The word is out: the car wash industry is a lucrative investment, and the market is primed to continue to expand in the near future. Whether through acquisition or new builds, car washes are an excellent purchase for those who know the industry or are looking to diversify.
That being said — as the industry expands, so do the car wash regulations around it. Navigating the bureaucratic hurdles in the car wash industry around things like permitting, zoning, variances and moratoriums can get complicated, and as more car washes pop up, local governments are cracking down. As interest rates continue to rise, the speed you can get your business to market will be even more critical, so avoiding month- or year-long delays due to bureaucratic red tape isn’t ideal. That’s why we’ll dive into how we can help navigate the top hurdles many car wash owners will likely face when building a new location or updating an old one.
Zoning
One of the first hurdles most potential car wash owners face is choosing an appropriately zoned location. Zoning distinctions vary widely city to city, however you’ll typically be looking for sites zoned for commercial-type purposes.
Working with a commercial real estate agent and developer who understands the car wash industry will be essential to ensure you align your business with the proper zoning laws for car wash establishments. There are also brokers who specialize in car wash site selection and we have forged multiple relationships in this arena to assist our clients.
If you are remodeling an old car wash location or if the lot you’re considering is already zoned for purposes that allow car washes, your path forward regarding zoning should be smoother than a ground-up car wash.
If you find a site that is not zoned for your purposes, it isn’t necessarily the end of the story. There are paths to re-zone or obtain variances to commercial zoning codes, but it will likely take quite a bit of time and knowledge on how to navigate the local government system to accomplish this.
Moratoriums
In addition to zoning, another government restriction on new car washes is moratoriums. This is a common policy decision that many municipalities put in place to slow down new construction of particular businesses they feel are oversaturating the market (think: dollar stores and self-storage units). Since they are such a lucrative business for many owners, the car wash industry is growing rapidly, triggering moratoriums in many cities.
Often, these moratoriums are put in place on car washes not just for oversaturation but due to lack of infrastructure. For example, in some areas, the proper storm sewer connections aren’t in place that are needed for car washes. It’s best to research the local laws and regulations for car wash owners.
Permitting
Of course, even if all the proper zoning is in place, no car wash owner can avoid the permits that accompany owning a business. Whether it’s a new structure or rebuilding an existing one, every municipality will require specific permits to get a business up and running. These are some of the most common permits for car wash businesses that most cities will be looking for:
- Water and sewer permits: A critically essential part of any car wash, the local government will have to approve that there is sufficient water supply as well as proper piping to bring water in and out of your car wash. In many cases, the burden here lies with the prospective owner or the applicant.
- Building permit: Most new construction projects and many remodeling projects will require building permits with signoffs from city building inspectors, fire inspectors, and whatever entity is in charge of traffic in your municipality. This ensures that your business not only follows car wash inspection procedures but proper building codes in general for your structure. These inspections might include a check to ensure everything mechanical, electrical, and plumbing is functioning correctly before a business can open.
- Sign permit: Many cities have rules around the size of the signage allowed to be in front of your business, along with other regulations of what your business might look like in relation to others in the neighborhood. You will likely need to navigate the building inspector or other departments that deal with signage to provide approval.
- Occupancy permit: Before any business opens, whether it’s an existing structure or a new one, the business owner will usually have to have an inspector come out to sign off that you have all the proper permits in place and will set the number of occupants you can legally have within your building at any given time.
Environment
As environmental laws around water conservation and reclamation become more prominent, this area will continue to become more and more important for car wash owners. Many cities now require car washes to have a reclaim system for their water, which will become growingly necessary in the future.
As many states face droughts and environmental issues tied to water shortages in warm months, car wash owners will increasingly see legislation surrounding this ecological concern. Some municipalities may even have environmental permits for car wash operations that owners need before opening their businesses.
New construction sites almost always require a stormwater pollution prevention plan (SWPPP) to ensure dangerous construction runoff doesn’t end up in public waterways. According to the EPA, a SWPPP is more than just a sediment and erosion control plan. It describes all the construction site operator’s activities to prevent stormwater contamination, control sedimentation, and erosion, and comply with the requirements of the Clean Water Act.
Community
While many people prefer to use car washes to wash their cars, and the need for this industry continues to grow, these structures often get pushback from the community when business owners bring plans forward to open one. There’s a stigma around having new car washes built near residential neighborhoods, and often the announcement of this type of business opening will attract complaints that people don’t want them in “their backyard.”
To circumvent some of the backlash of building and opening a car wash, connecting with your local community development or advocacy networks to share plans from the get-go will be essential. As a business owner in a community, you must remember that the community’s perception needs to be appeased to have good neighbors and support for your business. Here are some concerns you will likely have to address:
- Aesthetic: A welcoming and pleasant design that matches the neighborhood aesthetic will go a long way to avoid complaints.
- Traffic: Making plans to address traffic concerns and ensuring there are no potential traffic hazards will appease those worried about additional traffic in their neighborhood.
- Noise: Those neighbors in your immediate vicinity will be especially concerned about the potential noise a car wash can emit. This could especially be a concern if you have late hours of operation or 24-hour facilities. Sound-reducing materials and additional doors may have to be added to your car wash to avoid noise complaints in the long run.
In general, you will only benefit from connecting with your community’s development or advocacy organizations before you get started to work with them through any issues that may arise.
Getting Your Paperwork in Order
As your business gets ready to launch, there are a few more areas that you will need to address before you can open your doors. In addition to the permits your business will need before opening, you will likely need architectural drawings, landscaping plans, environmental construction plans, and market research to make your construction or remodeling go smoothly.
At Apple Growth Partners, we have a team that’s experienced and ready to help you manage all the accounting and financial hurdles you might face as you enter the car wash market. We even offer customized Car Wash Workshops to help acquire additional sites, expand market reach, and benchmark your industry performance.
For information and guidance on making the best financial decisions for your business, please contact Brandon Fredericks at bfredericks@applegrowth.com.