Episode 4: With Your Host Lanese Barnett

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About the Episode:

Want to know the latest in car wash M&A trends and predictions following the wrap-up of The Car Wash Show in Nashville earlier this month? In this episode, your host Lanese Barnett shares feedback on current mergers and acquisitions activity in the car wash space and what may be in store for valuations looking ahead. Lanese also expands on two exciting announcements made live at the trade show – the launch of Amplify Ventures, a new vertical bringing innovative solutions to the car wash industry, and a surprise donation to a very worthy cause. Lastly, Lanese spends time highlighting a unique aspect of the industry that can often surface at events like these, the communal nature of the car wash industry, and how even a trade show can feel a bit like a family reunion.

More about Lanese Barnett:

Lanese Barnett brings more than a decade of experience in the car wash industry specializing in brand management, marketing, and corporate communication. Previously working on the operator side, Barnett has a deep knowledge of what it takes to run a successful multi-site car wash operation. She is a current director on the Southwest Car Wash Association Board. Prior to joining the car wash industry, she was an account executive at a marketing communications agency in Dallas. She holds a Bachelor of Arts in Communication Studies from Southwestern University in Georgetown, Texas.

Check out the full transcript below:

Hi, I’m Lanese Barnett, Vice President of Business Development at Amplify Car Wash Advisors and your host of Car Wash M&A, The Podcast. Here we’ll take a deep dive into the current mergers and acquisitions activity of the car wash industry with the goal of keeping carwash owners informed on where the market is today, and where it’s going tomorrow so that you can make informed decisions about your business. We’ll help you answer the question: should I sell my car wash now or should I enter growth mode and really scale my operation? Each month I’ll speak with industry experts who will share practical advice on how to sell or scale your car wash. While the industry is undoubtably changing, what remains constant is the need for solid information so you can evaluate where you are and chart the course for the future of your business.

Hi, welcome to Car Wash M&A, The Podcast. Today is episode four. And today we’re going to spend a little one on one time talking about the recent International Car Wash Association trade show that took place in May in Nashville. Now this car wash show, for listeners who haven’t been, is the big car wash show of the year. And it really draws a wide audience of car wash owners, operators, managers, all levels of the car wash industry. And then of course, vendors, suppliers. And it’s almost like a family reunion. So for people who have been in the industry for a while, it’s nice to have a time where you get to see multiple friends and colleagues that maybe you worked with in the past or that you don’t get to see very often. And especially in these days where travel has been erratic, or you don’t make the same trips that you once did — and thank goodness, we’re kind of getting back to a sense of normalcy — but even before a global pandemic shifted all of our lives into zoom calls and departure from in person visits, I feel strongly that even the regional shows as well, but the trade shows for the car wash industry really do serve as that time where people equally look forward to catching up and to seeing old and new friends.

So while that part of it is great, and definitely something that was well worth it and enjoyable, I want to spend a little time talking about what we at Amplify Car Wash Advisors saw and some of the points we were thinking about for the rest of the year, particularly on the mergers and acquisition side for the car wash industry and then how our outlook has been impacted from the trade show and from hearing firsthand from owners and operators and vendors about the pulse that they’re feeling to get this bigger holistic view of where the market is and where it’s going. Now, I will make the disclaimer, I do not have a crystal ball. I don’t know what the future holds. But there are some things that we recognize are indicators of a little bit of a shifting tide.

First thing, there’s still a tremendous amount of enthusiasm and excitement and growth in the car wash industry. And being a part of it for the last decade plus, it’s been such an amazing thing to watch how much the carwash industry has grown. Even the perception of the professionalism of this being a career path is really pretty neat to watch. And we’re still seeing that operators and financial partners are coming into the space and that they’re making long term investments, and that there’s still quite a bit of runway for the industry to keep going and to keep on this path of just being a really robust business that people want to be in.

So with that said, there is a little caution in the wind that we are sensing and feeling and those are stemming from inflation issues. We talked about that in episode two with our COO, Chris Jenks, just really diving into some of the global impacts and national domestic impacts that affect car wash owners on a local level. But interest rates rising fuel shortages or fuel supply chain issues, general supply chain issues, the time that it takes to build a car wash and the rises in costs and raw materials in addition to the extended time that it takes because of the supply chain issues. These are real factors that are shifting how much people are investing in the car wash industry because now there’s a little sense of hesitancy. Again, overall, the sentiment is there still a lot of enthusiasm is a great industry to be in. But with that there’s a caution that we’re sensing. And it could be that now is the peak or we have already peaked on the multiples that these financial partners and buyers are willing to pay for car washes. It’s unlikely that they will go any higher.

