The Car Wash Show 2023: Key Insights and Technology Trends for Car Wash Owners

What’s new in the car wash space? Check out the key takeaways and emerging market trends from The Car Wash Show 2023. In episode 16 of Car Wash M&A, The Podcast, Amplify COO Chris Jenks joins Lanese Barnett to discuss the themes and sentiments that shaped this year’s event in Las Vegas.

As mergers and acquisitions gain momentum amidst high capital costs, it’s good news for car wash owners considering an exit. With demand outstripping supply, buyers are seeking well-performing car washes in desirable locations. Embracing new technology is crucial, as it streamlines operations and boosts cash flow. Businesses like Amplify Ventures partners Retention Express, AMP Memberships, and Merchant Advocate can strengthen operations, enhance customer experience, and improve the bottom line.

Don’t miss out on these valuable insights from The Car Wash Show to strengthen your car wash business.

Buyers Investing in Quality Car Washes

One significant shift observed at The Car Wash Show is the changing growth strategies and scalability of platforms. The old playbook of acquiring existing platforms and blending down the valuation through greenfield developments just doesn’t work today. The cost of building new units has increased, with budgets reaching seven and a half million dollars or more. Delays in construction and ramp-up time further impact the overall investment, making it more like a 9x multiple. On the other hand, acquisition activity is becoming more attractive, with multiples ranging from 8 to 10, offering a compelling alternative to greenfield developments.

With these changes, there is good news for sellers. Quality businesses have ample opportunities as the buyer pool remains focused on businesses with prudent capital deployment, strong same-store sales comps, financial discipline, and a healthy growth trajectory. This is particularly true for geographic areas or MSAs that are harder to penetrate. If you have a quality business, now might be an excellent time to explore selling opportunities.

There’s also a growing emphasis on operations and optimizing efficiencies within the industry. Multiples are compressing, making it essential for car wash owners to focus on improving operating margins and adding to the bottom line. This hyper-focused attention on operations was evident at The Car Wash Show, indicating the industry’s commitment to delivering high-quality services and creating a desirable experience for customers.

Focus on Operations and the Emergence of Support Services

As Chris and Lanese discuss, this year’s The Car Wash Show highlighted the growing importance for car wash owners to prioritize their operations in a tightening market. To address this challenge, there is an increasing emphasis on the need for support partners who can assist car wash owners by taking on certain tasks, freeing up time and attention to focus on crucial operational aspects. Two Amplify Ventures partners at The Car Wash Show 2023 were AMP Memberships and Retention Express, both of whom offer support services to car wash owners looking to maximize their efficiency and strengthen their operations.

AMP Memberships, a custom-branded mobile platform solution developed by car wash operators for car wash owners and operators. AMP Memberships offers an app to engage and nurture customer relationships while providing valuable data insights. By collecting demographic information and combining it with business insights, AMP Memberships enables targeted marketing, attracting and retaining customers based on their preferences and interests. This personalized approach allows car wash owners to connect with customers on a deeper level, fostering a mutually beneficial relationship.

A notable feature of AMP Memberships is the ability to assign a predicted lifetime value to each customer. By understanding the expected revenue, operating costs, and duration of the customer relationship, operators can optimize lifetime value through targeted actions. For example, if a customer is not engaging with the app while on-site, incentives can be offered to encourage usage and enhance the customer’s lifetime value. Additionally, factors like leaving reviews or making referrals can be leveraged to increase loyalty and maximize the value of each customer.

For more about AMP Memberships, check out Lanese’s interview with Dennis Dreeszen and Adam Trien in Episode 13, Talking Tech: Data, Marketing, & Memberships with AMP. (https://amplifywash.com/episode-13-with-dennis-dreeszen-and-adam-trien/).

Another Amplify Ventures partner, Retention Express, was at represented at The Car Wash Show. Retention Express is a comprehensive customer experience platform tailored for car wash owners. It offers white-labeled outsourcing services for handling customer inquiries, relieving operators of the burden and allowing them to focus on core operations. By leveraging professional call centers, Retention Express ensures that customers receive prompt and quality service across various communication channels like phone, email, text messages, and web chat.

This service solution is particularly beneficial during peak hours, preventing distractions and long wait times that can frustrate customers. Additionally, Retention Express captures valuable data from these interactions, providing operators with a comprehensive dashboard that offers insights into customer sentiment, preferences, and behavior. For instance, it tracks the exit sentiment of customers who want to cancel their plans, shedding light on their reasons for churn and enabling businesses to make informed decisions to enhance customer satisfaction.

With Retention Express, car wash owners can streamline their operations, improve customer service, and gain actionable insights that contribute to the growth and success of their business. By partnering with this platform, operators can optimize their business strategies without the need to reinvent the wheel, leveraging external expertise and technology to drive customer retention and business growth. For more about Retention Express, listen in to episode 5 of the podcast with Retention Express founder Bobby Thomson.

Amplify Ventures partners with best-in-class technology solutions providers to arm car wash owners with actionable insights that benefit both owners and their customers, creating a win-win scenario and driving overall industry growth and success.

Saving Money as Cost of Capital Rises

The enthusiasm and energy around Innovation Alley at The Car Wash Show this year was notable compared to previous years. As cost of capital continues to rise, car wash owners are turning more attention toward ways to save on the bottom line. Amplify Ventures partner Merchant Advocate is a service that offers significant cost-saving opportunities for car wash owners by diving deep into credit card processing fees.

In today’s credit card-driven world, the 2% difference in processing fees can make a substantial impact on a business’s bottom line. By leveraging innovative technology and machine learning models, Merchant Advocate analyzes your credit card processing charges, compares them to your historical data and industry peers, and identifies unusual categories. They then work on your behalf to negotiate lower fees with credit card processing companies. For example, they can detect and rectify recurring charges associated with declined credit cards, which can accumulate into substantial expenses for multi-unit operators. In one case study, they identified $60,000 in annual charges for failure to respond for an 80-unit operator, highlighting the potential for significant savings.

What sets Merchant Advocate apart is their forensic approach. They act as consulting-based forensic accountants, dedicated to finding savings without requiring car wash owners to switch credit cards or pay upfront fees. Their alignment with the operator’s interests ensures a mutually beneficial relationship, where they only receive compensation if they successfully bring savings to the table. With Merchant Advocate’s expertise and focus on transparency, car wash owners can uncover low-hanging fruit and significantly reduce credit card processing expenses, ultimately improving their profitability and enterprise value.

Adapting to Market Trends and Emphasizing Operations for Car Wash Success

The car wash industry is witnessing changes in growth strategies and scalability, making acquisitions of quality car wash businesses very attractive, especially those with strong same-store sales, financial discipline, and a healthy growth trajectory.

The industry is also placing a growing emphasis on operations and optimizing efficiencies. By staying informed about market trends, focusing on operations, and leveraging support services like AMP Memberships and Retention Express, car wash owners can position themselves for long-term success. Additionally, cost-saving measures, such as partnering with Merchant Advocate to analyze and negotiate credit card processing fees, can contribute to improving profitability and enterprise value. Adapting to these changes and implementing effective strategies will be crucial for car wash owners to thrive in an evolving industry.

For more information from Lanese and Chris Jenks, check out the full episode of Car Wash M&A, The Podcast.

Stay tuned the last Thursday of each month to hear the latest thoughts from podcast guests.

Want to dive deeper into car wash M&A information? View all Car Wash M&A, The Podcast episodes here.

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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