managing/operating someone else's wash

[GoBuckeyes]

Has anyone managed or run someone else's car wash? If you were to operate a stand alone automatic site for someone, like a bank holding a wash that has been defaulted on, how would you charge them? Is there a typical management fee such as X% of gross, a flat monthly rate or a combination of the two? This is something I have zero experience in and I would like to approach a bank that is in this exact situation. Thanks for any and all insight.

 

[Buzzie8]

There is too much information missing here. If the wash was performing well and it was foreclosed on because the previous owner defaulted for a reason other than poor performance I might tell the bank, I will take over the loan with them having full recourse. After you pay the bills, you get what is left over.

You need to look at all the aspects and information of what makes for a good car wash location: is it located on a road with high car counts, is it in a shopping district, are there bunch of roof tops nearby, little or poor competition, easy ingress and egress, community that is growing, and then look at the equipment they were using and it's ability to put out a good wash. If you do not have enough positives in these areas, it might (and probably is) the reason it failed. If it has all these positives it might be a good opportunity for you, if not, you should stay away from it.

 

[Waxman]

If it was underperforming I'd think you'd want to improve it somehow and that's alot of hands-on work. Perhaps build in a figure for an attendant to be on site plus your work?

 

[robert roman]

Principal reason for default is a business has insufficient sales. Consider the following points.

1) If price (average sales) is greater than average total cost (ATC), there is economic profit

2) If ATC is greater than price and price is greater than average variable cost (AVC), most owners would stay open and incur loss less than fixed cost (FC)

3) If price is less than AVC, most operators would chose to close and incur loss equal to FC

It must be possible to get back to point 2 or it would not make economic sense to reopen.

The people I work with only acquire such properties when they are reasonably comfortable they can get the property back to point 1.

So, how much would it be worth to the bank to get the property back to point 2 as opposed to point 1?

How much would each scenario cost (start-up expense)?

How much can a stand-alone in-bay really be worth in the marketplace?

Most likely, the answers are not much (point 2), much greater (point 1), potentially high and modest.

Since most buyers would only tender an offer equal to underlying value of real estate, it may not be worth much to the bank to re-open the business.

 

[rph9168]

From my experience a lot has to do with the bank or individual at the bank you are dealing with. I know a local distributor that operated several washes for the bank until they were sold. In his deal he rehabbed the washes, supplied them with chemical and maintained the wash. The bank paid for the rehabs and chemicals and split the revenue. That worked well since he got paid for the work and supplies. In most cases the revenue was not really that good. As an individual I am not sure it would be worthwhile to take a deal on like this unless they paid for all supplies and maintenance and gave you a set amount each month plus a possible share of revenue.