Liquid Assets
Mother Knows Best
Less Is More
Procter & Gamble Co. might be better known for its household goods than its wax-and-buff technique, but if the maker of Tide and Mr. Clean is going to go bumper to bumper, then it intends to do so as a top player.
A couple of weeks after rolling out its Mr. Clean Car Wash franchise in Atlanta, the P&G subsidiary that operates the venture has signed on seven additional franchisees, two in the Ohio Valley, four in the Southeast and one in Colorado. That will make for 22 locations, two years after launching the venture in Cincinnati, Ohio.
The goal: to be among the top five car wash franchisors by spring 2010, said Nathan Estruth, vice president of P&G FutureWorks, the division that launched the venture. Mr. Clean’s muscle has offered encouragement for such a goal: Its two Cincinnati sites have in the last 12 months recorded a 35 percent increase in volume and 23 percent increase in revenue. That’s with an average ticket price of $18 to $20, 80 percent to 100 percent above the industry average.
“Despite the economy, we received hundreds of qualified franchise applications,” Estruth said. “We think that is a testament to the power of the brand.”
While entrepreneurs traditionally have opted for franchising as a safe startup bet, even more are choosing this route in the recession, said Alisa Harrison, spokeswoman for the International Franchise Association.
“We’re hearing from our members that the quality or the level of experience prospects they are getting is very, very high,” she said. “The big speed bump this time is going to be access to credit.”
Estruth said many of the Mr. Clean franchisees have been able to secure financing within a 30-day window, in part by leveraging P&G’s relationships with financial firms. Franchisees require at least $500,000 in liquid assets, and the total investment typically runs from $3.5 million to $4.5 million.
The expansion of Mr. Clean Car Wash follows P&G’s February acquisition of the assets of Atlanta-based Carnett’s Car Wash, to form the subsidiary Agile Pursuits Franchising Inc. Agile now oversees all locations, including those in Greater Cincinnati. But P&G launched the actual car wash concept, a $3 million endeavor, in July 2007.
Don Nix, who has operated one of the Carnett’s locations in Atlanta for 10 years, said P&G is exposing the company to improved branding and cross-marketing. He plans to open a second location in the next 10 to 12 months.
“Marketing to car-wash people is not an easy thing to accomplish,” he said.
Future plans include giveaways of appropriate P&G products to women who get their cars washed on Mother’s Day. Customers who sign up for the car wash’s VIP program will receive, as an incentive, a coupon book for P&G products.
And P&G is putting Mr. Clean Car Wash coupons in its own fliers, such as those in Atlanta-area Target stores, Nix said.
Going forward, Agile Pursuits is registered to expand in 46 states, but it is targeting Texas, the Ohio Valley and Chicago as near-term growth markets, Estruth said.
Meanwhile, through its acquisition of Carnett’s, Mr. Clean Car Wash has inherited a series of lube centers that operate on the same lots. Agile is looking to expand that service to new locations and has entered into an agreement with Shell to carry Penzoil as the exclusive brand (the lube shop is being offered as an option to new franchisees).
“We’re partnering with best-in-class entrepreneurs,” Estruth said.
P&G FutureWorks was developed in 2000 to seek opportunities beyond the scope of its existing business units.
Lisa Biank Fasig is a staff reporter for the Business Courier of Cincinnati.
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