Survival; Just bought a car wash, Now tunnel opening a block away

[Dick Nitro]

Hello

I'm looking for those who have found themselves next to a tunnel. I've never owned a wash before and just bought one 5 months ago (6/2 SS/IBA). We're in process of renovating and making it better and things have been going uphill until now. I just got word that our city has signed off on approving a large tunnel chain to construct in a spot about 1000 feet from my location.

I've put everything I have into this project and are just beginning to see payoff potential. I always knew this was a possibility, but I thought I would have more time to restore our locations reputation and get a ball rolling. The coincidence is uncanny and my wife and I are very afraid. We lease the location and it would now be unsellable therefore sticking me with the rent forever. I estimate that I have about a year, maybe a little more before the Tunnel wash opens.

I've read some posts about competing with memberships and free vacs. I have a PDQ laserwash G5 and Tandem Rite Touch that i don't believe have any coupon or membership options.

I'll gladly go to free vacuums if it helps, though I just put CC readers on all of them possibly in vain.

I'm grateful for anyone's experience and help. Thanks

 

[Car_Wash_Guy]

Yeah, I would almost bet that your landlord knew exactly that thing was coming to town.

With that said, let me forewarn you - expect to lose 10 to 50% of your business.

if it was my place, I would :

1. Make the outside look impeccable. Fresh paint/decal/signage/everything looking new.

2. Go to some app based membership program. Maybe touch4wash? I’m sure you don’t have the budget to put Dencar in. That would be my first suggestion, but it’s not cheap.

3. I would set up a complementary towel drying station with window cleaner/all purpose cleaner/tire shine.

4. Free VAX. I would definitely suggest crevice tool and claw. Maybe add compressed air?

5. Try having it attended during business hours by a employee in branded clothing, looking professional and courteous, asking everybody what their experiences like and if there was any troubles.

that should be a great start!

 

[HeyVern]

Make the place look good, use good chemicals and get cars clean, include vacuums with purchase of an auto wash, have somebody on site to talk with customers and address any concerns. Let the garbage dumpers go use the free vacs at the tunnel.

 

[Dick Nitro]

Yeah, I would almost bet that your landlord knew exactly that thing was coming to town.

With that said, let me forewarn you - expect to lose 10 to 50% of your business.

if it was my place, I would :

1. Make the outside look impeccable. Fresh paint/decal/signage/everything looking new.

2. Go to some app based membership program. Maybe touch4wash? I’m sure you don’t have the budget to put Dencar in. That would be my first suggestion, but it’s not cheap.

3. I would set up a complementary towel drying station with window cleaner/all purpose cleaner/tire shine.

4. Free VAX. I would definitely suggest crevice tool and claw. Maybe add compressed air?

5. Try having it attended during business hours by a employee in branded clothing, looking professional and courteous, asking everybody what their experiences like and if there was any troubles.

that should be a great start!

Oddly enough, a deal with a different express chain failed at that very location right before we purchased. I figured that was our window to jump in and get going. I always knew the threat was there, but I guess I was a bit surprised when only 3 months later one of their competitors pounced on the same spot.

In hindsight, I guess I should have really saw it coming

Thanks for your advice. We will adhere to these suggestions.

 

[Dick Nitro]

This chain also has a location about a mile away around the corner. Some of my mentors are saying that we have probably already been living in the competitive market without knowing because we're none the wiser. Think a difference of 1 mile to right next door is that much worse? Again, fishing for anecdotes

 

[OurTown]

Is this a national chain? Some of those are run pretty well and others are awful but at least with one already established you can see for yourself. Is it busy? Have you used it? A mile can seem really close if the drive time is two minutes or less. It could also be in a really densely populated area with a low speed limit, lots of intersections, and in interstate in between. We don't know your area or market.

 

[Dick Nitro]

it is a national chain and yes its a very dense area. It's (currently) a 3min-5+min drive depending on time of day and stoplights. It looks top notch and seems steady.

I've never used their service, but friends from the area tell me that they do not like to use them because of clear coat damage and poor results.

EDIT: The current one around the corner is NOT the same franchise as the one being built. It is a competitor, but also a national chain. My bad... this is sort of a developing situation.

 

[Dan kamsickas]

I've never used their service, but friends from the area tell me that they do not like to use them because of clear coat damage and poor results.

Put up a sign that says "After you get your cheap car wash, come here and get it clean".

I know a lot of operators of independent tunnels and/or self-serve w/ automatic washes that have seen a hit for the first 90-180 days when a tunnel opens up near them and in many cases the numbers come back slowly. Some are doing better than before. The reality is those chains are not in the business of washing cars and getting them clean, they are in the business of selling memberships. By and large, people want to get their cars clean the first time they go through the wash, not have to go through more than once.

 

[Waxman]

I wouldn't go giving away a bunch of stuff for free. Keep your vacuums working well and charge two dollars. Keep your self service segment of the business popular by offering hot water, good strong high-pressure, ample soap,wax and all chemicals and charge a decent price where you can make some profit for yourself. The tunnel wash isn't going to steal all of your self service customers so don't worry about that. Worry about maximizing what you have currently. Accept credit cards of course. That is a must.

i'm five dollars to start, one dollar per minute. My touch free wash is premium priced, fairly new, and always puts out a great car. If you focus on the basics of the car wash business namely having the right chemistry to get the car super clean, fixing things as soon as they break, keeping the place tidy and attractive I think you'll do just fine and hold your own against any competitors. I have a towel dry station that I restock on a regular basis several times a day. We are right on site with a detail shop at a used car lot so it's easy for us to wash and dry the towels all day. And believe me it's all day when we're busy. Don't get too nervous about this because that's not going to help you at all. Refocus on the basics of this business and I think you'll do just fine.

