5 Questions With Justin Landau of El Car Wash

Justin Landau, co-CEO and co-founder of El Car Wash, said the investment wave has brought a new level of professionalism to the space — which has some negative connotations in pop culture. 

“There’s this misperception from ‘Breaking Bad,’” Landau said.

The crime series’ star used a car wash to launder drug money, but Landau noted that El Car Wash accepts only credit card payments — so there are no stacks of cash to stash in briefcases. But El Car Wash is green in another way — the tunnel washes reclaim and recycle most of the water used.

El Car Wash completed a recapitalization with Warburg Pincus in 2022. Landau, who co-founded the chain with Geoffrey Karas, spoke with Commercial Observer about his business strategy. 

This interview has been edited for length and clarity.

Commercial Observer: In April, you paid $6.5 million for a site in Pembroke Pines. Is that a typical price for a location?
Justin Landau: Yes and no. That was a turnkey site — land plus building. If we have a much bigger property, we might spend a lot more on it. The typical price range is $6 million to $10 million.

Why has private equity gotten so interested in car washes all of a sudden?
It’s been a trend now for five to seven years. The membership model allows for operators to better serve our customer base. The value of our enterprise went up in the same way that the value of gyms went up when gym owners changed to selling memberships from charging to visit one time. You have a much more sticky customer base. You have a much more stable cash flow. Those factors led to private equity investing more.

There’s also a next generation of investors and operators coming in and thinking of this business in a different way. We’re really trying to service our customers, and car washes are just the service we happen to offer.

What’s your biggest challenge?
There’s so many. Our biggest challenge is hiring talent. Because we’re at the forefront of the industry — at least we think we are — we’re setting the bar. It’s not like we can hire from outside. We have to create our own training programs from the ground up. As simple as it is to say, “You go through the card reader, the gate opens, and your car comes out of the tunnel clean,” there’s probably 500 little processes that go into it. There’s mechanical issues with the car wash itself. There are also the micro-interactions with the staff. Did they greet you with a smile when they waved you in? Was their uniform looking right?

Second on the list is land that is of the right size, in an area we want to do business in, that can be permitted as a car wash and that is priced reasonably. We typically look for similar pieces of land to Chick-fil-A, Wawa and Racetrac.

In your new locations, there’s no store selling air fresheners and bottles of Coke. Why give up that revenue stream?
What we give up in not having conveniences, we make up in focusing on the customer experience. Customer satisfaction and retention is more important to us than trying to upsell small items.

Amid the building spree of car washes, there have been complaints — these locations are noisy, they bring traffic, they don’t generate many jobs. How do you respond?
We’re not drawing additional traffic, because it’s mostly drive-by traffic. Your customer base is typically people who live within three to five miles of your store, or it’s on the route of travel to work, shopping and picking up the kids. In Lantana, where there’s a residential neighborhood nearby, we spent an extra $250,000 on a blower system silencer. Our goal is to change how people think about car washes.

If you wash a car in your driveway, you use 100-plus gallons of water. There are probably some solvents in the product you’re using, and the runoff is going into the storm sewers. At our locations, we use 15 to 25 gallons of fresh water. We use reclaimed water for most of the process. It’s only at the very end, when you really need your car to be spotlessly clean, that we use fresh water. And we fully treat our wastewater before we deliver it to the sewer system.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.