About the Episode:
What can car wash owners do today to facilitate their business’s continued growth and success amid changing market conditions? How do the current headwinds impact access to capital? As Paul Sigfusson, this month’s guest on Car Wash M&A, The Podcast, shares with host Lanese Barnett, it is not all bad news for operators looking to grow. In fact, the very conditions that are causing some current market instability are also offering some unique opportunities to car wash owners looking to scale or sell.
Listen in to hear Paul’s thoughts about car wash capital growth options in 2023 and beyond. Paul shares his experience in investment banking, capital markets and private equity investing, why he chose to join Amplify, and how the industry is faring in comparison to other consumer services sectors and how car wash owners can use that edge to their benefit.
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More about Paul Sigfusson:
Paul Sigfusson joined Amplify as Head of Capital Solutions in November 2022 after spending the past 15 years in investment banking and private equity. Paul was most recently a Director on the KKR Private Equity team as a member of the Consumer industry team. Prior to that, he was a member of the KKR Capital Markets team supporting KKR and third-party investors on capital markets solutions. He played a role in KKR’s investments in First Data, Dollar General, Academy Sports + Outdoors, The Bay Club, Fleet Farm, National Vision, and 1-800 Contacts, among others. Prior to joining KKR in 2011, he was with Deutsche Bank Securities in the industrials and transportation investment banking group, where he was involved in a number of corporate advisory, debt and equity transactions. Paul earned a Bachelor of Science from Indiana University.
Check out the full transcript below:
Lanese
Welcome, everyone, to Episode 12 of Car Wash M&A, The Podcast. Today I have with me Paul Sigfusson. He is new to our team at Amplify. And we’re really excited to have him here today because he diversifies the experience and the background that we have on the Amplify team. I’ll let him share a little bit more about what his background is, but I’m super excited to have this first official episode of the new year as we start 2023, and look forward to all of the amazing conversations that we will have. So welcome, Paul, thank you for being on the show today. If you could just give our listeners a little bit about your background and where you’re coming from.
Paul
Yeah, thanks for thanks for having me. I think I’ve been a serial consumer of podcasts over time. So this is the first real donator back to to the ecosystem that is podcasting. I’m a huge fan. So thanks for having me on, and I look forward to sharing a bit about me, and where the Amplify platform is going. So, yeah, just a bit about my background, I started my career in investment banking at Deutsche Bank, right at actually the start of the global financial crisis. So an interesting time,
Lanese
No kidding!
Paul
As banks were consolidating, liquidating, you know, it was stressful time for the industry but really a great learning platform. And I was super grateful to individuals and clients that I had a chance to work with and alongside, and I was able to capture really a great base understanding coming out of undergrad around the global financial markets, including the global capital markets, M&A advisory, debt equity structuring and placement. It was just a really great initial job coming out of school, and I’m forever grateful to the platform that it provided. After three years at Deutsche Bank, I transitioned to KKR, which is a global alternative investment firm. I spent the last really 11 plus years there in two primary roles. The first in New York was focused on capital markets and capital structure advisory. Simply put, we were really an internal team that was focused on providing highly aligned and tailored advice to our global portfolio of investments across public and private debt and equity securities. And we thought about ourselves in that role, really, as the nucleus of the firm. We saw everything that went in and was a part of most transactions that KKR was involved in globally, which was a great seat and a great, great place to, again, continue to further my understanding of the capital markets in depth in that area. But if folks aren’t familiar with a private equity transaction, it typically consists of a small portion of debt and a small portion or a big portion of equity funding that’s used to buy a controlling interest in the business. And both of those components are very interesting and very important for those transactions. As I thought about the time spent in the capital markets and advisory area, you know, we were really a very internally focused aligned group finding the best possible capital funding sources for our investment teams globally. And it was, again, a great place to learn about the capital markets and obviously a place that again… I met some great people and really furthered my career. And then in 2015 / 16 time period, I moved to the west coast and I transitioned into the consumer private equity team, which was really focused on making investments in In North America but connected globally.
Lanese
And give us an idea of like some of those businesses and industries that would be included in that.