I honestly wouldn't go with memberships right away because I think with the touch free car wash in many markets you're just rewarding all the customers that would come on a regular basis and pay your full price anyway. Many will disagree but that's the way I see it.

 

[DavidM]

Yes, it's a challenge but it isn't the end of the world. I have a tunnel and a 5/1 on the same site. Both businesses do well on their own. Some customers cross over, some will only use one or the other but there is room for both businesses.

 

[Islandwash]

I agree with what Waxman said. Concentrate on your making your self Service and the Laser great. They are your strength letting you offer something different and better. I remain uncertain of the value of a Wash club for an In Bay. Wash Clubs work great for conveyors but In Bays are capacity limited. Best wishes

 

[Car Wash Man]

Care to share what is the name of the national tunnel chain that is moving? A lot of us are familiar with the different chains and how they strategize against them. Also I wouldn't recommend going in a discount ware against a chain, once you discount your prices or give stuff away for free, your customers will expect it in the future always.

 

[Dick Nitro]

Care to share what is the name of the national tunnel chain that is moving?

Club Car Wash

 

[Car Wash Man]

I'm in the same boat as you a Club Carwash opened up right by us as well a year ago. The first 6 months they are open they will run the craziest deals, first week was free washes. First month was $1 washes, and discounted packages first six months like 20/mo unlimited top wash. I will admit their setup looks very professional. Really push home that you are touchless and they are not.

 

[Dick Nitro]

I'm in the same boat as you one opened up right by us as well a year ago. The first 6 months they are open they will run the craziest deals, first week was free washes. First month was $1 washes, and discounted packages first six months like 20/mo unlimited top wash. I will admit their setup looks very professional. Really push home that you are touchless and they are not.

well it looks like you're still washing, so that's hopeful news to me

 

[JLanman]

Hello Dick,

Happy to jump on a call to see how we can help you. I would recommend you add some ability to connect with your customers. This is what the tunnels do with their membership approach.
Even if you don't run a membership plan, it would be good to start capturing your customer info and having some type of automated communication to them. Keeping your wash on their radar....

Not sure if you have a FB page, but another great tool to drive awareness is to get them to follow your page and create a connection. We have had several customers face this situation. It's all about the connection you can make with them to keep them loyal to your wash.
I agree with the comments in the post, that initially the "new" will attract attention and will likely pull some business, but also know you can compete. Use the time it takes them to build to gain traction with your customers.

Your wash will likely clean the car better than the tunnels, the touchless wash, 24/7 operation and hand bays will be your differentiator. Just need to keep it reliable and manage customer feedback.

Again, happy to see if we can help.

 

[Greg Pack]

I had an express open a block away from one of my washes in February. I'm down about 20-25%. Not only did it reduce my net income substantially, it's likely cost me several hundred K in resale value just before I'm getting ready to put it on the market. It sucks but it is what it is. The soft cloth automatic has taken the biggest hit percentage wise.

As far as differentiating myself from them, I offer free vacuums with the purchase of an auto wash via token dispenser attached to the pay stations. My single wash prices are cheaper than theirs, but honestly a club membership is a great value for those that wash frequently . I also offer complimentary drying towels. This is a small lot with only four vacuums so I don't have room on the lot to offer other freebies (glass cleaner, air guns, etc.)that encourage people to hang around and thoroughly clean their cars. Right now my market has been reduced to those that want a touch free wash, don't like club memberships, and the self serve customer. I'd like to hear input from IBA people that have a membership that are literally going head-to-head with a tunnel (within 1/4 mile or so) and see how they've held up.

 

[Randy]

I had a similar experience last year. A run down tunnel a 1/3 a mile from my S/S was sold to a large local car wash company. They gutted the car wash, installed all new equipment, did a complete redo to the outside of the property and installed 18 free vacuums. The first week they reopened they sold car washes for a dollar, the next week it was half off of all wash packages for a month. The first 2 months they had a membership deal for $19.99 a month “wash all you want” if you paid a year in advance, they sold a lot of memberships. I’ve lost 64% of my vacuum revenue and 52% of my bay revenue. But the biggest hit like Greg said is the lost value of the business that I was getting ready to sell. I probably lost $200K in market value when they reopened. I think all I can do is hang on to it as long as I can. I would never buy a car wash on leased ground. The value in the car wash is in the dirt, not really in the car wash.

 

[Keno]

If it is a national chain that builds washes frequently, I hate to tell you, but pretty sure a lot of these guys can get one built and running in less than 1 year, probably closer to 6 months for the national chains that build multiple units a year. Also, if another wash co already passed on this location, maybe the metrics aren't that great for a tunnel location, could be a rough time for the national chain. Washes are already taking a hit on gross sales, I've personally seen tunnel projects getting scrapped before they break ground, in the middle of construction, and after construction and not able to get a permanent loan from construction loan and giving up the property. So, just because it's approved, doesn't mean it will necessarily come to fruition

 

[Keno]

Hard to make high dollar tunnel deals pencil out these days