An attractive component of this trend is the rapid and prolific adoption of the subscription /membership model for consumer services, which recently was adopted by the car wash industry and supported by the growing popularity of the express model car wash.
Access chose to focus its buy-and-build car wash investment strategy on the express model, which offers consumers a compelling value proposition with essential service demand characteristics. Overall the industry displayed multiple key investment characteristics:
- Highly fragmented industry: Over 64,000 car washes in the U.S., of which the vast majority are privately independently owned and operated.
- Limited scaled asset availability.
- Homogenous location profile to execute a buy-and-build strategy.
- Economic cycle resiliency.
- Operating leverage with scale.
- Strong unit level return on investment (ROI).
Access identified Cobblestone Auto Spa (“Cobblestone”) as a unique investment opportunity after nearly two years evaluating the car wash industry, and completed a partnership in January 2020. Cobblestone offered Access an opportunity to partner with best-of-breed operators alongside a differentiated, leading car wash platform that has thrived in one of the most competitive markets in the U.S. Access and Cobblestone have developed a shared point-of-view of future growth opportunities and a compelling vision for the business.