Self Service vs Express Tunnels

[carwash_nashville]

Hello Everyone,

We are in the middle of purchasing a carwash around a fast growing major city and looking for an advice. This carwash has 6 Bays out which are 4 Self Serve and 2 IBA. Most of the revenue that is generated of this carwash is from Self Serve (80% of revenue). Location is great, have nice visibility, traffic count and the signals.

However, there is no room for expansion and new equipment is needed for IBA bays. There are also new express tunnel car wash coming around with in 1 mile radius.

My concern is:

Am I banking too much on the Self Serve Car washes ? What is the future for self serve car washes in general, would eventually all the customers do migrate to Express Tunnels from Self Serve ?

This location is self sufficient and could pay for itself out of the income generated from self serve car washes, but we are worried that what if people stop using the self serve car washes.

Are we banking too much on the Self Serve Car washes ?

Appreciate any honest feedback from the people who are experienced in running a self service car wash.

Thank you in advance.

 

[Dcpagejr]

Nashville
The new wash is going to take some of your business for sure.
Honestly there is so much corporate greed out there... Most of the new tunnels popping up are being built with corporate funds and they just don't care if they hurt others along the way. In my town I ran one wash for years until it sold, I moved into building washes, and helped a local guy build another wash here as it was needed. The wash opened around valentines day. Now there are 4 more wash coming to town over the next 12 months. My advice...find another business to put on the property if you can.

 

[JMMUSTANG]

Why do you think they’re selling the self serv?
Unless you can buy it for considered less than they are asking I would really think hard about buying it.

 

[KleanRide]

I have express tunnels on either side of me, at 1/2 and 3/4 mile from my location. I bought my 7 bay SS wash 16 months ago and did an extensive renovation. Business has increased 40% over that time and continues to grow. Self serve in the right market and location will do great as long as you keep it clean and offer a great wash experience for your customers.

 

[carwash_nashville]

Thanks everyone for your feedback. The reason the carwash is being sold is because the owner is getting older and he is ready to cash out. He has bought the property almost 20 years back and the property has nicely appreciated since then. I see this as a good opportunity because of three reasons primarily:

1) Motivated seller selling the Business + Real Estate for less than the current market price
2) Since the carwash has positive cash flow, banks will be funding the deal
3) Real estate is appreciating nicely year over year, end of the day I am not in carwash business but the Real Estate business

 

[MEP001]

The tunnel nearby will hurt your IBA income as well as the vacs if the tunnel will offer them for free. In my experience, SS and auto/tunnel customers don't cross over much. Maybe consider turning the auto bays into more SS, or possibly extra large extra pressure truck wash bays if there's room for them to maneuver on the lot.

 

[Greg_T]

The tunnel nearby will hurt your IBA income as well as the vacs if the tunnel will offer them for free. In my experience, SS and auto/tunnel customers don't cross over much. Maybe consider turning the auto bays into more SS, or possibly extra large extra pressure truck wash bays if there's room for them to maneuver on the lot.

I like the idea of a bigger bay. For our humble little 3 SS bay wash, we have one larger bay that can accommodate prime movers (tractor from a tractor / trailer combination), horse floats, caravans, larger boats etc. These larger vehicles also have quite a high average spend per wash.

 

[Greg Pack]

SS if run well will do OK, the tunnels will have some impact but the IBAs will take the biggest hit. It sounds like the IBAs don't do that well anyway, Most of the time the IBAs are responsible for the lion's share of the income at a healthy site.

I'm getting ready to open a 5/2 with plenty of tunnels around and don't even know if I will install an automatic. For now, one bay is being converted to storage. I may eventually install an auto in the other bay or lease it out to a detailer. Touch Free might be a good niche in tunnel country if there are not many of them around

 

[MEP001]

I may eventually install an auto in the other bay or lease it out to a detailer.

A detailer can be a good plan, especially if you can either lease it out to someone who will take care of the wash or hire people yourself to do both. Leasing it is usually better since you won't have to deal with employees yourself, although if you can find the right manager you can let him/her do that. I myself have run a vehicle safety inspection station out of an empty auto bay - it barely paid my salary, but I was basically free labor with 6 or so hours during the day to keep everything perfect.

 

[MEP001]

I like the idea of a bigger bay. For our humble little 3 SS bay wash, we have one larger bay that can accommodate prime movers (tractor from a tractor / trailer combination), horse floats, caravans, larger boats etc. These larger vehicles also have quite a high average spend per wash.

My wash has one extra-wide bay (meant for handicap access) but the pickups, roach coaches, and bigger/taller vehicles prefer it.

 

[mac]

Nashville something in your post jumped out at me. You said that a bank would fund this. You might want to talk to them first. Many banks won't lend on a wash if the owner doesn't have any experience in the business.

