The Playbook for What Good Looks Like in Car Wash Operations

In this episode, we break down what good looks like in the car wash industry—capital partners, exit timing, operational discipline, and the fast-evolving role of technology. You’ll learn how family offices differ from private equity, why their long-term horizon can fit capital- and operations-intensive businesses, and how to decide whether to sell now or hold. We explore who wins in the next chapter—regional operators with hyper-focused density, scaled chains mastering memberships, and differentiated platforms—and why average performance no longer gets rewarded. Finally, we unpack KPIs, capex, tunnel standardization, vendor diligence, and practical ways to manage rising water and chemistry costs while enhancing customer experience.

What You'll Learn:

• How family offices compare to private equity for car wash M&A and growth
• A pragmatic framework for sell/hold decisions amid macro uncertainty
• Why regional density and membership excellence outpace generic national branding
• The importance of capex discipline, tunnel standardization, and integration
• KPIs that matter: churn, conversion, pricing, training, promotions, and COGS
• How to vet tech vendors, negotiate trial periods, and focus on ROI
• Real-world levers to manage water and chemistry costs without hurting quality
• How AI, IoT, robotics, and autonomous vehicles could reshape car washing

Listen now to sharpen your playbook and define what good looks like for your operation. #CarWash #MergersAndAcquisitions #FamilyOffice #PrivateEquity #CarWashBusiness

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Transcript

SPEAKER_00 0:08

Yeah, just uh a little bit more on the family office side of it, you know, just for the sake of providing definitions. Um, you know, a lot of a lot of folks out there may not necessarily understand what a family office is. You know, at the emergence of wealth in our country, specifically here, you know, family offices, they're they're pools of funds, right? Usually you have a family, they have a liquidity event, they now have a significant pool of of wealth to deploy, not just for now, but for multiple generations in the future. And they they very much act like private equity in terms of how they invest into companies. But again, the one key difference here is they're long-term thinkers because what they're looking for are good businesses that they could run and operate for multiple generations. And again, going back to the comments in car washing, value creation in car washing, given capital intensity and operational intensity of the business, it takes more than three to five years to fully realize that benefit. So there tends to be that better alignment of that fit with just the aspect of timeline and their investment time horizon. What I personally love about the family office model, though, is there's some really unique family offices out there. And you could find that proverbial one of one makes three, right? Um, so in other words, let's say this family office had a liquidity event within software and technology. And let's say you're an independent operator and tech technology enablement has been one thing that's lacking in your business. Well, you find yourself that right capital partner to help you go grow. Not only are they bringing you the capital, but it's it's smart money, right? They could help thinking about transitioning and transforming your business. It's not to say private equity doesn't do this. There's some great firms out there that could think about kind of the back-end support of your business and how they can help transform your business to you know be more institutional in nature. Uh, but you can find some really remarkable family offices out there, and I think that's one area where we're particularly excited about what the future looks like in car wash MA.

SPEAKER_01 1:54

You know, one one question, you know, I get asked a lot is uh, you know, I'm is the time right now for me to to to sell, or um am I what does next year look like? And I'm gonna tell you, it's it's it's almost impossible to answer that question. Right? At the end of the day, you know, the my advice to anybody is you gotta decide where you're at in your life cycle, because a year from now, could could we see that MA dry up? You know, it it it could it could. You know, it right now the depends on where we're where we're at in the global economy, right? So if all of a sudden the war persists on and consumer gets stretched, and all of a sudden we see a little bit of uh you know the stress in the consumer affecting the operation side of a business, could that cause reason or pause? Sure. Could we see another, you know, potential take five or you know, anything is possible. We just what we don't know is we don't know um how to read these T leaves of saying what what happens a year from now. And so the now on the on the flip side of it, we could be we could be the economy could be roaring back, we could have inflation could could stabilize and even start going down. We could see interest rates possibly go down, and all of a sudden, you know, we're seeing a little bit bigger lift. What we won't ever see is we'll never see it ever going back to where it was in the early 20s, 21, 22, uh because interest rates were zero. And that's just not going to happen. I think where we're at today, uh as far as multiples in the world, I think we're probably as good as we're going to get. So the question is, do you hold for a year and wait until your numbers improve and you got a better you got a better story to tell? That's that's that's up for debate here because the the question becomes is let's say the market gets really, really has some some some really distress in the marketplace. Are you okay with holding that and and running that company for the next three, four, or five years until a window opens up to sell again? And if that's the case and you've got a good company, maybe it doesn't matter. But if you're looking at it and saying, you know what, you're in your late 60s, you're looking at the world differently and saying, I I've got to tell you, if I leave four or five million on the table today, I'd rather leave four or five million on the table today than risk not having an exit a year from now. And and so you you've got to make what's what's best decision for you personally, but I gotta tell you, I'd remove that grief factor of saying I need to get the last uh 10 percent to make that decision because that that's really that's a that's a poor way to make that decision.

