With conference season in full force, PPR’s Dennis Matlack and Craig Johnsen attended an exciting event that focused on our newest vertical inside our recently launched PPR Opportunity Fund.
Read their report below:
The Car Wash Show, hosted by the International Car Wash Association (ICA), was held in Nashville, TN on May 13th & 14th. The event covered new markets, products, and educational material. They kicked off the show with the President of the ICA talking about the state of the market and the effects higher interest rates have had on the car wash industry. They touched on the fact that while industry data shows consumers are tightening their wallets, they continue to look for, and spend on, luxury items. The traditional self-car wash person that does it themselves in their driveway is no longer the norm and at this point is more of a novelty. Memberships to car wash companies continue to rise and have accounted for 60%+ of the revenue for companies like Tommy’s Express Car Wash – the franchisee PPR and our partner Olympus Pines have invested in in our new Opportunity Fund offering. The President of the ICA also spoke about the effects of the pandemic and how hard it hit the full-service washes (cleaning inside and outside of your car) extremely hard. The Express car wash, and more specifically the “Tunnel” car wash, however, has established itself as the premier car wash option.
In addition to presentations and panels, there were also informative educational classes that we were able to attend, including one hosted by Tommy’s Car Wash CEO Alex Lemmen, President & CIO Ryan Essenburg, and COO Andrew VanWylen. They spoke at length about the positive effects of networking and about how having multiple locations, even when close to one another, has shown to increase the profitability of both sites even with membership subscriptions. Many people would believe it that memberships may have the opposite effect, where consumers tended to go to the site they first signed up with, but the data shows that customers tend to view memberships as even more valuable when there are more options.
In the Real Estate industry, we all know the key is location, location, location, right? Well, we learned that while this is definitely true, the type of location is just as important. Say there is a Tommy’s Car Wash just one mile from your house, for example, but there isn’t one near the wholesale store you frequent most, then you still might not use it all that often. Now say there is another Tommy’s close to your local grocery store that is even further away, so you may be more inclined to purchase a membership knowing you have multiple options depending on where you are that day, the time you have available, etc. – having options gives you flexibility to do what works best for you on any given day.
Lastly, we learned that all membership fees roll up to Tommy’s corporate. This means that by utilizing their license plate reader, each franchise gets feedback on where their “Home” memberships are getting their car washed, and more importantly they are sharing in some of the revenue even when their wash isn’t used by one of their “Home” members.
Overall, the conference was very informative, and the attendees came from both independent car wash operators and major organizations. As you can see from the photos, the Tommy’s Express Car Wash booth was comprehensive and extremely well done. They had a large team there answering questions and were clearly having fun interacting with attendees.
They even had on display their patent-pending molded floor mat washer along with the fabric floor mat washer which are the newest innovations for 2024.
They also had a virtual car wash walkthrough (that you can see Craig using) that gave us an interactive experience.
On a final note, we were fortunate to be able to talk with Alex (the CEO of Tommy’s) and Trevor Sperry, the CEO of our operating partner Olympus Pines, as well as other key Tommy’s personnel that PPR will be working with going forward. After attending the show, it’s clear that Tommy’s Car Wash is a top-rated car wash service provider and one that many will try to replicate. But it was also clear that the team, their outgoing personalities, and the innovation Tommy’s has in operation will not be easily duplicated.
We look forward to bringing you more updates as we continue our journey into this space, and if you haven’t had a chance to watch our webinar explaining this new investment opportunity you can do so at this link: https://pprcapitalmgmt.com/opportunity-webinar-replay/
