Business Franchises

Business Franchises

A Car Wash Franchise is a Sound Business Model

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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.

No matter what type of business model you choose, franchising may be a sound option. The US Census Bureau compiled the first-ever franchising report based on 2007 Census statistics. Franchise sales accounted for $1.2 million in revenue, compared to $7.6 million in revenue for all establishments. Franchise businesses remained lucrative as convenience stores, retail stores, hotels, and restaurants.

Car Wash Franchise Considerations

Car Wash

You need to keep some things in mind before going the car wash franchise route:

Average Prices of Car Wash Franchises

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 5% to 10% of your gross monthly sales. Some franchises have monthly minimums that can really hurt during slow periods for your business.

When pricing a car wash franchise, the franchise fee and monthly royalty payment will be added up to create an estimated total investment amount. For example, if an initial franchise fee is $20,000 with an ongoing royalty of 5%, your total investment may range from $22,000-$49,000.

But the fun doesn't stop there. In order to prove that you have the financial capacity to open and run a new business like a franchise, you must also meet basic financial requirements. A small car wash franchise may require net worth of $60,000 with roughly $30,000 in liquid cash available; a more expensive car wash/auto service franchise with a multimillion dollar total investment may require $1 million in net worth with $2.5 million in liquid cash available.

Other Car Wash Franchise Expenses May Include:

Lastly, when considering a business like a car wash franchise, don't forget the time commitment involved. As you read the fine print in your franchise agreement, you may find that some companies require a 5 year renewable agreement, up to a 20 year renewable contract term.

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