Impact of state of the art express wash one mile down the street of 5 bay SS

[bmfbob]

hello I am currently in the due diligence phase of purchasing a 5 Bay SS in South Florida. I just learned a 50 car per hour express wash with 36 free undercover vacuum stalls and a dog wash building is being built one mile down the street. The 5 Bay SS is busy older, well maintained wash with $1.50 for 4 minutes and a $1.00 vacuums, with a local following.

Construction of this 1.3 acre mega wash with detail center less then a mile down the road will start next month. Their other location 9 miles away, has a $6.00 express up to 15$ in up charges fed into free vacuums and vending. I assume same model.

Question is what impact will this mega express wash have on my 5 Bay SS wash business.

 

[Kevin James]

I’m pretty sure the people who you’re buying this wash from know that there is an Express tunnel going in down the road so they are trying to unload it as fast as they can. They probably know that it’s going to hurt them and hurt them bad. Figure on losing 50 – 60% of the business. I’d pay no more than county tax land value for the car wash or walk on the deal, because I think you’re going to get screwed.

 

[robert roman]

That you are asking the question is enough for me to suggest you walk away.

If you want to buy a going concern get someone with industry and market experience to help with due diligence.

For instance, consider the values of a seller that would withhold such information.

Once upon a time, I bought a Florida lemon. The taste was very bitter.

 

[Earl Weiss]

No doubt it will hurt but so many factors come in to play I'd say it's impossible to tell how much. For instance.

1. How many SS around.
2. Is it in an area where there is lots of non auto use of the SS? Motorcycles, RVs, watercraft.

 

[rph9168]

I would agree with Earl and Bob. If the owner has not mentioned the new wash I would begin to question the whole deal. As far as effect it is difficult to assess it. It definitely would affect the automatic end of the business. In my area and others I am acquainted with EE's have had a damaging effect. When one opened by me three autos within 2 miles of the EE were closed and torn down. Two of those also had SS bays and the other was part of a C-store operation. I knew the owner of another wash with 2 autos and 6 bays of self service. He survived mainly because he had owned the wash for 10 years and his overhead and payments were low enough to make a profit even after some loss of business. After an initial drop in business it leveled out to one that he could deal with. If you are not in a hurry I would wait to see what happens with the wash during construction and after the EE opens. My guess is that the price will go down as construction proceeds and after completion. Unless you can get the wash for a price that takes into consideration less revenue than it currently generates due to the new competition I would walk away. Even then you are probably taking a risk that is difficult to assess.

 

[JMMUSTANG]

When I changed my FS tunnel to EE my SS next door lost 70% the first year.
Four years later it was still down over 40%.
So if it was me I would not even think about it.

 

[coincarwash.ca]

My closed competition less than 1 mile from me closed down in the spring...my numbers skyrocketed imediatley....I would assume that the car washes numbers would drop like a rock....I would cut the value of the wash by a large amount. They are only selling because of the new wash coming , but pricing it as though it was not coming.

 

[mac]

Hello all. I've stayed away from this conversation because I'm familiar with the present owner, but wanted to get your views on this. This particular wash is a 5 bay ss only, no automatic, and it's real tight so it would be hard to add an auto. My thoughts were that self serve and tunnels were two different segments of the market, and mostly did not compete with each other. With the coming of express exterior that seems to be changing. While the new place will definitely do something, I mean the car wash pie is only so big, those of us here in the business see the new place as a dumb decision. The location is just bad, but the guys have two others that are kicking butt. Thanks for your thoughts.

 

[MEP001]

My thoughts were that self serve and tunnels were two different segments of the market, and mostly did not compete with each other.

That's mostly true as long as their free vacuums are accessible to only their paying customers and not wide open for everyone.

 

[I.B. Washincars]

I kind of thought along the same lines as Mac. I would think that since it has no IBA that the damage wouldn't be as severe. IMO, most SS customers use the SS because they want to do it themselves, not because of the price.

 

[rph9168]

I agree that most SS customers are not usually tunnel customers. The impact would be much greater if the SS also had an automatic. While I think there will be some loss of business I think it will be minimal. It would be a good thing to dress up the SS as much as possible and keep in it good running order, well lighted and as clean as possible.