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Do I need to be on a corner? Not necessarily. I don't need the prime corner spot, but I also don't want to be hidden behind a shopping center. I need decent visibility and good access. I don't want a location where the speed limit exceeds 45 miles per hour. There are numerous variables to consider, but these are the main ones. I also avoid building too close to other car washes. Unlike gas stations, which often build across the street from each other, we don't do that in the car wash industry, even though the cost of entry is similar, around $6 million per location.
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The choice of competitor and demographic in the area I'm operating in are crucial. For instance, if I'm competing with Mister Car Wash, I first consider the demographic within a three-mile radius, or a nine-minute drive time. This radius might not equate to nine minutes in cities like Houston, Texas, or Atlanta, but it could in smaller cities like Austin, Texas. I also consider the competitor's presence in the area. For example, if someone proposed building stores in El Paso where Mister Car Wash has 25 stores, I might be hesitant. However, I might be more inclined to build in Pensacola, Florida, where the only competitor has three stores. If I build five stores there, I would control the market. This decision is significant because building in either El Paso or Pensacola costs $6 million per store. Many people are looking for what they call a "blue ocean" strategy. I refer to it as the AA baseball strategy. The question is, would I rather own in smaller towns like Knoxville, Tennessee, or Pensacola, or try to be a significant player in larger cities like Chicago, Houston, or Los Angeles, where I would need to establish 25 or 30 stores?
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Not really. What I've observed is that these businesses either become acquisition targets for companies like Mister Car Wash or Driven brands, or they stand their ground and succeed. The latter are usually family businesses that have been operating for 30 to 40 years and have a solid reputation. They sponsor local Little League teams, and their customers, who used to visit with their parents, are now grown-ups bringing their own children. It's challenging to overpower such businesses. For instance, chains like Crew Car Wash in Indianapolis or Mike's Car Wash are considered super regionals. No one can easily overpower them. However, businesses that have been operating for less than 10 years and have three stores are likely to get acquired or outcompeted.
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The executive has over 35 years experience in the Car Wash industry. The executive has held senior operations roles at car wash chains like Mister Car Wash and Wash Depot.
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