The car wash business is already a multi-billion-dollar industry, so is there room for more growth? Absolutely.
“This is a great industry, and it’s still expanding,” says Mark VII CEO Lee Norton.
The demand for car-wash services has been rising over the past decade, according to Grand View Research (GVR). This trend is expected to expand at a compound annual growth rate of 4.8% from 2021 to 2028, according to the GVR report “U.S. Car Wash Service Market Size, Share & Trends Analysis Report By Type (Tunnels, Roll-over/In-bay, Self-service), And Segment Forecasts, 2021 – 2028.”
Seven key factors are driving these growth trends in North America and beyond, including:
- More vehicles per household. It’s not unusual for modern households to have three to four vehicles. “There are also plenty of districts where new housing options are going up rapidly,” Norton says. “That means opportunity for new car washes, even in areas where car washes already exist.”
- Customer demand for more convenience. Busy schedules and time constraints have prompted more consumers to use professional car washes, rather than cleaning their vehicles at home. “Customers today don’t have a lot of time, and they don’t want to wait,” Norton says.
- Environmental regulations. More communities have adopted regulations that prohibit residential car washing practices, Norton says. This helps expand the customer base for professional car-wash businesses.
- Profitable business opportunities. The car wash business can fit a wide range of owners, from a retiree looking to invest a pension to a private equity group with multiple car washes in its portfolio. “A car wash can offer a significant return on investment,” Norton says. “While operating profits vary, depending on the business model, car wash gross margins are very attractive.” A car wash is a relatively simple business to run that can provide a long-term income stream. Car washes also tend to have strong resale value, Norton says. “If you’ve operated a well-run business, it’s usually not hard to sell a car-wash business.”
- More car wash options. If you have a piece of land in the right location, you can get into the car wash business. There are a variety of car wash options an owner can configure, from in-bay automatics with a soft-touch or touch free wash (the type often seen at convenience stores) to tunnel systems and more. “There are lots of choices, along with options within options,” Norton says. “It’s important to choose options that fit the size of land and location you have and suit the needs of the local community.”
- New technology. In years past, it wasn’t uncommon to experience serious peaks and valleys in a car wash’s income stream, especially in the winter. Modern technology can provide more stability to the income stream. Consider the subscription model. Similar to a monthly gym membership, the subscription model allows customers to choose a wash plan, pay a monthly fee, and get an unlimited number of car washes. “This model has become more popular in the last 10 years,” Norton says. “It’s a win-win, because it lets customers wash their car as often as they like, and it offers cost savings for the car-wash operator.” Since membership customers tend to wash their vehicles more often, this makes their vehicles easier to clean. “When soiling is less heavy, this means less wear-and-tear on the car wash equipment,” Norton says.
- Support for car wash owners. Multiple companies in the car wash industry can supply everything needed to start a car wash business. Not all of these companies are created equal, though. If you’re thinking about starting a car wash, reach out to two or three companies, visit with them face to face, and watch their technology in action, Norton says. “Not only should you ask questions about the products and training they offer, but also listen to the questions they ask you,” he says. “They should be asking you for details about the size of car wash you’re thinking about, the vision you have for your business, the layout of your property and more. You want a partner who is knowledgeable, honest with you and isn’t just trying to sell you stuff.”
Mark VII offers years of experience in the car-wash industry and supports customers across North America and around the globe. “As a company, we’ve been around for 55 years, and we have support techs all over North America,” Norton says. During the Covid-19 pandemic, there was never a day in 2020 when Mark VII closed its factory doors, he adds. “We kept building car washes and providing customer support.”
The potential for growth in the car-wash industry remains strong in the foreseeable future, says Norton, who encourages you to contact Mark VII for more information. “This is a fun business, and market opportunities are wide open.”