The car wash company MILES will open two licensed locations in Colorado next year. / Photo courtesy of MILES
By MATT BLOIS
The Franklin Car Wash company MILES will start licensing its brand to new car washes.
The first two licensed car washes will open in Colorado next year.
MILES, located in Franklin, currently operates three locations–a full-service Auto Spa and two Express locations in Middle Tennessee.
In addition to licensing out the brand name, executives at MILES are also offering start up help. MILES founder Miles Johnson said the company will help business owners with accounting, payroll, financing and management.
“Starting it back in 2007, to be candid, I didn’t know what I was doing … There was a lot of anxiety around it. We had multiple accounting firms, multiple legal firms. We went through multiple iterations of financing,” he said. “Over the 12 or 13 years that we’ve been in business we’ve been able to hone that model. We feel comfortable that someone else could come in and use this same model.”
Johnson said the licensed locations will pay an initial fee to use the MILES brand, but won’t pay a portion of sales after start up. However, licensees will pay the company a fee for back office services.
Johnson said that he put in a lot of work to create a management process that works well for the car wash industry, and in part that’s what licensees are buying. Johnson said licensees will also benefit from the consolidation and specialization of the back office services.
“We can scale those services and make them much more affordable to an individual car wash because we’re scaling them and because we’re sharing the services,” he said. “You’re ultimately going to get that at a much lower rate than if you got your own accountant and taught that accountant about the business. Most accountants don’t know how to do car washes.”
In addition to back office services, MILES will help with website design, social media advertising and financing through First Advantage Bank, which is headquartered in Clarksville.
In the fast food industry, franchisees typically pay a corporation like McDonald’s to open a restaurant. There is an initial start-up fee, and then an ongoing service fee based on sales.
At McDonald’s, franchisees pay an initial fee of $45,000 and then 4% of sales going forward.
McDonald’s also requires potential franchisees to complete a part-time training program that lasts 12 to 18 months.
MILES plans to charge these initial franchisees a $50,000 start up fee. Then licenses will pay between $3,000 and $5,000 a month for the back office services. The initial deals are designed to last five years, with an option to renew. Those number could change though as more licenses sign on.
Johnson said in total it usually costs business owners about $4 million to $5 million to start a car wash. That includes land, equipment, buildings and other costs not including in the licensing agreement.
MILES is starting small with these licensing agreements, but Johnson said he has plans to grow.
“I would love to be able to walk into an office building in Franklin in five years and have 20 people in there doing nothing but car wash accounting services,” he said.
In addition to the licensing agreements he said the company is still looking for opportunities to open its own locations in Middle Tennessee.