For those interested in getting involved in the car wash business, becoming a franchise owner can provide an excellent path to get started. By paying a franchise fee, the new owner can tap into the potential value of the brand name, get themselves set up, and start reaping the benefits of their car wash value.
In this article, we will explore what those interested in working in the car wash industry and buying a car wash franchise should know about the process.
How Does a Car Wash Franchise Work?
With a car wash business model, a franchisee purchases the right to use a particular brand name and operate their own business using that brand. Typically, the business opportunities that come with franchising also have a variety of regulations that business owners have to abide by. This will include rules in the areas of:
- Pricing
- Advertising
- Services offered
Business owners do not have complete ownership or control of their franchise, as they must abide by the franchise rules and pay royalties to the franchisor who owns the overall brand.
However, these opportunities can be appealing for many because they allow you to set up a business without having to start from the beginning. You get to start your business with an established brand that customers already associate with quality car service. You also have the main corporation helping you manage a variety of steps and expenses, such as marketing. The large parent company will market the brand as a whole, and you get to experience the benefits.
This can provide a major advantage for those new to business ownership or without much car wash experience.
What Are the Steps to Buying a Car Wash Franchise?
As you prepare to buy your franchise, it is paramount for you to take each of the steps outlined in this article. Buying a car wash franchise is a considerable investment, which means that you want to make sure you fully understand the terms with which you have agreed, and have the knowledge you need to build a successful business.
Evaluate the Different Car Wash Franchise Opportunities
Your first step is to look at the different car wash systems available as well as some of the biggest names in car wash franchises. This will help you find the best car wash franchises and the one that you want to invest in.
As you look at the different franchises, you will probably encounter brand names including:
- Mr. Clean Carwash
- Fleet Clean USA
- Tommy's Express Car Wash
- DetailXPerts
- Green Shine Waterless Car Wash
- Cactus Car Wash
- Superior Wash
These different franchise names will all have different benefits, car washing systems, and franchise models that you will want to investigate. You will not only want to compare their prices, but also their royalty fee structures, the support they offer franchise owners, and the types of services they offer. You will review the different types of car wash services you might encounter and need to offer if you decide to move forward with a particular franchise option. You need to decide if you want to get involved with services and options such as:
- Detailing services
- In-bay automatic car washes versus by hand
- Self-serve car wash, as some customers like the self-service ability to clean their own car with your equipment
- High-tech equipment so that you can offer touchless options
- Basic maintenance, such as an oil change
Many businesses will also allow customers to select particular services or get full-service options, where you take care of the entire car.
Look for Locations
As you evaluate the different franchise options, site selection will be your next important step. You need to consider — with caution — the different real estate options so that you can make the best selection. Look at where other car washes are located in your city and region. You also want to consider the convenience of customers reaching you and how easily they can get in and out of the car wash.
Car wash locations can also be limited by local laws and regulations. You will want to review the laws put forth by organizations, such as the EPA, as well as the local rules for your town and region regarding where your business can be located and the treatment of wastewater.
Depending on the franchise you end up working with, your franchisor might have some say in your location. Therefore, it can also be helpful to see if the franchise you are interested in working with offers any published recommendations or requirements for locations. Securing the land for your franchise will be an important startup cost, so make sure you make the selection carefully.
Carefully Review the Full Disclosure Document From the Franchise
Now that you have identified the location you would like to use and the franchises that you are most interested in working with, you want to reach out to the top franchise and begin reviewing their full disclosure document. This document will contain all the relevant information you need to know about the business and its structure. The Franchise Disclosure Document is legally required to provide complete information about how the relationship will work between you and the franchisor and what you can expect from the franchise once you start your business. For example, you will know what type of support you can expect and what type of training they offer.
You want to reach this document closely and thoroughly. It may be a good idea to review it with a lawyer before you sign anything as well, as it determines how your business will run and your rights as the business owner.
Begin Negotiations With the Most Appealing Option
Once you have reviewed the documentation, you will present your business plan to the franchise and begin your negotiations. The brand will have requirements they need you to fulfill to prove that you are ready to run this business. For example, they might want to see car wash experience or previous business ownership experience. They might also want to see evidence of personal financial stability. You want to be ready to meet their requirements so that you can move forward successfully.
You might have a few requirements of your own as well. For example, you might want to make sure the franchisor limits how close another business under their brand can build to your car wash. Once you have established your terms with the franchise, it is a good idea to have a lawyer look over the final plans with you before you pay that initial franchise fee. Make sure the terms are fair.
Set Up Your Franchise
Finally, once you have set up the legal documents with your franchise and selected your location, it is time to set up your franchise. You will need to make your initial investment, which means paying the franchise fee, finalizing the paperwork for your location, and securing your car wash equipment so that you can begin your car care operation. Whether you need to get your equipment from a popular supplier like Sonny or your franchise will help supply it for you, the moment that first piece of machinery rolls into place will surely put a smile on your face.
As you get your franchise set up, you will also want to go through any training that your franchise mandates. You want to make sure you fully understand their standards of car care and customer service.
In addition, particularly if you have not owned a business before, it can be helpful to take the time to learn more about business management. Studying accounting to make sure you understand how you will balance your books can help you feel more prepared by the time your first customer rolls into your new car wash. Skynova offers a learning center that small business owners like you can use to learn more about running a small business and the accounting responsibilities associated with it.
Manage Your Accounting With Skynova
Now that you have set up your car wash franchise, you can watch your customers and your revenue start to come in. To help you manage the accounting responsibilities associated with small business ownership, you can trust Skynova. Skynova was designed for small business owners like you, making it easy and intuitive to track your expenses and your income so that you can gauge your business's success.
As a car wash franchise, you will need to report on your progress to both your franchisor and the IRS come tax time. Therefore, maintain your accuracy with Skynova. Not only will you be prepared to report on your revenue and profits, but you will also have a better idea of your own net worth from the venture and when you have more money to invest in growing your new business.
See how easy small business accounting can be with Skynova.
Notice to the Reader
The content within this article is meant to be used as general guidelines concerning buying a franchise and may not apply to your specific situation. Always consult with a professional accountant to ensure you're meeting accounting standards.