More Mr. Cleans Coming
P&G opening up car wash/convenience store franchising to Ohio, Kentucky
Published in CSP Daily News
CINCINNATI -- The Proctor & Gamble Co.'s P&G FutureWorks is expanding the Mr. Clean Performance Car Wash business to all of Ohio and Kentucky and is seeking qualified multi-unit franchisee operators, the company told the media on a conference call on Friday. The facilities also include convenience stores, but no gasoline.
P&G currently owns and directly operates two car washes, both in Cincinnati. "We opened these sites as tests, and have learned a lot about the industry and the market," Nathan Estruth, vice president of P&G FutureWorks said in an opening statement provided [image-nocss] to CSP Daily News. "We've been pleased with the results and our learning at these two sites, and are now ready to move to the next step."
The franchise fee for a Mr. Clean car wash is $35,000. P&G also receives a 6% of total revenue as a franchise fee and 7% as a marketing fee, added a report by Business First of Louisville. The average car wash with c-store will be located on a 1.2- to 2-acre site.
This is a "historic first" for P&G, said Estruth. "P&G is a company of brands, manufacturing and marketing over 300 brands globally [including Pampers, Tide, Pringles, Folgers, Charmin, Duracell and Gillette]. The expansion of the Mr. Clean Performance Car Wash businesses in Ohio and Kentucky using franchises is without parallel in the 171 year history of P&G. We believe the chance to own and operate a Mr. Clean Performance Car Wash franchise is a great opportunity."
He said along with providing employment opportunities, each facility will be an "aesthetic asset to the community." They exercise environmental responsibility and sends "zero" soaps and chemicals into streams and waterways. The Mr. Clean car washes filter and recycle approximately 70% of the water it uses, the company said.
Also, franchisees benefit from Mr. Clean brand equity—the iconic image of Mr. Clean himself, a grinning, bald, muscled genie—through partnering with an established, leading consumer goods company.
Along with beverages and snack items, the c-store offers a selection of greeting cards, stationery, books, small gift items and car-care items including a selection of Mr. Clean AutoDry Carwash products. The facility also offers wide-screen TVs for customers to watch while waiting for their vehicles.
According to a report earlier this year in The Cincinnati Enquirer, the facility includes high-pressure and soft-touch washing systems, a special tire-shine device, a process to reduce minerals in the water that produce water spots and 11 blowers generating 165 horsepower to dry the vehicle as it exits. For kids, the washes feature the Sud Soaker and Radical Rinse stations. These stations allow kids to control remote spray nozzles that shoot colored suds and high-pressure rinse water at the cars as they roll by.
The first $3.3 million car wash opened last June in Mason, Ohio, in Deerfield Township, employs about 50 people and offers car washes ranging in price from $8 to $24, the report said. Detailing and other options can add to that price. A second car wash opened in Evendale, Ohio, in October.Although the announcement was not something she would expect from P&G, Erin Ashley Smith, a securities analyst at Argus Research Co. in New York, said the move is probably well-calculated. "The service area isn't something they've been involved in, but they are good at identifying long-term growth opportunities," she told The Cleveland Plain Dealer.
Donn Eurich, executive director of the Midwest Carwash Association, disagreed. "It's probably a mistake, because the car wash business is different from retail," he told the newspaper. "I don't stop by a car wash or convenience store to buy soap, shampoo or shaving products."
The car wash industry is "really quite depressed" right now, with consumers so mad about high gas prices that they skip the car wash, he said.
"P&G going into the car wash business is like Bacardi going into the saloon business," Alan Weiss, president of the Summit Consulting Group Inc., East Greenwich, R.I., told the paper. The move is "a huge leap from their core competency," he said. "Why a corporate giant would fool around with this is beyond me."
In an economic climate where consumers have less discretionary income to unload, investing in nonessential services such as car washes may seem like a financial risk. Smith said that is a valid concern, but she also considers car washes to be an "affordable luxury" that consumers might be willing to buy.