Tell Me More: Car wash franchise

If you're looking for a proven cash business, consider a car wash franchise. A neighborhood car wash provides a fast and convenient way for customers to get a professional external and internal cleaning whenever they need it.

You need to keep some things in mind before going the car wash franchise route. First, you need to get a wholesale permit to make tax-free purchases for your business. Next, which type of car wash franchise do you want to own? You can purchase one that is fully automated from wash to wax to dry, or partially automated where workers do some of the manual labor.

Location plays a big factor in the success of a car wash franchise. If you live in an area that gets a lot of snow three to five months a year, people will be more concerned with keeping snow off their cars than getting it professionally cleaned. Since it can be a seasonal business, you have to be prepared for potential slowdowns.

Car wash franchise price considerations
There are two main costs associated with buying a car wash franchise. The first, which is most likely to cause sticker shock, is the franchise fee. This is a one-time startup fee that can range be as low as $1,000 or as high as $100,000. Most are between $20,000 and $30,000, and some are non-refundable, even if you decide to pull out of the deal before opening your franchise.

The second major cost of a car wash franchise is the monthly royalty payment. This fee ranges from 3% to 6% of your gross monthly sales. Some franchises have monthly minimums that can really hurt during slow periods for your business.

Other car wash franchise expenses may include:

• Equipment. Could be anything from chemicals to car accessories to cash registers.
• Signs. You need signage to properly promote your car wash franchise.
• Working capital. For expenses that accrue before you start generating revenue - pre-opening payroll, for example.
• Advertising fees. Larger car wash franchisors typically require that you pay into a national advertising fund that goes to support the company as a whole.