Raising The Bar - Growing in a Shrinking Economy

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

For nearly 60 years, new investors and car wash veterans alike have looked to Benny’s Car Wash & Oil Change in Baton Rouge for innovative ideas to grow their business. I know I’m not alone in my feeling of gratitude towards the Alford family; both for their constant push to improve the business of washing cars, and their willingness to share what works and doesn’t with the rest of us.

Long famous for finding tremendous success doing what others would consider unconventional, or even ill-advised, Benny’s newest car wash opened on and eight-acre lot in a struggling part of town that has seen little development. Drive around the neighborhood and you can count the boarded-up store windows of previous investments that failed to overcome the areas demographic challenges. Traditionally this would make and ill-advised location for a car wash. This is where the Alford’s chose to build a 180-foot express-exterior tunnel car wash with 36 free vacuums alongside a gas station with eight MPDs, a 5,200 square foot convenience store with 50 parking spaces, a five-bay oil change center, and an express detailing center with a people mover. Visit the site on a good wash day and you’re likely to see well over a thousand clean, dry, shiny cars leave the property with a full tank of gas and a driver holding a fountain drink. If you’re a true believer in conventional wisdom and site selection you may find yourself scratching your head.

There seems to be a lot of head scratching these days, especially by the people involved in managing our financial markets. I doubt I’m alone in my feeling that the economy, at least for the next several months, may not allow nearly as much room for error as it might normally. That is why I was glad this month that Justin Alford, one of the principal owners of Benny’s, agreed to share some of his insights on express car washing, petroleum marketing, fountain drinks, and a few other topics that make up the modern landscape of car washing. Below are some excerpts from our conversation.

ANALETTO – PRESIDENT, SONNY’S THE CAR WASH FACTORY: Do you feel the combination of gas and a car wash on the same property can develop synergies that contribute to the success of both?

ALFORD – BENNY’S CAR WASH & OIL CHANGE: People like one-stop shopping, they like the convenience. At the same time, every location is a little different and you have to match the right mix of services to what your customers want. If you look at the big box retailers they have different store formats such as neighborhood stores or super centers, which offer different products and services around a core brand. We’re no different. We’ve owned car washes since 1951 and don’t have any locations without a car wash; it’s our core. All five locations also offer oil change services, but only three have convenience store and gas. When we add additional profit centers to a property, each one has to be successful as a stand-alone business. That means the site has to have space to properly give each business its own brand and be visible to customers passing by. I don’t like to try and put so much on one lot that nothing works. I would also never build a gas station behind a car wash thinking it will help sell more washes. Equally, a gas station that adds a car wash as an after-thought to help sell more gas may pick up some additional revenue, but I doubt they will ever see the results they were hoping for. I really believe each profit center must be successful as a stand-alone no matter what it is. At each Benny’s location, the manager for the car wash and the gas station is a different person. People who work at the car wash do not work at the convenience store and vice versa.  I think gas and car washing has always been a good combination, it’s certainly not new. When you run them as separate entities they can really leverage each other and contribute to better success for both.

ANALETTO: What percent of your car wash customers pay at the pump?

ALFORD: That’s a great question.  Every month we look at this number and try to gauge how many car wash customers buy gas and make purchases at our convenience store. It’s tough to say because for the last three years the gas business has been total chaos. The only people that have really profited have been the credit card and oil companies. Individual station owners have really taken a beating and our volumes have been down. It’s been a good thing that we have the car washes. Our volumes tend to change a lot as the price fluctuates, making it hard to give you accurate trends. I can say however, that I haven’t necessarily seen a correlation between pumping more gas and washing more cars. We’re constantly trying new ways to promote the car wash at the pump and right now sell about 25% of our car washes at the gas station, both pay at the pump and inside, which is a good number. We’re also pumping unbranded, or actually our own brand, of gas at two stations now. This has helped, but it’s still been a tough three years.

ANALETTO: All of your car washes are conveyorized; do you believe this is a better format than the in-bay automatic at a gas station?

ALFORD: There’s a misconception out there that the in-bay is going to die and the only way to go is a tunnel that I believe is wrong. There is a place for in-bays and a place for tunnels. If you have a gas station and the focus is not on car washing, then the in-bay automatic can be a good convenience to customers. They can not wash a lot of vehicles but they’re open 24 hours and you don’t have to have a person monitoring it every second of the day. When an in-bay is done right, it can be very successful.

A conveyorized car wash takes a lot more effort. You have to staff it, you have to have more space, and you have to treat it as a separate business. If you’re prepared to make the investment to manage, market, and maintain a conveyorized tunnel, you can generate a lot of revenue washing cars. If you’re not prepared to put in that effort, you’ll be in worse shape than if you went with an in-bay; you’ll have all the negative aspects without the high wash volumes that make it worthwhile. It has to look like a car wash and be visible with distinct signage. It takes a lot of planning to make sure the site flows properly. I’ve seen tunnels installed behind a gas station as an afterthought only to be later ripped out and replaced with an in-bay automatic. I’ll say it again, a conveyorized tunnel, even an express exterior, must be treated as a truly separate business to be successful.

ANALETTO: Are all of your car washes express-exterior tunnels?

ALFORD: No, two sites are traditional full-serve washes, one of which also has gas. The three express sites offer customers free vacuums to use and two of them have gas and convenience stores. The express-exterior and full-serve wash models really cater to different customers. I agree that if you build a full-serve tunnel, you have to have shopping near by. You have to have a high traffic count and you want to have high average income levels. With express-exterior, things change. We built our newest location in a struggling part of town with more than its fair share of boarded up businesses. The area is a mix of blue collar and lower income residents, and everyone we asked told us not to build here. But express-exterior delivers a lot of value for a customer who doesn’t mind driving their own car through the tunnel and vacuuming it themselves. People in this community are very proud of their vehicles. At our price-point, it makes sense for them to wash their cars here and they love us, they really do. I think there are a lot of areas in the country where a full-service car wash wouldn’t work but an express exterior would work really well.

ANALETTO: Is there anything you would do differently at your next location based on what you learned building this last one?

ALFORD: Right now there is nothing I would change. I’d build it just like we did. We went with a 180 foot conveyor packed with equipment, and our goal is turn out a very clean car at a very fast line speed. We have designed the tunnel to put out a really good product so that it’s a better value for the customer. If you have the room, longer conveyors don’t cost that much more in the grand scheme of things. You’re paying more for concrete and construction, but adding extra equipment is well worth the money if you have the space.