Hand Car Wash - Location-Based or Mobile

By Robert Roman

09/01/20

The subject of hand car washing rarely comes up anymore except for data from the International Carwash Association that indicates the practice continues to decline. Reportedly, hand-washing vehicles at home has dropped by about 50 percent since 1996.

There are still some conveyor hand car washes around but most of their numbers have given way to automation and making the switch from full-service to a flex-serve or express exterior platform.

Professional hand wash has two product classes: mobile car wash and location-based.

Mobile includes mobile detailers who offer a hand wash service and app-driven businesses such as independent “on-demand” mobile waterless car wash operations such as Spiffy, Washe, etc.

Location-based hand washes include facilities where cars are cleaned by hand using water with hose and bucket, high-pressure wand or steam cleaning, or a waterless process.

Shown in Figure 1 and Figure 2 is Superior Hand Car Wash in Tampa, FL. Formerly a used car lot, the property was repurposed decades ago as a full-service wash that offers a small selection of detail services.

Superior offers an exterior wash for $10, $18 for basic full service, and wash packages range from $25 to $31. Hand wax is priced at $80.

As for sustainability, this wash has seen changes in ownership but it has been around since I graduated from college.

Another stalwart in Tampa is Caribbean Splash (see Figure 3). Like Superior, Caribbean has a starting line, drive-through wash bay, and finish line just like a conveyor layout. An exterior wash is $10 and basic full-service is $13. Wash packages range in price from $16 to $27. Spray wax is available for $5 — $8 for large vehicles.

Figure 1 – Superior Hand Wash
Figure 2 – Finish line at Superior Hand Wash
Figure 3 – Caribbean Splash CarWash
Figure 4 – Hand wash at gas site
Figure 5 – ProntoWash hand car wash
Figure 6 – Mobile units
Figure 7 – Point of service
Figure 8 – Spiffy on-demand mobile car care

Although many of Caribbean’s customers drive SUVs, luxury vehicles, and exotics, there is also a good number of compacts, sedans, and even pick-up trucks.

A recent trend in my area relates to smaller gas sites where operators no longer consider car washing part of the profit picture (see Figure 4). In-bay equipment is removed and the space is leased to a third party that hand washes cars for $7 or $8 a pop.

Further up the food chain is ProntoWash USA based out of Tampa, FL, shown in Figure 5, Figure 6, and Figure 7.

The brand’s goal is to make car washing more convenient by locating service centers at America’s top shopping centers and entertainment venues so customers can shop, dine, or take in a movie while having their vehicle cleaned or detailed.

The company has four locations in Tampa, and several new locations are planned for malls in North Carolina, Texas, and Florida and at the Denver International Airport.

ProntoWash also has mobile units to service customers’ vehicles anytime, anywhere including at the office or at home while they’re relaxing on the weekend.

ProntoWash uses a completely waterless cleaning process and manufactures its own proprietary cleaning solutions. Each ProntoWash is independently owned and operated.

ProntoWash also has a lot more to offer than traditional hand car washes. ProntoWash prices vary according to vehicle size. Exterior is $25 to $35. Full service is $35 to $45. Hand wax is $25 extra. Wash and shampoo is $85 to $95. Detail is $100 to $155. Reconditioning (showroom quality) is $400 to $550. There is also a selection of a la carte services.

Another hand wash company that is growing is app-based Spiffy (see Figure 8).

With Spiffy, customers can schedule, track, and pay for a mobile oil change, car wash, detail, and other maintenance services such as trim repair, headlight restoration, and sanitizing, at a time and date that fits their schedule.

Spiffy technicians are traditional W-2 employees, rather than 1099 contractors. The company covers 50 percent of health insurance, and offers 401k and stock options.

Spiffy technicians receive 100 plus hours of training and fully equipped Spiffy vans to complete services.

Spiffy wash prices are $49 to $59 (30 to 60 minutes). Wax adds $30 to $40 (45 to 90 minutes). Detail is $159 to $299 (2 to 5 hours).

The company recently announced that it would begin accepting applications for franchise licenses in new markets across the country.

The start-up expense to create a hand car wash business varies considerably.

For example, a home-based mobile unit (two-person waterless) can be started for about $10,000. This includes inventory, auto lease and insurance deposits, website, customer app, mobile phone, and cash to cover six months of operating expenses.

The cost to start up a location-based hand wash like Superior and Caribbean is around $125,000. This includes expenses for building renovations, inventory, support equipment (air compressor, water treatment, and hot water), insurance and lease deposits, and six months of operating expenses (excluding labor).

The cost of starting up a ProntoWash is considerably more beginning with the franchise fee of between $15,000 and $35,000, which is based on quality of location. Start up inventory is between $21,000 and $40,000. Cost to outfit a point-of-service location is between $90,000 and $250,000 for a tier one location and $50,000 to $130,000 for tier two.

Like other car washes, revenue and margins are a function of volume, price, and cost of goods sold. For example, in 1999, the ICA estimated that hand wash facilities had average annual volume of 7,500 cars and $24 average price or sales revenue of $180,000.

Back then, hand washing was roughly a 30 percent gross net business or earnings before taxes of $54,000. This is equal to earnings of a typical self-service car wash but only 15 percent of the total cost ($125,000/$850,000).

A mobile hand wash is typically a two-person operation where it takes about 20 minutes to complete the exterior and 30 minutes or so for full-service. Take rate is usually 50 percent exterior, 50 percent full-service.

Variable cost for a mobile waterless hand wash includes credit card fees, materials ($5 per car), and auto expense ($0.60 per mile). Fixed cost includes liability and auto insurance, Internet fees, mobile phone, labor, and payroll expense.

Location-based or point-of-service facilities can process more vehicles than a mobile unit but these sites achieve lower car-per-man-hour numbers because demand is greater for full-service and detailing which take longer.

Variable cost for a location-based hand wash is around 15 percent of gross sales. Fixed cost includes expense for advertising, insurance, rent, maintenance, Internet-related fees, labor, and payroll expenses. Moreover, if a franchise is involved, there would be royalty fees.

Like at a full-service conveyor wash, labor is the principal operating expense, usually between 40 percent and 50 percent of gross sales revenue.

In terms of profitability, a two-person, mobile hand wash that produces an average of 12 washes per day over the course of a year would generate earnings before taxes of $40,000 for each team member (partner).

A location-based hand wash that produces 25 cars per day with detail service (2 cars per day) would generate gross sales of around $400,000 and $100,000 in earnings before taxes (owner’s benefit). Labor cost in this example consists of six employees each making $30,000 annually plus about $2.50 per car in tips.

 

Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.

 

 



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