Paul
Yeah, sure. We thought about ourselves covering three primary verticals: consumer products, consumer services, and e-commerce. So those were the three places, and I had been interested in retail and the American consumer. I mean, I think about that it’s the lifeblood of our economy. And I had amazing opportunities to invest time and resource and energy behind great investments, like National Vision, a public optical retailer, Academy Sports and Outdoors, 1-800-Contacts are a few examples of investments that I was a part of, and making and executing behind. But more importantly, I got to know and hear and see great leadership teams over time. And so this was a great opportunity to understand that advisory role, understand the investment lifecycle from making the investment through the value creation initiatives that go a part of it all the way through to ultimately exiting and monetizing these. And really in this role, over the past couple of years, I got hyper focused around the auto services landscape, which is where I was really introduced and got to know a little bit about the car wash industry.
Lanese
How did car washing become the key focus of that, as you’re, you know, exploring the automotive industry and you’re diving in deeper? And then how did you get connected with our team at Amplify to come over here and join us?
Paul
Yeah, I’m super excited. I mean, it’s a great team. I feel very fortunate in my career to have had incredible mentors who invested an enormous amount of time behind me and, of course, I’ve always thought about my career as a two way street. While I’ve feel like I’ve worked hard in various roles I’ve had, I’ve always felt like I was rewarded for that hard work by the time and folks that invested behind me, and I see that opportunity here. Really, if I can sort of outline three things that I loved about my time and enjoyed at KKR, I would say, the first is the founding principles of what we did was [the idea that] you do business with people you like and trust. This was instilled from the top from the founders, that organization, and I feel like we lived by that every day. And always doing right for the client is always going to be the right outcome. And, you know, what Jeff and Bill and the team have built is built on that principle. And so I see a lot of that. The second would be this entrepreneurial edge; if you’re not continuing to innovate, if you’re not continuing to sort of grow your career, or grow your capability set, you’re going to sit back and get left behind. And I see that entrepreneurial edge in this organization; it’s a small nimble organization. The last would be really a deep and experienced team. And while it’s not a global organization, like KKR, and it doesn’t have the depth of resources and capabilities across industries, you know, it does have something of significance in the car washing space, which is, you know, real deep understanding, a long tenure of operations multiple decades across the operations of a business, technology capabilities of the business, and, of course, the advisory aspects of these businesses. And so, you know, these are things and principles that I feel like are very strong tenants of a really healthy and strong organization. And I’m super excited to continue to grow that capability and build upon what’s already sort of existed here at Amplify.
Lanese
Well, thank you for sharing that, Paul. We met just a short time ago, but when we did, I felt very comfortable around you, and you have a lot of the same like-minded thoughts that we do value as an organization and as individuals as a part of this larger organization. And two things that you just said that I found really interesting: one is talking about the consumer services being, you know, kind of the lifeblood, and there’s something that really strikes me about that because how people behave and how they consume products and services really gives an insight into people and their daily habits and what they value and how they prioritize their day and their money. So one, I find that super interesting. And two, looking at the the work aspect of it, and why you joined amplify, in particular, is the relationship value. And that, you know, we do… doing business with people that you respect and that you want to do business with, like you said was a guiding practice at KKR, totally is something that we identify with is, you know, we want to have these long term relationships where we’re bringing value to them, and we’re… it’s that two way street, even amongst our clients as well, that they can trust us and that we also trust the relationship back. I just love those two things that you said, so thanks for sharing.
Paul
Yeah, absolutely.
Lanese
As we’ve kind of talked about your transition into the car wash space in particular, what are some things that you’re you’re excited about learning more about in the car wash industry or that is just fueling that interest further about kind of what’s going on and how it’s evolving as we head into 2023 and beyond?