So when we look at these effects on carwash valuations and what multiple that they would be commanding, the next question is, so what can car wash owners do about it? In our episode three, when we spoke with Amplify Car Wash Advisors partner, Bill Martin, who’s also the owner of Metro Express Car Wash, and just a general amazing person in the industry with tons of experience, the answer and the way to combat these external effects from inflation and interest rates and supply chain issues is to really dive in and focus on operations. The operational efficiencies, and strengthening operations, strengthening monthly plan programs and that reoccurring revenue and the stability that it adds — that’s what makes a huge difference. It provides the lift now, and it also helps secure and helps protect the value of the car wash, of your carwash possibly, going forward by focusing on exactly how this process can be more efficient, have better customer service, have better throughput, have technology embraces that can help alleviate some of the issues that that may be coming in that are new would with interest rates or inflation or labor or supply chain. And so while we’ve had a very robust half of the year — we’ve seen deal sizes larger than ever! As we move into the next half of the year, we expect continued momentum, but maybe not at the same clip that we’ve been going on the front half. Also with the focus on operations, we had a really neat announcement that we made at the car wash show about a new initiative that Amplify Car Wash Advisors has with the launch of Amplify Ventures, a new vertical within the firm. And the goal of Amplify Ventures is to bring cutting edge innovative solutions to the car wash industry. We already are advocates for car wash owners and operators as they look to scale their business, as they look to find a partner, or looking for capital advisory services to grow or if they’re looking to sell their business. But with Amplify Ventures, our goal is to help find technological or innovative solutions that can help them on the operation side as they’re growing and to help relieve some of those pain points by partnering with other companies that we feel are leading the charge on this.

So when I asked our COO Chris Jenks to kind of tell me his thoughts on Amplify Ventures and what his reasoning and ideas behind launching this, and he had such a great quote that over the last five years, we’ve seen a major boom in technology information. And with that growth, why shouldn’t the carwash industry be at the forefront of utilizing these new innovations, especially in the technology sector? That’s not his exact quote, but it’s close. And through our first partnership, which is with Retention Express, we are looking to help provide that resource of improving those operational efficiencies and maximizing overall performance. And Retention Express is headquartered in Atlanta, Georgia, and they provide membership-based car wash owners and operators a premium white label customer experience support solution. And their goal is to help close the loop with customers across all inbound touchpoints. This is a huge pain point for operators. Because, especially when you look at just monthly plans alone, they require quite a bit of admin work to process those plans and to keep the membership base healthy, even for just the basic things of canceling a plan changing your credit card. Maybe somebody has questions about the billing… So Retention Express takes those calls and uses their call center to act as your advocate and to represent your company and speak with customers on your behalf with a goal of having first call resolutions.

What does first call resolution mean? It means that if you are the customer calling in you hang up and say, “Yes, I’m very satisfied! My issue was handled, and I need no further follow up from this.” Now I’ve asked Bobby Thomson, who’s the founder of Retention Express, okay, so what if people don’t have a first call resolution? Well, that’s when they would loop in the store owner or the store man manager to find what the next step is. But again, the goal for Retention Express is to help increase customer support, reduce churn on memberships, or the retail customer and just increase the overall satisfaction for customers and even staff by taking away some of these burdensome duties that they have when it comes to stepping away from the carwash operations itself of processing cars of washing cars and handling that in their call center to where they can do what they’re good at. And then car wash owners and operators can do what they’re good at, which is washing cars. So that’s a really cool new vertical that we’ve launched and that we’re excited to keep going with that and to add other companies as we see fit to the mix and seeking strategic partners with emerging technology companies that can provide these innovative solutions to operational efficiencies. And I know I keep going back to that, but it seems that the car washes that can stay laser focused on carwash operations will be the most successful and set themselves up best for success both on scalability, maximizing value, and protecting themselves as things can shift in the environment. So those are a couple of things that we saw at the show.

On another note, another announcement that we made was our partnership with St. Jude. Amplify Car Wash Advisors has partnered with St. Jude. If you’re not familiar with St. Jude, it is a Children’s Cancer Research Hospital as well as they do research in general that they share worldwide, with other hospitals and other countries to help end childhood cancer. And what an amazing goal. And I’ll share that earlier this year, I had a chance to go visit their campus in Memphis, Tennessee, when they had their Corporate Sponsor Summit. And let me tell you, it was amazing. If I’m being totally honest, I was worried that I would feel so sad because there are so many children who are sick with cancer, and it feels like such a helpless situation. And I have small kids myself. But I left feeling uplifted and energized and motivated to help further this goal along. And I have to give credit where it’s due. The reason why Amplify Car Wash Advisors is involved with St. Jude today is because our partners, Bill Martin and Jeff Pavone, attended Motor City’s event that they hold annually that fundraises for St. Jude. And Bill and Jeff were so moved by this fundraiser that not only did they come home with artwork to furnish our offices, and were bidding against each other, but they also made a real commitment to be supporters of St. Jude.

