If you’re considering getting into the car wash business, you may also be deciding between owning and operating an independent business or buying a franchise. Publications aimed at entrepreneurs often hail the franchise business model as a great opportunity. Still, not all franchises are fail-proof. Here are a few advantages and disadvantages a potential franchisee should consider before pulling the trigger:
Advantages: Franchise systems have already been tested, offer the stability of an established name, and a robust network of support.
The foundation of business processes, standards, and technology will already have been tested when you purchase a car wash franchise. A good franchise development team will have rigorously tested all of the necessary equipment, from the car wash pumps and accessories, to the bill acceptors and point of sale systems. The wash process will already have been maximized for efficiency and low cost per vehicle, and the car wash supplies will have been tested for efficacy.
During the market testing and the actual franchising process, a reputable franchise will have established a recognizable brand name, as well. The time, money, and continuous effort to create an established brand name has already been invested, giving a franchisee an advantage over the car wash operator who has to work to establish an independent brand. Finally, a good franchise will offer a large network of support, both from the franchise, itself, and fellow franchisees. An established franchise will have been put through its paces by many owners in a variety of different markets, resulting in a large knowledge base for best practices and business solutions.
Disadvantages: Some franchises over-promise their results, offer only contractual terms that are subject to change, and often are royalty-based.
Some franchisors tend to pad their track records or make promises to get you to buy into their systems, but then fail to deliver. Promises of careful site-analysis, intensive training, and ongoing support can turn out to mean that there is only minimal support once the paperwork has been signed. In addition, some franchise contracts reserve the right to alter original terms or the operations manual, even after signing. This can require longer operating hours, to the detriment of your business, or change the prices of products at a later date. Lastly, franchisees are usually required to pay a regular royalty fee to the franchisor, which is based on sales. Others only require a flat monthly fee, but franchise fees should be taken into account when deciding whether or not to purchase.
All potential car wash franchise operators should do extensive independent research before purchasing a franchise system. While for some car wash operators franchising could be the answer, others would be happier and better served by operating independently.