On The Wash Front

Car Wash Vending - Location Characteristics Are Key

By Robert Roman

06/01/18

Institutionalization of the express exterior business model has created the opportunity for investors to develop and operate a car wash as a vending-machine business.

Today, a lot is made of the importance of potentially improved sales in a car wash machine. No doubt this is important, but this may not be enough when there is not a lot of difference between one location and the next one down the street. Here, the difference maker might be offering the right products as well as the right service.

The vending machine is an unattended, automated device that provides merchandise such as snacks, beverages, novelty items, and other products to consumers after money, a credit card, or other specially designed card is inserted into the machine. 

Business Profile

Population 25,000 within 3-mile radius

Traffic 15,000 — 25,000 AADT

Building 1,600 — 2,400 square feet

Land 0.35 — 0.5 acre

Revenue $300K — $400K

Net Income 60 percent of sales

An analogy would be an in-bay automatic car wash located at a convenience store and gas station or a self-serve car wash with coin-operated wands, vacuums, and drop-shelf vendors.

Express in-bay automatic

A vending-machine business must have a strong value proposition to compete effectively. Flexibility is important. In the car wash, equipment must be able to process vehicles of many different sizes and shapes. For example, an express in-bay automatic can accommodate more chassis and wheel configurations than a conveyor.

COST

Cost of ownership is another factor. The cost magnitude for a freestanding express in-bay automatic, 1,600 square-foot building, and real estate is between $1.0 million and $1.3 million or about the same amount as the prototypical self-serve car wash.

Revenue and margin characteristics for an express in-bay automatic are similar to those of the express exterior conveyor — and even better because there is less maintenance and onsite attendants are not required.

Product availability is also important because of consumer demand for greater convenience. For example, an express in-bay automatic can remain open 24/7, and its longer wash bay (60’) accommodates virtually the same range of profit centers as does a conveyor operation.

LOCATION

Location is another factor. Here, the problem is not how to find the most ROI-positive location but rather how to find a location that will benefit the most from the business model. This could be a conventional location such as former gas site or vacant land, or it could be a grocery-store parking lot, a parking garage, or an out parcel where tenants may not want to see employees or customers cleaning cars.

The target audience for an express in-bay automatic is the same as for an express exterior and even broader because the system can accept certain vehicles that can’t fit on a conveyor.

Like a vending machine, the usage rate for an express in-bay automatic would be affected most by factors such as price, cashless payment options, appearance, uptime, and variety.

INNOVATION

Lastly, innovation is another factor. Like mobile phones, vending machines have evolved into smart ones. Consequently, an express in-bay automatic would have a digital touch display, Internet connectivity, cameras, an advanced payment system, and the option for identification technology.

A smart in-bay automatic would enable a more interactive user experience and reduce costs while improving efficiency of operations through remote manageability. Technology would also enable better customer engagement for the brand through a website, phone app, and social-media connectivity.

In the final analysis, an express in-bay automatic appears to have a value proposition most suited to operate a car wash as a vending machine business.

TRAFFIC

The developer would find locations that would benefit the most from the business model, place the machines, and service them on a regular basis by route. Understanding location characteristics is a key factor in finding suitable sites for this strategy.

For example, our vending machine car wash model requires a certain amount of highway traffic just like a vending machine requires floor traffic. Traditionally, annual average daily traffic (AADT) is the measure used primarily in transportation planning and engineering.

AADT is the total volume of traffic of a highway for a year divided by 365 days. It is considered the most statistically accurate measure because counts are adjusted for seasonal and axle correction factors.

Functional classification of roads is another factor in site selection. Classification of roads is a function of mobility and accessibility. For example, if easy access and multiple entrances and exits are crucial, local and minor collector roads will provide the most opportunities.

If greater mobility is the objective, major collector roads and arterials (minor and major) will provide more opportunities. Characteristics of major collector roads include traffic circulation in higher density areas, channeling and distribution of trips between local and arterial roads, and more signalized intersections. Minor arterials provide more land access than collectors as well as greater traffic flow and they interconnect and distribute traffic to more geographic areas.

Other characteristics of minor arterials are traffic count in the range of 15,000 to 25,000 vehicles and urban clusters with 25,000-and-over population. Consideration should be given to the likelihood that a road could be reconstructed as a divided carriageway, and that new development or the extension of an arterial may change traffic patterns and/or traffic counts.

TRAFFIC GENERATORS

Non highway-oriented locations may also be suitable for this type of operation, such as a grocery-store parking lot. For example, consumers make an average of 1.5 trips to a grocery outlet each week. So, a store like Publix or Kroger’s might generate 15,000 or more door swings per month.

There are also other businesses that would serve as good attractors such as drive-through outlets, fitness centers, pharmacies, and support services that generate hundreds of customers per day.

Thus, there are many potential locations that would be suitable for the vending concept, including existing sites such as certain self-serve properties — both bank-owned and going concerns.

 

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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