SPEAKER_00 4:41

That is some of the best advice, Jeff, I've ever heard. Right? I I we hear that all the time. Like you're right, you get you have to boil it down to what makes sense for you based on your needs, for your family, and where you're at, your life cycle and your journey. I think um I've seen some very successful people in the world of finance and capital markets lose their job trying to to make bets on the macro environment, right? I don't think anybody had a war with Iran in their 2026 bingo card. You cannot sit there and make decisions for your wealth and your family based on forecasting macro events or where interest rates go, what happens to the consumer. You 100% have to march the beat of your own drum, and it's based solely on what makes sense for you. And um I think that's that's fantastic advice because a lot of a lot of groups could go out there and you could sit there and you can make assumptions or you know, like, hey, let's let's wait to see if multiples expand here in Q4. We're expecting rates to come down. Guys, that's BS. You're taking more risk than you need there. It all depends on what makes the most sense for you in that situation.

SPEAKER_01 5:37

You know, the other piece that they need to put in the equation is is sort of a math thing. So looking saying you're going to s if you sold today, it doesn't mean you're not so you're go you're going to have a you're going to get a you're going to get a capital out of the deal, right? So you're going to have a fairly good amount of cash to to to reinvest somewhere. So that money that you're leaving in the company might grow might grow a little bit over the next year or two with risk of not being able to exit, or you controlling your own destiny of having that money today. And again, there's a lot of alternative ways to invest your money than just buying real estate and car washes. So if you if at some point in the near future you feel if you just need you'll need to be getting out, we should have that conversation. There's a lot of good wealth advisors and other people, but there it there is a compound effect of having that money available. There's also a lot of really um there's a lot of other investments beyond car washing. And we're not saying car washing is a bad investment. The only thing I'm saying is that if you're looking at it and saying that the exit is going to be in your inevitable future, you need to take all this in consideration. On a long-term basis, you know, if you've got high-performing car washes and you're in a good region and you're and you've got a solid brand, you know, there may be no better business to stay in and continue to operate and run it. This is mainly if if sometime in the near future you've got a you're considering an exit, you you may want to have these conversations sooner than later.

SPEAKER_00 7:10

Yeah. That's a good point. We hear it all the time. You know, a lot of individuals in this business, their car washing's all they know, right? It's it's been their blood, sweat, and tears for a number of years, and the prospects of doing something outside car washing is often foreign and scary. Um, I'll tell you, it's a big, it's a big world out there, and there are a lot of opportunities. I mean, we see some guys, Jeff, that have successfully exiled to car washing and today they're doing you know multifamily development. Um, some have moved into kind of different different aspects of technology and software, the AI component. Like there's just a lot of interesting stuff out there. And um, again, always happy to have conversations with you, some of the new ideas that we're seeing. Um, because that that is a really good point here. As you're thinking about selling and potentially exiting the business and liquidating, understanding how to make that money work for you is important, but also understanding what that next next stage of your life looks like and what that journey looks like. Some embrace philanthropy. I mean, that's definitely a good point, kind of prepping yourself on the emotional side of it.

