Checklist

Car wash due diligence checklist

44 checks across the six factors that decide a deal, plus the 15 documents to request from the seller. Your ticks save in this browser; print it for the site visit. The framework behind the weights is the underwriting guide; the scoring version is the interactive tool.

0 / 44 checked

Market Quality

· 20 pts on the scorecard

"Is this a good trade area?"

Define the trade area as a 10-minute drive-time isochrone (or 3–5 mile radius) Every demand and saturation metric is a trade-area number; metro-level reads are unreliable.
Median household income in the trade area — against the ~$60K membership floor / $80K premium band Income sets the ceiling on membership pricing and penetration.
Population and households within 5 miles (30,000–80,000 people is the common viable range) Rooftops are the demand base; pair with saturation before concluding anything.
Count express tunnels competing in the trade area; compute tunnels per 10,000 households Below ~0.5 the market is expandable; above ~1.0 the target is fighting for existing washers.
Compute cars per wash across all formats in the trade area More than ~4,000 is underserved; under ~1,500 is likely oversaturated.
Score incumbent competitor quality from review data (weighted average rating) Weak incumbents (below 4.0) make a market more open than the pin count suggests.
Check announced/under-construction washes nearby (permits, chain development pages) The trade area you're buying is the one after the pipeline opens, not before.
Note local single-wash and membership pricing Market pricing bounds the revenue model you can underwrite.

Site Quality

· 20 pts on the scorecard

"Is this specific parcel advantaged?"

Pull AADT at the parcel, not the corridor average Top express sites sit above 40,000; two sites on the same road can see very different exposure.
Confirm posted speed on the fronting road (25–45 mph ideal) Above ~50 mph the traffic count is worth substantially less — drivers won't decelerate to enter.
Determine side of street vs. the dominant evening commute (going-home side) The same AADT on the going-to-work side is worth meaningfully less.
Drive the ingress/egress at peak: right-in/right-out, median breaks, U-turns Left turns across traffic shed real demand every single day.
Verify visibility from a half-mile out in both directions Sightline-blocked sites underperform by a measurable margin.
Count stacking depth and simulate Saturday peak Queues that spill into the street cap throughput and train regulars to go elsewhere.
Assess vacuum count, layout, and expansion room on the parcel Vacuum scarcity drives membership churn; landlocked parcels have no optionality.
Check easements, shared-access agreements, and any planned road construction A DOT median project or lost curb cut can permanently reprice the site.

Financial quality

· 20 pts on the scorecard

"Is the EBITDA real?"

Collect 3 years of P&Ls, business tax returns, and 12 months of bank statements The reconciliation set — no single document is trustworthy alone.
Reconcile POS reports to bank deposits to tax returns If the three don't tie, you are underwriting a story, not a business.
Verify every add-back line by line; strike what can't be documented Add-backs above ~15–20% of EBITDA without support are seller EBITDA, not yours.
Restate rent to market if the real estate is owner-held or related-party Below-market rent resets to reality at renewal — price it now.
Insert a real manager salary if owner-operator labor is missing from the P&L You are buying the business, not the seller's free labor.
Compare the repairs & maintenance line to a sustainable level for the equipment's age An anomalously low repairs line is deferred capex in disguise — the classic trap.
Subtract annualized maintenance capex (conveyor, pumps, dryers, arches, vacuums on replacement cycles) Maintenance-capex-adjusted EBITDA is the number to underwrite and to multiply.
Chart 24 months of revenue by month; flag any pre-listing surge A revenue bump timed to the listing deserves an explanation before it deserves a multiple.

Membership quality

· 15 pts on the scorecard

"Is the recurring revenue durable?"

Request monthly member cohorts: joins, cancels, and tenure by month A seller who can't produce cohorts is telling you the recurring revenue is unverifiable.
Compute monthly churn (cancellations ÷ active members) — below 4% excellent, above 8% leaky Churn is the difference between an annuity and a treadmill.
Check the discount history: intro promos, rate locks, grandfathered plans A roll pumped with $10 promos before a sale guarantees a churn cliff in your first quarter.
Split membership share of revenue from retail (40%+ is a durable base) Score quality separately from size — 2,000 loyal members beat 4,000 discounted ones.
Confirm membership contracts are assignable on sale Non-assignable plans mean re-enrolling the entire base under your paper.
Quantify prepaid liabilities: gift cards, prepaid books, annual plans You inherit the obligation; it belongs on the closing statement.

Operating quality

· 15 pts on the scorecard

"Do customers actually come back?"

Pull the target's rating and 24-month trend against the local competitor average Review-derived quality is the one operating signal the seller can't dress up.
Scan reviews for damage-claim patterns Recurring damage complaints are a liability signal and a churn driver at once.
Check wait-time and throughput complaints at peak hours Throughput complaints at today's volume bound the upside case.
Assess staff signals: turnover mentions, attendant quality, upsell-pressure complaints Labor culture transfers with the deal for exactly as long as you earn it.
Inventory equipment ages against typical replacement cycles; inspect with a tech The equipment list prices the first-year capex check that sits outside the loan.
Review chemical/supply contracts for exclusivity or minimum-purchase terms Locked-in supply contracts move margin you thought you were buying.

Capex, legal & environmental risk

· 10 pts on the scorecard

"What can blow up after close?"

