2023 Top 50 Carwashes

Annually, the Professional Carwashing & Detailing editorial team assembles and releases a compilation of the largest carwash chains, based on the number of year-end projected tunnel locations.

Estimated read time: 4 minutes and 59 seconds

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2023 Top 50 List of U.S. Conveyor Carwashes (Read Here)

Mister Car Wash

Carwash Industry Growth: The carwash industry has experienced remarkable growth and transformation in recent years, driven by changing consumer preferences, technological advancements, and environmental concerns.

Brand Ascension: New operators, brands, and platforms in the carwash market for five years or less are seeing unprecedented growth.

Slowed M&A Activity: External factors, such as higher borrowing costs, and a smaller pool of sellers, have resulted in fewer mergers and acquisitions.

Mister Car Wash Retains Top Position: Mister Car Wash is the largest car wash chain with over 400 locations nationwide.

  • Take 5 Car Wash: Fast, friendly, and convenient car wash experience with 389 sites nationwide.

  • ZIPS Car Wash: The largest privately held car wash operator nationwide with 279 locations, investing in tunnel and chemical upgrades.

  • EWC/Club Wildcat Car Wash Platform: Delivering an exceptional carwash experience through various brands across 17 states and 260 locations.

  • Tidal Wave Auto Spa: A rapidly growing car wash company with 235 locations, providing exceptional customer experiences across the South, Midwest, and Northern United States.

Car Wash Market Trends:

Investors and entrepreneurs are attracted to the lucrative carwash market, which is expected to grow due to increasing consumer disposable income and frequent use of professional carwash services.

🧠 EDITOR’S THOUGHTS

Car Wash Craze: As many of you in the industry know, the express car wash market has been wild af in recent years. Here’s why:

  • Profitability - Express car washes boast notably higher profit margins compared to other business models. They often yield profit margins ranging from 40 percent to an impressive 60 percent.

  • Subscription Models - Weather and seasonality pose significant risks for car wash owners, influencing consumer behavior. Monthly subscription models mitigate these risks by offering customers unlimited washes, allowing them to clean their vehicles at their convenience, regardless of weather conditions.

  • Sale Leasebacks - Among the attractive elements drawing equity groups to invest in express car wash businesses are sale-leaseback transactions. Substantial car wash operators capitalize on their strong corporate guarantee, recovering a considerable portion of their business investment by executing long-term leases and subsequently selling the real estate to private investors. This strategy enables these operators to leverage their robust corporate backing and extract value from their real estate assets.

  • Lease Structures - They typically secure terms of 15 to 20 years, coupled with annual rent increments, offering a safeguard against inflation. Often, these car washes are priced below the costs required to replace both the building and the business. Express wash development typically incurs expenses ranging from $3 million to $5 million.

  • Tax Benefits - The Tax Cuts and Jobs Act, particularly Section 179, grants car wash proprietors the ability to deduct all initial-year expenses for new equipment. Section 179 also accelerates depreciation over a 15-year period, a significant reduction from the previous 30-year timeframe. The only other net lease properties rivaling this depreciation advantage are convenience stores with attached gas stations.

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NET LEASE NUGGIES

  • Joann reports wider loss as net sales decline. The arts-and-crafts and fabrics retailer reported a loss of $21.6 million in Q3, compared to a loss of $17.5 million in the same quarter last year. Net sales fell 4.1% to $539.8 million, with e-commerce sales growing by 11.5%. The company expressed satisfaction with Q3 results and highlighted increased engagement from loyal customers. Joann also announced an increase in its cost reduction initiative target to $225 million. Sales for the full year are expected to be down 1% to 2%. (Read More)

  • CVS Health unveils CostVantage reimbursement model and provides positive 2024 guidance. At its 2023 Investor Day, CVS Health introduced their new CostVantage model, aimed at bringing transparency and simplicity to pharmacy reimbursement. The company forecasts revenues of at least $366.0 billion and adjusted earnings per share of at least $8.50 for 2024. CVS also rolled out a new branded name for its Health Services segment, CVS Healthspire, and announced the launch of TrueCost, a program providing clients with more visibility into prescription drug pricing and fees. (Read More)

  • Checkers & Rally’s Expands Rapidly in Arizona Markets Checkers & Rally’s is experiencing significant growth in Arizona, particularly in Phoenix. The fast food brand's expansion is driven by dedicated multi-unit operators who are adding Checkers & Rally’s units to their portfolios. The brand's success and commitment to quality and value have resonated with the local community. The company aims to continue its nationwide expansion objectives by leveraging its kitchen efficiency and compact store design. Franchisees and business partners are eager to explore further expansion opportunities in Arizona's thriving market. (Read More)

  • Cracker Barrel transforms with data-driven strategy. The struggling restaurant chain is undergoing a comprehensive review and assessment of its business, partnering with a consulting firm and investing in marketing efforts to address traffic concerns. The company's Q1 earnings showed a decline in same-store sales but revealed positive results from the actions taken. Cracker Barrel is focused on refining its brand strategies, prioritizing growth drivers, and executing with excellence to improve profitability and drive long-term value creation. Despite uncertainties in the environment, the chain remains optimistic about its strategies' ability to win market share. (Read More)

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