Paul
Yeah, maybe I’ll just start by saying, you know, similar to the reasons why I joined Amplify, it’s all about the people. I continue to be impressed by the individuals that I’ve met over time in this space. And as the industry grows, that network will only get better. I, in my approach to this space, am largely driven by an investor’s perspective. And so I will be a bit biased in that. I’ve never really been an operator in my career; I’ve been a banker, a capital markets advisory specialist, and an investor. And those are different aspects of the value creation model behind car washing, but they’re different than the core operations. And so I look forward to sort of learning more about that. But given the perspective and the pattern recognition that you see in evaluation of investment opportunities, not only in the car wash space, but across the consumer services landscape, it kind of forms a point of view. And from that perspective, the world continues to rapidly evolve and change. And of course, that’s also the case in the car wash business. And so as a consumer first business, consumers are winning through choice and new services. And that’s an exciting aspect of where the car wash business is going. In addition, with technology, I feel, from my perspective, it is still in the early innings of its evolution in this space. And so this digital first experience, a consumer touches and feels the operational improvement through digital implementation tools that support decision making in the business… There’s always a balance with technology, of course, but there are some exciting tools that are being used in and outside the industry that will continue to drive consumer behavior, retention, in the way that the ultimate decision maker, that consumer, sort of behaves in this segment.
Lanese
Right. And, of course, as operators, which is who our show is geared towards especially, knowing what tools and resources they have available to them to strengthen their businesses and make sure that if they are looking to fund growth, if they are looking to make an exit at some point, that they’re really protecting the value of their business, and also protecting and increasing their cash flow now, so that they’re they’re making money today, but they’re also protecting that value in the long run. Let’s talk a little bit about that. And then what your perspective, from an investment banker, what does the economic uncertainty that we currently have, and that we have for the foreseeable future, what does that mean for operators? And what can they be thinking about to protect their businesses or to strengthen them even?
Paul
I think it’s probably helpful, Lanese, to just kind of level set a little bit in terms of, you know, what’s happened over the last couple of years. And I viewed that time as more of an aberration, and we’re now entering a period of normalization. We were living in a very distorted time period over the past couple of years. And I can probably just share two examples in terms of how I think about some of the macro environment and what’s been happening, and then how that can shape some of the future thinking around it. I’m not a macro economist; I can’t predict the future. And I don’t think any of us should try, but we can control what we can control. The first real change over the past 12 months is cost of capital. You know, I, as an investor, was very focused on one singular primary metric when we evaluated investment opportunities, and that was return on invested capital. A simple way to just kind of frame what’s happened in the industry is the payback period of making a capital investment in this space. And so, you know, we can put some dummy numbers around this just to paint the illustration, but it’s really going to sort of change behavior longer term, which is as the Federal Reserve increased interest rates, and the cost of debt financing sort of materially increased over the past 12 months, and we’ve seen some inflation and building costs, you know, you went from 2020-2021, or even before that, building costs may have been slightly lower, and your interest costs were nearly zero as a base rate cost of capital on top of some credit spread that a bank would issue. As you think about the translation into cost of capital and the impact of making a return, you used to get paid back for making an investment in the car wash space in two to three years, under some normalized scenarios, and they can vary greatly. But if you include a 50 to 100% increase in cost of interest rates of financing that car wash, as well as continuing to sort of double down the operations, that cost of capital and that return on investment is getting close to double where it was prior to the past 12 months and what we’ve seen. And so, what that’s going to force in this industry — and I think it’s a healthy thing, again, back to this period of normalization — that’s going to force investors as well as sort of operators to just make sure they’re thinking twice about capital deployment. Is this a productive form of capital deployment in the space? These are capital intensive units. And I think that’s a very healthy part about the industry. It won’t be growth for the sake of growth. We talked about cash flow, and that’s an important piece. The other is valuation. And obviously, there’s various different ways to think about valuation. But, you know, let’s just take, for example, the one public comp in the space that’s out there, pure play public comp… If you take the valuation from the first half to the second half, for each 100 basis points of Federal Reserve increase, and we went from zero to four and a half today, and probably going up even more, that’s really reflected a pretty material decline in