Hell-Bent for Lather

 

Who: Chris Traczek
Title: Associate editor, National Petroleum News
Where: Chicago
"Ten years ago who would have thought there would be a Jiffy Lube on every corner? So why not a car wash? The market is definitely there, but I'm not so sure about Kingsley's efforts to implement the idea at existing service stations. Many of those sites are just not big enough, especially in the high-traffic areas they want to get into. A lot of the good sites are owned and operated by the major oil companies, and most of those have car washes already. They have a better chance of getting into hypermarkets. All those places have huge parking lots, and they want to sell gas. Wal-Mart, Sam's Club, and Costco all have big plans to put gas stations on their sites. Selling gas can be a loss leader for the car wash. Or the car wash can be a loss leader for the store. Buy so much merchandise, and you get a coupon for a free car wash."

Who: Kent Sutherland
Title: CEO of Kent Sutherland Cos., which operates a car wash, among other businesses
Where: Sherwood, Ark.
"They seem to be on the right road, but they're going to run into more competition. The big retailers are already building their own car washes. It's harder and harder to find good locations. I'm shocked that they think they can charge only $6 for an expensive car wash like this laser wash. I don't see them staying at that price point. Maybe $10. In the prime real estate areas, where they want to put these things, that dirt's not going to be cheap. You could easily pay $500,000 to $1 million just for the site. That's a lot of quarters."

Who: Tom Hobby
Title: President, Autec Inc., a car-wash manufacturer
Where: Statesville, N.C.
"If you partner with a convenience store, and if it's a well-run operation, the numbers work. But you have to be careful. There are a lot of marginal sites out there, and if a convenience-store chain goes in with you on a good site, they'll want you to take some dogs as well. And besides, if the site is good, the owner would be smart to do it himself rather than do a joint venture. Kingsley's concept is more convenient; a full-service wash normally takes you 30 to 45 minutes. But their idea is capital-intensive. They're looking at at least $200,000 per site in capital expense. Kingsley has to be very choosy about where they put their car washes and who they partner with."

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