Iron Fox prides itself on the growing success of it’s entrepreneurs. We help those foreign to the car wash industry build and brand their company.
Tag: carwash
While carwashes employ many tools and mechanisms in their cleaning processes, perhaps none are more important than the actual soap. To get the best possible results and keep customers coming back, it’s important to choose the right cleaning products for each application. But aside from their basic cleansing power, many factors must be considered when selecting soaps.
car covered with foam on car wash
The actual purpose of a carwash is twofold. First and most obvious, it must clean, shine, and protect the vehicles its servicing. It also needs to create a memorable customer experience, or “show.” Ironically, some operators get so caught up in the show that they forget to ensure that the vehicles are protected with wax and sealants. On the flip side, other operators spend too much time ensuring that vehicles are adequately clean, often discounting the customer experience, leaving some patrons wondering whether the price was worth the effort. A big part of this show comes from the soap delivery systems. Using lighting or air effects, such as foam curtain arches and bubblizers, to apply soap and waxes in spectacular fashion creates unique visual experiences for customers to enjoy.
In terms of actual soap properties, it’s important to consider the difference between high pH (Alkaline) and low pH (Acidic) soaps. High quality soap is necessary to clean, shine, and protect the vehicles that come through a carwash. Yet, particular contaminants, such as dirt and road grime, require different processes for effective removal. Low pH presoaks are best used against mineral based soils, while high pH presoaks are most effective against the majority of road film, such as organic grime or the oily residue from passing cars. High pH products work well on dry cars with a bit of dwell time to work away at the dirt, while low pH products are applied to help brighten glass and metal surfaces. In addition to enhanced shine, low pH products also serve the dual purpose of creating a hydrophobic environment on the surface of the vehicle. By doing so, cars dry faster and easier, while potentially saving money on more expensive finishing products later in the wash process. High-quality waxes should be used for final coats, not only to protect that newly cleaned car, but to give customers the pop and shine they’re expecting.
While the soap is, at the end of the day, the reason why customers come to get their cars washed, a show reinforces the value, assuring customers they’re getting their money’s worth. Ultimately, carwashes should serve a dual purpose: clean cars via an entertaining experience. After all, who doesn’t love to drive through a tunnel of soapy, colorful suds and riotously, spinning sponges?
IRON FOX is a company that focuses exclusively on helping investors, entrepreneurs and existing operators in the conveyor carwash segment. Beyond broad carwash operational knowledge, our Senior Consultants have extensive experience with retail real estate site selection, design, development, and acquisition or sales of existing locations. As owners in existing and former carwash ventures, we have customized our service offerings and employed mechanical and technical staffs to serve a niche we feel is missing in the distribution and service markets. To learn more about our company and see how you can benefit from our unmatched experience, connect with us!
The Car Wash and Auto Detailing industry is already worth over $11 billion, and that number is expected to increase over the next 5 years.[1] The highly fragmented nature of the playing field makes it an ideal investment opportunity for a variety of savvy investors. The right location, strategy, and execution can create one, or a string of, successful small businesses that generate large amounts of passive income. Just like every opportunity, these rewards do not come without risk though.
Car wash locations are marked as special use buildings which can make liquidity difficult. There is also the risk of over-investing in resources and inventory. What many first-time owners fail to understand is just how complicated opening a new location can be. The best operator on earth can’t fix a business in the wrong place.
There are several factors that can determine the success or failure of a car wash before the first customer ever arrives. The best way to mitigate risk is with a solid plan. In this post, we’ll cover some of the most common and vital areas of risk and what steps can be taken to avoid pitfalls.
The first step in creating a successful car wash is developing a nuanced understanding of the different available models. Will the location be full-service? Flex and exterior? Some models, like the exterior wash, will generate an increased competition for optimal sites. The answer to these questions will be extremely important for determining the class and quality of a location.
After deciding on an appropriate model that fits your investment profile and risk tolerance, it is important to map out how you will select your location. Start by weighing initial costs with expected returns, but create SMART (Specific, Measurable, Attainable, Realistic, Time-Based) goals to reduce the potential for over-extending and inviting potential catastrophes. Experienced industry professionals who have successfully opened and managed several locations often utilize well-funded real estate teams to analyze the viability of all new locations.
The next step is pricing out equipment and supplies. Be careful to take information from manufactures with a grain of salt. They will make money even if your location fails. Brokers want to maximize the sale or lease rate. Everybody has their own best interest at heart and might encourage you to open a non-viable location.
It is important to remember that success in the car wash industry is a mix of smart location and operational know-how. Consulting with experts can reduce the risks of overbuilding and poor design.
