already express locations within the marketing area?
Remember, whatever the population is in a three-mile radius, divide that into how many tunnel washes, including your potential site, are in the area. For example, if the population is 100,000 and you will be the third tunnel wash in the area, that reduces the population to approximately 35,000 for each location. In my opinion, there is too much competition for the population in this example.
Is there space for diversified or additional services or sales? A drive-thru fast food restaurant or a quick coffee shop could be compatible with an express exterior model.
The cost of property or proposed ground rental on a lease agreement certainly has to be taken into consideration regarding your total investment cost or the monthly expense of your operation.
In the article “Site planning: Adding to the carwash experience,” featured in a past issue of Professional Carwashing & Detailing, an expert interviewed for the article noted that site selection is no time to penny-pinch, adding, “Never be cheap when choosing a property.” He could not be more accurate.
If the site is right and projects to generate high volume, it is worth paying an additional amount to obtain the property or to agree to a higher monthly rental simply because there is no substitute in obtaining the ideal site. Whatever amount you have to pay for the desired property will be amortized over many years of operating.
In the scheme of things, it will only require a minimum amount of increased volume to offset a high cost for the property or additional rent you projected.
Reports and reviews
You certainly want to check with the city or county planning department to determine the required entitlements, permits, setbacks, landscaping requirements, etc. You also want to review a preliminary title report to determine recorded underground easements.
You or your architect do not want to be surprised to discover underground easements where you are planning your improvements. Typically, it is difficult to get utility companies to agree to rerouting existing easements. It is also extremely expensive to do so even with their permission. Utility and sewer locations have to be determined because bringing these lines into the proposed site could be expensive.
Existing grades should also be reviewed — are they high or low? If you have to remove or bring in dirt, it adds to the cost of your development. The same is true for off-site improvements. If there are no sidewalks, curbs, gutters or area lighting, this cost could easily run $150,000 to $250,000.
Furthermore, you want to make absolutely sure the property is environmentally clean — not just to assure yourself, but a lender will require a Phase 1 report that has been performed within the last six months.
Finally, you must analyze the site; is the property and location viable for an express exterior, full-service or flex-service? Is there a real need for this type of business in your desired location and community? Most importantly, should you proceed or fall back? And, what should you expect if you do go ahead and commit yourself to the cost of the property and building the facility?
At this point, you would want to prepare a projection statement with what you believe would be reasonable volume, gross income and expenses.
I have witnessed many mistakes with building tunnel carwashes. Some have been minor errors; others were major; and, unfortunately, many were fatal because the development(s) should not have been built in the first place, was not properly designed and/or wasn’t operated effectively, eventually leading to failure.
When building a tunnel carwash, and with the present and potential competition, there is little room for error. If the location measures up, and if built and operated properly, a carwash can be incredibly lucrative.
Harvey M. Miller is the owner of Car Wash Consultants. He travels nationally to perform site selection services as well as to analyze existing facilities. Miller has owned and operated 32 carwashes and detailing centers. He has been performing consulting services for the past 33 years. His carwashes have been recognized eight times as No. 1 Carwashes. He is the past president of the Western Carwash Association (WCA) and the International Carwash Association (ICA). Miller can be reached at [email protected] or 949-230-3623.