Car Wash Feasibility Study: Capture, Membership and Financing

A car wash feasibility study tells a lender whether one specific car wash, in one format, on one site, can build enough member and retail washes, fast enough, to pay its operating costs and its debt at the coverage the capital source requires. It answers from local evidence: the vehicles within a few minutes' drive, the washes already serving them, the membership base the site can hold once cancellations are counted, the zoning and water rules that apply to the parcel, and monthly debt service through the ramp.

Four facts shape almost every car wash loan file:

• The industry is large and still adding sites. The 2022 Economic Census counted 19,422 car wash establishments with receipts of $14.8 billion [1], and County Business Patterns shows the count rising from 15,296 in 2013 to 19,807 in 2023 [2][3].
• SBA treats a car wash as special purpose property. SBA's procedures list "Car wash businesses" among limited or special purpose properties [4], which raises the 504 borrower contribution to 15%, or 20% for a new business [4].
• Market saturation is a named trigger. SBA's procedures list "market saturation by industry type and location" among the conditions that may lead SBA to request a feasibility study [4].
• Projections must cover the debt within two years. For start-ups and other loans based on projections, SBA looks for debt service coverage of at least 1.15 within 2 years from loan funding [4].

This page sets out what the study must prove, the federal and state data it draws on, how membership and capture are modeled, and how each financing program reads the result. For state detail, see the car wash feasibility study for Texas; for what separates a study a lender can rely on from one it cannot, see what makes a feasibility study bankable.

Every study ends in one of three conclusions: feasible as proposed; feasible with stated conditions, such as a smaller loan, a funded interest reserve, a different format or a revised membership plan; or not feasible as proposed, with the changes that would make it work.

What is a car wash feasibility study?

It is an independent analysis, written for the lender's file, of whether a proposed, expanding or acquired car wash can support its financing. USDA's rule describes a feasibility study as a report "conducted by an independent qualified consultant(s) evaluating the economic, market, technical, financial, and management feasibility" of a project [5]. Those five parts make a sound outline for any capital source, and the study for a car wash follows them:

• Economic and market feasibility: the vehicles and households within drive time, the competing washes and the pipeline, and the share of washes this site can win.
• Technical feasibility: the format, the stacking and access plan, utility capacity, wash water disposal, zoning and the environmental path.
• Financial feasibility: member and retail revenue by month, operating costs, the development budget, and coverage through the ramp.
• Management feasibility: who will run the wash, with what systems, staffing and experience.

In federal statistics the business is NAICS 811192, Car Washes, defined as establishments "primarily engaged in cleaning, washing, and/or waxing automotive vehicles" [6]. The code is broad. Its examples include automotive detail shops, mobile car and truck washes and self-service car washes as well as conveyor washes [6]. A Census count of car wash establishments therefore mixes a 130-foot express tunnel with a two-bay self-serve lot and a mobile detailer. The study begins by defining the product precisely: format, tunnel length or bay count, wash menu, membership plan, vacuums and any detail or lube services, and then it compares the site only with washes that compete for the same customer.

A feasibility study is not an appraisal and not a business plan. The appraisal estimates value at a date; the business plan presents the sponsor's case; the feasibility study tests whether the project works and states what would have to change if it does not. The differences are set out in Exhibit 23 below.

What does a lender need the study to prove?

A lender needs proof that the wash's own cash flow will repay the loan under the program's rules, and that nothing about the site, the market or the operator breaks those rules. For start-ups and other loans based on projections, SBA asks for "supporting assumptions that reflect a debt service coverage equal to or greater than 1.15 within 2 years from loan funding" [4]. Repayment ability must rest on the cash flow of the business itself, because outside income "may not be added to the business cash flow" [4].

Exhibit 1. What the lender asks and what the study shows

Source: SBA SOP 50 10 8.1; 13 CFR 120.160 and 121.201; 7 CFR Part 5001, as cited in each row.

SBA does not require a study on every loan. Its regulation says SBA "may require" professional appraisals, a survey, or a feasibility study [7], and the SOP explains when it will ask: SBA has "the regulatory authority to request a feasibility study when it is needed to further understand the small business type and market conditions" at the project location [4]. The listed triggers include market saturation by industry type and location, a "highly specialized Project property" and a "project size disproportionate to size of community it will serve" [4]. An express tunnel is a single-use building, often proposed on a corridor that already has several washes, so a car wash can meet two or three of those triggers at once.

The SOP also treats an independent report as a way to strengthen a file. "Reports prepared independently of the small business may be beneficial in mitigating any weaknesses identified in the credit analysis," and feasibility studies are the first example it lists [4]. Independence is the point: an equipment supplier or franchisor that prepares a site evaluation has a stake in the site going ahead. The study reports what the evidence shows, whichever way it falls.

USDA is stricter. For Business and Industry guaranteed loans greater than $1,000,000 to a new business, "a feasibility study prepared by an independent qualified consultant acceptable to the Agency is required" [5]. At or below that amount, the Agency may still require one [5]. The Agency also weighs "the strength of the feasibility study and experience of management" when it sets equity requirements [5].

How large is the car wash industry?

It is a $14.8 billion employer industry of about 19,400 establishments run by about 15,600 firms. The 2022 Economic Census counted 15,613 firms, 19,422 establishments, receipts of $14,807,987 thousand and 169,609 paid employees in NAICS 811192 [1].

