Best Car Wash Franchises to Invest In for Steady Returns

A Car wash franchise is an excellent way to get into the automotive industry without a lot of experience or capital. Franchises in this sector typically have low start-up costs and offer comprehensive training and support to franchisees. Are you interested in owning your own business and have a passion for cars? A car wash franchise could be the perfect opportunity for you.

There are several different car wash franchise models to choose from, each with its benefits and drawbacks. The most important thing is to find a franchisor that’s a good fit for your needs and goals. Once you’ve done your research and found the right franchisor, you’ll be well on your way to owning and operating a successful car wash franchise.

There are many different types available. From express exterior washes to full-service detail shops. Franchisees can choose to operate their businesses from a fixed location or mobile unit. Giving them flexibility in how they serve customers.

A Proven Business Success

You can be your own boss while providing a valuable service to your community!

If you’re looking for a business opportunity with high potential and low risk, a car wash franchise could be the perfect fit for you.

Operating a car wash franchise can be a very rewarding experience. Not only do you get to be your own boss. But you also get to help keep your community clean and safe. When you franchise with a reputable company, you can feel confident that you’re getting the best possible training and support to help you succeed.

If you’re interested in exploring this industry, Vetted Biz has compiled some of the best options out there. To learn more about each franchise, click on any company’s name below.

First, What is a Car Wash Franchise?

What do they help with? One of the most important elements for any car wash franchise is its location. It sounds kind of obvious, but the location for a car wash is so important. And it’s much more important than many other industries that have franchise brands. You really need a location that has high car traffic, as well as ample customer parking for their vehicles.

Other key features, it needs to be close to major roads, highway, accessible for larger vehicles, like RVs trucks, proximity to restaurants, shopping, convenient hours of operations. That’s a lot because if it’s accessible for RVs trucks, and it’s super accessible, it’s probably going to cost you a lot. So you gotta weigh those factors. Many car wash businesses also use unique pricing system that offers different levels of services at different prices.

For example, basic wash might start at five dollars, especially if you’re in rural America. While a more comprehensive wash may cost $50 or more. If you’re in Miami, it could be $75, $90, it probably depends what type of car you’re driving and what the quote is.

If it’s a professionally owned and operated franchise being run the right way, hopefully, they’re not pricing solely based on how expensive the car is, but in the informal markets, you oftentimes see that.

For a car wash…

It is important to find that balance between offering affordable services where you’re going to get a good flow of customers, and having a high enough price to really make money from the business. And marketing’s really big for a car wash business while executing marketing campaigns can get those new customers in and keep the existing customers coming back.

That’s enough on the car wash. Everyone’s been to a car wash. If you’re in the United States, I imagine 99% of Americans have been to a car wash. Let’s go through three franchise examples in the car wash industry and start with Grease Monkey, which is an automotive company that also offers car washes. As of 2021, they had 186 Grease Monkey locations that were owned and operated by franchisees. And they had 55 corporate locations.

There are pros and cons to having so many corporate locations. You have to be a little worried that the franchise, or in this case, Grease Monkey, isn’t so focused on their corporate locations, and they are quite focused on serving franchisees. If you’re looking to open up a Grease Monkey, it’s going to set you back $25,000 for the franchise fee, and then another $200,000 to $600,000 to open up the business, the build-out, leasehold improvements, additional working capital for your employees.

Car Wash Franchises in Numbers

The franchise for sale rate is about 12%, which is pretty standard for this industry. And the failure rate’s not bad. For the past 3 years, only 4% of Grease Monkey franchises have closed or left the system. And in terms of the financials, doing pretty good across the board. The top 25% of franchisees are making sales of $1.4 million and then EBITDA of $373,000.

If you just invested $300,000 to open up a Grease Monkey, in year three or four, you’re making $373,000, that’s pretty damn good. The bottom 25%, still not bad. Having an EBITDA, basically, an owner compensation, and salary of $63,000.

If you fall somewhere in-between $63,000 and $373,000, it is a pretty big range. But depending on the investment amount and how long it took you to break even and start really making money with your Grease Monkey franchise, it could have been a pretty good business opportunity.

Now, the second franchise opportunity I wanna go through is Tommy’s Express Car Wash. It’s a national car wash franchise that offers quick service, modern facilities, and a professional clean. As of 2021, there were 53 Tommy’s Express Car Wash locations owner-operated by franchisees and just three corporate locations.

Some Final Considerations

I personally prefer when there are more franchise owned and operated. You know the franchise are going to be focused on the franchisee and not as much focused on those corporately owned-and-operated locations. The franchise fee is quite high compared to… Grease Monkey’s at $50,000, double the Grease Monkey costs.

And the cost to open up a Tommy’s Express Car Wash is pretty steep at $4 million to $5.6 million. However, there’s potential to make a lot of money if you sell the real estate as well as you’re developing, oftentimes, the land from the ground up to own the real estate, the building, as well as that operating business for a Tommy’s Express Car Wash.

So for the first operational year, you know, after you’ve been operating, open for 12 months, that 12-to-24-month period, they’re averaging $1.4 million in sales. That goes up to $2 million for that second year in operation and $3 million once you’re in that third year of operation. Costs of goods sold, not bad, 7.5%, and labor at 15%. This is a cash cow.

It takes time, but if you have a good quality site to develop, if you have a lot of capital, or you’re at least willing to take on a lot of debt to open up a Tommy’s Express Car Wash, this is definitely an opportunity to look at as it makes a lot of money. Now, the third option is Prime Car Wash. We don’t have as much data in terms of the unit growth and how they’re doing in terms of count.

Conclusion

The average gross revenues, though, are pretty good for a Prime Car Wash, at $2.4 million. And they’re operating at a pretty profitable margin in line with Tommy’s Express Car Wash. And they have 10,000-plus cars washed across their system of locations in the United States alone. Those are three options to review.

We’ll include links to those different franchise opportunities for those that are listening to…and watching on YouTube, as well as in the show notes for those that are listening over your favorite podcast app. If there’s some particular car wash franchise you’d like us to review in more detail, just shoot me an email at patrick@vettedbiz.com. Thanks