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Business Observer Friday, Feb. 26, 2021 7 months ago

Car wash family rolls into new venture

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With more than 50 years in the business, the Andersons have learned some industry secrets.
by: Elizabeth Djinis Contributor

A family-run car wash operation in Pinellas County has the industry in their blood. 

Through three generations, the Anderson family has run car washes ranging from mom-and-pop full-service operations in the 1960s to the get-in-and-get-out model today’s drivers prefer. Over the years, they’ve learned a thing or two about what works when it comes to car washes — and how to scale a membership-based business.   

In early February, they opened their third NASCAR Car Wash location in Pinellas County, with a spot in St. Petersburg. Along with their financial partner, St. Petersburg-based private equity firm Directed Capital, total investment in the three locations surpasses $10 million, company officials say. That includes some $1.5 million in the technology for the car wash equipment.

On branding with the auto racing giant, the family has a sublicense agreement with the master NASCAR license holder based out of Chicago. That provides exclusive rights for the Andersons to use the NASCAR brand in the area in exchange for a royalty. Although the business isn’t an official part of NASCAR, it has utilized some of the brand’s national assets in grand openings and marketing campaigns.

Beyond the colorful NASCAR signs, the exterior of the St. Petersburg location looks like an expanded Sonic Drive-In — if the fast food restaurant offered car washes and interior vacuuming instead of burgers and fries. 

In the days after opening, an employee waits to greet the driver at a console that offers various wash options. Do they want a $7 or a $25 wash? And if the customer likes this wash, would they be interested in a monthly membership?

The wash process is the usual sudsy affair, but the belt conveyor loading mechanism makes it easier to get your car on and off than what you might find at your neighborhood gas station. When customers exit the car wash, they can park and use vacuums and a rug beater to clean out their interior. It’s a one-stop shop for all things cleaning your car.

‘We’re trying to build smart and not just build quickly. We would like to keep going if we can find good locations.’ Emery Anderson NASCAR Car Wash

Located on a major corner of 4th Street North, one of St. Petersburg’s busiest thoroughfares, the latest location took about six months from breaking ground to opening — though it closed on the land at the end of 2019. In an oft-repeated phrase, there were “COVID-19 delays,” the Anderson family says. 

Rolling out three car washes in almost as many years — their first express car wash opened in Largo in 2017, another one followed in Seminole in April 2018 — has taught the Andersons something about how to best sell their product. As part of an opening promotion, for example, they offered free car washes while working out any kinks in the process. The deal isn’t marketed openly because they never have an exact start and end date. 

The strategy worked. In the early going in St. Pete, the Anderson family gave away some 1,000 free washes, at a cost of about $20,000 in value. They’ve sold a couple hundred memberships there already, which range in price from about $20 to $50 a month.

Main driver

What makes their washes different is their membership model and the type of car wash they offer. CEO Steve Anderson calls it a hybrid between a full-service wash, where an attendant would load your car onto a tunnel and vacuum it for you, versus a self-service, where you do the work yourself. 

The Andersons feel the express model makes the most sense because of convenience. “That’s the main driver of the express washes — convenience,” says CFO Emery Anderson, 34. “Especially for our age group, we’re just always going a million miles an hour. For a clean car, you’ve got to get it quick.”

The popularity of express car washes is more than simply a personal choice. It’s something reflected in national car wash trends, says Tyree Brown, the president of the Southeastern Car Wash Association. “Express car washes have become far more popular than full-service car washes,” Brown says. “It comes back to the ability to scale the growth and attract memberships.” 

The membership model is one of the biggest changes to the car wash industry in the past 10 years that is to the consumer’s benefit, Brown says. Two of the most frequent reasons customers decide not to wash their car are rainy weather and high prices, he says. Membership essentially eliminates those problems.

At the Andersons’ car washes, memberships do have a restriction: They cannot wash their car more than once a day. The Andersons say that caveat was aimed in part at Uber drivers, who might want to wash their car and vacuum it out after each passenger. 

If a customer washes their car even 20 times a month using the membership, that’s a losing deal for the business, Steve Anderson says.

But memberships also breed loyalty. In total, the family’s trio of NASCAR Car Wash locations have about 4,000 members, Emery Anderson says. Even at the lowest model of roughly $20 a month, that comes out to $80,000 a month, or $960,000 a year of memberships. The Andersons decline to provide annual revenue numbers, citing competition in the car wash industry.

So have they gotten their car wash down to a science, where it’s easy to replicate? Not quite. “You’d think it was like copy and paste, but it’s not really that simple,” Emery Anderson says. “Every tunnel is unique.” 

Here’s Johnny

Growing up in Sarasota, Steve Anderson spent his Saturdays, his vacations and his summers working at the car wash his father owned. The only way he could get an afternoon off was if he played a round of golf with his dad.

At the height of their business, the Anderson family had eight car washes — two full-service and six self-service. Over time, their interest in retaining the family business began to dwindle. In 2013, Steve Anderson and his brother decided to sell Johnny’s, their father’s iconic first car wash, off of Bee Ridge Road and Tamiami Trail in Sarasota.   

Steve Anderson wasn’t out of the business for long when a business partner pulled him back in. "This is a good business," the friend told him. He asked, "Do you want in?" That was how the germ of Steve Anderson’s first NASCAR express car wash in Pinellas County began. 

The family has made little tweaks to the machinery and business model since 2017, adding a new price tier to their memberships, for example. But for the most part, their structure and equipment have stayed the same. 

The biggest change they made to their physical building was their St. Pete car wash, which was constructed by hand rather than pre-manufactured, the way their first two express car washes were. 

What the Andersons believe really separates them from competitors in the jostle for repeat business is the conveyor belt system — which they say no one else in the area has. “You don’t have to be as precise driving on this,” 36-year-old Elliot Anderson says. “That’s why it’s less intimidating.” 

Keep going

At some point, the daily operations of the Anderson car wash chain will be passed down permanently to the two sons, Emery and Elliot. And although Emery says the eventual goal is to allow their 70-year-old father to ease into retirement, the elder Anderson shows few signs of slowing down. On a recent day, soon after the St. Petersburg car wash’s opening, Steve Anderson regularly found his way into the control room or working with employees, ready to handle the next operations crisis that might arise. 

“It’s in his blood,” Emery Anderson says. “Unless we’re on the moon, he’s going to make sure everything is good.”

Both brothers say the same thing about the car wash industry. It’s ingrained in them. Elliot Anderson’s first job, for example, was vacuuming cars at the family’s Pronto Car Wash on 34th Street N. in St. Petersburg. “This is not information that everyone has,” Elliot Anderson says. “It’s really learned, so it lends itself to a family.” 

That’s typical in the car wash business, Brown says. Because the industry was historically so specialized, it made sense that it would be passed down through a family business. But Brown says that’s changing, and now car wash models are popular with new owners and private equity investors. 

What helps all three Andersons navigate the family business dynamic, the brothers and father agree, is their ability to stay in their lanes. Emery Anderson handles financials, one of Steve Anderson’s favorite aspects is operations, and Elliot Anderson handles legal affairs.

Up next? The family is keeping an eye toward the future. They have a definite interest in opening more NASCAR Car Wash locations, at least in Pinellas. One challenge in building a car wash chain, they say, is looking for the right property. You need something large enough to hold rainwater retention and all the equipment required for a car wash to run. 

They don’t envision a day where a NASCAR Car Wash is on every corner. That actually would be bad for business. Car washes need to be at least a couple miles apart, Emery Anderson says. “We’re trying to build smart and not just build quickly,” he says. “We would like to keep going if we can find good locations.” 

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