soonermajic
Well-known member
Tunnel is coming baby! Rural town, nearest big town is 32 miles away!
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The Death Knell! Population 5300!!
- Thread starter soonermajic
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soonermajic
Well-known member
I hope they choke on Burger King French fries!!!
washnshine
Well-known member
They may not offer unlimited memberships. You have ss, friction and frictionless - right? You offer more they do.
MEP001
Well-known member
Eric H
Well-known member
Same experience an me!
I doubt with a population of 5300 they will have much success. They’ll be washing cars but probably not enough to cover the note. I suggest you make friends with the loan agent at the bank so you can buy it after it’s been foreclosed in 3 years.
traveler17
Well-known member
That’s crazy! What’s the population and how close is that to you?
Rfreeman
Well-known member
His population at that location is approx 5400...there is a Walmart there but it's still a very small town in east Tx
DiamondWash
Well-known member
They always offer unlimited memberships because that is the driving force behind these things, I know because I have 4 near me soon to be 5 could be 6 from what I'm now hearing.
Strava
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So what is the big picture plan on why people do this? Is it a tax right off? I used to be a multi-unit subway franchise and I can understand why they build subways on top of each other, it's good for the franchise. I don't understand why someone will a few million in the bank look at an oversaturated market that has 4 tunnels and thinks I should build another one.
Roz
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The new carwash model appears to be build an Express Wash for $5M, build up sales for 1-2 years, set a rent level that allows you to sell the place at a 5 CAP & 20 year lease on Loopnet that retires your entire debt. You then have 20-22 years to run the place at a rent expense rate at least 50% lower than if you had to repay the original loan. You can see the listings online, most that I have seen appear to be Tommy's franchises so you will need that rent savings to cover all their high franchising, chemical & service fees. Will be interesting to see if this is a successful business model for franchise owners (we know it is good for Tommy's).
washnshine
Well-known member
Coach - is this new tunnel part of a milti - site chain, or is it a one and done location?
Car_Wash_Guy
Well-known member
This. Sale-Leaseback. Pretty common strategy - I see many big corps doing it. Chick-Fil-A's , Taco Bell, Walgreens, etc.
Ironic because to me it seemed like the advice within this industry was don't own a wash without the land, and here we're seeing not just our industry but many others, racing to sell off and lease back the properties.
soonermajic
Well-known member
Pretty sure just a single tunnel, owned by the guy who owns Burger King nearby...
washnshine
Well-known member
Gotcha - he won’t know anything about washing cars!
Rfreeman
Well-known member
This is just private equity money and deep pocket investors doing these massive expansions. That's what happens when the govt prints money and makes it so cheap, people go bananas and start throwing money around at everything. Since the FED rate hikes this massive building spree should subside some.
I personally know a customer in my other business who sold out a portion of their business to PE and got paid really well for it. He still owns a minority interest in this business but with some other partners is getting into the car wash business as well. They have already purchased 3 locations at approximately $600k to $1million for each location. Before they even put a a shovel in the ground they were offered $2-$3 million more than the AIA document for total project cost.....this was before even breaking ground!
I personally know a customer in my other business who sold out a portion of their business to PE and got paid really well for it. He still owns a minority interest in this business but with some other partners is getting into the car wash business as well. They have already purchased 3 locations at approximately $600k to $1million for each location. Before they even put a a shovel in the ground they were offered $2-$3 million more than the AIA document for total project cost.....this was before even breaking ground!
soonermajic
Well-known member
Yep, those Venture Capitalists & Private Equity groups are killing the middle class!!!
Overachiever
Active member
Picture looks like a nice place but where will he find customers? I've got like 50k people in a 2 mile radius and the two tunnels near me have a hard time staying in business. Both have gone out of business at least twice since I bought my SS/iba 9ish years ago.
I would stress the things your wash can do and they can’t. You can wash construction equipment, patio furniture, motor homes, motorcycles, window screens, and showers for the homeless. Make sure you accept credit cards on everything. Set the self serve to count up (when I did this at my wash the revenue doubled. Check out all the new payment methods for discounts. Get all the free publicity you can. A while back one owner washed an elephant from a traveling circus. Hire some Hooters girls to wash for tips. Nothing magic about this business. The more you put in the more you make.
