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How to Buy a Car Wash Franchise
If you decide to invest in a car wash franchise, chances are you want to purchase one with a recognizable name and the good will associated with the brand. Buying a franchise is a good way to enter the business as an owner, but it also requires a substantial investment of both time and capital. Be sure you know what you are getting for your investment before you buy.
1. Decide how you are going to pay for a franchise. Ask yourself how much money you have to invest, and how much of that you can afford to lose. You also need to look closely at how you will obtain financing if you need it, and how you will get by financially while your car wash gets established. The cost will vary depending on factors such as location and the particular franchise, but you can expect that the average franchise will cost you around $275,000 to get started. Mobile car wash franchises cost less, typically in the range of $30,000 to $100,000.
2. Make sure you have the skills you need to run a car wash. Ideally, you should have spent some time working in a car wash in the past, to make sure you understand the day-to-day operations. If you don t have car wash experience, be sure that the training you receive when you buy the franchise covers the basics of operating the business. It s also important that you understand how to handle the business money and how to handle hiring and managing workers for your franchise. If you don t have these skills you should consider either working with a partner who does have the skills, or taking classes that can teach you business management. These classes are available at most local community colleges or through online business schools.
3. Evaluate the different car wash franchise opportunities that are available to you. Systems range from single person operations where you travel to your customer s location in a van and provide service on the spot, to large, multi-million dollar setups that handle hundreds of cars per day. The best way to find out about the various car wash franchise opportunities is to attend a franchise exposition. This event lets you talk to representatives from the different companies and gather information about each, which will help you evaluate and compare the different car wash franchises to see which one is right for you.
4. When you look for the right franchise opportunity, be sure to investigate all of the franchises carefully. Evaluate their operations by carefully reviewing all of the company information you are given. If the company makes any public earnings claims, the Federal Trade Commission requires it to provide written proof. This can consist of income statements for various franchisees, or audited and documented statements of earnings for the company as a whole. If the income documentation includes average income amounts or gross income amounts, ask for more details. Averages can be misleading if a few franchises are doing much better than the others. And gross income amounts don t consider the cost of overhead. A high gross does not necessarily translate into high profits. It’s important that you know what the expenses of operating the business are going to be.
5. Look carefully at the company s disclosure information, which it is required to give you before you buy a franchise. These documents consist of detailed information about the company and its operations. They also should include itemized listings of everything you will get as a franchisee and exactly what you can expect to spend to open the doors to your new car wash franchise. You will want to know which of your costs are non-refundable, and what other expenses — such as business licenses or facility construction — might be involved. The disclosure information will also tell you how much business experience the company executives have, and whether it has been involved in any litigation, bankruptcies or foreclosures. Check closely to see how much training is included. Find out where that training will be and how much help you can expect to receive once your initial training period has been completed. Ideally, the company has a representative you can turn to for help with problems as you are establishing your business. This is especially during your first year of operation. It also is helpful to have a lawyer go over the franchise documents with you.
6. Talk to several current and former franchise owners to find out how they feel about the company. Ask them about the upside of owning the franchise, but also ask about the downside. Find out if they have any regrets about buying the franchise. If there are serious flaws in the franchise system, you should look for a different company to work with.
7. Apply for a car wash franchise by filling out the company s application and paying the required deposit. Only take this step once you are certain that you are able to handle the car wash and that you will get good value for your money. Each company has a different procedure for processing and screening franchise buyers, so you will need to comply with whatever the franchiser requests. It might require you to provide proof of financial stability and worth, references, a business plan or other types of documentation.
8. Sign any final paperwork the company gives you once you have been accepted as a franchisee. Pay the required fees. Read everything carefully to make sure it is what you expect and no changes have been made to amounts or terms of the agreement.
- List of car wash franchises
- Franchise documents
- Investment capital
- Be sure car wash services are needed in your area before you decide to buy a franchise. If not, you might want to relocate before buying a franchise.