By Jim Utter
Director of Journalism
It was just a few months ago that Champion Xpress hit an important milestone with the opening of its 50th site and just this month entered its sixth state with a location in Maryville, Missouri.
Leading the charge is Champion co-founder Trey Merchant, who returned as CEO of the express car wash company last year after serving in the role for its first six years since its founding in 2015.
Champion currently ranks as the 26th largest car wash company by Car Wash Advisory with more than 55 locations.
Car Wash Daily News recently spent some time with Merchant discussing several topics regarding the car wash industry. Today we present the first part of the interview, tackling issues such as his surprising entry into the car wash business, his thoughts on expansion and the current state of the industry as a whole.
Obviously, you were a co-founder of Champion Xpress in 2015 but how did your involvement begin in the car wash industry?
Merchant: “So obviously, I grew up in Lubbock, Texas, and so through high school and college, I had a lot of buddies that worked at Extreme Car Wash when I was in high school. They later became Mister when they were acquired. But just tons of friends in high school and college that worked at these express washes, and you know they would come home and to our college house and I would get to hear about their day and everything that happened and. Without myself working at one, I learned and heard a lot about it, about that industry. And I’ll be honest, I took advantage of a lot of those friends and got the free car washes and did all that.
“Now, now I’ll tell you I’ve paid that back a thousand-fold. I just had a lot of friends that just worked with these car washes and one of them came to me once I started my career as a project manager at 7B Building and Development and said, ‘Hey, have y’all ever considered building and operating your own car wash?’ I told him no and it wasn’t really ever a thought in my mind at that time. I was 26 years old. But after he asked me that question, you know, he said you ought to start considering and looking into it. I started paying more attention to the industry through the business. I decided I wanted to try to do one, so I put a business plan together and I pitched my dad and brothers, who are my partners and presented that to them. You know, I was blessed enough that they had confidence in me and gave me their go ahead and their approval to do that. I went to another buddy of mine who was banker here in town. I was blessed that he funded my first project in Roswell. I had no grand plan for where Champion would be today. But I think God had obviously had a bigger plan than the 26-year-old had at that moment. So, here we are.”
Are you optimistic about your strength, your expansion and growth opportunities for Champion this year and will you focus on greenfield locations?
Merchant: “There are several in the pipeline coming that’ll be greenfield developments. You know with 7B, in my opinion, being the best and most experienced car wash development and building firm in the country – they’ve done over 150 locations – I get to reap the benefit of that (Merchant’s family also owns 7B). So, we’ve built a reputation from greenfield locations. We are looking at a few acquisitions currently. And so, we’ll do a little bit of MNA (merger and acquisition) side, but it is going to primarily be greenfields expansion like it has been for us.
“I think like most right now we’re focused within the markets that we’re in. You won’t see us take on a new territory or general area that we’re not currently in. We’re working to continue to add market share and be able to add the next convenient location for our customers.”
Along those lines, how would you describe the current state of the car wash industry generally and perhaps more specifically, how you feel Champion fits in it?
Merchant: “I think the car wash industry is going to continue to experience strong growth. I do think that you will continue to see some mergers within the industry. I think it’s some of the bigger players, they’ll continue to merge and gobble up the other operators that simply aren’t having the success that they thought they were going to have. I think the car wash groups focused on expanding their membership base and offering that exceptional experience on site, I think those are the groups that are going to do fine, and you’ll continue to see growth. I think you’re seeing some companies are struggling simply because of the cost of these things, what people have either paid in the past or what it’s costing to build them, develop and build them now along with the increased cost, whether that be interest or just having to squeeze margins with more competition. Costs are up. Competition is up.
“From when I started on our first location to now, we’re a little bit more than double what it cost us to be in these things. And now I have more competition, and I have to wash twice the number of cars that I did back in 2015. So overall it’s a strong industry, I think. The most important thing you can do is take care of your own sites and grow your membership base. If you’re doing that, you’re going to be fine. I think we’ve got it as an industry smarter about how close we’re located to one another. There’s still plenty of greenfield out there. Going in and sitting on top of another operator is silly. It’s not a smart move and I think some people are paying for some of those decisions that were made.”
