About the Episode
In this episode, host Evan Roberts sits down with industry veterans Jeff Pavone and Chris Jenks, CFA to break down the latest trends shaping the car wash M&A landscape. From bonus depreciation and dry powder deployment to the resurgence of larger check sizes and aggressive platform growth, the conversation dives into the forces driving today’s market cycle.
They discuss why membership models remain resilient despite consumer headwinds, how AI and technology are reshaping the customer experience, and what operators should focus on as competition intensifies. The trio also look ahead to 2026, exploring the role of private equity timelines, the return of flex-serve models, and why only a handful of disciplined operators will separate themselves as market leaders.
Check out the full transcript below
Evan Roberts:
Welcome to Behind the Business, the podcast where we dive deep into the stories, strategies, and trends shaping founder-led businesses. I’m your host, Evan Roberts, bringing you candid conversations with owners, sellers, and industry leaders driving growth and innovation. Whether you’re in the trenches or watching the market, this is your front row seat to the world of M&A and beyond.
Evan Roberts:
All right, guys, welcome. We have a lot of good stuff to chat about today—really excited to dive into it. I think the first thing I want to ask is: what’s driving the current market? Where are we at right now?
Jeff Pavone:
Yeah, Evan, the space feels like it hasn’t felt since 2022. Since June we’re seeing a significant increase in activity around the car wash space. There are several things driving it. First, when bonus depreciation passed—why is that significant? When private equity sponsors buy car washes, they typically unload the real estate. The investors buying that real estate can take advantage of bonus depreciation, which improves the cap rate. Bonus depreciation came into effect under Trump and was just put back in place around May. As soon as that happened, it made car wash real estate very attractive for the investor community. Lower cap rates meant the buying community could get more aggressive because there were more buyers for the real estate. That was a big driver.
Second, there’s a lot of dry powder sitting on the sidelines—this is true for M&A in general. With the economy stabilizing and the market doing well, that cash has to be deployed, and now feels like the time.
Third, after a reset in the space, buyers concluded the car wash business was very stable. They didn’t see anything overly concerning. Memberships felt sticky, so they’ve got both feet back in. These M&A cycles aren’t flat—they swing up and down aggressively. We’re now in an up-cycle, and it’s fairly aggressive.
Evan Roberts:
Before this ramp up, it felt like the industry took a pause. Chris, do you want to jump in on that transition from the pause to now?
Chris Jenks, CFA:
Definitely. At the heights of M&A activity in 2022, we saw a cool-down in 2023 and 2024, largely due to increased volatility in capital markets. When the cost of capital doubles quickly, you see a global pause in M&A—this wasn’t specific to car washes. Also, after a big absorption of units, strategics and sponsors needed time to integrate, test theses, and stabilize operations. That reset showed up not just in deal activity but also in valuation multiples.
Today, that pause created an opening. Strategics that were disciplined in early consolidation phases used the window—while others were stabilizing—to expand unit count meaningfully. The groups with operating muscle and disciplined capital deployment are accelerating in a big way. On the sponsor side, the membership-model thesis remains intact. Some sponsors who couldn’t get comfortable with 2022 multiples believe in the sector and are jumping in now. There are also structural factors in private equity: limited global M&A the last two years, a lot of capital on the sidelines, and pressure on DPI (distributions to paid-in capital). Sponsors are highly motivated to put money to work, and the car wash thesis is still strong.
Jeff Pavone:
One of the things we’re also seeing is the size of the checks buyers want to write. Credit markets were tight the last couple of years, limiting access to capital. Sponsors paused deployment. Today it feels like 2022 again: we’ve got more deals in the $50–$200 million range than we’ve had in the last two or three years combined, all in a short period. In general, the community wants to write bigger checks, which should make the next couple of years exciting for good operators.
Evan Roberts:
With this renewed, heightened cycle, how are car washes performing?
Chris Jenks, CFA:
Operationally, there are still some very well-run chains. Labor markets remain challenging. The Fed just reduced rates, partly due to signs of structural weakness in labor and poor consumer sentiment data. Benchmarking reports show single-wash and retail volume lower recently. That said, the membership model has stabilized cash profiles, unlike more discretionary businesses feeling the pinch of tighter consumer spending. A good analog is gyms—recurring revenue helps.
