The Suds and Duds - Shake Ups in the Express Car Wash Market

Driven Brands Divests to Whistle Express

Is the express car wash industry dying or going through growing pains? In this article we will discuss recent events with larger operators classifying the Suds & Duds in the space. (“Suds” is a play on the word Studs, “Duds” is self-explanatory.) At the latter half of this article, we dive into the Whistle Express acquisition of Drive Brands.

Key Points

• It seems likely that Driven Brands divested its U.S. car wash operations to reduce debt and focus on core businesses like Take 5 Oil Change, with the sale to Whistle Express Car Wash for $385 million announced in February 2025.
• Driven Brands entered the car wash market in 2020 via the acquisition of International Car Wash Group, growing to over 360 U.S. locations through further acquisitions.
• Whistle Express Car Wash, based in Charlotte, NC, operates over 150 locations in the Southeast and Midwest, with plans for expansion and leadership including CEO Jose Costa and recent additions like CFO Michael Osovski.
• Mister Car wash is still one of the only available public comparable company and is still viewed as a leader in the space
• Mister Car Wash Debuted on the Stock Market at a ridiculously high 38x Market Cap to Adjusted EBIDA Multiple when many M&A deals were peaking at 15-20x EBITDA.
• Today, Mister Car Wash trades at 7x Market Cap to Adjusted EBITDA (Feburary 2025)

SUD: Whistle Express Car Wash
Whistle Express Car Wash, formerly Magnolia Wash Holdings, was founded in 2016 and rebranded in 2022 under CEO Jose Costa. It currently operates over 150 locations across states like Alabama, Florida, and Ohio, with an aggressive growth plan to add up to 50 more in 2024. Its leadership team includes CFO Michael Osovski and COO Brannan Lahoda, both with experience from Driven Brands.

SUD: Mister Car Wash

Mister Car Wash, a publicly traded company on the New York Stock Exchange (NYSE: MCW), operates 514 locations across the United States as of December 31, 2024. The company's financial health is comparatively strong when assessed through its revenue, profitability, liquidity, and solvency metrics.

Mister Car Wash is growing by boosting their Unlimited Wash Club (UWC) memberships, which now make up 74% of wash sales, up from 71%. They opened 38 net new locations in 2024, reaching 514, and plan to continue with greenfield expansions. They also pursue acquisitions in the fragmented market and focus on operational efficiencies to generate free cash flow for further growth. Even though their EBITDA multiple has declined precipitously and their stock price has suffered this does not reflect the strength and growth prospectus for the company. See our other article about Mister Car Wash.

DUD: Background of Driven Brands' Ownership of Car Washes

Driven Brands, headquartered in Charlotte, NC, is the largest automotive services company in North America, offering a range of services including oil changes, vehicle repair, and car washes. The company entered the car wash industry in August 2020 through the acquisition of International Car Wash Group (ICWG), which operated over 900 locations across 14 countries, including more than 230 venues in the U.S. Car Wash Advisory. This acquisition marked Driven Brands' strategic entry into the fragmented express tunnel car wash market, aiming to leverage consolidation opportunities.

DUD: Zips Car Wash

Simply put, Zips is a Dud because they failed and filed for bankruptcy a few months ago. This was due to an unsubstainable debt load. Additionally, the poor site level of around $1.1M AUV’s compared with Mister Car Wash ~$2M AUV demonstrates the poor performance of Zips. The poor performance was likely as a result of poor management, poor site selection and ineffective integration of acquisitions made. See our article on the Zips Car Wash bankruptcy.