The Top 5 Reasons Why Car Washes Fail
In the United States the car wash industry, as a whole, has seen a long period of growth with steadily increasing demand – around 2% more cars washed each year over the past decade. However, despite this growth and the real need so many communities have for reliable car wash resources, some car washes have failed in recent years.
Why?
We asked Ryan Essenburg, President of Tommy Car Wash Systems and founder of the Tommy’s Express Franchise, why this is the case and what the most common root causes behind car wash failure are.
1. Poor Design
RE: It’s important to note that failure, in our industry and this article, does not always mean a shuttered site gone out of business. It also includes car wash businesses that underperform, failing to meet the great opportunity at hand and limping along for years or decades at a time without real success or growth.
Poor site layout cause nearly half of the car washes built to “fail” before the day they open. Hard to navigate mazes, and layouts designed one-off to fit odd parcels destroy most hope of building a consistent brand. Facilities designed to be cheap or low investment, rather than to attract or entice consumers, also destroy many car washes before they open. The ‘me too’ car wash sends consumers a message that your site is no different than the other bad car wash down the street.
2. Bad Location
RE: Without guidance, investors and operators think a good deal means a good plan. A good deal on a piece of land means you have a bad site and bad location. Very simply, the more you pay for land the better your car wash will likely perform and the less risk you’ll have of failure. The less you pay for land, the poorer your car wash will likely perform and your risk of improvements on the cheap site will be at great risk of loss.
3. Poor Operations / Misunderstanding Your Guests’ Desires
RE: Beyond basics like uniforms and well-trained team members, big errors come from misunderstanding the needs of your guests. While some operators often think they’re serving their market, it’s shocking how often you speak with the consumers and they say “I can’t find a GOOD car wash around here.”
Take prepping for example. Instead of investing in proper equipment and chemistry, many operators just stick an employee upfront with a pressure washer. After all, it’s cheaper (up front) and allows operators to tell themselves lies like, “I’m serving my customers extra and adding value”. No, what you are doing is slowing your processing speed and introducing human error, and it’s driving your customers to your competitor.
4. Equipment Neglect
RE: Car washing is a service business and depreciation is our expense. Like a jet airplane, ½ our costs are incurred now and ½ our costs are incurred in the future after the engines need to be rebuilt. Depreciation is not a perk on your taxes, it’s real and you must put dollar for dollar aside towards future improvements just to get your wash back to baseline with where you started. Most operators think their cash flow is their profit and find themselves with a worthless asset inside 20 years because they killed their golden goose by not feeding (maintaining) it.
5. Poor Processing
RE: Processing is not just about speed. It’s a crafted experience that involves consistency, harmony, and anticipated circumstances. Companies that process well perform well and those that don’t usually fail.
Success is in the details, from the downhill slope we pioneered in 1990 to triggering the customer’s senses at specific points in the process with instruction, lights, colors, and scents. Everything must work in harmony to achieve continuous, smooth, high throughput, including your team members’ ability to anticipate situations as they happen and respond. The principles of processing apply to any business transaction and those that master efficient processing win.
About Tommy Car Wash Systems:
Built on fifty years of car wash experience and innovation, Tommy Car Wash Systems provides designer stainless steel equipment, high performance detergents, car wash conversion services, and performance-focused facility designs while supporting the design, development, and logistics of the Tommy’s Express Car Wash franchise.
International shipping from our Holland, Michigan headquarters is available.
Tommy Car Wash Systems.