If the Fast Lube Fits, Add It
Research is critical to a quick lube's
By Gail Stout
Reprinted with permission from Modern Car Care, the
premier magazine of Car Care professionals.
For more information, visit www.moderncarcare.com.
When people are in the mood for cleaning their cars,
the next logical step is often a 3,000-mile oil and filter change.
Many of these customers are getting this service and more at carwashes
with fast lubes on site.
While the idea of adding a quick lube is enticing,
operators need to carefully research the feasibility of adding this
profit center to their locations. Walt Gislason, owner of Walt's Car
Wash in Wilmar and Alexandria, MN, has fast lubes at both of his locations.
The Alexandria carwash also has a convenience store, tunnel carwash
and a Buff N' Shine machine. Though he has been in the fast-lube business
in Wilmar for more than 20 years, Gislason spent about three years
researching adding a fast lube to his Alexandria location.
"I went to different schools to see how to do
it," Gislason says. "I visited different oil-change operations,
even though we already had one in Wilmar. In Alexandria, I built a
three-bay side-by-side. I wanted to be certain that it would be absolutely
right for the Alexandria site. We didn't make too many mistakes when
we built that one. It caught on right away, even though it's off premise,
just a block away from the carwash. That was the only way it would
The research necessary for adding a quick lube, according
to Gislason, is similar to research done prior to adding a conveyorized
carwash. "The first [thing] to ask yourself is: What is my reasoning
for wanting to go into the oil-change business?" Gislason says.
"Is there a real need by customer demand or is an oil company
trying to influence me into building? Will I be able to finance the
project through my own bank or do I have to depend upon financing
from an oil company and thus be obligated to their demands and products
for the next five or so years?"
Other questions Gislason suggests
operators ask include:
How visible is the proposed site from each
How high is the traffic count and how slowly
will cars be travelling? (Traffic should be under 40 mph so customers
can spot the fast lube right away.)
Is there a stop sign or light within a block
of the site?
How available are clean-cut, impressionable,
courteous, honest and efficient employees? (They're key to increasing
What are the city sign ordinances on freestanding
and building signs, zoning and general building codes?
Seeking outside expertise
Many carwash operators turn to fast lube franchises when
adding an oil-change center.
Many carwash operators turn to fast lube franchises when adding
an oil-change center. Carwash operators looking to boost profits
and increase traffic by adding quick lubes to their existing sites
might turn to a franchise company or a supplier. Going with a major
franchise company offers instant recognition, training assistance
and continued support. However, it also forces an owner/operator
to pay a franchise/license fee of up to $35,000 and a royalty fee
of up to 7 percent. Going with a major supplier usually does not
require fees, though the partnership generally obligates the owner
to carry and use the supplier's products. Even though it is not
a free ride, the expertise and assistance of many of these major
firms can prove advantageous.
John Brant, fast lube director at Phillips 66, Bartlesville,
OK, helps many owner/operators move into the quick-lube business.
Brant says that part of the research involves looking at area demographics.
"A fast lube typically draws its customers from a three-mile
radius around the business," Brant says. "It depends on
having good residential housing in the area, since 80 percent of a
fast-lube business is personal automobiles; the rest is fleet business.
A good site must have some destination-type shopping in the area and
offer excellent visibility to the fast lube. Remember, people change
the oil in their vehicles three or four times a year, so they need
to see the fast lube sign on a regular basis and keep it in mind.
Out of sight; out of mind."
Paul McCusker, product manager, Automotive Lubricants
and Installed Programs, for CITGO Petroleum Corporation in Tulsa,
OK, says the first step is to determine the viability of a potential
fast-lube business on an existing carwash site. "One factor to
consider would be the existing level of carwash business. Is it mature,
successful and in need of site-revenue expansion?" McCusker says.
Conduct an informal survey and listen to what the
carwash customers are saying. Consider the staffing resources. The
same analysis that went into the carwash development should go into
the fast-lube decision as well, he asks.
When choosing a site, the first step should be a
physical evaluation to determine property size/availability, ingress/egress
points, layout and orientation of the fast-lube building. "Next,"
McCusker says, "a formal site analysis should be completed that
takes into account the demographic and competitive forces in the fast-lube
trade area that will add to or detract from the potential of the business.