SPEAKER_01 8:05

You know, one thing we may want to talk through a little bit is you know, where do we see long-term this this space going? Like who wins, how do they win? What is what is what does winning look like even at this point? And um, you know, you know, not I'm curious what you think on that uh topic.

SPEAKER_00 8:24

Yeah, what does winning look like? That that's that's an interesting one. Um you know, to me, and I I know we say this a lot, Jeff. I I'm still convinced that the group that wins at the end of the day is you know the bet the best regional operator will will continue to outperform. Um I don't think there's as much weight as having a big national brand as many groups think. So I think having kind of hyper fo hyper focused density and attractive markets is is definitely the way to go in terms of that recipe going forward. I think you're gonna start to see a lot of that backfilling and uh of kind of geographical footprints come to play here as we think about car wash MA in the future. Uh but at the end of the day, it's it's whoever could deliver you know exceptional customer service, you know, good brand, good way to engage and interact with your customers. And I think one thing that personally excites me about this industry is it's been you know independent, highly fragmented. We're now starting to see technology come to play in a very interesting way in the car wash sector. And a lot of it's not just centered around kind of what's going on in the tunnel, it's all the magical stuff that happens outside the tunnel with that customer, right? So I think the groups that are thinking a little bit more about tech enablement in terms of how does that manifest in their their business and their operation and how does that deliver exceptional customer service, those will be those will be the groups that would in the long run. You know, to me, I think the question mark is what disrupts this business? And you and I have had a lot of conversations personally about automation and autonomous vehicles and robotics and what that means for this sector. And I think that's always where these these conversations get interesting is you know, what what is autonomous vehicles? What how does that reshape this business? Or think about robotics, right? We've seen a couple of groups here try to crack that code. And I think they're starting we're starting to see some really interesting technologies and robotics that could be used in the tunnel. Um, so that's to me where I where I start to really think long and hard about, you know, we have car washing today, but what is car washing and tomorrow look like? And with the wave of Internet of Things, artificial intelligence, autonomous vehicles, I think it's safe to say that it's gonna look different. We don't know what it's gonna look like, but it's certainly different than what we what we're seeing today.

SPEAKER_01 10:21

Yeah, you know, if I'm betting, man, I'm I would venture to say we will see a thousand car wash chain in the next 36 months. And and and you see, we're seeing I would say there's a few guys or the few groups already that that are sort of forging their path forward. When you look at the clubs of the world, the quick and the quick whacks of the world, you know, they've got a fully integrated everything. They can they've got their own, you know, subs on, they've got their own GCs, they've got their operating infrastructure, they are they've got marketing teams, they're so dialed in uh and looking to build a brand uh market by market. And you know, I wouldn't be surprised to see them guys, you know, somebody go in and have a national brand of, you know, I would say it starts with a thousand. Could it get bigger? Sure. You know, at the end of the day, I think they if you can if you can build a car wash efficiently and really run that membership model properly, it becomes very attractive. I I think the I think those those guys end up you know becoming real winners. The they but then you got on the flip side of it, you've got you know groups like you know, spotless brands, cobblestone just, you got the Dale car washes, the Misters, you know, who have a little more diverse product offering. And I I think the consumer has still got an appetite um you know for a flex offering, for a full service car wash, a detail service. So I I think there's going to be an opportunity for uh car washes that differentiate and give a really high quality product to to the to their customers. I think there's a there's a real winner. And then, like you say, in there are certain markets of the country where you'll never outrun the great regional operators. And again, you got just examples of of crew car wash in Indianapolis where Metro, you know, um in that metro in that Boise and Washington markets. I mean, these these guys are just um good at everything. Hard to ever think that they can be displaced unless they choose to. But but they're they're just there's going to be real winners on the regional side. I think there's gonna be national, but I but I do think the the days of paying and we're getting rewarded for being average or below average, I would say is over. And I think those guys are gonna get those guys are gonna get wiped out.