valuation to the tune of high single digits per 100 basis points. So that’s been a material impact on both capital, capital availability, return on investment, and valuation. And that’s distorted. So that’s just a level set, as we’ve seen the economic conditions change over the past few years. But then as we think about forward looking, you know, how can an operator think about preparing? I love the way that Jeff at Amplify thinks about this and talks about Car Wash 2.0: focus on what you can control in the operations of the business, and start to scenario plan. I can’t be the one to predict the environment going; I can’t tell you, we’re going to have a prolonged consumer uncertainty or contracting spending behavior environment. Or maybe it’s the opposite: how do you plan for an alternative in a more resilient consumer? But what you can do is plan for multiple different scenarios. Understand how your business is going to behave from an analytics perspective in any of those different scenarios, and then focus on the data you have access to. There are all sorts of different quotes that I love to sort of delve down into. But, you know, “what gets measured gets managed” is a great one. In these environments, it’s really important to double down into the data that you have access to and in how you can sort of manage your business better. And then, you know, lastly, just in terms of scenario planning, and starting to think about the future, it’s always been difficult in a rising tide environment. So the environment where everybody’s being lifted by low interest rates, the conditions are pretty benign, it’s very difficult to differentiate your brand in that environment. And I think about the conditions in a more uncertain conditions setting as an opportunity in this is to double down on yourself, your operations, your people, in how to go out-execute for the consumer, and at the expense of your competition. All those things will add up into helping, you know, prepare operators for the uncertainty that is in front of us, which no one can really sort of paint out in a clear picture.
Lanese
So Paul, you talked a little bit about some of the growth options for car wash operators. And I think it would be beneficial for them, too, to hear about how the change in valuations and things like that have have opened up doors for new entrants to come into this space. And, in particular, we’ve had some recent announcements that we’ve seen about acquisitions and new companies coming in. So what does that look like? And what does that mean for for the car wash owner themselves about these additional parties that are interested in the car wash space?
Paul
Yeah, it’s a great question, Lanese. I think capital is forming in different ways. And there continues to be plenty of capital looking and evaluating the space, so that’s a very positive thing for car wash owners. But I think it’s been evolving and will continue to evolve. And I’d characterize it really in three buckets. One, you have the small and medium size operators that, you know, are the vast majority of the space and will continue for quite some time to be that way. And they have existing and new growth that they’ll continue to fund, so that that’s a big source of growth in the space and big opportunity that continues to exist. The second bucket would be private equity, which has been a material contributor to capital growth over the past decade and continues to have large sums of dry powder of committed capital available to them. I think I read a statistic in December that their dry powder, which is committed, unfunded capital, to private equity as a whole is approaching $2 trillion. So still a large sum of money out there and that goes across multiple different sectors. And then a new entrant which I would call the corporate segment… And a good example, as you mentioned, would be the Couche-Tard acquisition of the True Blue portfolio, where you have a very well capitalized investment grade public company making in a small wave into the segment, and I think that is a very unique case study, and one that I don’t think will be the first or the last in the space. And these investment grade operators have access to very cheap capital; this is the highest grade of credit exposure, so the highest quality of credit exposure is how they would deem that, and these are well capitalized, well funded and strategic entrants into the space. And so there’s a new entrant coming in. And I think that’s very interesting to note.
Lanese
Right. And as you said, this is probably the beginning of additional groups that maybe had been kind of on the sidelines prior, that had been eyeing the space, are making an entry point, because the winds have shifted a little bit. And so that actually makes it more attractive for them and gives a greater opportunity to go ahead and make a meaningful investment.
Paul
Yeah, and as you think about the sources of capital each one of these pools have access to, I think that small and medium size on the left side and the corporates, the deepest pocket investment grade operators on the right side, and the private equity in the middle… that whole middle section, which goes back to this predictability and stability of the markets, has really been sort of sidelined. It’s been very difficult for them to raise capital, debt-financing capital, over the past six or nine months as those markets have been frozen. Although there’s deals getting done; it’s not completely frozen out. It’s just more challenging, and they have to get more creative. And so that small or medium size operator that has access to commercial lending at the local level at very attractive rates and the corporates at the investment grade are very well positioned right now.