The survey should include traffic count, population trends, registered
vehicles and competition. All of these factors can be rolled up within
designated radii and a market potential car count can be determined.
From here, the operator should complete a projected income statement
and make a business decision whether or not to proceed with the project."
Once an owner/operator decides to build a lube and
considers the franchise vs. supplier partnership cooperative efforts,
the next consideration is where to build. Gislason favors building
the lube on the same property as the carwash, gas station and convenience
store. First, operators need to make sure there is adequate space,
that it's visible to traffic and that there's enough stacking room
without causing congestion for that traffic that exists.
"The devil is in the ownership details,"
says Gislason. "It's awfully nice to have an oil change in the
same location as your carwash and convenience store like we have here
at our Wilmar location...And, for customers, to have a carwash, gas
station and oil change at the same location helps because it draws
customers from one to the other. People want a one-stop shop. It's
a phenomenal concept. Just because you have a carwash there is a plus."
One bay, two bay, three bay,
Once an operator decides to build a fast lube at
a carwash, he needs to determine what size location he wants. Brant
says, "I would always start with a two-bay, and if your numbers
are going to be up in the 40s, consider a three-bay. This is because
when you're providing other services like transmission fluid exchanges,
antifreeze flush and others, you can keep the oil changes happening
without making customers wait longer than normal."
"Base the decision on property size, potential
car count and the amount of value-added services that are planned
for the fast lube," McCusker says. "Normally, one bay per
25 cars per day is a basic rule of thumb."
The next step is finding a builder. Brant suggests
using a local builder who knows the fast-lube industry. "Any
reputable contractor who can handle your specific blueprints would
be fine," Gislason says. "It's often more important to ask
a contractor to commit to a completion date than to a start date.
Most contractors will offer to start tomorrow with only one person
available just to get the contract."
The next consideration is what type of equipment
to include in the new quick lube. If the basic lube, oil and filter
services are performed, then at a minimum plan on having the following:
bulk and packaged lubricant storage and dispensing equipment, a catwalk
system for the pits, a computer system, an air compressor, water and
used-oil storage, McCusker says. If an expanded service offering is
planned, then consider a vacuum, windshield washer fluid and coolant
Brant suggests that operators with questions seek
help from the experts. "Oil companies have national account programs
with the major lube-equipment companies to help with keeping down
the cost of equipment. The local oil distributor you go with will
know and use a lube-equipment distributor. This equipment distributor
typically helps with layout and installation. We have a preferred
vendor list that covers equipment, uniforms, software, insurance and
The right number of employees
"Don't under-employ," Gislason says. "Too
often management worries about dollars rather than covering the needs
and desires of customers. That is a dangerous answer because it is
a delicate balance. But all too often I see customers neglected when
management is saving on pennies rather than taking the risk to build
Staffing, according to McCusker, depends on the day
of the week. Thursday, Friday and Saturday are the peak days. Typically,
two to three employees per bay are adequate at peak periods plus a
greeter and a cashier, he says.
Brant adds that it takes time to find the right balance
between full and part time. "Usually you have about half as many
part-time people as you do full-time," he says. "Also, at
startup you will need only two to three full-time people." As
the business grows, an operator needs about one employee for every
10 cars, depending on the type of services offered and how the add-on
sales are performing.
Another important decision to be made is the type
of computer-management equipment to purchase. An information-management
system is a critical item in today's fast-lube environment because
of its many benefits, McCusker says. Inventory control, proper lubricant
and filter use, billing, customer tracking, staff information and
scheduling, and countless other tasks are all part of the data management
offered by a computer system.
Once an operator determines what computer software
and hardware systems meet his requirements for cost, ease of use and
tasks performed, service separates the men from the boys, Gislason
"Many oil changes began without individual invoices
and later determined what their needs would be," Gislason says.
"If you know at the outset when high volume is imminent, ask
for a reference list of long-time users from the computer companies
you are considering."
Operators considering building a fast lube next to
their carwash will find out that land, building and equipment may
cost anywhere from $200,000 to $500,000, Gislason says. Operators
should take their time and learn all they can about the potential
for success. A certain volume of business is critical to survive.
Thirty cars a day can provide a good profit, Gislason says. Do you
have enough traffic for 50 to 80 cars a day? Eighty cars a day for
a two-bay--now that's a business worth considering.