In the car care business it is difficult to be everything to everyone. Most operators focus their efforts on one particular concept or segment of the industry and ignore the rest.
By Timothy Denman
In the car care business it is difficult to be everything to everyone. Most operators focus their efforts on one particular concept or segment of the industry and ignore the rest. But that doesn’t mean successful diversification is impossible.
For 30 years, the WLR Automotive Group has been providing consumers with everything they need to maintain their cars: car wash and detail, quick lubes, and full automotive repairs.
The Frederick, MD based business has grown over the past three decades from a single standalone quick lube, to a 20-location car care chain that is not afraid to change and evolve with the times.
For WLR’s first 17 years, Randall Simpson, president and CEO, and his former partner Steve Ranney operated as quick lube and automotive repair specialists. They had their pulse on the desires of the local motoring public and saw a need for a well-run, full-service car wash. To meet that need the partners opened their first Auto Spa in 2004, and WLR has been in the full-serve car wash business ever since.
While extremely successful, the five full-service tunnels Simpson operates require a ton of labor. This overwhelming labor demand coupled with changing consumer trends has prompted WLR to change its direction, and dive head first into the express exterior market. Simpson currently operates one Auto Spa Express in Bel Air, MD, with another location under construction in Frederick.
“Right now the excitement is in express,” Simpson says. “In the first year our Bel Air location washed about 110,000 cars and this year will do about 170,000. We have washed 1,500 cars in a day. You just can’t do that in a full serve.”
In addition to the speed-of-service benefits, Simpson points to the convenience factor and the low labor component for his decision to pivot his wash operations and focus on the express model. “Minimum wage is going to continue to increase. Customers don’t want to pay more for a car wash, so profit margins will get squeezed and it will be harder to make money in the full-service arena. Also, an express customer will wash their car 18 to 20 times per year. A full-serve customer might wash six or eight times.”
Because of these factors Simpson is looking to rapidly expand his express business. “Our goal is to build 10-15 express washes in the next five years in the DC and Baltimore area. There is a window of opportunity in the express car cash business like anything else. We want to control and dominate this market as much as we can.”
To help him reach his lofty expansion goals, Simpson partnered with Tommy Car Wash Systems to purchase the buildings and equipment for his Auto Spa Express locations. Unlike some of Tommy’s other express customers, Simpson did not choose to franchise under the Tommy name, but rather simply purchase the building and the corresponding equipment from the manufacturer. With the structural and equipment concerns taken care of, Simpson is free to focus on locating and securing the perfect sites to place his express locations.
“We actually have three new sites under lease and we are purchasing another,” Simpson says. “We are looking at 18 sites right now and I hope we are able to get four or five out of that. We are working with KLMB very aggressively to locate sites. But the process can take months. We are always looking at 10-15 sites at any given time.”
After more than 30 years of slow, incremental growth, Simpson is flipping the script and going for an all-out expansion blitz to capitalize on changing market conditions and a favorable economic landscape.
“We are really focused on growing fast,” Simpson says. “We are working with a bunch of individuals and financial institutions to do sale lease backs. They buy the property and build the building and lease it back to us and we operate. I want to operate. I don’t want to own my own locations. It is a different business model. I can only grow so fast with my own money.
“The only land we own right now is the one in Hagerstown. All the others have 20-35 year leases. We did own a number of our locations, but we sold them to investors and leased them back, which created cash for us.”
While Simpson might be new to the express market he is no stranger to operating a large chain of car care facilities. His first foray into the industry was in the fast-lube vertical, a business he has perfected and turned into one of the most successful local chains in the country. Currently he operates 11 The Lube Center locations, with another two in the works.
“We are probably doing about three times the volume at our lube centers compared to the industry average,” Simpson says. “I attribute that to being in a very good area, but we also have a unique way of operating. Customers stay in their cars, we give them refreshments, and our sites are all meticulously maintained. It is all about the experience. Everyone has to get an oil change but we want them to have a good experience when they come into our locations.”
Joining The Lube Center chain is a three-bay location in Lanham, MD, set to open its doors in the fourth quarter of 2018, and a monstrous six-bay facility being built across the street from the popular Arundel Mills Mall in Hanover, MD that will open in the spring of 2019.
In addition to its growing chain of Lube Centers, Simpson operates two full-service automotive repair shops, branded as The Auto Repair. The mechanic shops are unique in the WLR Automotive Group. Most of the business’s 20 sites are standalone entities, but the repair shops share their space with other WLR business units, benefiting from cross branding and the traffic the other businesses produce.
The Auto Repair site at the Gambrills, MD location shares the lot with a full-service tunnel and a lube center. At the Frederick site, the repair facility is side-by-side to one of Simpson’s The Lube Center locations. This synergy has helped both businesses grow, while providing consumers with a one-stop-shop, car-care experience.
Traditional small business success is built on the mantra of: Do one thing, and do it well. But Simpson is proving you can have success in more than one arena. He provides his customers with a unique value proposition and is committed to continuous improvement through ambitious expansion. Without losing sight of the core values that have been his compass for the past 30 years.