Car Wash M&A, The Podcast Episode 10 News Overview

Where is the car wash market today, and what will it look like in the future? Those two questions are at the center of Matt DeWolf’s interview with Jeff Pavone, which was featured on CAR WASH the Podcast and shared on Car Wash M&A, The Podcast.

Jeff shares some essential advice that benefits all car wash owners. Check out the highlights below, and tune into the full interview to hear all of Jeff’s thoughts.

THE RESETTING OF VALUATIONS
As Jeff and Matt discuss, the last few months have led to a reset of valuations within the car wash space. Between inflation and rising interest rates, the car wash landscape has drastically changed over the past several months, leading to a tightening of valuations.

However, Jeff states, “The good news is there are still good valuations being paid for good companies. The buyers haven’t gone away here; I’m getting calls on a weekly basis from groups that want to get in and buy car washes. They’re just being more selective. They’re making sure that their diligence is a lot tighter.”

Jeff reminds car wash owners that these headwinds are indicative of a resetting of valuations and that while there are still excellent deals happening for strong car wash operators, the market is tighter than it was at the beginning of the year, and it’s not likely to drastically improve anytime soon.

Jeff advises owners who are looking to stay in the business to work on improving their operations, and he suggests that owners who are looking to exit consider doing so sooner rather than later.

THE IMPORTANCE OF CUSTOMER EXPERIENCE
As the market tightens, operations are critical, and the customer experience is more important than ever. With increasing competition and tightening budgets for customers, providing a meaningful experience that goes beyond a clean car is becoming increasingly important. Protecting memberships and rewarding loyal customers is key amid tightening conditions.

Jeff shares, “At the end of the day, some of these businesses never focused on memberships. They’re going to have problems! The groups that have 5,000 to 7,000 members at a location, maybe they churn a little bit more, but that comes down to… how do you handle the churn of your memberships? We’ve got some great data from Retention Express about watching what their ROI is, because you’ve got to pay attention. You can no longer let that customer go into a phone box and not deal with them.

“Because when you’ve got difficult times, customers do have a choice about where to spend their money. This is a time that you’ve got to make sure that everything you do is your A game. And so paying attention to those people is critical today, way more critical than it was when money was just flowing.”

FUTURE PREDICTIONS AND ADVICE FOR CAR WASH OWNERS
Jeff recommends that car wash owners adjust to the valuation reset and keep doing the focused, hard work they know how to do.

As far as owners who are considering an eventual exit, Jeff advises car wash owners, “If somebody is thinking that at some point… they need to get out of this business, I wouldn’t wait another year or two. A couple people have said to me, ‘We’ll wait until interest rates come down.’ It’s not going to happen anytime soon! The bottom line is what we were living in before was not normal; what we’re living in today might be more normal, more the norm.

“I think with more increases in interest rates projected, that’s going to drive multiples down. For the people that are thinking about wanting an exit in the near future, I would say the sooner, the better, because I don’t think it gets better next year. You look at it, and it may be a few years before things change. I think they’ve got to learn to live with what they’re given, and focus on the operations going forward if they’re going to stay in this business.”

WHAT WE CAN DO TODAY TO BE BETTER TOMORROW
As Jeff and Matt wrap up their conversation, Matt asks Jeff about something he wants to do to be better in the future.

Jeff shares, “I can tell you, buying material possessions has probably given me less reward than I thought. And as a firm here at Amplify, we’ve seen a lot of people that need our help. And I would say as an industry, we’ve got a lot of lot of folks that made a lot of money. I’d say, at least for me personally, it’s focusing on the giving side.

“I’ve committed 20% of my personal time starting next year. We’ve gotten behind Boys and Girls Club recently a lot because of their needs… the needs of the community are going up dramatically. We look at the food kitchens now; the demand they’ve got us is under a lot of pressure. St. Jude is another famous, great organization we got behind.

“I can only tell you that we’ve been blessed as an industry. I’d love to see [us] giving back as best as we can. Because at the end of the day, you can’t take it with you. I would say look in the mirror, but I do think it brings great rewards and satisfaction well beyond anything you can buy for yourself.”

For more tips that Jeff Pavone shared with Matt DeWolf, check out the full episode of Car Wash M&A, The Podcast.

Want to dive deeper into car wash M&A information? View all Car Wash M&A, The Podcast episodes here:https://amplifywash.com/podcast

Jet Brite Car Wash

With decades of hands-on experience as operators, when it came time to sell our car wash business who we sold to was important to Sam and me. Chris [Jenks] and the team at Amplify listened to us throughout the entire process. They found the right buyer in ZIPS who would be a good steward of the brand and helped find the best path forward for us where we can continue pursuing our passion for manufacturing high-quality car wash equipment.  