Lanese
Right. And you talked about the stability. So do you see that, even though we’ve entered this period where there’s some economic instability, but really, because of this normalization of valuations, that this is creating a more stable environment going forward? Because things have calmed down, and they’re more realistic or more normalized then than they were previously?
Paul
Yeah, I think as you look at the normalization of valuations, that’s a healthy thing for transaction volume. You know, I think we can also, it’s probably fair to say, we’re at the later stages of the Fed hiking cycle than at the earlier side. And that all contributes into that predictability and stability and ability to underwrite a deal and understand that variables. Investors do a very good job understanding and controlling the controllable. And when these macro shocks, or external events that create a lot of uncertainty creep in, that’s where you get these periods of volatility, which is what we’ve been experiencing over the past six or nine months. And as the environment normalizes and transaction volume continues to pick up, of course, it’s a great time to continue to sort of invest behind a really stable industry with very sound unit economics in an excellent growth trajectory. And I think you’re going to continue to see those that were interested, continue to be interested in this space.
Lanese
And the operations that they’re going to be interested in are still going to go back to that foundation that we were talking about the very beginning, the ones that have strong cash flow, that have strong foundational… their leadership team they have, they provide excellent service, they’re protecting their memberships, they’re focusing on the infrastructure of the organization and the health of the organization operationally. Those are the ones that command the most value, because they have what is needed to keep growing that business.
Paul
Absolutely. All operators are not created equal. Those that can go and create a very sustainable well-functioning operational capability in their organization are going to be well-suited longer term for that.
Lanese
You were talking about some of the different scenarios that they can prepare for. Can you give us an example of what types of scenarios those might be?
Paul
Yeah, it’s sort of thinking through your existing p&l, understanding what a smaller growth rate than maybe what you experienced last year might do to your p&l. How do you more aggressively manage some of the costs in your profit and loss statement? How do you understand the different variables that that can assess. What happens if you have 100 basis points of attrition versus 100 basis points of increase in your membership retention? What do these variables do in your business? And how do you offset those to continue to sort of manage your cash flow through these time periods? Cash is king, and the fundamentals of this business allow for a very profitable unit economic to sort of come through, and if you can manage those variables and prepare for the different variables that can come through, then you can effectively manage through the downturn and get to the other side on a better and stronger footing.
Lanese
Yeah, absolutely. All the work that the operators are putting in and pouring back into their business to make it stronger today, to be leaner to be more efficient, that it is helpful today, but it also drastically pays off in the future by protecting that value and by having that already established as they move forward, especially as we enter different periods where maybe it’s easier to fund growth, or you can start growing again at a faster rate that you have the foundation in place. For car wash operators and owners that are still interested in taking a maybe a conservative growth strategy, what are some of their opportunities to fund that growth today? Or in the foreseeable future? And what options do they have?
Paul
Yeah, I think it’s still a really interesting time and space. And I think as things have normalized, I think it could be even more interesting, I think about capital deployment in ’23 as being potentially one of the better times to deploy capital as a capital allocator going forward. So I think it’s still a very interesting time.
Lanese
Let’s pause there. Why do you think that?
Paul
Yeah, look, I mean, I think you’ve seen a big reset in valuations. If you deployed capital over the last couple of years, it was at a different valuation than potentially what it is today. You know, despite the macro uncertainty, this is a very strong… it has very strong under pins to its business model, which are economically resilient over time and have proven that. I think, if you think about going back to the global financial crisis, this industry, based on various different sources, has declined maybe low single digits. And, you know, the creation and implementation of a membership base today is certainly more helpful than what the structure was during that time. And as well as consumer adoption… There’s more awareness from the consumers’ perspective around what a car wash can really offer. And I think those things make their earnings certainly more resilient, and their earnings base more resilient than it has been in the past.
Lanese
Yeah, absolutely. I totally agree. And back to our question that I interrupted you from, what are some of the capital options that car wash operators have? What can help them fuel and fund their growth?
