6-Bay self serve car wash 4 vacuums Ontario, Canada

[tristavendryes]

Hey everyone! I have an opportunity to take over a car wash that has been closed for less than 1 year. The landlord operated it for 3 years and decided he no longer wanted to be an operator. I scouted the location and left a note to get in contact with this landlord. The plan is to sign a long term lease (10-20 years) and retool the 6 bay self-serve car wash (4 vacuums) however, I need some guidance with how to negotiate the starting lease price. We have already agreed to abated rent for 12 months, which is awesome!

The total lot size is 12,000 SQ/F and the building size is 4100 SQ/F. Do car wash leases go by $/sqf or is there another formula to determine a starting rate?

Site fundamentals:
Key demographics (borderline)
Traffic count (poor)
competition (excellent)
site visibility (great)
site accessibility (good)
retail draw (good)

I look forward to your input on this!

 

[Rfreeman]

Key demographics...borderline
Traffic count....poor
Competition....excellent (meaning there is other washes close by????)

Lease property........

This would be a no deal! Just on the first two I would pass on it. Add that its a lease then for sure no thank you.

Why de he decide he didn't want to be an operator any more? Maybe income wasn't worth the work due to the factors you listed above. 12 months free rent????

Sounds like a poor location

 

[Dan kamsickas]

Sounds like a poor location

It looks like it. The building is perpendicular to the road, the bays are pull in/back out, and it's not eye-catching in any way. Looks like if the customer does choose to use the place, it's going to be a pain to use.

I'd recommend passing.

 

[tristavendryes]

Key demographics...borderline
Traffic count....poor
Competition....excellent (meaning there is other washes close by????) This means little competition- nearest car wash is 20 minute drive away

Lease property........

This would be a no deal! Just on the first two I would pass on it. Add that its a lease then for sure no thank you.

The demographic report does not account for the military base (thousands of people as their address is not registered to the city)

Why de he decide he didn't want to be an operator any more? Maybe income wasn't worth the work due to the factors you listed above. 12 months free rent????

Car washes are not for everyone, he learned this quickly. I am taking it over for free, I just need some insight on how to make an offer for the monthly lease as I don't want to overshoot it.

Sounds like a poor location

 

[tristavendryes]

It looks like it. The building is perpendicular to the road, the bays are pull in/back out, and it's not eye-catching in any way. Looks like if the customer does choose to use the place, it's going to be a pain to use.

I'd recommend passing.

It is on a very busy street, do you really think the way the building is situated would cause people not to use it? It is the only one in the small town.

 

[traveler17]

It is on a very busy street, do you really think the way the building is situated would cause people not to use it? It is the only one in the small town.

You said there is excellent competition, whats that mean? People want convenience. What if you did get busy during a rush part of season, how is anyone supposed to wait on a bay. Ask yourself if you would pull in sit behind somebody waiting to pull out. Sounds like an accident waiting to happen. Listen to advice above. Just the layout of that building is a
No and a lease in a small town is a hard no. I bought my first wash in a small town and if I had a lease on it I wouldn’t make any profit. There is a reason that place isn’t open. If it were making money I promise the guy wouldn’t be so eager to give away 12 months rent. How much money needs to be put back in this place ? Does any of the equipment operate? How much was this place generating 3 years ago? LOTS of questions

 

[Roz]

Folks. Some of the points are valid however I would not be so negative on the opportunity. It’s like buying a house, everything is overpriced until you settle on a fair price.

In this case maybe the landlord will make the rent a small amount with an option to buy the place in the future and forgo the rent entirely until the renovations are covered. There is more than one way to look at a potential deal if the location is good. Hard to evaluate a place remotely as it takes eyeballs on the place to see the true potential or lack there of. I recall a wash I made an offer to purchase after visiting the site on serveral days for a few hours to see how the place looked with customers. If one just looked at Google demographic data you would have passed on the place because the town was under 2000 people. The wash was in a major road which changed the picture entirely.

 

[Dan kamsickas]

It is on a very busy street, do you really think the way the building is situated would cause people not to use it? It is the only one in the small town.

Yes. Pull in/back out is a pain. Perpendicular to road usually signifies a narrow lot which further complicates the traffic flow on site. I can think of 4 washes like that built around here during the boom of the 90s and everyone had multiple owners over the years that were convinced they got a sweet deal on it so they could for certain make a go of it. Everyone eventually failed and the sites were bulldozed.

