IBA Box next to Leased land from Convenience store

[washregal]

Ok - Here is an interesting question for the forum - I am not sure if there are experienced operators out there that can comment - However it would be appreciated.

Thinking of building a box IBA on leased land next to a convenience store - either buy the land out rite or lease the land. It will depend on what might be an option. In taking advantage of car count and the convenience store next to me - How is it best to work a business relationship with that property owner "Convenience store operator"? Thinking it would be great to tie in the wash with the POS of the convenience store - Has anyone done it like this.. if so what % of wash do you offer the convenience store operator? and do you negotiate a better land lease based on this or property price purchase?

Just curious - The car wash is like hand and gove to that convenience store or so I would think.. what have experiences been?

 

[soonermajic]

Ive been tryin for 2 years to hook up w/ 2 C-Stores across the street. They are both foreign owned, & they both think I am trying to steal from them. I offered both guys 10 cents off per gallon, & I pay 100% of that 10 cents off per gallon. NO GO.
I have the Paystation, POS, Printer, wires et all......so incredibly frustrated...

If anybody has a better idea, PLEASE share it

 

[loewem]

I've become friends with a man that owns a very nice 6 ss bay/1 auto bay wash. He also leases space for a 3 bay SS that is adjacent Jiffy Lube and he has several (5 I think) "profit share" arrangements at C-Stores like you are thinking about. My understanding is that he doesn't lease the space/land from the C-Store(s). They provide the space/land and he takes care of the rest and then they agree on a split of the profits. I've never asked him about the specific split, but he did tell me that his 6/1 wash isn't his most profitable location. I think he said that two of his profit share sites do better than his 6/1 site. I was shocked by that because I've seen his 6/1 in action several times and it rocks. He told me that he likes the c-store profit share arrangements the best. Very curious to see if anyone has experience with this.

 

[soonermajic]

Well, what kind of "profit share arrangements" doe he have? I've heard of IBA owner paying 5 & 10 cents/gal; pay nothing for gas but give 15 ---25% of all CarWash sales...

 

[washregal]

These numbers would be very interesting to get a hold of - Do they split the cost with the C store guy relative to chemicals / maintenance as well - ? Just thinking car counts for an IBA should be 25-30K a year maybe? Did the guy ever give you his car count? avg ticket 10.00?

 

[washregal]

When you say 5-10Cents per gallon - the c store would pay this and deduct from the wash cost? I was thinking of just capturing the user at the pump and charging standard ticket or somewhere close to that - and maybe a small discount at the paystation - It would hurt "bigly" if I had to pay 50% of my profuit back to the c store owner.. But the free land deal might make it attractive - if the program goes into infinity..

 

[loewem]

Well, what kind of "profit share arrangements" doe he have? I've heard of IBA owner paying 5 & 10 cents/gal; pay nothing for gas but give 15 ---25% of all CarWash sales...

As I wrote, I've never asked my friend what the profit share arrangement is. The point of my post was to tell washregal that I am aware of someone who has/is doing well with arrangements similar to the one that he is considering. My understanding of washregal's post is that the store owner also owns the land that might be purchased or leased. Based upon that understanding washregal is asking how he might enter into a relationship of mutual benefit with the store/land owner. I think that your scenario is different from what washregal is considering, but seems like there is still opportunity to work something out that benefits you and the store owners.

I'm curious about your offer. How does 10 cents per gallon benefit to the store owner? As I understand your offer, the customer gets 10 cents off per gallon of gas when they purchase a certain wash package and the end result is that you discount your wash package by the number of gallons purchased times 10 cents? Let's say the store charges $2 per gallon and a customer fills up with 15 gallons of gas. The store owner collects $2 x 15 gallons = $30. If that same customer had purchased a $10 wash package the store owner would have collected $1.90 x 15 = $28.50. Of the $10 collected for the wash package the store owner would get reimbursed for the 10 cents per gallon discount $.10 x 15 = $1.50. In the end the store owner would collect $30 for the gas in either scenario. What is in it for the store owner other than the hook of 10 cents off per gallon with purchase of a car wash? I understand that the actual profit on a gallon of gas is 2 or 3 cents. Either way the store owner makes the same profit...which isn't much. How many additional customers would fill up at the stores each week because of the 10 cent discount? Using the same scenario 10 additional fill ups per week would be $4.50 of additional profit for the store owner. Regardless of how much discount the store owner offered within the ten cents it seems like it would take a lot of cars to be worth it for the store owner.