At IRON FOX, we help you avoid risk with complete and sophisticated volume analytics to help you make the best investment decisions. At the start of planning, we offer a free preliminary site inspection and analysis. Our many years of experience in retail site selection for carwash operations as well as operational knowledge allow us to assist you in decision-making to set your business up for success.
Learn more about how IRON FOX can help you avoid risk in your next carwash venture.
[1] https://www.ibisworld.com/industry-trends/market-research-reports/other-services-except-public-administration/repair-maintenance/car-wash-auto-detailing.html
micro fiber cloth
Historically, car wash operators have relied upon customer service and maintaining a small number of locations, if not a single one. However, the truth is that the explosion of exterior express platforms has exploded in popularity for entrepreneurs, with many opening multiple sites. There’s a lot to be said about a small business. But the hard truth is that one of the most profitable models is owning and operating many locations, and that’s only recently become viable.[1] With better price points and attractive amenities bringing in the cash, investor interest is reaching an all-time high. Manufacturers, entrepreneurs, and private equity are noticing this wave of cash and getting ready to vacuum up as much as they can. The time is ripe, now more than ever, to enter the car washing industry.
Around a decade ago, industry experts predicted the development of two major operator types: cheaper, high-volume exterior washes that could work through a large volume of cars per day at a low price point, and a full-serve experience for wealthier customers ready to shell out.[2] The experts got most of it right, enough to be useful, at least. With approximately 4 out of every 5 new car washes utilizing the exterior models, investors are chomping at the bit. This influx of private capital has offered entrepreneurs a way to exit their investments once they’ve reached maximum value. The truth is, entrepreneurs want to take advantage of a specialized industry like this one while minimizing their risk, and now that’s possible. But what’s all this hype for this new model about? Does it hold up to honest scrutiny?
An exclusively exterior platform is more scalable than full service as it avoids the need to manage a bunch of employees, reducing time spent micro-managing. Managers also don’t need to worry about liabilities and other expenses that add up quick. Interior services are notorious for nitpicky customers, so focusing on the exterior makes customer satisfaction easier to manage. Finally, while working on cash alone has advantages, shifting to card payment is the next big thing. Tracking data on services, expenses, and trends is useful when dealing with hundreds of locations across the country.
In an industry buzzing with new investor attention, Iron Fox sees an opportunity for experienced advice to serve the increase in business, consolidation, and innovation. Bigger chains means more consolidation. Business will quit dealing with employees to spend more time on equipment and operational issues. Iron Fox has credible experts to partner with new car washing ventures and old dogs in the industry looking to expand. It’s not enough to have tested methods and industry knowledge. Getting ahead of the competition requires an honest perspective that recognizes trends but doesn’t get too caught up in them.
To learn more, visit Iron Fox today at: www.ironfox.com
[1] https://www.carwash.com/the-express-exterior-phenomenon/
[2] http://www.carwashmag.com/home/article/is-size-it-express-flex-whats-next/4c38370285dbf94e64d0d16b32a0f2cc.html
Historically, the conveyor carwash industry has been extremely fragmented, with a majority of operators owning and actively managing a single carwash. From the beginning in the 1950s through the 1990s, few operators had as many as 5 locations. Beginning at the turn of the century, this changed. There is an accelerating trend toward acquisition and consolidation. Since 2000, IMO and Mr. Wash have aggressively acquired existing carwashes. This trend is reflected in smaller operators as well with a number of smaller roll-up operators operating 30 to 40 locations. In 2013, there were only 43 operators with more than 10 carwashes. By 2016, there were 61. Private equity is actively seeking carwashes as sound investments, which creates exit opportunities for operators, entrepreneurs and investors.
As these shifts occur, the more entrepreneurs are looking to start ventures in the carwash industry. These new owners will focus on multiple exterior-only and flex-service sites. This will place a premium on distributor partners who can provide more operational, site selection and equipment expertise to entrepreneurs looking to expand quickly.
This shift is due in part to the explosion of the exterior-only operating model for conveyor carwashes. The exterior only model consists of a 90’ to 120’ carwash tunnel with an area for customers to vacuum their cars. The model requires very little labor compared to a full-service model, which has as many as 25 employees at busy locations on peak days. Exterior only operations are slightly less profitable than the full or flex-service models; however, the model is not as management intensive and is more scalable, allowing an investor to build multiple units. Equipment manufacturers and distributors have encouraged the exterior-only model. New investors are increasingly looking to create chains of 3 to 10 carwashes. Since 2010, more than 80% of new conveyor carwashes are exterior only models. Operators of exterior only models, with limited management and labor, will increasingly rely upon distributor partners, such as Iron Fox, who have the management expertise and staffing to address development, equipment and operational issues. Learn more about Iron Fox and its services.