By Jim Utter
Director of Journalism
Just over a year ago, Magnolia Wash Holdings announced it had rebranded as Whistle Express Car Wash, unifying more than 100 car wash locations under one brand.
Leading the change was CEO Jose Costa, who joined the company in spring 2022 after tenures at Bojangles Restaurants and Driven Brands.
Whistle currently ranks as the 10th largest car wash company by Car Wash Advisory with more than 150 locations.
CW Daily News recently spent some time talking with Costa about several topics regarding the car wash industry. Today we present the first part of the interview, tackling the state of the industry, its headwinds and Whistle’s outlook for 2025.
How do you see the state of the industry heading into 2025?
Costa: “I think it’s a good moment to be in the industry if you are a large-scale operator, if your balance sheet is strong and if you don’t have a lot of debt on the business. I think the last 12 to 18 months, a lot of people got in trouble. Some competitors are going through restructuring because of the fluctuation in interest rates and the pressure of interest payments on the balance sheet.
“So, if you’re a smaller operator and you own the real estate and you have a good piece of real estate and competition is not too close, I think you’re sitting in a great position, and you can wait to transact when the time is right. There’s been a shift of tides in the marketplace, but still, it’s a great industry.”
What are some of those tides?
Costa: The automotive parts industry in the U.S. is one of the largest in the world and vehicles are getting older, generally on the road 13 years or so. People love maintaining a clean vehicle, so I feel we are in a good space. There was a headwind which I think has corrected itself, which was oversaturation. Some of our competitors were building across from each other.
“I have a great example in Shelby, N.C. Let’s say Shelby has 10,000 households. The math usually is you need one car wash for every 12,000 to 15,000 households. In Shelby, there’s three car washes. That is just not good for the industry. This has happened in so many areas across the Southeast. That, combined with interest rates, have been two of the largest headwinds for the industry.”
As far as Whistle Express in particular, are you optimistic about your expansion and growth opportunities going forward?
Costa: “Absolutely. We did an extensive study a few years ago that showed the opportunity for more growth in our geography just in the 10 states where we are. So, we are very optimistic about our 2025-2026 pipelines. The shift has been from greenfield, from organic to inorganic. The last two years we put up roughly 20 to 22 locations every year that were brand new greenfield locations. Going forward, the shift is more acquisitions versus new store development.
“An average car wash, real estate cost is between $1 to $1.5 million. Roughly, you’re talking about $5 to $6 million to put up a 120-foot, good looking car wash with 30 to 35 parking spots. It’s a very expensive investment. With cap rates and the rent factor, if you’re not smart and you don’t control your rent, that can really hurt you in the long run.”