Did you ask the store owners what would be an acceptable arrangement?

 

[loewem]

These numbers would be very interesting to get a hold of - Do they split the cost with the C store guy relative to chemicals / maintenance as well - ? Just thinking car counts for an IBA should be 25-30K a year maybe? Did the guy ever give you his car count? avg ticket 10.00?

As I understand it my friend handles everything related to the car wash. He owns and maintains the equipment, orders and pays for the chemicals, collects the money. He is a car wash service technician (his business) and I became friends with him when he started doing work on my laserwash. I'll ask him for some details. I've checked out his 6/1 wash a few times and two of his profit share locations. The one he said is his best location has had a line every time I've gone by there. Interesting that you started this thread. I was talking to one of my friends/partners in my wash about this a month ago. We ended up grabbing lunch on the way to check the profit share that I said always has a line. Seems like a good idea to me. I enjoy working on my wash, but the effort to keep up with the self-serve side can wear on you. When you consider the effort of one IBA vs 4 or 5 SS bays.....this seems like a good way to go.

 

[soonermajic]

Well, what kind of "profit share arrangements" does he have? I've heard of IBA owner paying 5 & 10 cents/gal; pay nothing for gas but give 15 ---25% of all CarWash sales...etc. Also, astnoshing, what this guy has achieved. Sounds like he inherited this situation somehow

 

[washregal]

This is and can be a big opportunity for us car wash guys.. The C store guys know nothing about our business - and I woul dnot dare to figure out the best way to sell tastycakes off of a store shelf.. Having said that.. I spoke with a guy earlier today that is working with a few convenience store locations - the car count per month is 3K!!!! yes 3K... He also stated to land a building equipment permitting - all in turnkey would be aprox 500K. Thats loaded washing cars day 1. If you can work a deal with the land and c store this would be an amazing retirement program.. The key here we need weigh n on is - what deals are people putting together with the c store guys? I am still not clear on what is referenced as a 6/1.. as well as the 10 cent off a gallon stuff and how that relates to making $$ - if we can get this piece of the formula down.. all we need to do is find 500K!!!

 

[I.B. Washincars]

6/1 = 6 Self-Serve bays, 1 Automatic.

 

[washregal]

Ahhh I should of known that.. you guys are getting way too technical on me..

 

[loewem]

This is and can be a big opportunity for us car wash guys.. The C store guys know nothing about our business - and I woul dnot dare to figure out the best way to sell tastycakes off of a store shelf.. Having said that.. I spoke with a guy earlier today that is working with a few convenience store locations - the car count per month is 3K!!!! yes 3K... He also stated to land a building equipment permitting - all in turnkey would be aprox 500K. Thats loaded washing cars day 1. If you can work a deal with the land and c store this would be an amazing retirement program.. The key here we need weigh n on is - what deals are people putting together with the c store guys? I am still not clear on what is referenced as a 6/1.. as well as the 10 cent off a gallon stuff and how that relates to making $$ - if we can get this piece of the formula down.. all we need to do is find 500K!!!

Sorry about the 6/1 abbreviation. I work full time for the federal government and I get irritated when people speak in abbreviations and assume that everyone knows what they are referring to.

I agree with what you are saying about this being an interesting opportunity. I've seen a few scenarios where a wash was built near a c-store that already had a wash and the c-store ended up shutting down their wash. So, to your point that there are c-store owners that don't have the knowledge to run a car wash...... I don't get the 10 cent off a gallon model either.