Exhibit 2. Car washes in federal statistics

Source: U.S. Census Bureau, 2022 Economic Census (EC2281BASIC) and County Business Patterns 2023 (cbp23us), NAICS 811192, all establishments. Ratios calculated by FSC.

The averages hide a wide spread. Receipts of $762,434 per establishment combine conveyor washes, self-serve lots and detail shops, so they are not a benchmark for any one format. They do show two things a lender should know. First, the typical firm is small: 15,613 firms ran 19,422 establishments, or 1.24 establishments per firm [1]. Second, labor is a large cost. Payroll took 29.8% of receipts across the industry in 2022 [1], which is why the format decision, with its staffing model, drives the operating budget.

Exhibit 3. Car wash establishments, employment and payroll, 2013 to 2023

Source: U.S. Census Bureau, County Business Patterns, U.S. files for 2013, 2018, 2019, 2020, 2021, 2022 and 2023, NAICS 811192, all legal forms [2][9][10][11][12][13][3]. Ratios calculated by FSC.

Establishments rose by 4,511, or 29.5%, from 2013 to 2023, and by 2,831, or 16.7%, from 2019 alone (calculated from [2][10][3]). Employment grew more slowly, by 21.9% over the decade, so employees per establishment fell from 9.3 to 8.7 (calculated from [2][3]). That is consistent with growth in labor-light conveyor formats, though the Census does not report formats, so the study does not rely on that reading. The latest year shows the pace slowing: establishments grew by 344, or 1.8%, from 2022 to 2023 (calculated from [13][3]). County Business Patterns lags about two years, so the study supplements it with a site-by-site count of washes opened, under construction and approved in the trade area.

Exhibit 4. Car wash establishments by employment size, 2023

Source: U.S. Census Bureau, County Business Patterns 2023, cbp23us, NAICS 811192 [3]. Shares calculated by FSC; published size classes sum to 19,803.

More than half of all establishments have fewer than five employees. That class includes self-serve lots and in-bay automatics at small sites, and many express tunnels run with a small crew per shift. The typical borrower is therefore an owner-operator or a small platform, which makes management depth, systems and the staffing plan central credit questions.

Where are car washes concentrated, and how saturated is each state?

Car washes follow population and vehicles, but not evenly. Ten states held 54.9% of all car wash establishments in 2023 (calculated from [14]), and the number of residents and registered vehicles per wash varies by more than twofold between states.

Exhibit 5. Car wash supply in the 15 states with the most establishments

Source: U.S. Census Bureau, County Business Patterns 2023 (cbp23st) [14], Vintage 2025 population estimates for July 1, 2023 [15] and 2022 Economic Census [1]; Federal Highway Administration, Highway Statistics 2024, Table MV-1 [16]. Ratios calculated by FSC.

Nationally there were 5.88 car wash establishments per 100,000 residents and 15,021 registered motor vehicles per establishment (calculated from [3][15][16]). The extremes are instructive. Wyoming had 10.26 establishments per 100,000 residents, Iowa 9.39 and Montana 9.38, while Mississippi had 3.53, Vermont 3.86 and Minnesota 4.03 (calculated from [14][15]). New Jersey had only 9,465 registered vehicles per establishment, against 21,775 in New York and 25,592 in Minnesota (calculated from [14][16]).

These ratios are a screen, not a conclusion. A state ratio says nothing about the corridor where a tunnel is proposed, and a low ratio can reflect climate, density or a large share of self-serve and detail establishments rather than unmet demand. Receipts per establishment, from $596,313 in Pennsylvania to $990,994 in New Jersey in the table above, partly reflect format mix. The study repeats the same arithmetic at the scale that matters: vehicles and households within each drive-time band, divided among the washes that actually compete for them.

Which car wash format fits the site?

The format that fits is the one the site, the market and the operator can all support, and the study documents why. Format drives every other variable: land area, stacking, capital cost, water and power use, staffing, the wash menu and whether a membership plan is central or secondary. A mismatch is one of the most common reasons a car wash pro forma fails: a tunnel squeezed onto a lot too small for its queue and vacuums, an in-bay automatic on a corner that could carry a tunnel, or a staffed full-service menu in a market that will not pay for the labor.

Exhibit 6. Car wash formats and what the study tests for each

Source: U.S. EPA, WaterSense at Work, Section 5.4 Vehicle Washes (November 2023) [17]; FSC study framework.

The EPA's guidance draws the technical distinction that matters most for conveyors: friction and frictionless washing. "Conveyors with friction wash cycles use less water per vehicle," because cloth curtains and mitters hold water and detergent between cars [17]. Frictionless washes rely on high-pressure nozzles, which affects water, power and chemical budgets. The study takes the equipment package from the sponsor's quotes and checks its stated water and electrical loads against the utility letters for the site.

The study then asks whether the chosen format fits the demand pattern. An express tunnel depends on volume and membership: it needs a dense trade area, a site that can queue a peak-hour surge off the street, and enough distance from competing tunnels to win a fair share of members. A flex-serve or full-service wash depends on ticket price and labor productivity, so it needs evidence that households in the trade area will pay for interior cleaning. An in-bay automatic at a fuel site depends on the fuel customer, so its demand follows the fuel and convenience traffic rather than the wider market. A self-serve lot depends on a customer who wants to do the work, often owners of trucks, trailers and boats, and on low operating cost.