 

[BenBranam]

You could also think about upgrading your IBA to compete with the tunnel. There are a lot of new things on the market that can fit in your IBA area and compete with a tunnel for speed. Tunnels are there because people want quick in and out and don't want to do anything. If you can match that on your site, you can take a chunk out of their business instead of letting them take yours. The new POS systems will do monthly washes and everything the large tunnels are doing, most without the employee expense.

Check out https://www.autobriteco.com/car-wash-equipment/conveyor-tunnel-system

Disclaimer: This only works for a high traffic area and I work for the company that is producing this equipment.

I think it is the best on the market and was designed to help you compete with the tunnels going in. If you want more info contact me and I can help with some traffic analysis and what kind of numbers you might bring for the location of your wash.

 

[carwash_nashville]

Nashville something in your post jumped out at me. You said that a bank would fund this. You might want to talk to them first. Many banks won't lend on a wash if the owner doesn't have any experience in the business.

I have an existing relationship with this bank. We have given them the presentation and they reacted positively and currently under the approval process. Fingers crossed, hop everything works as planned.

 

[carwash_nashville]

The tunnel nearby will hurt your IBA income as well as the vacs if the tunnel will offer them for free. In my experience, SS and auto/tunnel customers don't cross over much. Maybe consider turning the auto bays into more SS, or possibly extra large extra pressure truck wash bays if there's room for them to maneuver on the lot.

Thanks for the insight. Currently not much is generated out of this IBA bays. In fact only one out of the two is barely functioning.

 

[carwash_nashville]

I like the idea of a bigger bay. For our humble little 3 SS bay wash, we have one larger bay that can accommodate prime movers (tractor from a tractor / trailer combination), horse floats, caravans, larger boats etc. These larger vehicles also have quite a high average spend per wash.

I like this idea, need to take the measurements of this vacant IBA bay and see if this can be re-purposed.

 

[carwash_nashville]

SS if run well will do OK, the tunnels will have some impact but the IBAs will take the biggest hit. It sounds like the IBAs don't do that well anyway, Most of the time the IBAs are responsible for the lion's share of the income at a healthy site.

I'm getting ready to open a 5/2 with plenty of tunnels around and don't even know if I will install an automatic. For now, one bay is being converted to storage. I may eventually install an auto in the other bay or lease it out to a detailer. Touch Free might be a good niche in tunnel country if there are not many of them around

Like the idea of leasing the vacant bay to a detailer. Will explore more on this. On top that, they can also help maintain the car wash on day-to-day activities.

 

[carwash_nashville]

You could also think about upgrading your IBA to compete with the tunnel. There are a lot of new things on the market that can fit in your IBA area and compete with a tunnel for speed. Tunnels are there because people want quick in and out and don't want to do anything. If you can match that on your site, you can take a chunk out of their business instead of letting them take yours. The new POS systems will do monthly washes and everything the large tunnels are doing, most without the employee expense.

Check out https://www.autobriteco.com/car-wash-equipment/conveyor-tunnel-system

Disclaimer: This only works for a high traffic area and I work for the company that is producing this equipment.

I think it is the best on the market and was designed to help you compete with the tunnels going in. If you want more info contact me and I can help with some traffic analysis and what kind of numbers you might bring for the location of your wash.

Looks good. I like your self service system(https://www.autobriteco.com/car-wash-equipment/self-service-system). Will explore more.

 

[BenBranam]

Looks good. I like your self service system(https://www.autobriteco.com/car-wash-equipment/self-service-system). Will explore more.

Thanks. Let me know if I can help you.

 

[Rfreeman]

1) Motivated seller selling the Business + Real Estate for less than the current market price
2) Since the carwash has positive cash flow, banks will be funding the deal
3) Real estate is appreciating nicely year over year, end of the day I am not in carwash business but the Real Estate business
[/QUOTE]

Current market price is whatever you the buyer and the seller agree too so I wouldn't base your decision on this. I wouldn't consider it at all for that matter unless you are buying the property for less than the real estate market price because remember your in the real estate business (point #3) Regarding your #3 No you are in the car wash business since you will be operating it as car wash and you better have a plan in place because that tunnel will have an impact. I know a car wash owner that lost 42% of his revenue as soon as the tunnel opened up less than a mile away. Every market is different and I do agree to an extent SS customers may or may not like tunnels. I had a self serve approx. 1.5 miles south of me between me reopening my site (purchased out of foreclosure) and the tunnel that opened up next door we did him in and he closed it down.

My point is, have a plan in place and execute on that plan and it better include running a top notch site with quality products and services.

 

[Axxlrod]

3) Real estate is appreciating nicely year over year, end of the day I am not in carwash business but the Real Estate business

Uh, no. You're not. You'll be in the car wash business. These things don't run themselves.