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Car wash Franchise & Business Opportunities

Car Wash Industry

Car Wash Franchises/Businesses 

The car wash industry encompasses businesses that offer cleaning, washing, and waxing services for automotive vehicles. This industry also includes self-service car washes and conveyor belt style car washes, but excludes businesses that offer auto maintenance or repair services. Since they provide non-essential services, revenue is highly dependent upon external trends in discretionary spending. The industry is also dependent upon fuel prices, as consumers will drive more when fuel costs are lower. There are no major companies with control over more than 5% of the market share, but some prominent players include Autobell, Wash Depot, and Mike’s Car Wash. There are over 50,000 businesses in this industry.

 

Overall Automotive Industry Trends

The primary factors affecting the automotive industry are the rise of electric vehicles such as Tesla and the volatility of fuel prices due to the pandemic. Rising environmental concerns over the negative effects of carbon emissions has accelerated demand for low carbon emitting vehicles, propelling the advent of electric vehicles into the industry. More recently, the COVID-19 pandemic has stagnated the automotive industry as more Americans are confined to their homes and therefore traveling less. The enormous drop in oil and gas prices because of a lack of demand has also deeply affected the automotive industry, a reflection of the debilitating impact of the pandemic.

 

Car Wash Industry Trends

This industry has a low market share concentration, with no major company dominating the market. It also has a moderate level of capital intensity, or a moderate amount of capital present in relation to other factors of production. Overall, the outlook is currently not very bright for the future of the car wash industry. While increased consumer spending levels in general will likely have a positive association with increased spending on highly discretionary services like car washes, projected increases in oil and gas prices and the lingering effects of the pandemic on employees who will likely continue to work from home limits the expansion of this industry. Ultimately, the car wash industry has not been exempt from the turbulent economic climate resulting from the pandemic.

Average Automotive Franchise Industry Percentage Fees

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Royalty Fee
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Marketing Fee

Standard Automotive Franchise Industry Investment

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This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 55 franchise concept investment breakdowns in order to calculate this figure.

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Paid-in-Full Rate

The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.

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Charged Off Rate

The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.

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SBA Loan Success Ratio

For every 4 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted. 

*SBA Franchise Loan Data from 2010-2019

*Franchise Businesses taken into account: 2,083

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