By: Anthony Analetto
Originally Published in AutoLaundry Magazine
Take a second to review the two drawings below. Personally, I just completed construction of a 135 foot Express Exterior tunnel on a street with a 65,000 daily traffic count. A few weeks after opening – things are exactly on track and we’re beating estimates on our pro-forma. That being said, the 16 month construction process gave me a lot of time to think about car washing. Actually if you throw in the 14 months it took to find a viable location at a price that made sense – I’ve thought about almost nothing but the construction, marketing, and operation of an $3 Express Exterior wash with free vacuums for over three years. In fact I’m about to break ground on a second, nearly identical location, only 10 miles down the street. Obviously a firm believer in the large high volume location, I have to admit, it does complicate finding a piece of property.
Land Considerations – “I wonder if”
It’s difficult to find a property, with good visibility, easy access, and a huge daily car count with limited competition, at an affordable price – that is big enough to build a 100 to 160 foot tunnel with 20 or more free-vacuum lanes. While searching for properties I would often find myself thinking “I wonder if”. Sometimes I would see a nice property in a smaller market and be enticed by a reasonable asking price; only to decide that the daily traffic count wasn’t high enough to support the volume I needed to make my numbers work. I started sketching out short 50 foot tunnels able to process 60 cars per hour peak. Suddenly every where I looked I saw a car wash. Closed gas stations, vacant drugstores, small lots on good streets off the main thoroughfare, even re-use of an existing building all started to seem like possibilities.
Compounded Savings
It’s no secret that I am the chief operating officer of a large car wash equipment manufacturer. It should also come as no surprise that I believe that on the right property, a large express exterior or flex serve tunnel can be a home run. There are so many success stories in the industry today that I jumped into the market myself and am glad I did.
Unfortunately, a lot has changed over the last several years. Everyone seems to focus on higher land and equipment costs, but the reality is that almost every aspect of building any business has gone up dramatically in recent history. Construction materials such as copper, concrete, roofing, and windows have skyrocketed. Landscaping and irrigation requirements in most municipalities can add huge costs to every square foot of property you have. Once you start getting into the astronomical expense for each contractor and sub, you can almost start to think in terms of how much every square inch of your business will cost. More specific to car washing can be the higher impact fees experienced with larger tunnels. Some municipalities will assess thousands of dollars to go from a standard 1 inch water main needed for a tunnel under 50 feet to a 2 inch hookup for a larger tunnel. Other towns have impact fees to penalize the electrical requirements for bigger locations.
There is no question that the automated express exterior model is growing, but mostly in large markets with a high barrier of entry to meet the land and construction costs to get started. Does this mean that customers in smaller markets don’t want a fast, affordable wash with free vacuums? Traditionally these areas are served by a combination of self-serves, in-bay automatics, and small full-serve locations relying heavily on labor. That appears to be changing. Several operators are discovering a huge return on their investment by building extremely small express tunnels, usually 50 feet or less. Let’s take a look at why this trend seems to be gaining traction in the marketplace.
The Appeal of Extremely Small Conveyors
For years, the growing popularity and availability of In-Bay automatic car washes had a distinct impact on the industry. They delivered convenience, speed, and when tied with a gas purchase, affordability. They still do, but the erosion of gas profit margins has eaten into the ability to discount heavily with a fill-up. Consequently, price points for rollover car washes have risen along with chemical and utility costs. The days of a free wash with a fill-up are nearly extinct. In today’s business environment, the car wash must function as a profit center to justify its existence on a property. That means it must process cars quickly, offer a robust selection of extra service selections to increase the ticket price, and deliver a consistent clean, dry, shiny product.
Equipment manufacturers have responded with new in-bay rollovers that clean better, are much faster, and offer greater extra service abilities. This addresses the fact that customers demonstrate little tolerance for a wet and dirty car when they are paying a fair price for the service, but ignores the reality that people wash cars during peak times. To understand the concept of peak capacity and throughput, think about your average fast food restaurant. Designed to process the maximum peak anticipated lunch volume, most seats are empty at other times. The fact is they must be able to process their maximum potential volume with a consistent waiting time that the customer anticipates. A customer who returns late to work because it took longer than expected to be served lunch will either not return, or only visit the restaurant when they have time to wait. That creates bottlenecks, the same as everyone showing up to wash their car on Saturday.
The other dilemma for an In-Bay automatic is that the most profitable top package normally includes extra passes and takes longer. A potential customer looking at a 5 car line doesn’t know if they will be waiting 30 minutes if everyone before them selected the 6 minute top wash, or 10 minutes if everyone in front purchased the base 2 minute base wash. Despite its shortcomings, the Rollover wash has an extremely compelling advantage; it can operate with absolutely no employee intervention.
In many markets, this fact is keeping things moving along at status quo, with most Self-Serve washes, C-Stores, and Gas Stations continue to favor adding Rollovers. What’s interesting is the growing number of installations of extremely small tunnels, less than 50 feet at these locations. As the car wash is increasingly viewed as a profit center, there seems to be a greater interest managing an additional employee to guide customers onto the conveyor in exchange for increased throughput and reduced abandonment.
Changes in Technology; Why Now?
Admittedly not as dramatic as the increased power and reduced sizes of computers and consumer electronics, the ability to wash cars in more compact spaces has seen dramatic improvements over the last 5 years. New plush wash materials, equipment designs, and chemical technologies, have advanced the ability to safely clean a car better and faster in a shorter distance than ever before. Advanced computer systems, roller designs, conveyor innovations, and control systems have dramatically improved the safety of loading the front wheel of a vehicle. Internet based surveillance cameras and online equipment monitoring systems have made remote management a reality. Although not the 24 hour availability of a Rollover, extremely small express tunnels have definitely encroached into their hallmark of “always open” while meeting customer expectations for speed and consistent wait times.
Summary
Maybe I’m becoming overly optimistic, but I feel our industry is on the cusp of a major shift in public opinion and opportunity. Professional washes are increasingly recognized as a “greener” alternative to driveway washing. The growth of the Express Exterior model has eliminated the large crews of manual labor that no matter how professional, always are a point of friction with local neighborhoods. I foresee an emergence of what I call drive-through auto appearance centers located right next to other widely accepted retail businesses. All right, maybe I’m getting a little ahead of myself. The municipality where my newest wash is located still groups car washes with adult bookstores, but I really do believe the tide is turning. Each time a creative operator refines the value proposition for customers to get a clean, dry, shiny car – there is a potential to draw more driveway washers into a professional car wash. I recently read an article that said today’s express exterior wash format has been around for decades. Businesses have also poured coffee for centuries, but it would be hard to argue that Starbuck’s seemingly slight modification to the retail experience hasn’t brought millions of dollars in business out of the home. Car washing is a retail business affecting all senses. I think the investors out there building extremely small express exterior tunnels as stand-alone washes or attached to another business are onto something. It’s another exciting twist on the express exterior model.
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