SPEAKER_00 12:43

No, agreed. I think um you know that that's a consistent thing that we've been talking about here is the discipline, right? There's no more paying up for speculative growth, right? You have to have a track record. Um, you know, you're not getting as much credit today on on projections or run rate numbers. You you have to be able to show something that's tangible, right, to get credit for it. And I think too, like, because we talk about, you know, you mentioned club. You also mentioned kind of capex earlier on, too. I think that's one one big lesson learned by a lot of these groups is uh what it takes to successfully integrate an acquisition. And I think the capex side of it too is one thing that's that's significantly more important today than it was in the past. You know, all of what this business does, it all centers around that tunnel, right? And deferring maintenance, and the more you kick the can, the harder it is to bring those facilities back to standard. I think that's one area where groups have a much more of a fine eye today is understanding kind of tunnel itself, how to integrate. Uh, but more importantly, what they don't want to do is find themselves the portfolio of different car wash tunnels with different equipment providers all over the place. Um so that's one interesting thing is we see some of these groups like the quick quacks, like the clubs. That's one area where they're very, very uh particular, right? Which is equipment, more importantly, what it's gonna take to get this facility to the standard of a club car wash or a quickquack car wash. And um I think that's been one interesting dynamic that's kind of played out here over the last two years or so.

SPEAKER_01 14:08

So the advantage they have is they know what good looks like. More importantly, they know how to get to good, right? So it's easy. So you recently did a presentation at Southwest Car Wash Show, and you talked about your about KPIs. And and it was well received, and and and again, I think that's this is the kind of level level of the playing field. Let's the data's got to get out, show you what good looks like. The the bigger the bigger problem becomes is okay, once we talk about getting churned down, right, uh or conversions up, so how do we how do you do that? And and that's where I think the there there needs to be probably, you know, the first step is every owner's got to understand what good looks like. The next the next thing is it becomes even a little more challenging is how do you get how do you get good, right? And and with all the technology and we talked about AI, we start looking at saying the good news is there's a lot of data out there that we're that we have as owners. The question is, what do we what do we use? How do we use it? And how do how do we how do we improve how do we prove what we're doing to get to that next level?

SPEAKER_00 15:17

Yeah, no, I completely agree. I mean, you you can't manage what you can't measure, right? So I think first and foremost is having that appreciation for what the data means and understanding kind of what KPIs matter most and what those metrics are. But I mean, unfortunately, it's never a you know magic bullet, right? There's no never a singular answer. It could be everything from pricing to how you go about training your teams to an effective promotional strategy. I mean, it it's it's typically a mosaic of factors, but I think step number one is at least having the ability to jump off into a position where you could sift through the data of your business and find that right guidance and and figure it out. But I mean, you're right. That's one thing to me that's just still just amazing is the fundamental lack of understanding of what good looks like in car washing. And it's through virtually every dimension of the operation, whether it be how you manage your labor pool, um, you know, how you go about pricing, how you go about selling plans, how you go about marketing and promotions, you name it. Um, even to just your cost of goods, right? How much should you be paying in chemistry? You hit that right on the head. Um, we've seen groups that are paying damn near close to a dollar, right, in chem cost, and it's just that they're unaware of everything from their vendor pricing and the contracts they're securing, but more importantly, you know, how do you manage the application and chemistry in an efficient manner so that you're not losing in the tunnel, right? It's everything from time timing to dialing up those hydromitters and hydromiters and um all you know, making sure your nozzles are in good shape, and you name it, it is usually a mosaic of things to consider here. But again, having that fundamental understanding of where you lie, um, that's I think one thing that we've been proud as an organization is that we can provide some optics into a very opaque industry. Um, unfortunately, a lot of these data points aren't widely distributed or available to a lot of car wash operators.

