Why are multiple car washes coming to the Loves Park area? Here’s what’s behind business trend

By Kevin Haas
Rock River Current
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Subscription plans and strong profit margins have drawn private equity investors and publicly traded companies to build more car washes, including a handful in the Rockford area

LOVES PARK — Mark Hawkinson on Friday cleaned up his truck at what is still — and only for a short while longer — the newest car wash business in the city.

About 3 miles east of Tommy’s Express, which opened in February 2023, is a new Mister Car Wash on Riverside Boulevard that’s nearly complete. Head 2 miles northwest and you’ll find a Champion Xpress Car Wash under construction on North Second Street. Or if you went 4 miles north up Forest Hills Road you’d find the future plot of Club Car Wash on the Rockford Speedway site. About 3 miles north on North Alpine Road in Machesney Park is another Mister Car Wash.

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“I used to go to all the car washes at the gas stations — half the time they work, half the time they don’t — with these automatic ones you drive up, especially if you have the paid subscription, you just pull right in,” Hawkinson said. “There’s zero interaction with anything, anybody. You just drive-in, drive-out, and in two minutes you’re done.”

Nationwide growth in the car wash industry is apparent in Rockford’s neighbors to the north, where multiple car washes are in the works. The growth is fueled by heavy investment from private equity firms and publicly traded companies that see a low-cost business model with steady profit margins that’s been touted as recession resistant. The auto wash industry has flooded new markets over the past few years behind a subscription-based model that creates convenience for customers and a steady stream of revenue for investors and operators.

“These car washes do an immaculate job compared to the laser jets at the gas stations … I think it’s just the next trend,” Hawkinson said. “Business owners look it as an opportunity to make money, and rightfully so.”

The popularity of car wash subscription plans and strong operating margins has drawn investors, with an estimated 500 new facilities being built nationwide per year, according to the International Car Wash Association. Revenue from car wash sales has grown from $10.9 billion in 2018 to nearly $16.3 billion in 2022, according to the Federal Reserve Bank of St. Louis.

‘Big guys are not stopping’

The industry is expected to continue to grow, with an estimated annual compound growth rate of 6.7% from 2023 to 2031, according to Transparency Market Research. The hot car wash industry has also attracted celebrity investors like Shaquille O’Neal, who owns 150 car washes, because of its steady revenue stream, according to Medium.

“There’s a reason why these venture capital groups and there’s a reason why Mister Car Wash is publicly traded with 500 locations — because these guys started to do this when the express exterior tunnel started to shape and take form,” said Bobby Walsh, a real estate broker who has been studying the industry for the past four years as he prepares to invest in his own company. “They saw the runway and they saw the future. They were in front of it, and that’s why they’re doing so well.”

Aside from the four car washes under construction in Loves Park and Machesney Park, there’s also a Club Car Wash being built in Belvidere and plans to bring one to Rockford as part of a redevelopment of the old Kmart property on East State Street. Walsh is the one developing the plans for the new wash in Rockford.

“I saw the benefits of what the publicly traded companies were doing from cash flow analysis to performance to multiple store locations,” he said. “Once you put your vision on paper, and then you can put numbers into your analytic pro forma, you really start to see how these things can operate and what the reward can be.”

His opening is dependent on City Council members approving a deal for the redevelopment of the Kmart site. They’re scheduled to reconsider a previous no vote on Monday night.

The car wash industry has been magnet for private-equity investment over the past for years. Take for example Mammoth Holdings LLC, which both acquires existing washes and builds new ones. The Dallas-based company operates 130 conveyor car washes under brands such as Ultra Car Wash, Wiggy Wash, Finish Line Car Wash and Busy Bee Car Wash, to name a few. It aims to have 500 car washes by 2025, according a Wall Street Journal report titled “Private Equity Wants to Wash Your Car.”

“These big guys are not stopping,” Walsh said. “These guys will own and operate the majority of the markets.”

Walsh said being a local owner and operate could be an advantage for him as he enters the market.

“Local business, local owner-operators, I believe is the way forward,” Walsh said. “If you have a problem, you can pick up the phone and dial me and I’m going to answer my phone.”

Benefits, pushback

For local governments, there’s not much incentive to attract new car washes. For a community like Loves Park that doesn’t levy its own property tax, the business generates only a small amount of sales tax and some minimal water fees, said Steve Thompson, director of community development and public works for Loves Park.

“It’s just a service for the citizens,” he said. “It’s a national trend right now. There’s three things that are real hot now — chicken, coffee and car washes — the three Cs.”

Some communities that were criticized for allowing too many car washes havd enacted moratoriums that put a temporary block on the businesses. Among them are several communities in northeast Ohio, including Brook Park, which had more than a half dozen car washes built in less than 8 square miles, according to News 5 Cleveland.

There have been no such talks of moratoriums in our area.

For Traci Lighthart of Machesney Park, the new Tommy’s Express in Loves Park was a welcome addition. She’s a member to its subscription program.

“I have noticed more are coming to the area and I think they are overdue,” she said. “We lost Windsor car wash and TLC years ago and other than a few gas stations with the brushless option there really weren’t good places to go. Now we get a car wash and free vacuums as often as we want.”

The percentage of drivers who say they frequently wash their vehicle at a professional car wash increased from 48% in 1994 to nearly 80% today, according to the International Car Wash Association.

One explanation for that could be the need to maintain an increasingly older fleet of vehicles on the road. People are holding onto their vehicles longer, something economics professor Bob Evans credited to the growth in car washes.

The average vehicle on the road is 12.6 years old, a record high, according to S&P Global Mobility.

“Inflation and high interest rates make car payments really, really expensive,” said Evans, associate professor of economic and political science at Rockford University. “So people are stretching the life of their used cars.”

Evans said part of the economics at play with the growth of car washes is Rockford’s shift from a manufacturing community to a service economy.

“For the longest time Rockford was known as a strict industrial town, but that’s gone,” he said. “We’re not strictly or perhaps even primarily a manufacturing town any more. It’s more service orientated.”

Lighthart said the winter months will be a true test of their value because all the road salt that can eat away at paint and cause rust.

“The trend seems to be growing similar to slots and coffee shops. I’m sure the business plan has great revenue potential,” Lighthart said. “I hope they don’t just get abandoned when things start breaking. People are keeping their cars longer and I think they understand the need exists. The places that don’t require several employees to be involved would be the most likely to produce a good revenue stream.”

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas