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BUYING A CAR WASH

In buying a car wash, there are many things and items that must be reviewed and investigated. Most individuals who purchase car washes are not experienced in this type of business and are at a disadvantage dealing with the seller who is experienced and the business broker, who represents the seller, is primarily interested in receiving a large commission.

Parties that have purchased car washes have made mistakes and have found after purchasing the business and operating it for a while, it was not what they expected and resulted, in many cases, with negative cash flows.

When we are retained by someone who is interested in buying a car wash and/or car care center, we use the following criteria in analyzing the existing facility that is for sale in order for us to provide our recommendations and opinions as to whether or not the business should be purchased and at what price:

Analyze existing facility, review demographics

Observe and review entire operation in all departments

Hold discussions with owner/seller and their accountant

Review management, equipment, improvements and property

Analyze existing competition within a 3 mile radius

Check with City Planning Department to determine if any new car washes are being planned or built
Analyze existing marketing and advertising programs, bonus and commission schedules, any employee agreements, medical and pension plans, vendor agreements and Sub-Leases (if applicable)
Analyze how extra services and sales may be added or upgraded
Review property to determine what additional profit centers may be added, such as oil lube, smog testing, gasoline, express detailing, engine cleaning, convenience store, windshield repair, paint chip repair, etc.
Review existing computer software for suitability
Review operational income and expense statements
Review Lease Agreement (if applicable) regarding lease terms, rent increases and other conditions that would affect buyer
Assure that the property is free of toxic contamination. Provide recommendation if an Environmental Phase One is required.
Prepare a valuation of the business to use in determining a reasonable purchase price
Provide a list of Conditions and Contingencies to be used in preparing an offer, escrow instructions and Purchase and Sale Agreement
Analyze facility for possible State and Federal violations

Provide handbooks, materials and forms to be used in the operation

Provide new bonus and commission schedules, marketing and advertising programs, in the event business is purchased
Review offers, purchase agreements, assist with negotiations, interact with buyer’s attorney and accountant to protect the buyer’s interest
Assist buyer during due diligence period
Provide a Business and Operational Plan for use by owner, management and, as required, by outside lenders if purchase is completed
Provide lender’s contacts for outside financing
Provide insurance contacts for required coverage
Provide unlimited telephone consultations with all parties involved
We provide these and any additional services desired before purchase and after possession of the business on a daily or hourly rate.

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