SPEAKER_01 16:55

Yeah, we're we're seeing a um a real evolution of of technology coming in the marketplace. You know, recently I visited a car wash chain that has uh uh something that really was a pipe that literally went between its chemical and water and how it managed that, what was going on in a car, and it and it got its cost down significantly. You know, there's um there's a lot and when you look at memberships, you know, being able, you know, the technology now to be able to interact with their customers and really understand, you know, what will they be willing to pay for a car, right? How much will they pay for a wash? You know, you get an extra bucket car dropping that it it's it drops to the bottom line. And so there's there's a lot of unbelievably great uh advancements in technology and resources to improve someone's top line and bottom line. The the problem I'm seeing, you know, if I if I look at something is when I go visit operators all over the country, they they got their head down, they're running their company, and then there's a lot of misinformation put out there. So there's a lot of guys selling stuff, putting whether they're marketing it, whether it comes from an association. The question is, so how do you how do you narrow it down to say what is really good? What is worth because I don't really care. I want to measure what good is. And so how do we how do we look, how do we find good?

SPEAKER_00 18:22

Uh from a technology standpoint? Yeah.

SPEAKER_01 18:23

How do we get how do we find good with things that are actually working and driving results?

SPEAKER_00 18:28

Yeah, I mean, uh that's a really good point. I mean, you're being sold a lot of stuff, and it you know, I think a lot of groups out there and they see money being allocated to a sector, they immediately circle the wagons and try to pitch in a bunch of interesting technologies and innovations that may not necessarily be worth it. Uh, that's a good point. I mean, I I encourage every operator to have kind of their their own diligence playbook and what questions to ask. I mean, first and foremost, referrals go a long way, right? Really understand has this been used in other applications in car washing? And if so, give me the name of the operator so I can have that conversation. Because a lot of stuff, I mean, could sound good on paper, but when it comes time to reality, I mean, you got to really kick the tires on a lot of this stuff. Um, you know, there's no such thing as a free launch, right? If you think it's gonna significantly boost top line or better manage your bottom line, do the work to really understand the return on that investment and and and the efficacy of it. Um, I think that's step one. Um, you know, step two is as you're negotiating contracts with vendors and technology, always make sure you're giving yourself an out or some sort of trial period to actually test it, especially if you're making a significant shift to your to your operation, right? I think if we're seeing some stuff centered around technology application, be able to better manage and monitor water usage and chemistry application, that's great. Um, but make sure you're you're testing this out in a way in which you're not you know swapping out your chemistry across your entire operation or locking yourself into a one-year commitment on the chem to get the technology with it. I think making sure you're negotiating good terms is also a very important piece of it. Um, and then the third one is that does it really matter to you, right? Um we could talk about some really interesting stuff, but if it's at the end of the day, it's you're picking up pennies in front of the steamroller and it's not something that really matters to your business or the needs of your business today, don't even entertain it, right? I'll tell you firsthand one thing that we've we've been struggling with in our car wash operations is we've had the privatization of a lot of our water utilities here in the Chicagoland market. And as a result of that, we've seen our water prices spike. And we've been fortunate enough for a lot of our sites that we've, you know, we're we're here in Cook County, we have abundance of water just being our proximity to Lake Michigan. Uh, but once you have that privatization, now we're starting to think about you know, reclaiming how do we effectively manage and monitor our water controls. It was amazing to me once we started going down that, you know, the path of exploration to say, okay, how can we better manage this? There's so much technology out there, right? So that to us that mattered a lot is figuring that out. Um, on the other side of it, when it comes to chemistry, you know, we have a really good kind of chem vendor here locally, the chem technicians, essentially an extension of our team. Um, sure, we could put some really interesting technologies to better watch, you know, monitor, manage, and apply chemistry, but at the end of the day, wasn't as important to us because we felt that we had the wagon circled in terms of how that manifests in our operation here. So I think really boiling it down to what matters to your operation, and then going on that search to find the technology instead of you know the tail whacking the dog, if you will. And that's a wrap on this episode of Behind the Business. Thank you for joining us. If you want any additional information, please visit us at www.amplifycapgroup.com.