Does Anyone Have Ever Purchased A "car Wash Business"? Any Advice?

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06/15/2020 Redacted Redacted

searcher Harvard University - Harvard Business School Pace University - Lubin School of Business

DOES ANYONE HAVE EVER PURCHASED A "CAR WASH BUSINESS"? ANY ADVICE?

1 like 312 views 24 comments

intermediary Virginia Polytechnic Institute and State University (Virginia Tech) The University of Akron - College of Business Administration & School of Accountancy University of Akron - 06/15/2020

Worked on a few transactions before but never owned one. They can produce some incredible cash flow but mom and pop ones are cash based for the most part so you really need to do due diligence on them.

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admin Massachusetts Institute of Technology - MIT Sloan School of Management - 06/15/2020

^[redacted]‌ - You can view self-reported Searchfund transactions under Searchfund Data List page. You can find this under Menu / Searchfund Data / Searchfund List. Sort twice by acquired date to view in descending order for most recent acquisitions. This is by no means comprehensive, but a good place to start if curious what types of businesses have been acquired using the Searchfund model. Here is the direct link:

Searchfund List -

like reply | 1 like

searcher The University of Texas at Austin - Red McCombs School of Business - 06/16/2020

I’ve heard the same thing as Matthew, but there could be a roll up. There’s a really awesome car wash chain in Atlanta. Check it out - it’s called Mister Car Wash. I think there’s an opportunity, but it’s very unlikely to be a home run.

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searcher University of North Texas - 06/16/2020

I currently live on Vancouver Island and the people 'making money' on the three I'm familiar with are those in medium size towns that are stand-alone units with bays/self-serve/timer, then more coins (or tokens). The math game here is time per token watching, tightly, the use of things like the wax and soap mixes and, not surprisingly, tight control on who has access to the token machine. The traditional units like Davis's Mister Car Wash, can be tricky given the payroll and demographic analys

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searcher Cornell University - SC Johnson College of Business - 06/16/2020

I know that there are independent sponsors targeting acquisitions and roll-ups in the space from talking to private placement folks

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searcher - 06/19/2020

I looked at one in an idle moment and had a good chat with the owner. It was touchless, recycled water, fully automated (no attendant), with alerting for low supplies, machine problems etc. He had gone to great lengths to ensure maximum profitability and it was in a very good location, (always a line to use it). He said the problem he had was the cost differential between automation and non-automation. If he hired an attendant it wasn't profitable enough to be "exciting" (his words). But if he

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investor Georgetown University - The McDonough School of Business - 06/21/2020

Happy to discuss. I helped a regional chain successfully exit last year and have been involved in the space a bit with other founders looking to exit and sponsors looking to buy. May be able to offer some helpful insights. DM me.

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searcher University of Pennsylvania - The Wharton School - 06/22/2020

generally high cash flow business but usually they trade at high multiples 8x+

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searcher Loyola University Maryland - Sellinger School of Business and Management - 06/22/2020

There are basically two types of CW models: 1) Automated car-washes and 2) Wash by hand. Both, if managed properly are good cash flow producers particularly as the subscription model i.e. you pay a monthly fee and get x amount or unlimited amount of washes, takes off. Both have pros and cons: the automated model is higher capex/maintenance but lower labor costs than the hand wash. Obviously location is a key variable in the equation....

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professional Southern Methodist University - Edwin L. Cox School of Business St. Mary's University Texas A&M University - 07/08/2020

I saw this auction posting for car washes and thought you might be interested. It's happening right now, July 6-10 so check it out. https://www.williamsauction.com/property-group[redacted][redacted][redacted]

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intermediary St. Vincent College - 07/17/2020

Interesting thread. I'm guessing the multiples are "messy" as reported...some include real estate, others don't, the ones without real estate may not have rent at FMV (assuming that the seller probably owned the real estate in most instances), obviously the non-reported cash issue for the "mom & pop" locations. Additionally here we are talking multiples, but I often see cap rates used (easy enough conversion). I'd love have some clarity from someone the has bought/sold one or a consultant

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searcher - 07/13/2021

Multiples vary for all the reasons you would expect. Type of wash, location, recurring revenue model, market share, and number of locations are some big ones. It is a great industry that is really growing fast right now.

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investor Georgetown University - The McDonough School of Business - 07/13/2021

Edoardo, feel free to message me. I'm familiar with the space on both the buy side and sell-side and happy to share my insights where helpful.

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searcher University of British Columbia Indiana University at Bloomington - 07/14/2021

Good business - future seems to be in fully automated tunnels. But startup costs are quite high (equipment and real estate), acquisition multiples seems to be 8-10x range. Another side of car wash is full service - lots of fragmentation and ripe for innovation (and I think some good deals to be found - particularly in co's that incorporate green or steam washes).

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searcher The University of Tampa - John H. Sykes College of Business - 07/14/2021

How much are DIY trends impacting the full service side of this business?

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searcher University of Virginia University of Virginia-Darden - Darden School of Business University of Virginia-McIntire - McIntire School of Commerce - 07/15/2021

PE interest in car washes has grown in the last few years, so multiples have risen for good assets. Building a new location is a good alternative if you find an ideal site and do a leaseback after building it out. The gains from the sale of the improved land help accelerate the payback period a lot.

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lender Indiana University of Pennsylvania - Eberly College of Business and Information Technology - 07/15/2021

I've worked on several CarWash projects and currently have 2 acquisitions in process & 1 construction project. Many great points above with each project having great impact on the overall review: understanding the Mom & Pop Financials, conditions of RE/Equipment, any additional revenue streams, etc. The historical owner involvement is extremely important with many thinking Carwashes being a more passive investment but can be time intensive if limited # of employees to handle cash, mai

like reply | 0 likes

admin Massachusetts Institute of Technology - MIT Sloan School of Management Taylor University Stanford University - Graduate School of Business - 07/15/2021

Since this car wash post is trending right now, just wanted to tag a few folks who have commented on this topic in the past but aren't currently on this thread.

Also be sure to check out the Car Wash reports on IBISWorld & BVR Deal Stats.

Car Wash & Auto Detailing in the US:
www.searchfunder.com/ibisworld/report/8169

BVR DEAL STATS: Car Washes (NAICS: 8

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professional New York University - Leonard N. Stern School of Business James Madison University City University of New York, Bernard M. Baruch College - 07/15/2021

Looking into the industry as well. From what I've discovered so far is owners play everything close to the chest. Broker I'm working with has to sign an NDA every time he sees the seller, just give an example. As most have mentioned already, a great wash produces high cash flow and multiples are at a minimum 4-5x.

like reply | 1 like

intermediary University of Pennsylvania - The Wharton School - 07/16/2021

I'm reposting this information in case you haven't seen it. Might be helpful for your due diligence.

The IRS publishes a Cash Intensive Businesses Audit Techniques Guide. Here's a link:
https://www.irs.gov/businesses/small-businesses-self-employed/cash-intensive-businesses-audit-techniques-guide-t

like reply | 0 likes

searcher Westminster College of Salt Lake City University of Utah - 07/16/2021

What specifically do you want to know? I built one from the ground up, three self-serve bays, one automatic and operated it for almost 15-yrs before selling it.

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