Where does car wash demand come from?

Demand comes from the vehicles garaged and driven within a few minutes of the site. The study counts them from federal data, then narrows them to the households and drivers who will use a professional wash of this format, at this price, on this side of the road.

Nationally, 297,525,836 motor vehicles were registered in 2024, of which 97,413,321 were automobiles and 189,754,931 were trucks, a class that includes pickups, vans and sport utility vehicles [16]. The household count matters as much as the vehicle count, because membership is sold to households, and many households cover more than one vehicle.

Exhibit 7. U.S. households by vehicles available, 2025

Source: U.S. Census Bureau, American Community Survey 2025 1-year, table B08201, United States [18]. Shares calculated by FSC.

In 2025, 58.1% of U.S. households had two or more vehicles, and the average was at least 1.79 vehicles per household, counting the top class as four (calculated from [18]). The same table is published for counties, places and tracts, so the study builds the vehicles-per-household figure for each drive-time band from the tracts it covers rather than applying the national average. A band of townhomes near a rail line and a band of single-family homes with three-car garages can hold the same number of households and very different numbers of vehicles.

The study then layers in what drives wash frequency locally: commuting patterns, the share of trucks and sport utility vehicles, road salt and dust, pollen seasons, and income. It does not adopt a national "washes per vehicle" figure as a fact. That input is an assumption, labeled as such, and it is calibrated to the performance of comparable washes in the same market wherever their records can be obtained.

How is car wash capture rate calculated?

Capture is calculated in stages, band by band, against every competing wash, and each input names its source or is labeled as an assumption. A capture rate applied to a whole trade area measures the market, not the site. The question a lender needs answered is narrower: how many of those washes will this site win from the washes already there and the ones on the way?

The study builds capture in five steps:

1. Count vehicles by drive-time band. Households and vehicles in the 0 to 5, 5 to 10 and 10 to 15 minute bands, from Census tract data such as table B08201 [18].
2. Estimate professional washes. Vehicles times an assumed number of professional washes per vehicle per year, calibrated to comparable sites.
3. Allocate by format. The share of those washes that go to the format proposed, given the formats already present.
4. Take a fair share. The site's share in each band, against every competing wash in that band, adjusted for quality, access, side of the road and price.
5. Calibrate and split. A check against comparable sites' point-of-sale or customer-origin data, then a split into member and retail washes.

Exhibit 8. Capture build-up for an illustrative express tunnel

Source: FSC illustrative model. Households, vehicles per household, washes per vehicle and site shares are assumptions chosen to show the method, not market facts; a real study takes them from tract data, competitor surveys and comparable-site records.

Two lessons follow from even a simple build-up. The first is that share falls steeply with distance. A wash wins its near neighbors and competes hard for everyone else, so most of its volume comes from the closest band even though that band holds the fewest households. The second is that a blended capture rate hides the risk. In Exhibit 8 the site wins 11.5% of the trade area's washes overall, but that average is the product of three very different shares, and a new tunnel opening in the 5 to 10 minute band would cut the middle row far more than the blended figure suggests.

The fair-share step is where most of the work sits. The study maps every competing wash in each band with its format, tunnel length or bay count, menu and membership price, its side of the road relative to the commuting flow, and how it is reached from the main road. A comparable tunnel on the inbound side of a commuter corridor can hold a near-monopoly on morning traffic that a technically superior site on the outbound side cannot win back. The shares are then tested against what comparable sites actually achieved, which is why point-of-sale exports from operating washes are the most valuable evidence an acquisition or a second-location study can obtain.

Required capture is the same arithmetic run backward. The study computes the washes per year the wash needs to reach the coverage the lender requires (Exhibit 18), then divides by the washes available in each band to show the share the site must win. When the required share is well above what comparable sites achieve, the conclusion says so.

How do traffic counts, access and stacking decide throughput?

Traffic counts show exposure, but access and stacking decide how many of those vehicles can actually enter, queue and wash. The study uses state DOT counts as screening evidence, cites each count with its year, and then times the site's ingress and egress at weekday and weekend peaks, because car wash demand is decided in the moment of passing.

State counts come with caveats that a study must carry into the file. Colorado's traffic data, for example, publishes an annual average daily traffic estimate for each station together with the year the station was last counted, so a 2025 estimate can rest on a count several years old.

Exhibit 9. State DOT traffic counts: estimate year versus count year

Source: Colorado Department of Transportation, Online Transportation Information System, traffic stations in Douglas County [19].

The table makes two points. A freeway carrying 195,000 vehicles a day is exposure, not access: drivers cannot turn into a wash from a freeway lane, so the count that matters is on the arterial and at the signal that serves the site. And a figure published for 2025 may rest on a 2019 count, so the study states the count year and, where the count is old or the corridor has changed, commissions or obtains a current count.

Access is then tested on the ground. The study records curb cuts, medians, signal timing, turning restrictions and the distance from the entrance to the nearest intersection, and it observes whether a left turn into the site is realistic at the hours the wash is busiest. A site that can be entered only by a right turn from the outbound direction will draw mainly from that direction.

Stacking is the last constraint. The queue must hold the peak-hour arrivals without spilling into the street, and local codes increasingly set the standard. When the City of Novi, Michigan, took up a zoning text amendment on February 23, 2026 to reclassify auto washes "from Principal Permitted Uses to Special Land Uses in the B-3 District," the draft carried a set of use standards [20].

