Recap of The Car Wash Show With Your Host, Lanese Barnett

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.  

For a full transcript of the episode and more, check out the post. Sign up for Car Wash M&A, The Newsletter | Follow us on social media @AmplifyCarWashAdvisors on LinkedIn or Facebook | Connect with Lanese on LinkedIn

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Transcript

SPEAKER_00 0:07

Welcome to Car Wash MA, the podcast, brought to you by Amplify Car Wash Advisors, the number one advisors of car wash chains nationwide on mergers and acquisitions in capital advisory services.

SPEAKER_01 0:25

Hi, I'm Lenise Barnett, Vice President of Business Development at Amplify Car Wash Advisors, and your host of Car Wash MA, the podcast. Here we'll take a deep dive into the current mergers and acquisitions activity of the car wash industry with a goal of keeping car wash 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 undoubtedly 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 MA, 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 to 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 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 with 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 car wash industry has grown. The even 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 Jinx, 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 these supply chain issues. These are real factors that are shifting how much people are investing into the car wash industry because now there's a little sense of hesitancy. Again, overall, the sentiment is there's still a lot of enthusiasm. This is a great industry to be in. But with that, there's a caution that we are 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 car wash 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 recurring 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 car wash profit possibly going forward by focusing on exactly how can this process 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 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 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 Jinks, 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 car wash industry be at the forefront of utilizing these new innovations, especially in the technology sector? That's not his exact quote, but that'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 touch points. 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 the goal of having first call resolutions. What does first call resolution mean? It means that if you were the customer calling in, you hang up and say, Yes, I'm very satisfied. Now, I've asked Bobby Thompson, 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 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 car wash 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 car wash 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 car wash 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 Fozio with Sonny's The Car Wash Factory before and telling him 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 car wash show, we're really motivated and energized. And we've got representatives from St. Jude out in the audience. 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 $100,000, $200,000, $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. 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 would 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 car wash 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 that at the end of the day, that we are connected through our car wash community and our car wash shared experiences. And from my perspective and my point of view, that's what I left this 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 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, like, 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 it's just different. And I like that it's different. I think that that's pretty special and pretty amazing. And I 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 car wash 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. So as we keep going on, just keep operations in 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 lbarnett at amplifywash.com. 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 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 love to connect with you. Hope that everyone had a great show if you went to it. And if not, you can go to the 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 were excited for the show with Carrie 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.

SPEAKER_00 19:02

Thank you for joining us on this episode of Car Wash MA, the podcast, with your host, Lennise Barnett. Like what you hear? Subscribe to our podcast feed and leave us a review or follow us on social media at Amplify Car Wash Advisors. Want more MA information? Visit our website at amplifywash.com and listen for new episodes on the last Thursday of each month.