When thinking about a relationship between carwashes and fast-food restaurant chains, it may be hard to come up with one. However, working with some major fast-food restaurants has influenced how Whistle Express Car Wash CEO Jose Costa runs his business. More on that later.
Charlotte-based Whistle Express Car Wash, formerly known as Magnolia Wash Holdings, was originally founded by Frank Bennett and Brooks Moye in 2016. They joined forces by combining Camel Premium Express Wash and The Wave Car Wash, two express brands in the Southeastern U.S.
With just seven units between Georgia, Florida and North Carolina, Magnolia Wash Holdings began to grow. When Costa became CEO in 2022, Magnolia Wash Holdings was operating around 50 units under 16 different brands. That’s when he brought up the idea to bring those different brand identities together.
Only blow one whistle
This is where the influence of fast-food restaurant chains becomes clear. Before becoming CEO of Whistle Express and becoming a president at Driven Brands Inc. from 2013 to 2017, Costa spent a lot of time in the fast-food restaurant industry during his formative years.
He worked for popular chains like Taco Bell, KFC and Pizza Hut. Each of these chains is owned by Yum! Brands, along with The Habit Burger Grill. That’s four brands in one company.
Costa’s experience with these fast-food chains fueled his idea to bring Magnolia Wash Holdings’ 16 carwash brands into one.
“When you analyze the landscape in retail, it makes a lot of sense to transition to one brand,” explains Costa. “It helps the operating playbook and it helps with marketing, training, onboarding of team members, pricing, your marketing ad fund, etc. There [are] so many benefits to be able to operate under one brand.”
Costa and his team came together and built a business case about this idea and presented it to the company board. After gaining the board’s approval, the rebranding was put into motion, which led to Magnolia Wash Holdings becoming Whistle Express Car Wash.
“We are fully rebranded, fully completed under one umbrella with one point-of-sale (POS) system, one operating platform, one marketing platform,” says Costa. “It feels really good to look back to where we started with 16 brands and 50 units, and now to see 150 units under one banner; it’s a good case study on transforming our company.”
The whistle explosion
After rebranding was complete, it was time for Whistle Express Car Wash to expand. In the last two years, the company has grown quickly through acquiring carwashes and building new ones under the Whistle Express name.
According to Costa, Whistle Express is the 10th largest carwash brand in the country and plans to add up to 50 additional locations this year. “We’ve had explosive growth over the last 24 months, going from 50 to 150 [units], and they’re all branded under Whistle Express,” he affirms.
So far in 2024, Whistle Express acquired three independently owned and operated carwashes — two in Myrtle Beach, South Carolina, and one in Raleigh, North Carolina. The company also acquired seven independently owned and operated carwashes around Louisville, Kentucky.
Most recently, Whistle Express announced the acquisition of five Rainforest Car Wash locations across Northeast Ohio. This acquisition is more than doubling the company’s portfolio in the Akron-Cleveland area.
“[Acquisitions] take a long time,” explains Costa. “It takes a lot of time to identify the right partners by geography and then building those relationships, reaching out, finding the right contact and working together on a mutual, agreeable outcome.”
Costa also says it can take anywhere between three and six months to complete a carwash acquisition. It can even take up to 12 months depending on the situation.
“One of the parties may not be ready when you reach out, and you need to be patient and wait and continue to build a relationship,” says Costa. “Over time, maybe it materializes, maybe it doesn’t.”
Whistle Express is also very strategic when it comes to picking where to acquire carwashes. Currently, the company only has carwashes in the Southeastern U.S. and has only expanded as far north as Indiana and Ohio.
Costa’s strategy behind this expansion has to do with the opportunities in states that are close to where Whistle Express was founded.
“You are not going to see us jumping two or three states to acquire locations in Colorado or Arizona or California today because there’s so much opportunity in the 12 states that we operate in,” emphasizes Costa. “We want to continue to create density in those states.”
Whistle Express’ lens of expansion goes beyond density, however. Costa says the company also operates through the lenses of staying contiguous, being patient and slowly moving out of its geography.
“Headwinds” in carwashing
Costa doesn’t call his difficulties “challenges,” but instead calls them “headwinds.” He points to three headwinds specifically that are not just affecting Whistle Express, but the entire carwash industry.
• Interest rates and cap rates
On the macroeconomic scale, Costa points to high interest rates creating tension with cap rates. The “trickle effect” of this tension is that new carwash construction and development is slowing down.
“The cost to build something is high right now,” states Costa. “So that forces you to pivot into more M&A activity, acquiring existing locations.”
• Developing talent while scaling
Whistle Express has close to 2,000 employees, many of whom have grown through the carwash industry. Costa says they make great carwashing team members, and there is a need to overlay their retail experience from a large multi-unit retail business into the carwash industry.
“Think of a barbell, thoughtful approach to talent development,” explains Costa. “You are hiring and acquiring and growing people within the industry and supplementing certain functions with outside talent that has multi-unit retail experience.”
• Pricing
The price of a carwash is something that is a headwind for both carwash operators and customers. Operators are increasing their prices, and customers are feeling a bigger pinch in their pockets.
For Costa, it’s a battle of adjusting how much a single trip through a carwash is worth when compared to customer satisfaction. He ponders, “How do you retool your value proposition so customers feel like you’re giving them more for the same price?”
Every wash is a win
Amid these headwinds, Whistle Express still considers every carwash a success. Take a look at the company’s website to find the phrase “every wash is a win” plastered across it.
“It not only translates to customers, but it also translates to our team members and to our communities that we serve,” shares Costa. “It’s anything from a surprise or a delight when you’re going through the tunnel, maybe an upgrade or maybe a small present or thank you item at the end of the customer journey.”
The mantra also applies to Whistle Express’ partners, such as when they offer a discount or benefit to carwash members. For his employees, Costa says “every wash is a win” acknowledges their hard work.
“It may be recognizing our team members based on performance by sending them on a special trip or giving them special recognition, things of that nature,” says Costa.
Moving in the right direction
Looking ahead, Costa is optimistic about the future of Whistle Express and the carwash industry.
“I spent many years in automotive retail, and I see so much opportunity within the carwash industry today when it comes to technology, the operating model, marketing, loyalty, as well as how to grow and develop our team members,” says Costa.
He references the intersection of five “playbooks” that have driven success at Whistle Express and can lead to a successful carwash business moving forward:
• Growth playbook: Where and how an operator grows the carwash.
• Operating playbook: How an operator runs the carwash.
• Technology playbook: What machines and equipment are used in the carwash.
• Marketing playbook: How an operator sells the carwash to customers.
• People playbook: The relationship between a carwash operator, employees and customers.
If these five playbooks can work together at the same time, it helps a carwash stand out from its competitors.
“That’s what excites me,” affirms Costa. “Not a lot of brands are doing that, and we believe we have a unique approach by combining those five areas, and we’re having a lot of fun doing it.”
As for Whistle Express’ future, Costa hopes the company can continue to stay focused on growth and serving the communities where Whistle Express operates.
Kyle Alexander is a multimedia journalist for Professional Carwashing & Detailing.
