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How to Value a Car Wash
Professional Car Washing and Detailing , Dec. 2003

By: Roger A. Pencek

September 22, 2003 3:00 p.m.

By: Roger A. Pencek, President / MBA
Car Wash Brokers, Inc.

Two distinct audiences in the car wash industry: full service and self service

Both car wash businesses, as similar as they are in providing the clean car "service", are dramatically different when determining an "estimated market value" for the following reasons:

Full Service Car Washes Valuations:
Obviously requires a greater land mass (1 & 2 acre sites), buildings at $200 p/s/f and equipment packages ($150K - $325K). Where self service car washes can be placed comfortably on as small as 17,000 square feet with $180K - $200K in equipment and building.

Although there are obvious differences in assets required for each of the car washes, so does the gross sales for each of them. Therefore, our process of valuing a car wash must address many variables. Our "market value" technique of a car wash is primarily based on a combination of comparables (related to sold units) and industry standards of values.

Full Service Car Wash Equation of Value: We generally "list" a full service car wash on a factor of 15 x's the average monthly gross sales for the ongoing "business" if it is on leased property; if there is fuel we will add the yearly net (7 cents p/g) to the monthly average gross sales to arrive at the "business value". (EX $1MM gross sales divided by 12 months = $83K times 15 = $1.2MM listing price with or without land).

However, there are many variables (just to mention a few) to the 15 times multiple, that will determine the levity (up or down) of this equation:

• Length of Lease
• Market Rent
• Capital Improvements
• Age of Facility
• Neighborhood Strength
• Road Construction
• Owner / Semi Absentee

If the real estate is included in the sale, we will add those values to the above (which already included the equipment); land that can range from $10 - $40 per square foot plus buildings cost at $150 - $330 p/s/f.

Example: Car Wash Full Service with land:

• Gross sales $1MM per year = $1,250,000 (15 x $83,337)
• Land (average) = 600,000
• Building 4k s/f x $150 p/s/f = 600,000
Total $2,450,000

*This in general is the "ceiling listing" of a typical full service car wash and is a pure hypothetical value for a full service car wash in "anywhere USA":

Note: As a second opinion, if this same car wash has an EBITDA of 22% of the gross sales ($1.2MM x 22% = $264K), buyers like to buy at 8 x's EBITDA which is $264K x 8 = $2.1MM for a buyers value.

By virtue of this example there is a "range of value" of $2.1MM - $2.4MM.

*Our historical typical sale which ultimately becomes a comparable, averages 13.8 x's the monthly gross sales!

Hence, from our "mock" examples above of $1MM gross sales ($83K per month times 13.8) is a value of:

• Business - $1,145,000
• Building - 600,000
• Land - 600,000
Total $2,300,000

From the above two examples of establishing a "Fair Market Value" they are within $100K of each other. As stated earlier, these "values" can drastically fluctuate related to geography, affluence, customer base, as well as the economy and location. We attempt to educate sellers prior to listing their particular car wash for sale, its marketability based on site specific variables.

Self Service Car Wash Valuations:

The following are two basic techniques we use as "value equations", based on an imaginary 6 bay self service car wash with an automatic:

(1) Yearly Sales Multiple: We list at 3 & 5 x's the yearly reported gross sales (including land, building and equipment).

Example: 6 bay with automatic at $225k g/s/p/y

• $225K x 5 x's = $1,125,000
• $225K x 4 x's = 900,000
• $225K x 3 x's = 675,000

(2) Reconstruction Cost:

• 6 bays at $33K p/bay = $198,000
• 1 automatic = 225,000
• Land 30K square feet at $12 p/s/f = 360,000
• Site improvements $100K = 100,000
Total $883,000

By comparing both of the above techniques a "value" range can rationally be achieved.

Hence: Of the two above examples our experience of 4.3 x's gross sales is the common multiple that an average 6 bay with an automatic might sell for.

• $225 x 4.3 x's = $967,500

Note: The self service car wash market is the most difficult to value due to the inconsistency of providing exact yearly gross sales.


I cannot emphasize enough that the examples of values noted above are only "acid tests" and equations to assist us at CWB, Inc. , to arrive at estimates only. The variables for each car wash can fluctuate as much as 20 & 50% between the above examples. Each car wash has its own personality, customer base and most of all "owner standards of performance". Our primary objective in using these equations are to "mentally" prepare sellers and buyers as to a "range of values" typical in the car wash industry.


We at CWB, Inc. are not MAI Certified or in any way claim to be Certified Appraisers, nor purport to be experts in appraisals. Our "acid tests", "opinions of value" or "market value analysis" are estimates and purely based on our real estate expertise in listing and selling car washes.

Any articles authored by Roger A. Pencek are the expressed property of said author and only with expressed written permission will be allowed to be duplicated or used in any text manner.


Car Wash Brokers, Inc.
11408 N Blackheath Rd
Scottsdale, AZ 85254
PHONE: (602) 787-1100
FAX: (480) 483-1116
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