Exhibit 10. Use standards in one city's 2026 auto wash amendment

Source: City of Novi, Michigan, City Council packet for February 23, 2026, first reading of Text Amendment 18.306 [20].

Standards like these decide whether a format fits a parcel before any market question is asked. A 100-foot residential setback that includes stacking and vacuums can remove a third of a small corner lot from use, and a 2-acre minimum rules out many infill parcels. The study therefore confirms the zoning district, whether a wash is permitted by right or by special approval, the stacking rule, the setback rules and any decommissioning requirement, and it sets throughput from the queue the site can actually hold.

How is market saturation measured, and what is in the pipeline?

Saturation is measured site by site: the vehicles and households in each drive-time band divided among every wash that competes for them, including the washes approved or under construction. The state ratios in Exhibit 5 are a starting screen. The question for the lender is whether this corridor can absorb one more wash at the volume the pro forma assumes.

SBA names the risk directly. "Market saturation by industry type and location" is the first condition listed among those that may cause SBA to request a feasibility study [4]. A study for a car wash in a busy corridor should expect that question and answer it with a full inventory.

The supply survey records, for each competing wash: format, tunnel length or bay count, opening date, menu and single-wash prices, membership prices and tiers, hours, vacuum count, side of road and access, and the observed queue at peak times. The pipeline is built from planning commission and council agendas, site plan approvals, building permits and utility tap applications in each jurisdiction that touches the bands. A wash approved a year ago and not yet built is still competition for the loan's repayment years.

Local governments have started to act on saturation themselves, and the ordinance record cuts both ways. A moratorium or spacing rule can block a proposed wash outright. For an existing wash being acquired or refinanced, the same rule can protect it from new entrants.

Exhibit 11. The local ordinance record: recent car wash actions in three cities

Source: Municipal records of each city, as cited.

Mission's ordinance states its reasoning plainly: "the car wash use is a prevalent business model that requires the consumption of large volumes of water" [23], and the moratorium finds the city "currently experiencing conditions of water shortage and drought" [24]. Novi's packet notes "an increased interest by the development community seeking approval to build new auto washes" [20]. The study searches the record for every jurisdiction in the trade area, reports any moratorium, spacing rule or pending amendment, and recommends that the loan not close until site plan approval is final and appeal periods have run.

How should the study model an unlimited wash club membership?

From the bottom up: gross new members each month, monthly churn, the tier mix and the price of each tier, modeled month by month. A membership base is never set as a percentage of revenue or copied from a mature operator's network average, because the number of members a site can hold is the outcome of two flows, sign-ups and cancellations, and both are specific to the site and the operator.

The arithmetic behind the steady state is simple. A wash that signs up a constant number of new members each month, and loses a constant share of its members each month, converges on the point where monthly cancellations equal monthly sign-ups. That point is sign-ups divided by churn. At an illustrative 250 new members a month and 7.5% monthly churn, the base settles at about 3,333 members; at 4.5% churn, the same sign-ups support about 5,556 members, 66.7% more. At an illustrative $30 average monthly price, 3,333 members produce $100,000 a month, or $1,200,000 a year, in member revenue. Churn is the assumption with the most leverage in the whole model, so the study states its churn input, its source and its downside case.

The membership check above runs that arithmetic. It takes three inputs, gross new members per month, monthly churn and the average monthly membership price, and returns the steady-state member count, monthly member revenue and annual member revenue, along with how much larger the base would be at a lower churn rate. Its default inputs are illustrative, not benchmarks and not a feasibility conclusion. A study replaces them with the site's own evidence: sign-up rates from comparable openings or, for an operating wash, the point-of-sale export of members, cancellations and revenue by month.

Exhibit 12. Steady-state members by sign-ups and churn

Source: FSC illustrative arithmetic. Steady state equals monthly sign-ups divided by monthly churn; average member life equals one divided by churn. Inputs are assumptions, not market data.

The grid shows why two pro formas with the same sign-up assumption can differ by more than half in member revenue. Moving churn from 4.5% to 7.5% cuts the steady-state base by 40% at every sign-up level, and moving it to 10.5% cuts it by more than half. The study therefore shows member revenue at the base-case churn and at a higher churn as a downside case, and it reports the coverage that results from each.

Several details decide whether the inputs are credible:

• Gross and net sign-ups. A promotional first month at a deep discount can produce a burst of sign-ups that cancel early. The study models promotional cohorts separately from full-price sign-ups.
• Voluntary and involuntary churn. Cancellations by choice and failures of the stored card behave differently, and the second can be reduced by billing practices. An acquisition study reconciles both from the billing records.
• Tier mix and price. Member revenue is the sum across tiers, each with its own price and its own churn. A plan that sells mainly the entry tier needs more members for the same revenue.
• Family and fleet plans. Plans that cover several vehicles change the relationship between members and washes. The study tracks memberships, vehicles covered and washes per vehicle as three separate quantities.
• Wash frequency. Members wash more often than retail customers, which matters for throughput and for variable cost. The study takes wash frequency from point-of-sale data where it exists and checks that peak-hour queues can absorb it.
• Price increases. A plan that raises prices on existing members trades churn for revenue. The model shows the effect on both.

How long does a new car wash take to stabilize?