Paul
Yeah, I think it’s helpful, again, to start maybe at the macro level, which is to say, there are portions of the capital markets that are very unhealthy today. And that’s really driven by the incredible dislocation that’s been caused over the last 12 months with interest rates rising. And the changes… These markets tend to thrive on predictability and some degree of stability. And that hasn’t been the case over the past 12 months or so. And so that all being said, there are pockets, and there is broader support, and there is growth in this industry that is continuing. If you took, on a relative value, a debt… Let’s just take a private debt lending pool of capital that has a diversified allocation to industries — healthcare, consumer, industrial — you know, car washes, on a relative value basis would be a strong performer in that portfolio today, driven by the continued resilience of these business models. And that’s a very healthy thing for the broader capital markets in attracting additional capital. So you still have access, and there is still a well functioning bank lending market at the commercial bank, at the hyperlocal level. There is plenty of direct lending debt capital. There are creative minority equity partners; there is still a functioning real estate market. All of these still exist today, and are continuing to sort of build support and continuing to have more and more interest in them. I think in this market, and in a more challenging, sort of more uncertain time, it takes more creativity between the operator and the financing partner to come up with the appropriate solution that’s right for that operator. But there is plenty of capital out there for people to find solutions for growth. And I think people should be excited about that the growing interest in this space.
Lanese
It is amazing how… I don’t know the exact timeline on it, but the interest and the interest level, even from like an operator level that when you would say, “I work at a car wash,” you know people would be kind of scoffing or asking, “What do you do there?” And now it’s more, you know, “how do I get in?” So that’s been a really interesting part of my car wash journey is just the perception outwardly in general. And then also, of course, on the institutional investment level that this has garnered so much attention because of the various attributes that you mentioned about its resiliency and all the different things that make it attractive. But that’s that’s been a neat part of the last probably 10 years especially.
Paul
Yeah, I don’t think you can say anything to the contrary that the support system around pools of capital in the car wash space are growing and will continue to grow.
Lanese
Well, that’s good news. So we’ll take it. Let’s talk about that a little bit as compared to other consumer industries in particular that maybe you have some experience with of why that is so.
Paul
Yeah, again, maybe I would… And this is obviously a space in terms of other services sectors that I’ve evaluated as an investor, and so I would again come at it from the investors perspective. And I start, when I think about the different consumer services options… And just to name a few sectors, so people can have a good understanding of other services sectors, there’s healthcare services, I would include optical, veterinarian, pet in that category, there’s home services as an example, so HVAC, plumbing, electrical, lawn, pest. And then, of course, auto services. And that’s a whole ecosystem in itself outside of just car washes, like tires, oil, collision, maintenance, all those type of different sectors. And so, you know, I come at it from the perspective of various different ways in which services touch the consumer. And from an investor’s perspective, I start by thinking about the disruptive trends in those spaces. And there are plenty of disruptive trends across these consumer services verticals. It’s been a perpetual topic of discussion around “how Amazon-able is your business model?” for the last 20 years. I mean, just think about the bookstore and the classic example of how dislocated and disruptive Amazon was for that business. And when you do that, the long-term position in the car wash space is very attractive. And it’s not the cheapest in terms of capital investment or build versus buy. But it has a durable long-term earnings profile that’s very interesting across those consumer services sectors that I think is where I zeroed in on. And when you zero in on specifically into the auto services space, and you think about some of the electrification trends and the electronic implementation in cars, and the future mobility, I mean, these are mega trends that exist in the space. And we don’t need to dive into having an opinion one way or the other. But those trends have varying different impacts on the ecosystem in the services world, and in particular the auto world, and car wash has a lot of defensabilities against some of these characteristics, as I think about disruptive themes here. And so, it continues to be a place where consumers enjoy; it’s a consumer service that puts a smile on somebody’s face. I think you hear a lot of operators talk about that. I love hearing that. And ultimately, it provides a consumer convenience and value proposition that is really interesting and really, really valuable to somebody over time.
