Intro and first question

[JohnnyGunn64]

Hello all. I've been lurking on here for several weeks and appreciate all of the information provided in this forum. I am interested in buying a SS car wash in western/central NY. My concern is that there have have been lot of big time tunnel washes that have been moving into this area over the past couple of years. (Delta Sonic/Mister Car Wash/Go Car Wash) with the monthly membership packages and free vacuums. I'm also seeing SS car wash go up for sale in the region and staying on the market for some time. In some cases the prices are dropping as well. It seems like some owner/operators may be tying to get out before the bottom falls out of the market. I am considering makin an offer on a wash but the current owner is unwilling to share his financials. He's retiring after 50 years and says he's been hiding cash from the IRS so he doesn't want to show his books to anyone. He is selling it as land, building and equipment only....not the business. I've scouted the wash on several occasions to record car counts, time in bays, etc. and his claims of gross income seem to be legitimate. There is a new Go Car Wash tunnel that opened a year ago 1/3 of a mile away. He says, it has only hurt his one touchless automatic bay but not the 5 SS bays.
My overriding question....Is there still a long term future in the financial viability of the SS car wash model or is model dying with the changes in the industry?
Thank you in advance.
Johnny

 

[Dan kamsickas]

Hello all. I've been lurking on here for several weeks and appreciate all of the information provided in this forum. I am interested in buying a SS car wash in western/central NY. My concern is that there have have been lot of big time tunnel washes that have been moving into this area over the past couple of years. (Delta Sonic/Mister Car Wash/Go Car Wash) with the monthly membership packages and free vacuums. I'm also seeing SS car wash go up for sale in the region and staying on the market for some time. In some cases the prices are dropping as well. It seems like some owner/operators may be tying to get out before the bottom falls out of the market. I am considering makin an offer on a wash but the current owner is unwilling to share his financials. He's retiring after 50 years and says he's been hiding cash from the IRS so he doesn't want to show his books to anyone. He is selling it as land, building and equipment only....not the business. I've scouted the wash on several occasions to record car counts, time in bays, etc. and his claims of gross income seem to be legitimate. There is a new Go Car Wash tunnel that opened a year ago 1/3 of a mile away. He says, it has only hurt his one touchless automatic bay but not the 5 SS bays.
My overriding question....Is there still a long term future in the financial viability of the SS car wash model or is model dying with the changes in the industry?
Thank you in advance.
Johnny

My first reaction when someone doesn't want to show you numbers is to walk away. If you make him an offer based on the real value of land with a purpose built building and equipment he's probably not going to like it because it may very well be not much more than an empty parcel. How old is the equipment? Is the manufacturer in still in business and, if so, do they still support it? What is the physical condition of the building? Has he kept up with capital reinvestment in improvements?

 

[washnshine]

What town? I am in Buffalo

 

[JohnnyGunn64]

The wash I'm looking at is in Syracuse. What are your thoughts on the market in WNY?

 

[Axxlrod]

The SS customer and the express tunnel customer are different. There will always be DIY customer that wants to wash their own vehicle at a SS wash. The express tunnels do destroy IBAs though.

As far as that particular seller, what an idiot he is for admitting to a stranger that he hides $ from the govt. But that's his problem. He'll never be able to sell his business for the enterprise value; he'll only be able to get land/property value, which would work to your benefit.

If you can buy the wash for land value then go for it.

 

[Roz]

The SS customer and the express tunnel customer are different. There will always be DIY customer that wants to wash their own vehicle at a SS wash. The express tunnels do destroy IBAs though.

IBA can compete against a tunnel if run well. Tunnels are not touchless so a touch free IBA could do well with customers not looking for the cheapest wash (monthly programs) nor want to run the risk of damage to their vehicle - plus an IBA is Always Open! SS is a demographic as there are a lot of vehicles that cannot fit into an IBA or tunnel. My sprinter van and truck customers spend more per wash than an of my automatic customers. If you are the right location with the right demographics, well the SS revenue can totally outpace the automatic revenue by far.

 

[washnshine]

The wash I'm looking at is in Syracuse. What are your thoughts on the market in WNY?

I know a lot of the washes there and have been familiar with many owners and their changes over time. The boulevard used to have several tunnels like Dewitt, whale of a wash, boulevard car wash etc. that got pushed out when Delta Sonic entered your region. Since then Delta built a few more locations. Then Go came to town years later. Some of the tunnels responded by converting to touchless IBA washes. There was one in Thompson road - it’s now owned by Bubble Up, but less than a mile away, a Speedway opened up with two Laserwashes and they are killing it. To put out a good product - I’ve used them.
Valet Auto Wash killed North Salina’s tunnel wash - they had to pull their tunnel and put in two razors. I felt bad because it just changed hands when Valet opened and the new owner had to deal with that.
The only tunnel I have seen open recently is the Sudsy Bucket and he actually replaced a touchless tunnel - that was a headache-trying to wash with a touchless tunnel I spoke to guy who owned it when it was Sparkle City.
If the current owner of the wash you are interested in is telling you his IBA has been impacted, that’s probably correct. Generally speaking, Syracuse, Buffalo and Rochester have dwindling self serve markets - I know everyone does / but we are newer to the express game and big box washes, and we also have some months where it is absolutely miserable to wash by hand - as you know. Many of the ss are also in more run down parts of town. If there is a nice suburban one, that may be a different story. If you want to share the specific location, I can tell you what I know, if not, I completely understand.

 

[Earl Weiss]

. He is selling it as land, building and equipment only....not the business.

Well there you have it - that is what you are buying and that is how you should value it based upon what you think it can do and if that makes the price reasonable.