Longer than most pro formas assume, because a membership base fills gradually even when sign-ups start strong. The study models the ramp month by month and states when the wash reaches the coverage the lender requires.

The same steady-state arithmetic explains why. If sign-ups are constant from the first month, the share of the eventual base that a wash holds after n months is one minus (one minus churn) to the power n. With churn at 7.5%, a new wash holds about 60.8% of its eventual base after one year and 84.6% after two; with churn at 4.5%, it holds only 42.5% after one year and 66.9% after two. Lower churn gives a larger base but a slower approach to it.

Exhibit 13. Share of the steady-state member base reached, by month and churn

Source: FSC illustrative arithmetic, assuming constant monthly sign-ups from opening: share reached equals one minus (one minus churn) raised to the number of months. Real openings rarely have constant sign-ups, so the study models the sign-up curve itself from comparable openings.

The arithmetic flatters the ramp, because real sign-ups are not constant. They usually peak around a grand opening, settle, and then rise again as the brand becomes known in the trade area, while a competing opening can cut them at any point. The study therefore models the sign-up curve itself, using the opening history of comparable washes where it can be documented. Retail washes follow their own curve and are projected separately.

The ramp sets the financing structure. SBA's 504 rules require a minimum of two years of projections for projection-based projects, and "if the projections show repayment in Year 2 but not in Year 1, sufficient liquidity must be shown to cover the shortfall in Year 1" [4]. Under 7(a), projections must reach coverage of 1.15 within 2 years from loan funding or, for construction projects, from the end of construction [4]. A wash that reaches only 60% of its steady-state member base in its first year will often fall short of coverage in that year, so the study sizes an interest reserve or working capital for the months before coverage, and makes that reserve a condition of the conclusion when the budget does not fund it.

How are retail washes, pricing and ticket mix projected?

Retail washes are projected separately from member washes, with their own volume, menu mix and price, because the two lines move differently. Members pay monthly and wash often; retail customers pay per visit and can be lost to a competitor's membership offer or to weather. A blended "average ticket" times "cars per day" hides that difference and is not used.

The retail projection starts from the price ladder. The study records the single-wash menu of every competing wash: the number of packages, the price of each, what each includes, and the membership price for the same package. It then places the subject's menu in that ladder and sets the expected mix across packages from comparable sites' point-of-sale data where available. A wash that prices its top package above the local ladder needs a reason customers will pay for it, such as a longer tunnel, better drying or included services.

Three relationships get explicit treatment:

• Retail to member conversion. Many members begin as retail customers. A strong conversion rate grows the member line and shrinks the retail line at the same time, so the study keeps the two consistent.
• Upgrade rate. The share of retail customers who buy the top packages drives the average retail ticket. The study takes it from comparable data, not from the menu.
• Discounting. Fleet accounts, coupons and fundraising programs lower the realized ticket. For an operating wash, the study compares posted prices with realized revenue per wash from the point-of-sale export.

Where state sales tax applies to wash charges, the study models whether posted prices include or exclude tax, since that changes realized revenue per wash. Exhibit 19 below sets out how differently states treat car wash sales.

What will water, sewer, electricity and chemicals cost?

They are budgeted from the equipment package, the utility rates that apply to the site and the volume the model projects, and each is checked against a published benchmark. These costs vary by format and by state more than most other lines, so national averages are not used.

Water and sewer. Water use is a function of format, equipment and reclaim. The EPA's WaterSense at Work guidance gives the basic equation: annual water use equals "Water Use per Vehicle x Vehicles Washed x Days of Facility Operation" [17]. Utility and state programs then set water-use thresholds that a new wash should be designed to meet.

Exhibit 14. Published water-use thresholds by wash type

Source: U.S. EPA, WaterSense at Work, Section 5.4 Vehicle Washes (November 2023); Colorado Springs Utilities, Car Wash Certification Program; Georgia Environmental Protection Division, car wash certification page and inspection form.

The thresholds matter for credit, not just conservation. In a drought, a city can restrict outdoor water use, and Georgia's program allows a certified car wash not to be treated as an outdoor water user [28]. A wash designed below the thresholds, with reclaim, is better placed to keep operating through restrictions. The study also checks the sewer side: impact and tap fees, the monthly sewer charge, whether the utility bills sewer on water consumed, and any pretreatment permit or surcharge for high-strength discharge.

Electricity. Conveyor motors, blowers, pumps, vacuums and water heating make power a major variable cost, and commercial rates differ widely by state.

Exhibit 15. Average commercial electricity price, August 2026 and August 2025 (cents per kilowatthour)

Source: U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, Average Price of Electricity to Ultimate Customers by End-Use Sector, by State [29]. Changes calculated by FSC. States shown are the ten with the most car wash establishments in 2023.

A commercial customer in California paid more than three times the Texas average in August 2026 [29], so the same tunnel can carry very different power budgets in the two states. The study takes the tariff that applies to the site from the serving utility, including demand charges, which can matter more than the energy rate for equipment that starts and stops many times an hour, and it budgets power per car from the equipment's rated loads.

Chemicals and supplies. Detergents, presoaks, waxes, protectants and tire shine are budgeted per car from the supplier's program and the projected menu mix, since premium packages use more product. In many states the operator also pays sales or use tax on these supplies even where the wash itself is not taxed (Exhibit 19).

Which wash water permits and environmental reviews apply?

