Over the past several years, there has been an influx of institutional investors into the car wash industry. These private-equity-backed firms are building massive chains at previously unheard-of speeds, often scaling from launch to 50 or 100 sites in as little as a year or two.
This contrasts starkly with the traditional mom-and-pop approach to car wash growth. The old-school model featured a slow and steady expansion methodology. When owners launched a new site, they would devote their efforts to making it a success before thinking of adding another to their holdings.
The modern method prioritizes speed and size, building and, more often, acquiring as many sites that fit the business profile as possible, as quickly as possible. It’s hard to argue with the new-school approach. There are numerous examples of modern, investor-led mega-chains setting the pace for success, building cohesive, consumer-focused businesses that have become the industry’s gold standard.
While these shining achievements provide the industry with a roadmap to the possible, not every aspiring mega-chain will enjoy the same level of long-term triumph.
“A lot of these big groups grow so quickly that their operations start to decline,” said WOW Carwash co-founder and CEO Scott Wainwright. “Their offering to the guest starts to go down and the business suffers.”
To avoid this unfortunate phenomenon at WOW, the subject of this month’s Profile in Success (starting on page 56), the business adopted a hybrid approach to car wash chain growth. Wainwright and his business partner Todd Bender opened WOW in 2017 and have averaged a little more than one new site a year. They currently own and operate 11 WOWs in and around Las Vegas, NV.
The partners took a bit of an old-school approach to their growth, taking the time necessary between site launches to ensure operations remained consistent as the local express chain scaled. In 2021, however, WOW partnered with Garnett Station Partners to help finance the next stage of WOW’s story.
After establishing itself and perfecting the brand’s operations and growth strategy, WOW is now ready to scale at an accelerated pace. WOW has plans to reach 30 sites by the end of 2025 and has longer-term goals of expansion beyond the Las Vegas market.
WOW’s ownership is aware of the potential pitfalls of rapid growth and believes that the slow-and-steady approach they employed as they launched the brand has prepared them for rapid expansion now.
“A lot of these groups go out and they acquire a lot of sites and end up having kind of a hodgepodge offering,” Wainwright said. “They don’t have a consistent feel across the chain. All of our sites, with the exception of one unit, have been ground-up builds. This way we can offer our guests the same consistent, predictable experience. Which has always been our focus.”
WOW has successfully blended old-school and new-school expansion approaches and is poised for ongoing success. A slow ramp-up is not always possible in today’s private-equity-backed environment with its need for near-instant investor ROI. However, a hybrid approach allows operators to cut their teeth in the industry and establish a well-oiled brand before pumping out site after site.