The nation’s car wash market is far from saturated, with extensive growth expected over the next few years, thanks in large measure to improved technology. And while opportunity is plentiful, franchise organizations are expected to dominate a greater market share.
Attendees at last week’s Car Wash Show at the Las Vegas Convention Center learned about the challenges and opportunities this rapidly expanding but changing business is providing during a presentation from one of the major players, Tommy Car Wash Systems, a car wash operation chain and equipment supplier. The session was titled, “Industry trends, technology and disruption.”
“While the industry is very competitive, we think the best is yet to come,” said Alex Lemmen, company CFO. “You just need to be doing all the pieces really well.”
Lemmen began the presentation describing the growth of the nation’s largest car wash brands. He presented a list of the top 20 car wash brands and noted that the top 10 brands rose from 5% of all conveyorized tunnel car wash brands a few years ago to 15% today, and will eventually account for 40% of all locations.
The top 10 brands in order of size are:
- Whistle Express
- Mister
- Empress (EWC/Club)
- Tidal Wave
- Zips
- Quick Quack
- Tommy’s Express
- Spotless Brands
- GO Car Wash
- Mammoth Holdings.
The second top 10 brands in order of size are:
- Whitewater Express
- ModWash
- Super Star Car Wash
- Autobell
- LUV
- True Blue (Circle K)
- Casey’s Express
- Caliber Car Wash
- BlueWave Express
- El Car Wash
One reason for the growth of these brands is the capital available to them. Eighteen of the top 20 brands are private equity based or publicly held.
“What that means for the future development of these brands is they’re going to keep growing,” Lemmen said.
Financial resources
The financial resources enable these companies to invest in new technology, open multiple locations in a market, and build new car washes from the ground up instead of acquiring existing businesses.
“We see accelerated greenfield development from these groups, and these brands, when they enter a market, are never going to build just one location,” Lemmen said. “It’s going to be hard to compete with just one location today.”
Tommy’s opened 25 stores in Q1 2025, he said, while last year, Mister opened 39 stores, all of which it built from the ground up.
One of the most important benefits franchises provide is the “network effect.” When a franchise group has multiple stores in a given market, its customers tend to patronize those stores as opposed to competing stores.
Expansion continues for national brands
To illustrate the impact of national brands on the industry’s growth, Lemmen cited the example of one intersection that four years ago had one car wash doing 10,000 cars a month. Two national brands have since entered the market; that intersection now does 55,000 car washes a month.
“It’s just an example of how the industry’s evolved,” Lemmen said.
Technology, particularly AI and data analysis, has proven critical in allowing a company to predict a site’s revenue prior to building the site. Lemmen said his company has spent seven years studying one particular site.
“There just hasn’t been the right opportunity yet, but we map it out at that level of detail across the whole country, so the trigger to go is the right site,” he said. “We won’t compromise our site model to adapt. It’s got to fit one of our standard models.”
An integrated technology suite includes a customer app, a POS and a tech support program. “We think AI and data analysis are more important than ever,” Lemmen said.
Marketing makes a difference
Marketing is another area where technology brings important benefits.
“You’ve got to be marketing in every channel,” Lemmen said. This includes national events, guerilla marketing, print marketing, a full digital marketing platform, and local crowd source marketing. “You’ve got to be active in all of that today.”
Another area where technology plays an important role is in employee training, including on-site training, a digital curriculum and providing a career path for employees to allow people to become site leaders and regional managers.
Still another area where technology comes into play is guest services, which include club memberships and 24/7 customer support. At Tommy’s, guest services are managed by a central organization, enabling the individual site teams to focus on car wash operations. This ensures members get better service.
Ryan Essenburg, company CIO, agreed with Lemmen that franchises are an important trend, and cited the following additional trends:
- Conveyorized tunnels.
- Window up/effortless car washing.
- 2-minute car wash experiences.
- Mega car washes.
- Point-of-sale-less car washes.
- Indoor vacuums.
Essenburg also affirmed the importance of technology, noting that the biggest industry trend is software innovation. In the past, hardware innovation was dominant, but “today, innovation is happening more on the software side of the business.”
“You can’t solve today’s problems with yesterday’s technology,” Essenbrg said.
Another trend Essenburg cited is tearing down existing facilities and rebuilding them from the ground up. He said companies are now focused on finding sites that fit their models versus the less efficient method of designing a car wash to fit a piece of property.
Tommy’s, for example, was able to tear down a car wash that went out of business and build a new car wash that did 385,000 washes in its first year.
“If you want to be successful in the long term, sometimes it means starting over,” Essenburg said. “With the technological leap that’s happened in the last decade, things like belt conveyors and multiple pay lanes are difficult to update old washes to.”
A car wash that is 13 feet long can process over 200 cars an hour. “That is really the standard model,” he said. “There is a consistently diminishing return on anything longer than that.”
The network effect
Andrew VanWylen, company COO, expanded on the importance of the “network effect” Lemmen mentioned. A car wash network makes multiple locations available to the customer.
“The power of networks I think is a contributor to the changing texture of competition,” he said.
The conversation has shifted from site to site competition to whose network is stronger in providing customer value.
In one city, Tommy’s has four car wash locations, each within a 10-mile radius of the other locations. The company found that 76% of the members used more than one of these locations, while nearly 15% used five or more locations.
“They’re washing at an adjacent city 25 miles away, and if we combine that with those who are washing at all four locations, we have roughly 30% of the members in the city are washing at four or more locations, some of them going to a different city to wash,” VanWylen said.
At the state level, 43% of members use more than one location. “That’s because every city in the state is built out with four locations,” he said.
To quantify the value of building a network, the company looked at 138 of its car washes opened for at least 24 months and grouped them into three categories, low, moderate and high network connections. The moderate member network connections sites experienced a 26% revenue increase over the low network connection site, while the highly connected washes saw a 35% revenue increase.
AI brings new benefits
VanWylen also expanded on the importance of AI in improving efficiency and the guest experience.
The company is using AI to provide immediate responses to members’ questions. The customer support team responds to 95% of member questions on an automated basis. Member surveys, meanwhile, reveal a high rate of satisfaction.
“We get to deliver on a better guest experience when someone needs more help from us,” he said. “We’re using it to get the right person working on problems quickly for our car wash customers.”
AI has also helped with site revenue analysis. The company was able to identify variables to provide insight on why one site does better than another.
In 2023, the company was able to identify 41% of the variables impacting the level of revenue performance between high and low performing car washes. “We were able to explain 41% of the variability in revenue from car wash to car wash,” VanWylen said.
In 2024, they were able to explain 63% of that variability. The single most predictive variable was how long the site has been open.
Another important variable is the site’s market share.
Other variables are median income, proximity to a fuel station and proximity to the operating partner’s residence.
“If the operating partner lives closer to the car wash (it) will have a measurable impact,” VanWylen said. “The car wash will perform better and be higher revenue than if they live a far away.”
The research also found it is better to open a car wash in a region that already has successful car washes as opposed to opening in a region that has a poor performing car washes.
One listener asked if the company has considered changing the car wash size to accommodate larger size vehicles that are in use today. Essenburg replied that they don’t want to compromise the service for the majority on behalf of a minority. The company is looking at expanding the size by inches, not feet, to accommodate more vehicles.
“You want to get the right model for the right market for the guest experience,” he said.
Article by Elliot Maras, Content Writer.
