Lenders’ usual concerns have only been exacer-
bated by the number of car washes launched dur- ing the peak period of 2004-07 that subsequently failed and were foreclosed when the economy went south. In his home market of California, Saei reports, “There were a number of transactions during the peak years at very high multiples, with relatively large loan amounts, that subsequently defaulted.Many were good locations but were just over-leveraged.” The memory of these car wash failures has
prompted many lenders to be more conservative, making things “especially difficult for smaller sin- gle-site operators and new entrants to the indus- try,” believes Saei. “Most lenders right now are much more comfortable with the credit profiles of experienced multi-site operators who have stronger personal financial statements and often have other sources of revenue.”
WHAT TO EXPECT Equipment pricing for new car washes—not including costs for land and construction—can range for $20,000 for a basic two-bay self-serve wash, and between $60,000 and $180,000 for an in- bay automatic wash, up to $500,000 or more for a
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full tunnel wash, according to Steve Jeffs, vice pres- ident of sales for Mark VII Equipment in Arvada, Colo. That is where the manufacturer may really be able to help. And Santy of Patriot Capital pegs the cost replacing or remodeling an existing wash with a newer model at $85,000 to $150,000. When everything is factored in—land, construc-
tion, equipment, zoning, licensing, entitlement— even a small express wash can cost more than a mil- lion dollars, while full-service washes can be signif- icantly more. “If you run into approval obstacles— and in some cities, approvals are extremely diffi- cult—the total price tag can skyrocket,” observes Saei. “The length of the tunnel, the equipment used, and the sophistication of the premises can impact the costs by a factor of several times. I have a client who recently constructed a luxury car wash and detailing facility in California that cost approx- imately $5 million.” Another variable is whether a car wash project “is a new construction, a retrofit, or simply a rebrand,” advises senior product manager David Dougherty of PDQ Manufacturing in De Pere,Wis. “At the same time, manufacturers are working hard to come up with creative equipment packages to help operators meet their needs within their
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Photo courtesy of PDQManufacturing