Order a Phase I environmental site assessment (2–4 weeks) Chemical storage, drainage, and oil-water separators make washes a standard Phase I candidate.
Verify water/sewer rate structure and any pending municipal increases Rates vary wildly by municipality and a pending increase lands straight on the margin.
Confirm water-reclaim compliance and discharge permits Non-compliance is a capex bill with a deadline.
Review the lease: term, options, escalators — or confirm fee-simple title A short lease with steep escalators can zero out an otherwise good deal.
Pull insurance loss runs and claims history Loss runs are the objective record of the damage complaints you read about in reviews.
Search litigation, liens, and UCC filings on the entity and owners Encumbrances surface at closing when they're expensive; find them now.
Confirm permits, certificates of occupancy, and signage rights transfer A non-conforming sign you can't rebuild is lost visibility forever.
Review employment terms: key staff, accrued PTO, any retention needs The Saturday crew is an asset that can quit.

The document request

15 documents to request from the seller

Send this list with the LOI. What the seller can't produce is itself diligence signal — a missing cohort report or an unreconcilable P&L is a price deduction, not an inconvenience.

Document	Factor it verifies	Why
P&Ls, monthly, 3 years	Financial quality	The base document — but only alongside its reconciliation set
Business tax returns, 3 years	Financial quality	The version the seller told the IRS
Bank statements, 12 months	Financial quality	Deposits are the ground truth for revenue
POS reports by month (washes, ticket, mix)	Financial quality	Ties volume to revenue; exposes cash leakage
Add-back schedule with support	Financial quality	Every line either survives scrutiny or gets struck
Member cohorts: joins, cancels, tenure by month	Membership quality	The durability evidence — summary counts hide the churn
Membership plan terms, pricing, and discount history	Membership quality	Finds the promo-pumped roll before you pay for it
Utility bills with water/sewer broken out, 12 months	Risk	Water cost per car is a core operating metric
Equipment list with ages, brands, and service records	Operating quality	Prices the year-one capex check
Chemical/supply contracts	Operating quality	Exclusivity and minimums move margin
Lease or deed, plus any easements and CCRs	Risk	The parcel rights are what you're buying
Insurance policies and loss runs, 3 years	Risk	The objective damage-claims record
Phase I environmental report (order if none exists)	Risk	Standard for wash transactions; lenders will require it
Employee roster with roles, tenure, and comp	Operating quality	Replacement labor cost and retention risk
Gift card / prepaid balance report	Membership quality	A liability you inherit at close

What to do with the documents once they arrive — the reconciliation, the add-back scrub, and the three-EBITDA bridge — is section 04 of the underwriting guide.

Frequently asked

Due diligence questions, answered

What should be on a car wash due diligence checklist?

Organize it by the six factors that decide the deal: Market Quality (trade-area income, population, saturation, competitor quality), Site Quality (parcel-level AADT, speed, access, visibility, stacking), financial quality (POS-to-bank-to-tax reconciliation, add-back verification, the EBITDA rebuild), membership quality (monthly cohorts, churn, discount history, assignability), operating quality (review-derived scores, damage patterns, equipment ages), and capex/legal/environmental risk (Phase I, water/sewer, lease, loss runs, litigation).

What documents should I request when buying a car wash?

Three years of P&Ls and business tax returns, twelve months of bank statements, monthly POS reports, the add-back schedule with support, monthly membership cohorts, plan terms and discount history, utility bills with water/sewer broken out, an equipment list with ages and service records, chemical contracts, the lease or deed, insurance loss runs, a Phase I environmental report, the employee roster, and the gift-card/prepaid balance report.

How much of car wash due diligence can be done before the LOI?

Three of the six factors — Market Quality, Site Quality, and operating quality — are measurable from independent data before the seller shares anything: demographics, traffic counts, saturation, competitor ratings, and review-derived quality signals. WashIndex measures all three for every wash in the US and Canada, which is why the location half of this checklist can be completed in an afternoon.

What is the most commonly missed item in car wash diligence?

The maintenance-capex adjustment. Buyers verify the P&L but accept the repairs line at face value — and an anomalously low repairs line is deferred capex in disguise. Restate maintenance to a sustainable level, then subtract annualized equipment replacement (conveyor, pumps, dryers, arches, vacuums) before applying any multiple. The runner-up: membership rolls pumped with intro discounts just before the listing.

Do I need a Phase I environmental report to buy a car wash?

Practically, yes. Car washes store chemicals, generate wash-water discharge, and run oil-water separators, which makes them a standard Phase I candidate — and any SBA or conventional lender will require one. It takes two to four weeks, so order it early in the diligence window.

The location half of this checklist
takes an afternoon, not a data room.

Market Quality, Site Quality, and operating quality are measured on the WashIndex platform for every wash in the US and Canada — before the seller shares a single document.

Launch the platform

Car wash due diligence checklist

"Is this a good trade area?"

"Is this specific parcel advantaged?"

"Is the EBITDA real?"

"Is the recurring revenue durable?"

"Do customers actually come back?"

"What can blow up after close?"

15 documents to request from the seller

Due diligence questions, answered

What should be on a car wash due diligence checklist?

What documents should I request when buying a car wash?

How much of car wash due diligence can be done before the LOI?

What is the most commonly missed item in car wash diligence?

Do I need a Phase I environmental report to buy a car wash?

The location half of this checklisttakes an afternoon, not a data room.

The location half of this checklist
takes an afternoon, not a data room.