Jeff Pavone:
Over the last couple of years, the industry has been hyper-focused on operations. From small operators to large platforms, there’s a clear focus: you can’t just build it and assume someone will buy it; you have to perform. The good news: there are many well-performing assets, and operators doing a good job are being rewarded. The conversation has shifted from “Where are multiples?” to “What should I be paying for chemistry costs?” and “How do I optimize my labor?”—less about value, more about operational excellence.
Evan Roberts:
Performance is there, checks are bigger, memberships are sticky—and new technology is being implemented. How is that driving the market, and what’s next?
Chris Jenks, CFA:
We’re seeing awesome innovation, much of it centered on AI to better the business. A lot focuses on the point of sale (POS), because differentiation comes through customer experience. Using AI and tech to enrich CX is key. Table stakes are a dry, clean, shiny car every visit; the differentiation is in the experience. Next, innovation will circle back to the tunnel itself—advancements around the tunnel controller and potentially robotics.
Evan Roberts:
So what’s next down the road?
Jeff Pavone:
Over the next couple of years, a handful of players will aggressively grow their platforms. We’re already seeing evidence—new entrants acquiring initial assets and gearing up to scale, and continued growth among leaders like Quick Quack, L Car Wash, Spotless, and others. Expect significant growth and scale unlike before. The largest chains are around 500 sites; there’s plenty of room to grow. Many operators who were waiting on the sidelines may start to exit as multiples improve and buyers can write checks again. Beyond that, growth will come from operational excellence and discipline. The “get big fast” through M&A or new builds proved expensive; now it’s “get big through discipline,” but still move quickly.
Chris Jenks, CFA:
One more interesting point: early private equity entrants are hitting the 4–7 year hold window—Tidal Wave with Golden Gate Capital, Spotless with Access, Imperial with Go Car Wash, Red Dog behind Mammoth, and others. As they breach those bands, they’ll either transact or move to continuation vehicles. It’ll be interesting to see how the top-10 landscape shifts as early entrants decide what to do with their portfolios.
Jeff Pavone:
I wouldn’t be surprised to see some of these consolidate into one. The most significant trend you’ll see is high growth from leaders in the pack—separating them from others. I don’t see a status quo; I see a handful of groups taking off and leaving the rest behind.
Evan Roberts:
We’ve seen growth in the second half—how is it different from the first half, and where does it go from here into year-end?
Jeff Pavone:
It’s not a minor change—it’s significant. Over the past couple of years, the mindset was conservative: fill in platforms with small add-ons. In fact, only one $100M+ operator deal closed in a little over two years (we closed that in December last year). Today, we’re actively seeing many more $100M-sized deals, with buyers leaning into the platforms and geographies they want. Sponsors are paying up where they want to be. Check sizes are bigger, and the ability to close—and close quickly—is back.
Evan Roberts:
So with all that information, how do you see the rest of the year finishing off?
Jeff Pavone:
We expect several large deals ($100M+) to close, with momentum carrying into next year. Going from one such deal in 2+ years to several in the next quarter is a meaningful shift, and that momentum should carry into 2026. It’s exciting to have buyers leaning in with cash deals—recently, everything had to be heavily structured to fit the credit available. Today, credit is available to close.
Chris Jenks, CFA:
Looking beyond to 2026, expect continued momentum. After so much focus on the express-only model, other formats are coming back into focus as differentiators—flex-serve, automatics, etc. As the labor market loosens, more labor-intensive formats become more viable again. You could see more hub-and-spoke models that mix flex/full-serve alongside exterior-only operations.
Evan Roberts:
Awesome. Thanks for joining us—and we’ll see you next time. Thanks for listening to Behind the Business. To catch future episodes, subscribe to our newsletter at amplifycapgroup.com/subscribe. If you found value today, leave a rating, share it, and connect with us on LinkedIn. I’m Evan Roberts—see you next time.