I spoke with my friend. I didn't push him for $'s or car counts, but he gave me some decent information about the deals that he has put in place. He currently has five "profit share" arrangements with convenience stores. In four of the five arrangements the wash bay was already in place. In these cases he installed new equipment and shared the cost of the equipment with the c-store owner. The shared cost varied from 40% my friend/60% store owner to 60% my friend/40% store owner. The one case where there was not a building in place my friend shared the cost of both the building and the equipment with the store owner. The profit sharing follows a similar split from 40/60 to 60/40 (it isn't one or the other.....one might be 50/50, one might be 45/55...the range is between 60/40). This next part amazes me. The store owner pays the electric, the water and the chemical costs. My friend pays for maintenance and small repairs and the store owner pays for the parts on larger repairs.

I probably didn't explain the setup at the one location that I mentioned. The site includes a McDonald's that is attached to a c-store and there is a shell gas station. I'm sure that the car count is pretty good at that location. Couldn't find any good road level pics, but check out from above at https://www.google.com/maps/@35.7444772,-78.8220927,101m/data=!3m1!1e3.

 

[loewem]

Well, what kind of "profit share arrangements" does he have? I've heard of IBA owner paying 5 & 10 cents/gal; pay nothing for gas but give 15 ---25% of all CarWash sales...etc. Also, astnoshing, what this guy has achieved. Sounds like he inherited this situation somehow

Definitely impressive what this guy has achieved, but I know that he has worked his butt off and he didn't inherit anything. He owned a c-store 30+ years ago and did very well with it. He sold the c-store and built his 6 ss bay/1 auto bay wash about 30 years ago. About 15 years ago he started his car wash service business with his son. He still had contacts in the c-store business and he started servicing c-store washes and eventually he worked out the profit share deals.

I lucked out meeting him. I was at the bank one day and I heard him talking to a bank employee about his car wash. I waited in the parking lot and talked to him. Two days later he replaced a leaking swivel in my laserwash and he's been helping me out ever since. I'd rather be lucky than good.............

Is my understanding of the deal that you offered the store owners correct?

 

[washregal]

Love that google earth - Now we are getting to the heart of it. So you state a 60/40 split - ? Is there a lease arrangement in the deal or is it sort of on a handshake.. I would be leary of anything like that. is the car wash facility ties into the POS of the c-store? Can the c store sell wash's either at the pumps or the register - if so - is there a percentage split on those numbers as well? If there is not land / mortgage and you go in with a 60/40 and the c store pays everything that might be a great deal. I would have to look at the numbers - still seems like your working for the man though. I wonder what that agreement would look like.. agreement of sale or just a general working relationship? I would be worried if I put 500K into a facility and the owner owned everything else - theoretically I own nothing. How do you see it?

 

[soonermajic]

I think everyone should know, that is the exception, NOT the rule. I have a friend who owns a NICE tunnel wash, that is hooked up w/ a massive C-store (2 restaurants, gift shop etc) which offers .10 off/gal, & he gets 35 cpd from that super busy C-store. I thought that was a LOT, but 100 cpd is almost too good to be true.
I'd think that the avg setup would garner about 15 ---> 20 cpd, which is very good!

 

[soonermajic]

My above response was to wash regal.

For Loewem's guy, glad he's doing good. But, as you state, he owned a C-store for yrs, worked on several of these washes & already was tied in w/ some of these guys. I'm sure, after the 1st guy, perhaps it was your friend, did this...then the others were a LOT easier to talk into it.

 

[tdlconceptsllc]

Definitely impressive what this guy has achieved, but I know that he has worked his butt off and he didn't inherit anything. He owned a c-store 30+ years ago and did very well with it. He sold the c-store and built his 6 ss bay/1 auto bay wash about 30 years ago. About 15 years ago he started his car wash service business with his son. He still had contacts in the c-store business and he started servicing c-store washes and eventually he worked out the profit share deals.

I lucked out meeting him. I was at the bank one day and I heard him talking to a bank employee about his car wash. I waited in the parking lot and talked to him. Two days later he replaced a leaking swivel in my laserwash and he's been helping me out ever since. I'd rather be lucky than good.............

Is my understanding of the deal that you offered the store owners correct?

(Sounds like this Guy is Gary Boyette?)

 

[loewem]

Yes it is. He has been great to me.