Gas Station vs. Car Wash

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May 01, 2024

by a searcher from Johns Hopkins University in Orlando, FL, USA

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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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
^redacted‌ thank you for the tag. I cannot say for sure why car washes attract more attention, but my speculation it is because they are easier to manage and because there are not the same environmental issues that exist with a gas station. Most gas stations operate long hours if not 24 hours and can have high environmental risks. They are much more management intensive. You are also subject to fluctuations in fuel prices and going forward with the push to electric, how that might impact the businesses (although I personally think we are still a long ways off from the conversion to electric, especially based on the number of new gas stations I still see being built everywhere). The other thing many car washes offer is memberships which means they provide recurring revenue. So there is a big attraction there. I hope this helps. Again, just my perspective from the lending side. Happy to discuss as well. Feel free to reach out to me here or directly at redacted Good luck with your search.
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Reply by a searcher
from Johns Hopkins University in Orlando, FL, USA
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
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