Carwash entrepreneur Fred Komen: ‘The future is up to who can handle the numbers’
Fred Komen, owner of WeWash in Almere, sees the carwash industry in the Netherlands changing rapidly. In an exclusive interview, Komen says standing still is not an option. He therefore advocates investing in people, technology and experience. “Only those who dare to innovate now are working towards a future-proof business,” he says.
Many carwashes struggle to find and retain good staff. How do you view this challenge and how do you ensure motivated employees yourself?
“That carwashes struggle to attract and retain employees is not surprising. The work is physical, the labour market is tight and shifts often fall in the evenings and weekends. Also, career opportunities within the industry are limited in many cases. Yet the solution is closer than people think. Our belief is simple: treat people well, pay them fairly and offer them prospects. That is why we do not talk about ‘staff’, but about employees. Employees are not a cost item, but the foundation of a healthy company. In that light, we consciously choose not to advertise so-called ‘all-in wages of 17 euros and a bit’, which in reality are often no more than the legal minimum wage plus holiday pay and holidays. Those who bring people in by trickery do not see them as valuable colleagues, but as a balancing item on the budget.”
Do you do that differently?
“I take a different approach. We offer a transparent, fixed salary that is 20 to 30 per cent above the collective agreement. We also provide a pleasant working environment, healthy meals for those who work in the evenings, and above all: attention to the person behind the work. Small things make all the difference. Discussions with our employees repeatedly show how important good basic facilities are. A clean changing room, a shower to go home fresh after work and, remarkably often mentioned, a private toilet for the team. Not huge investments, but they do show respect as an employer.”
And does this approach work?
“Absolutely. From the beginning, we have dealt with our employees in this way. As a result, we notice commitment, more initiative and simply more job satisfaction. People think with us, stay longer and are visibly proud of their work. Our customers notice this too, who regularly compliment us on it. Sometimes people ask whether this is not ‘too expensive’. But it is not. On the contrary: the carwash industry is an extremely profitable sector. If, in an industry where so much is earned, we still think that a decent salary and good facilities are too much to ask for, then the problem is not cost, but lack of vision. Good pay is not a luxury. It is not a closing item, it is an investment in the people who do the work and keep your business running. The future of our industry lies in people-centred employment. Employees who feel appreciated stay longer and actively contribute to the quality, image and continuity of your company. If we don’t take that seriously, it’s only a matter of time before carwashes can no longer open on certain days or at certain times, simply because there is no one to do the job. And then we as employers can really only look in the mirror.”
We see more and more big players and investors becoming active in the carwash industry. What is your take on this development?
“I think the increasing interest of takeover parties in the carwash sector can be well explained. Current acquisition multiples are between five and eight times EBITDA, while financing costs remain relatively low. Moreover, the sector offers considerable scope for operational optimisation. When using alternative financing structures, return on equity can quickly reach 10 per cent, with a potential towards 20 to 25 per cent with further economies of scale and efficiencies. The attractiveness is reinforced by the exceptionally high EBITDA margins of larger carwash locations, which typically range between 35 and 60 per cent. These margins come from economies of scale, automation, efficient staff deployment and customer retention through loyalty programmes. Once a location is operational, fixed costs remain limited and cash flow is stable and predictable.”
That sounds quite complicated
“Let’s face it: washing cars is not higher maths. It is one of the simplest industries there is. Anyone can do it, provided they are willing to invest heavily in the first few years. The sector is capital-intensive at start-up, but relatively easy to operate afterwards and easily scalable. This makes the sector interesting not only for private equity, but also for strategic parties looking to strengthen their position through clustering, brand development and central control. The entry of strong financial parties is a positive development: they ensure professionalisation, scale and tackle inefficiencies. The wheat is separated from the chaff and the whole sector benefits from this.”
Where do you think are the biggest opportunities for carwash entrepreneurs in the coming years?
“The carwash industry offers plenty of opportunities for entrepreneurs who dare to look ahead and are willing to invest. The market is developing rapidly: customers are making higher demands, technology is becoming more advanced and competition is growing. Entrepreneurs who distinguish themselves in quality, customer focus and scalability can make the difference. A first big opportunity lies in technological modernisation. Many car washes are still running on outdated installations; there is a lot of ‘old iron’ in the industry. Investing in modern, energy- and water-efficient equipment leads to more efficient operations, higher capacity and better wash results. Combined with automation, such as license plate recognition, contactless payment and smart control, this provides more convenience and speed, exactly what the modern customer counts on.”