It depends on where the wash water goes, and the state sets the rules. A wash that discharges to a public sewer usually needs the sewer owner's consent and must meet local pretreatment limits. A wash that discharges to surface water, to the ground or to a septic system is regulated far more tightly, and several states prohibit subsurface disposal outright.

Federal pretreatment rules set the floor for sewer discharges. A user "may not introduce into a POTW any pollutant(s) which cause Pass Through or Interference," and the specific prohibitions include discharges with pH lower than 5.0 and petroleum oil in amounts that will cause interference or pass through [30]. Local sewer authorities add their own limits, which is why grit traps and oil and water separators are standard in wash design.

Exhibit 16. How selected states regulate car wash wastewater

Source: State environmental agencies and rules, as cited in each row.

SBA environmental review. SBA's procedures list NAICS 8111, automotive repair and maintenance, among environmentally sensitive industries, "except for 'car wash only' facilities, for which a Transaction Screen is an acceptable starting point" [4]. The exception ends where fuel begins: "A Phase I should always be obtained if the business sells, supplies or dispenses fuel" [4]. A wash that adds an oil change bay or sits on a former fuel station site will need more than a screen, and the study flags the path early so the environmental report does not delay closing.

How do weather and seasonality shape the revenue curve?

Weather sets both the demand for washes and the days a wash can operate, so the study builds a monthly revenue curve from local climate data rather than applying a flat daily average. Rain suppresses washing on the day and for a day or two after; snow and road salt raise demand in winter; freezing temperatures can close a self-serve bay or force heated floors and doors in a tunnel.

Exhibit 17. Climate normals that shape wash demand in ten metro areas, 1991 to 2020

Source: NOAA National Centers for Environmental Information, U.S. Climate Normals 1991 to 2020, annual and seasonal normals for the airport stations shown [41]. "Not reported" means the station has no snowfall normal in the dataset.

The spread is wide. Phoenix averages 33.4 days a year with measurable precipitation and Seattle 156.2 [41]. Chicago averages 38.4 inches of snow and 121.3 days with a freezing minimum, which brings salt-season demand and freeze risk in the same months [41]. A membership plan smooths some of this, because members pay in rainy months too, but retail washes, sign-ups and cancellations still follow the weather.

The study therefore builds a monthly index for the site from local normals, the subject's own history where it operates, and comparable washes' monthly sales where available. It applies the index to retail washes and to member wash frequency, holds member revenue steadier, and then tests coverage month by month. A wash that covers its debt over the year can still fall short in a wet spring, and the reserve is sized for those months.

What does labor cost, and how is staffing tested?

Labor is budgeted from a staffing plan by shift, not from a percentage of revenue, and then checked against Census ratios. Across the industry, payroll took 29.8% of receipts in 2022 [1], and annual payroll per employee rose from $17,130 in 2013 to $29,378 in 2023, while employment grew 21.9% (calculated from [2][3]). Those figures mix full-time and part-time workers and every format, so they are a check, not an input.

The staffing plan starts from hours of operation and the peak-hour throughput the site must handle. An express tunnel may run with a site manager, a shift lead and attendants who guide vehicles onto the conveyor, sell memberships at the pay station and keep the vacuum area clean. Flex-serve and full-service formats add interior cleaners and detailers whose productivity, in cars per labor hour, decides the margin on those services. The study prices each role at local wage levels, adds payroll taxes and benefits, and tests whether the plan can cover open-to-close hours seven days a week with the turnover the local labor market implies. Membership sales are part of the attendant's job at many express washes, so the study links the staffing plan to the sign-up assumptions in the membership model.

What does it cost to build and equip a car wash, and how are reserves set?

The development budget comes from the sponsor's land contract, site plan, construction bids and equipment quotes, and the study tests each line rather than accepting the total. It checks that the budget includes everything required to open and reach coverage: land and site work, utility taps and impact fees, the building, the equipment package and installation, the pay stations and membership software, signage, vacuums, a contingency, interest during construction, working capital and the reserve sized for the ramp.

SBA's construction rules shape the budget. When the construction component of a 7(a) loan "is more than $350,000," the lender must obtain specified protections before construction starts, including evidence of the contractor's performance and payment bonds or an approved alternative [4]. For real estate, the maximum maturity is 25 years, and "an additional period reasonably necessary for the construction or renovation period may be added to the 25-year maximum maturity" [4].

A car wash wears out faster than most commercial buildings, because its equipment works in water and chemicals all day. The study therefore separates the building from the equipment in both the budget and the pro forma. It lists the major components (conveyor, arches, cloth, pumps, blowers, water reclaim, reverse osmosis, pay stations, vacuums), assigns each a replacement interval from the manufacturer's documentation and the operator's experience, and funds a replacement reserve in the operating budget so that coverage is measured after the reserve, not before it. For a franchised wash, the franchisor's equipment and remodel requirements in the franchise agreement are added to the schedule.

How many cars a day does a car wash need to break even?

Break-even volume equals the annual fixed costs plus debt service, divided by the net contribution of one car. The study runs it at three thresholds, 1.00x, the program's minimum coverage and the lender's own target, because a wash that only breaks even cannot meet a 1.15 coverage test.

Exhibit 18. Break-even and coverage volume for an illustrative express tunnel

Source: FSC illustrative model. Debt service is the payment on a $4.5 million loan at 10% for 25 years; all inputs are assumptions chosen to show the method. The 1.15 threshold is SBA's coverage test for projections [4].

