Car Washes

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 16,700 car washes in the US provide washing, waxing, detailing, hand washing, and self-service washing of cars, trucks, vans, and trailers. Companies may also perform scheduled and preventative maintenance or body repair. Operations generally involve three types of car washes: conveyer car washes, in-bay automatic car washes, and self-service car washes. The industry includes regional chains, franchises, and independent operators.

Capital Investment

Automated car washes are capital-intensive and require a sizable investment in equipment.

Express Washes Explode

The number of express wash facilities has grown dramatically, driven by vehicle owners looking for faster, less expensive options and car wash owners looking for more economical alternatives.

Industry size & Structure

The average car wash operates out of a single location, employs 11-12 workers, and generates just over $807,000 annually.

    • The car wash industry consists of about 14,300 firms that operate 16,700 establishments, employ over 164,600 workers and generate $11.5 billion annually.
    • The industry is extremely fragmented; the top 50 companies account for 20% of industry revenue.
    • Large companies include Wash Depot, Mister Car Wash, and Autobell Car Wash. Most of the largest chains have less than 100 locations.
    • The industry includes regional chains, franchises, and independent operators.
                            Industry Forecast
                            Car Washes Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Nov 15, 2022 - Rising Cybercrime Threat
                            • Car washes are among the many small- to midsize businesses vulnerable to cyber and ransomware attacks due to a false sense of security. “People often mistake ‘nothing has happened to me’ for ‘it is working,” cautions John Stengel, CEO of the cybersecurity firm JSCM Group. While attacks on big organizations make headlines, Stengel says smaller firms are a growing target. Car wash operators don’t have to spend heavily to protect their businesses and customers as good cybersecurity is more about having good policies, standards and procedures in place. “Start with the basics like credit card information storage and contact details of your customers,” suggests Anoop Kanthan, CEO of omniX labs. During the first half of 2022, the average cost of a cyber claim for a small business owner increased to $139,000, 58% higher than levels during the first half of 2021, according to Help New Security.
                            • High-top service vans represent a growing opportunity for car washes, Car Wash Magazine reports. The increase in popularity of taller vans in the logistics field has increased the demand for the capability to wash them in the mainstream car wash industry, says ISTOBAL Vehicle Wash & Care’s Kyle Styer. In general, the wash process for extended-height vehicles is similar to a standard car wash process, though the automated equipment has been extended to be able to handle the extra height and more water and airflow is needed, he explains. Sites with extended height equipment for high-top vehicles need staff trained to explain capabilities clearly to clients. “Either as an add-on operation or standalone, a 24/7, unattended, LPR (license plate recognition) interface capable, with touchless or friction capability and a 9-foot, 6-inch clearance fills this huge gap in the fleet and retail market,” says Styer.
                            • The extremely-fragmented car wash industry is attracting the attention of private equity firms seeking to bundle independent operators and find new ways for them to make money, The Wall Street Journal reported in August 2022. Investors are paying top dollar for smaller and regional chains – as much as 18-to-20 times EBITDA, bankers told WSJ. As an example, WSJ cited Ultra Car Wash, one of 107 car washes primarily in the Southeast and Midwest that was amassed with the backing of Atlanta buyout firm Red Dog Equity LLC. The firm, which acquires existing car washes, builds new ones and then merges them, aims to reach 500 car washes by 2025. Historically the labor-intensive car wash sector held little appeal for investors, but that has changed as car wash owners introduced prepaid wash memberships, revenue became more consistent, and fewer employees were required on site, according to WSJ.
                            • Take 5 Car Wash, a portfolio company of Driven Brands, announced in September 2022 that it had completed a series of acquisitions in the Midwest, including Soft Touch Car Wash in Michigan, Auto Oasis Car Wash in Ohio, and Clearwater Car Wash, and Birdie’s Car Wash in Indiana, Auto Laundry News reported. The acquisitions bring the total of express car washes Take 5 operates to more than 360 sites across the United States, and adds Michigan to the list of US states where it has a presence. Parent Driven Brands is the world’s largest local car wash conglomerate washing more than 35 million cars a year through a network of more than 900 locations in 14 countries across the US, Europe, and Australia.
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