Car Wash Business - roll-up strategy
Would like to hear people's thoughts about the car wash industry. Roll-up strategy? New Dev? How strong are the margins? What are market benchmarks for EBITDA, margins, etc.
It seems like a highly fragmented business. There is a tremendous amount of employee turnover and it depends on very low labor cost. Very little opportunity for automation.
Even if you managed to professionalize the industry you are still dealing with small local competitors willing to be scrappier and skirt rules to outcompete, for a time. Low/no barriers to entry mean a revolving door of competitors mis-pricing their product, putting you out of business while they go out of business.
You may be able to roll up in a city or region, but I would be amazed if a single car wash threw off over $1MM/yr in revenue with anything over a 20% margin. A whole lot of not worth it. And if you don’t own the land it’s a slippery slope.
I would avoid.