Coloring Outside the Lines - Best Practices in Site Selection
By Anthony Analetto
With real estate prices soaring, and the car wash industry booming, some have resorted to buying properties that wouldn’t have been considered even just a few years ago. While it’s one thing for a newcomer to the industry to build in a location with questionable traits, it’s another thing entirely when we see industry veterans, some with several existing locations, breaking standard site selection rules.
These folks appear to be coloring outside the lines when it comes to finding wash sites. Granted, some are posting record numbers, but is this the type of gamble for you? Well, before you pick an alternative site, you should be familiar with what the rules are before you break any of them. Most industry experts agree that site selection is the single most important decision you’ll make regarding the success of your car wash. The fact is that part of selecting a winning site relies on understanding that particular market. Experience and intuition play a role as well. Regardless, before you consider an alternative site for your next car wash project, you must know what criteria contribute most heavily to a car wash’s success. So, what are they? Let’s take a look.
1. Traffic should exceed 25K cars per day, i.e., a 24-hour period. That’s the bare minimum. When looking at a particular location always remember that not all traffic is created equal. Several conditions should be discounted from the raw number of cars. First is commuter traffic. Employees on their way to and from work stop less often for a car wash than local residents and should be discounted. Also, too much traffic during peak hours isn’t always a good thing. If the road you’re considering gets so congested during rush hour that it’s stop-and-go driving, discount that traffic as well. Few people will pull off the road and further delay their drive. Also, when looking at a property on a divided highway, or without a nearby turning lane, only consider the traffic on your side of the street.
2. The property must be visible from a distance and easily and safely accessible. Ideally, there is a deceleration lane. In a perfect world, your proposed property is on the right hand side after a stop light with the road bending to the left. Businesses on the inside of a curve have limited visibility from either direction. Car washes are often an impulse buy and visibility is critical.
3. Whether it’s a street sign or a building sign, zoning rules must allow you to prominently promote your brand and service. Don’t immediately be discouraged if a monument sign or a pole sign isn’t an option in a particular municipality. I’ve seen creative uses of building signs and even architectural enhancements to overcome this. Confirm with reasonable certainty that you will be able to effectively promote your business to customers driving by with sufficient time to slow down and pull in. If that isn’t available, I’d recommend moving on to another piece of land.
4. Traffic speed shouldn’t exceed 45 mph in front of the ingress. Speed matters. Not too fast, not too slow. Too fast and potential customers will zip past never realizing the wash is there. Too congested and frustrated drivers, eager to get through the traffic, seldom pull in for a car wash. Are there exceptions? Of course. Traffic lights and stop signs can create intermittent traffic conditions that work well even if the posted speed limit is over 45 mph. It is rare for a car wash to perform well, though, without a flow of traffic moving by at a reasonable speed.
5. Population density should exceed 50K in a three-mile radius. It’s not only the raw number that matters. Look for markets with high occupancy rates, meaning, the market isn’t saturated with unoccupied units available for rent or sale. Mixed residential with some apartment inventory, not just single-family homes, is preferable. Apartment complexes rarely allow driveway washing and can positively impact overall volume. Some locations in rural communities, or markets not saturated with other washes, have found success with population densities of just 35K in a three-mile radius. However, don’t look below 50K unless you have the experience and intuition to back it up.
6. Look for markets with a working population, with at least 55 percent of the total population being between the ages of 25 and 55. As a general rule, employed people have more disposable income than retirees and students.
7. Ideally 50 percent of your proposed market should make over $50K household income per year. This is critical for a full or flex serve, though the income level is somewhat relaxed for an express-exterior wash. Even with an express wash, however, you will rarely find success in a market where 50 percent or more of the market falls below $35K annual household income.
8. Total population and income should be projected to grow over the next five years within a three-mile radius of the property you’re considering. Enter a market too early and you may fail before it takes off. Buy too late and the cost of the land may not fit your investment objective. Review census data to see if the population is growing. Visit the city planner’s office to see which, if any, land areas have been plotted for retail development. You’re looking for opportunities to get in before prices surge for land that has sufficient traffic to support your businesses during that growth.
9. Car washing should be a permitable use for the property before you invest money. If it’s not, be prepared to spend tens, or even hundreds of thousands of dollars to get an exception made, with no guarantee that you’ll have anything to show for it. Sometimes a great site is worth fighting for, and if successful, it will be practically impossible for a competitor to enter the market.
10. Required utilities should be available before you make an offer. This includes the presence of a 2-inch water main and a sewer connection without an exorbitant impact fee. Three-phase electricity must also be available. Don’t assume. I’ve had to help operators size diesel generators mid construction because they assumed that the three-phase transformer they saw on the other side of the street meant it was available where they were building.
11. Seek a property that has no direct competition within three miles of the wash. Don’t look at only existing sites, check with planning and zoning for your town, and neighboring towns, for new car wash permits that have been applied for. Also consider self-serve and c-store rollovers that may not be direct competitors but can be easily converted to a tunnel wash. I won’t deny that many are finding mutual success operating much closer than the traditional guideline. Call me old fashioned, but I still don’t think I’d build less than three miles from a direct competitor.
If you find sites with all of these characteristics you should fare well, provided you deliver a consistent quality product, good value, and a positive customer experience. If you’re going to color outside the lines on the rules of thumb I outlined above, then you’d better make sure you know what you’re doing. Rely upon good, sound, business practice and common sense before moving forward on a property for your next car wash project.
Good luck and good washing.
Washing cars for over 30 years, Anthony Analetto serves as president of SONNY’S The CarWash Factory, creator of the Original Xtreme-Xpress Mini-Tunnel, and the largest manufacturer of conveyorized car wash equipment, parts, and supplies in the world. He can be reached at Aanaletto@SonnysDirect.com or at (800) 327-8723 ext. 104.