In this illustration the capture estimate falls well short of the volume needed even to break even, which is exactly the kind of gap a study exists to find before a loan closes. The conclusion would be "not feasible as proposed," with the options that would change it: a smaller loan, a lower-cost format, a site with a larger near band, or evidence that capture would be higher than assumed. The numbers in Exhibit 18 are illustrative only. A real study uses the site's budget, its debt terms and its own capture model, and reports the break-even in cars per day next to the capture estimate so the lender can see the margin at a glance.

How do sales taxes treat car wash and membership sales?

Very differently by state, and the difference reaches both revenue and costs. Some states tax the wash itself, some exempt it, and some tax only certain kinds of wash; almost all tax the operator's purchases of chemicals and supplies when the wash is exempt.

Exhibit 19. Sales tax treatment of car wash services in selected states

Source: State revenue departments, statutes and rules, as cited in each row. Treatment of memberships, local taxes and mixed menus should be confirmed for each site.

Where the wash is taxable, the study states whether posted prices include tax and computes revenue net of it. Where the wash is exempt, the operator pays tax on supplies, which belongs in the chemical budget. Membership plans raise their own questions in some states, such as how a monthly charge covering washes, add-ons and vacuums is classified, and the study notes any open point for the borrower's tax adviser.

Which financing paths fit a car wash?

SBA 7(a), SBA 504, USDA Business and Industry guarantees for rural sites, and conventional bank or private credit all finance car washes, and each reads the study for a different test. The study is built to the strictest test likely to apply.

Exhibit 20. Financing paths compared

Source: 13 CFR Part 120 and 121.201 (revised as of January 1, 2026); SBA SOP 50 10 8.1; 7 CFR Part 5001 (revised as of January 1, 2026); USDA FY2026 OneRD notice, 91 FR 11272. USDA resets guarantee percentages and fees each fiscal year; confirm with the State Office.

SBA 7(a)

The 7(a) program fits owner-operated new builds, conversions and acquisitions up to $5,000,000 [7]. The business must be small: the size standard for NAICS 811192 is $9.0 million [8]. A start-up needs a 10% equity injection based on project cost [4], and SBA treats a business as a start-up if it has operated for "1 year or less" [4]. For loans over $350,000, the variable rate may not exceed the base rate plus three percentage points [7]; with the prime rate at 7.00% in November 2026 [55], that cap was 10.00% where prime is the base.

SBA 504

The 504 program fits real-estate-heavy projects. Because SBA lists car wash businesses as limited or special purpose property [4], the borrower must contribute at least 15%, or at least 20% if the project also involves a new business [4], and the regulation sets the same tiers [7]. CDCs must address whether the project property is limited or special purpose in their credit memorandum [4], so the study describes the improvements in terms the CDC can use.

USDA Business and Industry and REAP

For a rural site, a B&I guarantee can reach longer terms, up to 40 years subject to useful life [5]. A new business needs at least 20% balance sheet equity [5], and a feasibility study is mandatory above $1,000,000 to a new business [5]. For FY2026, USDA set the B&I guarantee at 85% for loans under $5 million and 80% from $5 million to $25 million, with a 3.0% initial fee [54]. REAP changed in 2026: under a final rule published October 1, 2026 at 91 FR 62600, projects "must already be fully built and operational before the applicant ever applies," with 12 months of actual savings data [56]. Water and energy efficiency equipment at a rural wash may still qualify after it has operated, but a REAP grant cannot fund the build.

Conventional and private credit

Without a federal guarantee, terms come from each lender's credit policy, and net-lease buyers evaluate the operator and the rent coverage of the individual site. A study written to the USDA five-component standard and the SBA coverage tests usually serves these lenders as well, and it adds the unit-level coverage a sale-leaseback buyer will ask for.

How does an acquisition study differ from a new build?

An acquisition study starts from the wash's actual records and tests whether they support the price and the debt, and SBA sets stricter tests for change of ownership loans. The lender's analysis must rest on "the three most recent year-end historical financial information" [4], and the study reconciles those statements to the point-of-sale system before any projection is made.

Exhibit 21. SBA tests for a car wash change of ownership

Source: U.S. Small Business Administration, SOP 50 10 8.1, Appendix 15 and Section B [4].

Car washes take card and cash payments at unattended pay stations, and memberships bill automatically, so the records are rich but need reconciling. The study ties monthly revenue in the financial statements to the point-of-sale export and to bank deposits; separates member revenue, retail washes and add-ons; counts active members, sign-ups and cancellations by month; and checks for discounted or complimentary plans that inflate the member count. It then asks whether the record will survive the buyer's plans: a new brand, a price increase, a conversion from one format to another, or a new competitor already in the pipeline.

Franchise or independent: what does the disclosure document add?

A franchised wash comes with a Franchise Disclosure Document, and the study uses it as evidence of cost and performance while testing it like any other source. The FTC's Franchise Rule sets the items every disclosure document must contain [57].

Exhibit 22. Franchise disclosure items the study uses

Source: 16 CFR 436.5, Disclosure items (revised as of January 1, 2026) [57].

Item 19 deserves care. A franchisor that makes a financial performance representation "must have a reasonable basis and written substantiation" for it [57], but the figures still describe the units included in the sample: often only units open for a full year, with closed and transferred units dropped. The study reads the notes, compares the subject's trade area with the sample's, and uses the figures as a range, not as a forecast. An independent wash has no such document, so its study leans more heavily on comparable sites, the operator's track record and the membership arithmetic.

