Gas Station vs. Car Wash

by a searcher from Johns Hopkins University

11 months ago

It seems like there is a fair amount of investor interest in car washes but much less in gas stations is there a particular reason for this? It looks like car washes would typically qualify for a 30-year SBA loan vs gas stations at the traditional 10-year term.  It also looks like car washes typically command a 10X multiple on EBITDA, perhaps bc of this distinction, while gas stations trade closer to 3X. 

I am curious as to this difference in interest given the business models are fairly similar (operations seem to be the pressure point, not a lot of marketing/sales, high volume lowish margins, etc.)

(1) Are there any investors interested in gas stations?
(2) Why do car washes/laundromats seem to attract more attention than gas stations?

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4 comments

searcher from York University

I believe between the two, car washes might be more desirable as they can be a bit more automated amongst the two with minimal manpower for operations and considered as a source to generate passive income.

10 months ago | like reply | 0 likes

searcher from Johns Hopkins University

Hi Brad, thank you for your response, I was thinking the concern relating to demand could make some investors hesitant plus dealing with employee turnover. On the other hand, it isn't too technical, and I have seen some attractive valuations

10 months ago | like reply | 0 likes

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