Category: Podcasts

As is the case across each and every one of the world’s industries, the COVID-19 pandemic and its ripple effects have impacted the way tunnel carwash operators do business.

Though signs of a new normal might be beginning to peek over the horizon, there are still critical measures that need to be taken to ensure tunnel carwashes operate as profitably and optimally as possible during this period of uncertainty.

To give his insight into how they owners and operators can do just that, Iron Fox President Dominic Lewinsohn joined host Tyler Kern for this episode of The Iron Fox Podcast.

“Obviously, the biggest issue everyone’s facing is the safety of both their employees and their customers. That’s the biggest thing facing all people in the carwash industry,” Lewinsohn said. “Keeping social gatherings at less than 10 people really limits the amount of flow that carwashes can do, as well, and adhering to CDC guidelines and local, state and other federal guidelines (is also a challenge).”

For example, Lewinsohn said, the state of Maryland has officially shut down all carwashes, meaning that the simple act of opening for business is impossible for carwashes in some regions.

Competing with federal unemployment payouts, which have been bolstered during this period, has also strained the workforces of carwashes across the country, Lewinsohn said.

However, there are paths forward.

Specifically, Lewinsohn said doubling down on commitment to ample handwashing stations, closing or limiting lobby space, wearing appropriate masks and other personal protective equipment, thoroughly disinfecting surfaces, temperature checks with touchless thermometers, and other measures can help ease the burden of fighting back against the novel coronavirus.

On the labor side and to maximize revenue and cash flow as much as possible, particularly for larger, full-service carwashes, Lewinsohn recommends applying for small business loans and grants, keep as many full-time employees at normal capacity as possible to ensure eligibility for Paycheck Protection Program loans, and engaging in thorough record keeping and scheduling oversight.

On this episode of the Iron Fox podcast, host Tyler Kern was joined by Iron Fox Executive Sales Leader Karen Nalls, who highlighted one of the biggest changes set to sweep through the tunnel car wash industry – rising minimum wages.

Another key consideration is a rise in competition in the industry.

“The first thing that comes to mind would be the minimum wage increases for our area, and the other is just the major increase in competition in our area,” Nalls said. “Both of those have been hot topics through social media and just throughout all of our clients.”

The minimum wage increase could have lasting effects due to rising labor costs.

In particular, states like Maryland and Virginia have minimum wage increases already in the works and heading down the pipe, which could lead to necessary cost reductions in the car wash industry.

However, owners and operators still have cars to wash.

To help them balance this new wage frontier without sacrificing performance, Nalls said Iron Fox can provide helpful insights aimed at analyzing how much operators are currently paying per car and optimizing that number.

Iron Fox can also assist owners and operators with finding the correct equipment, chemicals and soaps for their specific needs and region and setting up water-quality-analysis and preventative maintenance plans that can help them be proactive and prepared for this shifting landscape.

“We have to ensure that the client is getting a clean, dry, shiny car to keep the staff from having to do unnecessary work that would increase their labor. You don’t want the labor to go up. You want the labor to go down,” Nalls said. “(Other strategies include) customizing their chemical lineup based on a variety of factors … and installing add-ons to up the average ticket costs to offset the cost of minimum wage increases.”

Generally speaking, the role of an investor is very different from that of an operator. On this episode of The Iron Fox Podcast, Bob Rust, the CEO of Iron Fox, sat down with host Sean Heath as they discussed how advances in technology are changing the nature of investors in the car wash industry.

With technological improvements being introduced constantly, not only have the services grown, but the makeup of the operators has evolved, as well, explained Rust.

“It’s an interesting industry because it’s been growing and consolidating and has been a fun time to be involved in it because of all of the change,” he said.

The carwash industry has traditionally been one of tremendous revenue swings, primarily due to weather. Subscription models are causing significant improvements to that issue, according to Rust.

“If you’ve had a really bad weather month, you might be really hurting for revenue and what the subscription model has done, is that’s really evened out some of that cash flow,” he said.

“It’s evened it out in a great way because it has probably stopped the floor from being so low,” he said.

Being involved in the industry has its own mystique, Rust offered.

“If you tell people at your cocktail parties that you’re in the carwash business, it’s surprising. It’s never, like the first choice for folks. And we like it that way. We like it to be under the radar, in that sense,” he said.

If you’ve got money to invest then you might consider parking it in the stock market or buying a piece of real estate. But increasingly, more and more investors are adding car washes to their portfolio. On this week’s episode of The Iron Fox Podcast, company president Dominic Lewinsohn shared what attracted him to the car wash industry and how it has become a hot investment play.

Lewinsohn revealed he got his start at Boston Market before creating his own restaurant group. From there he transitioned to a career on Wall Street to head up a consulting firm. Always on the hunt for new opportunities, the car wash industry caught his eye.

“I was able to look at the financials of car washes and that was very appealing to me,” Lewinsohn said.

Of the three industries he’s worked in, he said car washes are the most fun but also the hardest. The business requires a technical background to handle the logistics of the tunnel, exceptional customer service, and a keen understanding of how the financials work.

He went on to explain that there are three types of tunnel car washes. With the express version, the customer’s car goes through the tunnel and they vacuum it themselves. Full service includes detailing and hand-washing by attendants. And flex offers customers the option of either self-service vacuuming or service by attendants. Each has an important place in the car wash ecosystem.

“The reason express is doing so well at the moment is because the labor from an investor standpoint is very, very low,” Lewinsohn said.

Subscription plans where customers pay a monthly flat fee for unlimited washes have taken off over the last eight years. Operators like the model because it provides a steady stream of income that they can use to hire a stable labor force. Lewinsohn thinks people with a hospitality or foodservice background do well with car washes because they go from an industry with many costs to one with just two, labor and chemicals.

Lewinsohn said that the industry is becoming more and more competitive, but it remains a lot of fun.

“The returns on investment are superb if executed properly,” he said.