Lanese
Right. And something that comes up a lot, maybe a little less so now, but it’s still relevant is the idea of saturation in this market or in various regions. It’s something that I had a great conversation with Jeff about a while back, using Phoenix as a case study. Phoenix has more large car wash chains per capita — I don’t know the exact statistics there, but let’s just argue that there’s plenty there — but that they’re successful, and that the broader consumer trend of adoption of professional car wash services, particularly Express car wash services, doesn’t show any signs, even in a weaker consumer environment — that it’s still something that they find value in. And hopefully, as an industry, we can lean into that and and that spurs us to provide better services and make that a stronger connection and relationship with consumers that this is the last thing that they’re going to cut, or one of the last things that they’re going to cut when they’re tightening their spending; maybe they don’t go to Starbucks that day, but they do still get their car washed or keep their membership because it is such a great value. And it has the feel good component of it. So I think that that’s a really interesting part of the car wash industry that that continues to be really important on how we relate to the consumer directly as the car wash industry — that you have these interaction points, that you have these habits and these relationships that form that make it really sticky.
Paul
Absolutely.
Lanese
Bonus question: what has surprised you most about the car wash industry not just joining here, but through your keeping eyes on it over the last several years and getting exposed to it? And so what has surprised you most?
Paul
Probably the biggest surprise, to the upside, I think, which I commented on earlier, would be the people. I’ve so much enjoyed spending time and getting to know people in this sector. And again, it goes back to the principles of why I joined Amplify and what I enjoyed so much about my time at KKR. And it’s really about the people. The people are the lifeblood of this business, all the way to the labor pool, and when I ever visit a car wash, or evaluate a car wash, I love spending time with the operators at the field level… not the senior management sitting in their ivory tower. I wanted to go see the people that were on the ground operating the car wash, and then touch the consumer. Seeing the smile on the consumer’s face; that provides a smile to my face. When you’re winning that consumer, and giving that consumer what they want across their experience, convenience and importantly, that value threshold. That’s a really important aspect of winning that consumer every day.
Lanese
The consumer is so varied because you could have a store that has just the most wide range of socioeconomic backgrounds, of so many different factors. But they’re all coming to this place because they find the same value created by the service. And that was always something on the operation side of being at some of our stores, in my my past role, that you could see literally like a guy with a Bentley or a lady with a Bentley that’s you know, up for a little joy ride, and then a car that it seems so pointless to wash because the clear coat is gone. But it’s still the same amount of pride and value that that’s valuable to them. And I think that’s very endearing. And it is something to that I love about the car wash industry.
Paul
There’s something about picking your kids up from soccer practice or school or baseball practice with a clean car.
Lanese
Yes, everything is better. If I have a dirty car, which is pretty rare, I want to roll down the window at a stoplight and say I usually have a clean car.
Paul
That’s a miracle with young kids. It’s usually crusted Cheerios.
Lanese
So this is how we solve that problem in my household is that whoever does not have the kids takes one car; whoever has the kids takes the other. So they’re dedicated… It’s like a family car, and a non-family car. So that’s how… One car is clean, and the other car is trashed.
Paul
We’re a free for all.
Lanese
I used to fight it. But now it’s kind of nice. Well, anyway, Paul, thank you so much for sharing your perspective from your investment banking experience, and from what you are looking to continue exploring through the car wash industry and the value that you bring to us as a team. And we’re really excited to have you and excited to to get you more exposed to drying off cars. And maybe we can even arrange for you to go clean a tunnel pit somewhere, you know, if you really want to get your hands dirty, I’m sure I can make that happen for you.
Paul
That’s one thing I haven’t done yet.
Lanese
There’s a first for all. Thank you again, and we look forward to just this year ahead and embracing the new opportunities. Even though they may be different than last year, it doesn’t mean that it’s all bad. We just have to look at things, on every level, both of the car wash industry and any business, being smart and efficient about how you build your infrastructure and how you build out your team and your operations. And then what that looks like going forward. So thank you, and for our listeners, you can catch our episodes the last Thursday of every month. If you have not signed up for our newsletter, I would encourage you to check that out. You can find it at amplifywash.com Be on the lookout for that; we send it out in tandem with the release of the podcast each month, and then throw in a little bit other information in there. Thanks so much. Bye.