How do a site study, a feasibility study, a business plan and an appraisal differ?

They answer different questions for different readers, and a lender's file often needs more than one.

Exhibit 23. Four documents a car wash file may contain

Source: SBA SOP 50 10 8.1; 7 CFR 5001.3 and Part 5001 appraisal rules [4][5].

A feasibility study contains no opinion of value. Where the program requires an appraisal, such as USDA when real estate collateral exceeds $250,000 [5], it is engaged separately, and the study reports stabilized income in a form the appraiser can reconcile.

What must a car wash feasibility study contain?

1. A conclusion first: feasible, feasible with stated conditions, or not feasible as proposed, with the conditions or changes spelled out.
2. The project defined: format, tunnel length or bays, menu, membership plan, vacuums, hours and any added services.
3. Program fit: SBA size and eligibility, the 504 special purpose tier, or USDA rural status.
4. The trade area in drive-time bands, with households and vehicles from Census data.
5. A supply survey of every competing wash and the pipeline, with formats, prices and membership offers.
6. A capture model by band, with a fair-share step and calibration to comparable sites.
7. A membership model from sign-ups, churn, tiers and price, with a downside churn case.
8. A retail projection with its own volume, menu mix and price.
9. A monthly ramp to stabilization for both lines.
10. Site findings: zoning and ordinance record, stacking, access, utilities, wash water disposal and the environmental path.
11. An operating budget from quotes, tariffs, a staffing plan and a replacement reserve, checked against Census ratios.
12. A development budget with sources and uses, contingency, interest during construction, working capital and reserves.
13. Coverage by month and by year at the program's threshold, with break-even cars per day and downside cases for churn, competition and weather.
14. A management assessment and, for an acquisition, the reconciliation of statements to point-of-sale data.
15. Every source and assumption listed, with model outputs labeled as such.

What does a car wash feasibility study cost, and how long does it take?

A car wash study is quoted as a fixed fee of $5,500 to $9,000, delivered in 3 to 6 weeks from the date the document set is complete. The fee is fixed in the engagement letter before work begins, is not a percentage of the loan, and does not change with the conclusion. The band covers express tunnel, flex-serve, in-bay automatic, self-serve and conversion projects; where a file needs a faster turnaround, the timing is agreed at scoping.

To start, the study needs the site plan with stacking and vacuum layout, the format and equipment package, the development budget or purchase contract, the franchise documents if franchised, the proposed loan structure and capital source, and, for an operating wash, three years of statements and tax returns with point-of-sale exports of members, cancellations, washes and revenue by month. Zoning approvals, any moratorium or spacing rule, and the operator's experience complete the set.

How does the study run?

1. Scoping: confirm the capital source, program, loan size and the tests that apply.
2. Document intake: site plan, budget, equipment quotes, utility letters and, for an operating wash, statements and point-of-sale exports.
3. Field and market research: site inspection at peak hours, the competitor and pipeline survey, and the ordinance record.
4. Model: monthly member and retail volume, operating budget, coverage, break-even and reserve sizing, with base and downside cases.
5. Review: the draft is checked against the lender's questions and revised only for new facts.
6. Final report: signed by Sarrah Allen, MAI, with written answers to the lender's follow-up questions. More about the practice is on the about page.

Can one study cover a second location or a multi-site portfolio?

Yes, if each site gets its own capture, membership and coverage test. A second location that shares a membership plan with the first can draw members from the existing site rather than from new households, so the study models overlap between the two trade areas and reports the net gain to the operator, not just the new site's gross volume. For a portfolio acquisition, the study reconciles each site's records separately before combining them, because a strong site can hide a weak one in a combined statement.

What happens after the loan closes?

The study's monthly model becomes the benchmark. Members, sign-ups, cancellations, retail washes and coverage can be compared with the projection each quarter, and a gap is visible early, while there is still time to adjust pricing, marketing or staffing, rather than at the first missed payment.

Download the evidence behind this page's exhibits (CSV, 505 data points with sources)

Who signs your study

FSC Consulting, Inc. is led by Sarrah Allen, MAI, a Member of the Appraisal Institute, who signs every study the practice issues. The certification page names the lead analyst who performed the research and modeling, the senior reviewer who checked it, the data sources used and the independence representations made, and both sign. The person who signs answers the credit officer's questions after delivery, as part of the fee.

Independence on a car wash file

• No ownership or operating interest in any wash the practice evaluates.
• No referral fees from equipment manufacturers, distributors, franchisors, operators or brokers.
• No advisory work for the operator of any wash evaluated within the prior 24 months.
• Conflicts are disclosed in the engagement letter before work begins, including prior work on a competing site in the same trade area. The sponsor or lender may terminate at that point with a full retainer refund.
• No advocacy work: the conclusion follows the evidence, whatever it is.

Quality and coverage

• Four-pass review: lead analyst, senior analyst, and a second senior reviewer who took no part in the primary analysis.
• Errors and omissions insurance of $1 million; a certificate is available before the engagement letter is signed.
• Licensed data: CoStar, IBISWorld, RMA Annual Statement Studies, Esri Business Analyst and Moody's Analytics.

More about the practice and the person who signs →