On the Wash Front - February 2008

Lessons Learned:
Full-Serve to Flex-Serve Conversion
By Anthony Analetto

Few businesses remain content with the status quo — especially when confronted with a business climate that seems to be changing all around. At the car wash, wash performance, customer service, facility improvements, and advertising are a few of the common areas addressed. A more recent trend has been the growing number of full-serve operators evaluating a complete renovation and conversion to either the express-exterior or flex-serve wash formats.

Having reopened four weeks ago (at the time of this writing), following a three-month conversion of his Busy Bee full-serve wash in Miami, FL, owner Jim Mulholland was kind enough to share some of his experiences with the rest of us. Below are excerpts from our conversation on how to successfully convert a full-serve location.

ANALETTO: What made you consider converting a successful full-serve location to a flex serve?

MULHOLLAND: We were having a number of issues, but what really elevated the sense of urgency were our insurance company’s requirements for drivers. We had a good record for years until a few minor fender benders shot our premiums through the roof. I was staring at a worsening cycle. Paying more for qualified cashiers and drivers — already 25 percent of our labor cost — forced me to raise prices, which in turn chipped away at my full-serve volume. Worse yet, I was struggling to find people over 21 with a clean driving record and willing to work. Today, everywhere I look, I see “hiring now” signs. How am I supposed to compete for decent talent against large multinational employers offering comprehensive training programs, predictable schedules, air-conditioned work environments, and more prestige than the local car wash? For me, the biggest reason to convert to a flex-serve wash is that it lets me shift some of the labor and even some of the management onto the customer.

Can you explain what you mean by the customer becoming part of the management team?

As a typical flex serve, customers pay at an automated attendant, ride through the tunnel, and either use the free vacuums and mat machines or drive over to the aftercare center and pay us for detailing services. Cars coming to the aftercare have already received tire dressing, extra services, and even an automatic chamois wipe online. Since the customer and the equipment have done all the work to get the car to this spot, tips don’t have to be shared; they’re earned directly by the attendant performing the detailing services. The word “tip” actually means “to improve performance” and has always been a big part of car washing. Employees are more motivated because they’re directly compensated for doing a good job, even if it was what they should have been doing anyway. Flex serve is different because you’re not trying to do a basic interior cleaning for every car that comes in. Instead, you’re giving a phenomenal service to customers willing to pay a fair price for it. It truly lets the customer be a part of the management team through tipping.

What were your greatest concerns about the conversion?

My biggest concern is what I’m kind of living right now. I shut off a full-service car wash that was profitable. The downtime, originally planned to be four weeks, ended up taking 12 weeks, and we’re still not entirely done. When you’re trying to put a new dress on an old girl, sometimes they just don’t fit that well without some tailoring. Some customers have been resistant to the change. We re-opened about one month ago and our full-serve volume has dropped off, but I anticipate it coming back. I’m also expecting an offset with an increase in exterior volume. I’ve been able to stay open longer while scaling back my labor costs so I don’t need to do as much full serve. We had a very successful detailing business, and now we’re back to doing couponing and billboard advertising, just trying to get back in people’s faces that we’re open again. Being closed so long, people find different drive patterns and you have to actively go out and pursue them again. After spending a huge amount of money, you start to anticipate you’re going to knock it out of the park the first day you reopen. Unfortunately, it doesn’t work that way. It’s been four weeks now and things are starting to build but it takes time and effort.

What did you do to test market the exterior service before conversion?

Before doing the flex conversion I had added an express lane on the outside where customers could go through the wash, stay in the car, but we did not have free vacuums or mat cleaners. When I closed for renovation we were doing 125,000 cars per year, 55,000 of which were full serve. At one time the site was doing 100,000 full-serve washes before competitors and other factors ate away at that volume. Adding the exterior lane got my volume back up and although the dollar per car wasn’t the same it spread out my labor cost.

Where did you start?

We started with an architect and a clean slate. No part of the property was untouched. We did equipment, asphalt, awnings, electrical, plumbing — you name it. I would recommend to anyone considering this to make sure they have all the professionals in place and permits in hand before they start.

Did everything go as you planned?

Not even close. First, it took a lot longer than I expected. Second, whatever you think your costs will be, add 30 percent to the total. I repeatedly found myself thinking I’ll never have the chance to do this again. Hundreds of things that were sufficient for years look dated and out of place once everything else started to look so nice. Little upgrades such as using stainless steel bolts instead of the standard zinc oxide for $1,000 more will suddenly make absolute sense. Budgeting for this up front lets you make more efficient use of the time you’re closed for renovation, as long as you don’t let yourself get carried away. Before closing, I’d also suggest pre-paying for whatever materials you can. This not only locks in your cost, but also lets you pay out of operating cash, which is less painful if it takes time for volume to build.

How did it affect your existing employees?

We were able to move a couple around to other locations to protect our best employees. Ultimately, four of the 12 stayed on who were willing and able to work on other things during the renovation. Eliminating the cashiers and drivers, we didn’t have many issues getting new people to start.

How did you communicate the changes to your customers?

We put up signs that we were closed for renovation, but I was honestly reluctant to give out too much information. I didn’t want to give competitors any lead-time to exploit me being closed by jumping on advertising and employees. We planned the renovation for our worst months and have begun advertising more heavily now that we are open again.

What are your future plans?

I have two other locations — an express exterior and another full serve. I’m planning, as we speak, to convert the other full serve to a flex once the volume at this site stabilizes. With the full-serve model, you’re constantly beating up your managers for having too much or too little labor; it’s like trying to balance on top of a pinhead. With flex serve, you’re on a solid footing, able to offer customers a wide range of services that meet their expectations, and you are in a position to execute and get paid for the value you provide. With all the uncertainty in today’s economy, a car wash has to run with extreme efficiency. To me, flex serve is more efficient. It lets me reduce my labor and keep them in one area where it’s easier to manage. Updating my equipment has also helped me reduce chemical and utility consumption, as well as reduce repair and maintenance costs. It’s been a lot of work and a struggle to build volume back up, but long term I know I’m going to be better off. I’m no longer willing to devote every waking minute of my life to the wash. The flex-serve format is easier for me to replicate. It lets me provide long-term career opportunities for my staff and greater balance for my managers and myself.

Any final recommendation to operators considering a retrofit?

Yeah, make sure you give yourself two to three weeks to really look over the plans before you start. Also, have a solid team in place. I’ve had the good fortune to have others in the industry help get me through this. Lastly, don’t cut corners on signage. The bill might seem huge at first, but it is the cheapest form of advertising over a 20-year period that you’ll ever do. Amortize the amount over five years and compare it to all the money spent on Valpak, Yellow Pages, or some kid standing out front with a sign hanging from their neck. A Disney World-style appearance is what I’m going after. If I can make my property yell out, “Professionalism,” to the motoring public, then the $5 car wash and free vacuums are just icing on a cake that seems too good to be true.

Questions can be sent directly to Jim Mulholland at jim@busybeecarwash.cc.

Anthony Analetto has over 26 years experience in the car wash business and is the president of SONNY’S The Car Wash Factory’s Equipment Division. Before coming to SONNY’S Anthony was the director of operations for a 74-location national car wash chain. Anthony can be reached at (800) 327-8723 x 104 or at AAnaletto@SonnysDirect.com.


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