And so at the carwash show, we have this great photo where we’ve got the big check, and we donated $100,000 to St. Jude, which was incredible. But what was so surprising and really, really neat to be a part of and to witness is we were speaking with Paul Fazio with Sonny’s the Car Wash Factory before and telling them just about this donation we’re about to make. And he thought it was really neat. And he said, “You know what, I think that sounds like a great idea. And I think I’ve got some family that helped start that organization and are still on the board today. And I can’t believe I haven’t donated to them. I’m going to make a donation, too.” So, on the spot pretty much, as we’re presenting the check up on the stage at the carwash show, we’re really motivated and energized. We’ve got representatives from St. Jude, out in the audience, and Paul raises his hand and says, “You know what? I’m going to contribute $100,000 to St. Jude as well.” So, at the end of the day, $200,000 were contributed to St. Jude, in addition to the I don’t know how much but I think it’s 100, 200, or $300,000 that Motor City contributes on their end on a yearly basis. So, it was really special and such a neat thing to see how relationships matter and how you can influence other people for the good as far as that tether of Motor City introducing us to St. Jude, us making a commitment to support them, and then Paul making a commitment to support them. And it was just really special to watch, and on just the fundraising advocacy side, I hope that that chain continues on there, and there are other people that want to contribute and support. And if anyone is interested, please feel free to email me or email St. Jude. I’m sure they will be happy to help. But they were blown away by how giving and how generous and how large the car wash industry is! They meaning the representatives that came from St. Jude. And so it was really cool to kind of watch their eyes as they’re taking in the car wash show to see oh my gosh, I can’t believe that there are all these people here that have booths and all the different vendors that are there providing everything under the sun! So, that’s always kind of a fun thing to witness when people kind of open their eyes and realize that the carwash industry is much larger than perhaps they’ve ever considered before. So that was the icing on the cake with a really, really neat experience and a heartwarming experience and just the power of community and the power of coming together for a shared goal of supporting St. Jude, supporting fundraisers, and supporting organizations that help make the world a better place. And then at the end of the day that we are connected through our car wash community and our carwash shared experiences.

And from my perspective and my point of view, that’s what I left the show the most energized by. So even though we’ve talked about some airs of caution that are in the wind, and a little bit, a little quelling of the intense growth and intense speed that the car wash industry has been operating at, what remains true is that there are so many people in this industry who love the industry in general, but more importantly, who love the people that they have met along the way, and that it’s beyond a colleague or an acquaintance… that they become real valued friends, and you get to know their family members, and they can become lifelong people that you keep in touch with and that you share your life with.

And so, at our booth, there were times when our partner Bill Martin was speaking with some of his colleagues and friends that he’s had for the last six decades. And there’s a great picture in the booth of him with a couple other folks that they’ve taken this picture every year. And they’ve been doing this for decades and decades, and how special of a memory to have this ongoing relationship that’s shared over many, many decades. And so, I left feeling just that communal nature of the car wash industry that’s really special. And as I was mulling this over in the back of my mind, I was asking people: what are your thoughts on this? Do you feel the same way? And every single person I talked to — every single person from the CEO of a large car wash chain to somebody who’s brand new in the industry and has just entered in from another field — they still said the same thing. They said that this is different than anything that they’ve ever experienced as far as that communal nature and that there is a shared bond that even if you are even competitors, that you can still be friends. And it’s just different. And I like the fact that it’s different. I think that that’s pretty special and pretty amazing. And I really, on a personal note, want to continue to lean into that community aspect and the communal nature because no matter what changes with how the carwash industry is made up, how large chains get, who’s involved or who isn’t. We are a community. And we’re a group of people that have a shared interest. And I don’t see that changing anytime soon. If anything, people are excited and lucky because they get to join us, and they get to be part of our cool club. So, the more the merrier! As we keep going on, just keep operations mind, and really focus on how that affects not only the lift that you receive today, but also helps protect the value of your business long term.

And if you want any more information about St. Jude or Amplify Ventures, you can go to our website, amplifywash.com. And there’s some information on there, but you can always email me too. So my email is [email protected] If you ever need anything, feel free to reach out. You can also find me on LinkedIn and you can find Amplify Car Wash Advisors on LinkedIn, too, where we keep information kind of, you know, in a little bit more of an informal way. We post to our news page on our website, which you can subscribe there to receive our monthly newsletter. It comes out at the same time as the podcast is released. So, every month we have that, but then we also share other timely news, again on our LinkedIn, either the company page or on mine, but we’d love to connect with you. I hope that everyone had a great show if you went to it, and if not, you can go to carwash.org And I think that they have some cool videos. I know we have a really neat one that shows kind of a recap of day one and has a neat interview of Bill and Jeff talking about Amplify Ventures, talking about we’re excited for the show, with Karen North from the ICA. So, I’ll have a link up to that as well that you can go check out. But until next time, have a great one, and I’ll see you next month.

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