Jet Brite Car Wash  
Dave Delesandro  | Founder

Quick N’ Clean

My relationship with Commercial Plus over the past 20 years has been a very professional and trustworthy relationship. The feel of trust is very important in this business, and Jeff Pavone and his staff have exhibited a level of trust that makes me continue to feel that they have my best interest front of mind. I deal with many brokers across the nation, and my best experiences and results have been achieved with Commercial Plus representation.

Quick N’ Clean
Richard Karle | Owner

Zips

It’s been a great experience working with Amplify Car Wash Advisors to bring these sites into the ZIPS portfolio. We look forward to serving Dallas area customers with an enhanced car wash experience unique to ZIPS, with the added benefit of our extensive network of stores. This year we have continued our aggressive growth track with the goal to truly shine in our efforts to be the best express car wash provider in the industry and it’s acquisitions like this that help us reach our goals.

Zips
Gene Dinkens | CEO

ModWash

It was truly a pleasure to work with the Amplify team on our most recent acquisition of three additional operating locations in our home state of Tennessee. Their team provided great support and ensured a timely and seamless closing process, and we are excited for the additional growth opportunities this relationship will produce in our near future. We know this is the first of many transactions we will successfully complete with the Amplify team as we grow from our current operating store count of 23 to well over 200 locations across 14 states in the next two years.

ModWash
Brian Thornton | COO

Busy Bee Car Wash

For years I’ve talked to a lot of brokers with the same goal; sell your car wash chain as quickly as possible. But I chose to work with Amplify because they were interested and invested in the emotional side of selling my business and truly value long-term relationships. They weren’t forcing me to take a deal just to take a deal. They listened to my concerns and goals then educated me on all my options. And that’s how I decided on the right partner for my chain specifically. I went to bed at night after I signed the papers knowing I got the best deal possible versus just having any deal put in front of me that is only about money.

Busy Bee Car Wash
Jim Mulholland | Owner

Q Car Wash

We really appreciate Jeff and his entire team at Amplify. Their expertise and deep industry knowledge helped us navigate our options and best showcase our strengths to maximize our value. Caliber is a good fit for Q Car Wash as they look to expand in North Texas.

Q Car Wash
Viran Nana | COO

Cobblestone Auto Spa

I have known both Jeff and Bill for over thirty years combined, and respect them both as experts in our professional car washing industry. Their unique and individual strengths bring very strong talent and advice to operators, sellers, and buyers with sharp knowledge, client’s best interest in mind, and an actual personal touch. They hold the expertise and performance track record to hold a very high level of respect within this rapidly-changing car wash industry.

Cobblestone Auto Spa
Tuck Bettin | CEO

Oasis Car Wash

Turning over a business you started from one shovel of dirt 25 years ago and grew to several locations is a difficult and even uncomfortable process. So, when it came time for Larry and me to sell, we chose Amplify Car Wash Advisors to guide us through the process because of their strong reputation and thought leadership in the industry. Their team was professional and did a great job walking us through each step.

Oasis Car Wash
Dallas Hawkins | Partner

Busy Bee Car Wash

Selling our business after 52 years is big deal and certainly not a decision I took lightly, turning over our family legacy was an emotional process and I appreciated that the team at Amplify respected that. They helped me understand my options and found the best deal for me.

Busy Bee Car Wash
Jim Mulholland | Owner

Ducky’s Express

I have been a multi-site developer and operator in the car wash industry for over 30 years. Four years ago, a partner’s health concern forced me to sell a portion of my portfolio, and during that process, I was introduced to Jeff Pavone of Commercial Plus. I was immediately impressed with Jeff’s knowledge of my industry and his volume of successful deal closings. In a very short period of time, Jeff found the right buyer at a very fair price, and the transaction closed shortly thereafter. I was looking for a team with honesty, integrity, and a proven track record of success, and I found all of that in Jeff.

Ducky’s Express
Richard Miller

Trademark Car Wash

These are some of the most exciting times for car wash owners. As we grew 350% in revenue in just one year, we recognized the time to partner up with a top-tier team that has mastered growth in retail and specifically the automotive industry. Amplify Car Wash Advisors had helped us acquire, raise capital, and was the perfect partner to help us reach this next chapter of the Trademark story.

Trademark Car Wash
Andrew Goldberger