But it’s not just about technology, is it?
“No, the total customer experience is becoming increasingly important. Customers want more than a clean car: they expect a fast, pleasant and worry-free experience. Entrepreneurs who invest in appearance, good staff, clear communication, marketing and a well-kept environment are building an experience that customers like to come back for. A strong brand identity plays a big role in this: recognisable, professional and reliable.”
How important is your role in this as an entrepreneur?
“In the carwash industry, as an entrepreneur you can make the difference yourself in terms of wash quality, experience and customer focus. Unlike many other sectors, you are not affected by online competition or price pressure via the internet. A good carwash is a physical experience that cannot be replaced by a click on a web shop. Those who excel in quality and convenience win local market share. There is also a lot of potential in exploiting data and setting up smart subscription models. The rise of ‘unlimited wash’ subscriptions, linked to customer data with or without an app, makes it possible to better predict sales and strengthen customer loyalty. By analysing customer behaviour and using it for personalised offers and pricing models, you not only increase the frequency of visits, but also long-term customer value.”
“The carwash market is still highly fragmented, but professionalisation and chain formation are rapidly gaining ground. Strategic choices are emerging for entrepreneurs with well-organised and forward-looking locations: grow themselves through acquisitions or intensive cooperation, or become attractive to larger parties looking for scalable and well-managed businesses. In my view, the value of such businesses will only increase in the coming years, as the sector continues to professionalise. At the same time, the challenges are increasing. Changing environmental legislation, including on water use, discharge, chemicals and energy consumption, require proactive adaptability and investment in sustainable techniques. Entrepreneurs who anticipate this now will give themselves a head start and reduce their risks in the long run. In short: the opportunities are plentiful, but they are not there for those who wait. Entrepreneurs who focus now on innovation, sustainability, customer focus and strategic growth will give themselves a head start in an industry that is changing rapidly and becoming increasingly professional.”
How do you see the future of the carwash industry as a whole?
“The carwash industry is facing a new phase in which not only technology and scale will make the difference, but especially sustainability and experience. Whereas in recent years investments were mainly made in capacity and automation, in the coming years it will be crucial to respond to tightening environmental legislation and the growing need for customer-oriented total experiences. Environmental requirements are becoming stricter. Regulations around the consumption of water, chemicals and energy will increase. Municipalities and provinces are setting higher requirements on permits and sustainability, and the pressure from society on companies to do business responsibly is growing. Entrepreneurs who lead the way with, for instance, closed water systems, biodegradable agents and energy-efficient installations, position themselves as reliable and future-oriented players. Those who lag behind not only risk fines or licensing problems, but also reputation damage and customer loss.”
What will consumers notice?
“Where car washing used to be a functional act, it is now a moment of convenience, care and comfort. Customer expectations are changing. Experience is becoming increasingly important. Customers want to feel welcome, be helped quickly and experience a well-kept, professional environment. The look of the premises, the quality of communication, the ease of checkout, the smell, the waiting time – it all counts. Entrepreneurs who invest in customer experience build loyalty, repeat visits and word-of-mouth advertising. So tomorrow’s carwash is not just a technical installation, but a sustainable, customer-oriented total experience. Entrepreneurs who understand this and dare to invest in these pillars, environment and experience, will make the difference in an industry that is becoming increasingly professional and competitive.”
Finally, what advice would you give to other entrepreneurs in the carwash sector?
“My advice to fellow entrepreneurs is clear: don’t get stuck in the past, but invest. In your machines, in your people, your image, your marketing and in your customers. The market is changing rapidly. Those who dare to innovate now are working on a future-proof company. Those who stand still will inevitably lose their edge. Let’s be honest: in several places in the country, existing carwashes will soon have a large, luxurious and strategically well thought-out carwash as a neighbour, simply because they have stood still for too long. Not because they didn’t have a chance, but because they didn’t take it. The lesson is clear: stagnation is not slowing down – it is loss. Loss of customers, market share and future. The question will no longer be who can wash a car, but who can wash the numbers.”
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