El Car Wash to Open More Locations in 2024

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CAR WASHES EVERYWHERE

El Car Wash to Open More Locations in 2024 (Read More)

El Car Wash to Open More Locations in 2024

• Growth Acceleration: Average annual growth rate of 115% between 2020-2022, adding 100+ jobs.

• New Locations: 20+ new openings in 2023, with plans for 20+ more this year.

• Community Leadership: Partnerships with key local organizations driving expansion and brand affinity.

Focus on Sustainability and Innovation

• M&A Strategy: Strategic market entries through premier site acquisitions.

• Technological Investment: Emphasis on cutting-edge technology and engaging products.

• Eco-Conscious Practices: Environmental impact reduction with biodegradable chemicals and efficient waste disposal methods.

• Inc. 5000 Honors: Ranking among top 50 fastest-growing private companies validating investment strategy.

🧠 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.

TRIPLE NET TENDIES

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NET LEASE NUGGIES

• Red Robin's Strategic Marketing Shift Red Robin’s CEO, G.J. Hart, focused on enhancing guest experience and operational efficiency in his revitalization plan. To support these changes, the company reduced marketing in 2023. Now, ready to showcase improvements, Red Robin plans a new marketing push, emphasizing TV ads, social media collaborations, and a revamped loyalty program, aligning with its North Star plan goals. Financially, Q4 saw revenue growth and improved EBITDA, setting the stage for accelerating progress in 2024. (Read More)

• Warby Parker sees positive momentum. The eyeglass company reported a slight loss of $19 million, with revenue up 10.5% to $161.9 million. Store expansion continues with 40 new locations planned for 2024. Warby Parker's revenue grew 12% to $669.8 million for the year. A partnership with Versant Health doubles in-network access to over 34 million individuals. Exciting plans include new collections and expanded retail presence. (Read More)
  

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