 

[Earl Weiss]

Don't put yourelf on the hook for 10 years. Get:

A. 2 year leas with lots of options
B. Right of First Refusal.
C. Try to get an option to buy.

 

[Roz]

Yes. Pull in/back out is a pain. Perpendicular to road usually signifies a narrow lot which further complicates the traffic flow on site. I can think of 4 washes like that built around here during the boom of the 90s and everyone had multiple owners over the years that were convinced they got a sweet deal on it so they could for certain make a go of it. Everyone eventually failed and the sites were bulldozed.

There is some validity to Dan’s observations. I own a “Canadian Style” self service location. We converted the place to a self storage location as the location was not great. The benefit of that style is that wind will not blow through the bays so they do not get as cold in the wintertime. We also have garage doors on each bay that we closed prior to a snow storm.

I would still kick the tires on the place. The real reason the place closed may be due to competition nearby. In our case an Exxon station was built that has two IBA (TF and SC) which is what people want. They get a discount on gas with a wash so most people moved away from self washing their cars.

 

[Greg Pack]

Silver lining- If conventional operations don't work it would be sasy site to convert to gated wash.

Have one (buy used) paystation with a fixed price ($10)and entry gate. Have one exit gate. Everything behind the gate is included in the entry price. The pull in-back out bays would reduce the undesirable customers at a gated wash which are big vehicles or trailers. I'd give it a go with short term lease with options to extend if it worked. Could probably do this conversion with a used paystation for 15K Advantages- reduces theft concerns (all money is at the gate near the road) and simplifies money collection. Easy to run if it works.

 

[tristavendryes]

There is some validity to Dan’s observations. I own a “Canadian Style” self service location. We converted the place to a self storage location as the location was not great. The benefit of that style is that wind will not blow through the bays so they do not get as cold in the wintertime. We also have garage doors on each bay that we closed prior to a snow storm.

I would still kick the tires on the place. The real reason the place closed may be due to competition nearby. In our case an Exxon station was built that has two IBA (TF and SC) which is what people want. They get a discount on gas with a wash so most people moved away from self washing their cars.

Thanks for your insight. The location has a lot of traffic, and only 1 other operational self-serve car wash that is 20 minutes away. I don't want to own this land that is why I connected with the landlord of the property to negotiate a long term lease to get the car was business for free. He already agreed to this and I will have the rights to the business. Good idea for the winter as this is a hurdle I will need to tackle since it is close to Ottawa- (winters are brutal). My next step meeting with a distributor to see what would work best for the lot.

We can constantly go over as to why the previous operator failed, but once someone knows what they are doing and cares about the business it will be successful. That is what I plan to do, I have a structure and strategy where I am already winning by not having to buy the business out right, paying no rent for 1 whole year to cover the costs of re-tooling the equipment.

I live in Toronto and there are plenty of carwashes that are EXTREMELY successful and have terrible traffic control and people will still come and use it.

I am also looking for a mentor in this space so please let me know if you are willing to share any additional knowledge by connecting via email or phone.

Thanks!

 

[OurTown]

How will you be able to run this so far away? Isn't it something like a 5 hour drive one way?

 

[Rfreeman]

How will you be able to run this so far away? Isn't it something like a 5 hour drive one way?

Add that to the list of reasons why I personally would say no to this deal.... hell sometimes I hate my 25 min drive to one of my washes haha

 

[Walter White]

Thanks for your insight. The location has a lot of traffic, and only 1 other operational self-serve car wash that is 20 minutes away. I don't want to own this land that is why I connected with the landlord of the property to negotiate a long term lease to get the car was business for free. He already agreed to this and I will have the rights to the business. Good idea for the winter as this is a hurdle I will need to tackle since it is close to Ottawa- (winters are brutal). My next step meeting with a distributor to see what would work best for the lot.

We can constantly go over as to why the previous operator failed, but once someone knows what they are doing and cares about the business it will be successful. That is what I plan to do, I have a structure and strategy where I am already winning by not having to buy the business out right, paying no rent for 1 whole year to cover the costs of re-tooling the equipment.

I live in Toronto and there are plenty of carwashes that are EXTREMELY successful and have terrible traffic control and people will still come and use it.

I am also looking for a mentor in this space so please let me know if you are willing to share any additional knowledge by connecting via email or phone.

Thanks!

Hi send me a email

 

[traveler17]

Where do I sign up? Sounds like an easy money maker!!

 

[Waxman]

I would pass based on the drive-in back out situation alone. Then you add in not owning the land and for me that's an even bigger no. But that's just me and how I think about business based on my own experience location etc.

 

[traveler17]

I would pass based on the drive-in back out situation alone. Then you add in not owning the land and for me that's an even bigger no. But that's just me and how I think about business based on my own experience location etc.

If you’re referring to me I was just kidding or being a smart a** , one or the other