P&G Puts Its Power Behind Mr. Clean Car Wash

Everything about Procter & Gamble seems big. It is an enormous company with global reach that generated more than $80 billion in sales a year ago during a bad economy. This is a company that bases its success on billion-dollar consumer brands, and now it wants to be the muscle behind the first successful national carwash brand.

Positioned with deep pockets and ambition, P&G does not enter business ventures lightly, and its accelerated entry into full-service carwashing earlier this year raised plenty of eyebrows when it acquired the assets of the respected Carnett’s Car Washes chain based out of Atlanta. Suddenly, Mr. Clean Car Wash went from a nice testing ground of two corporate stores in Cincinnati to a regional player touting 16 locations.

From left, Brett Arnett, Brandon Arnett, Bruce Arnett Jr. and Bruce Arnett Sr. pose inside the express detailing bay at Mr. Clean Car Wash in Lawrenceville, Ga.

Since then, Agile Pursuits Franchising Inc., the P&G subsidiary that oversees the carwash franchising efforts, has secured seven new Mr. Clean Car Wash franchisees in the Southeast, the Ohio Valley, Chicago and Colorado, and pinpointed Texas for rapid expansion. The company expects to open its first Texas franchise in Round Rock by spring 2010 and has designs on a stable of more than 20 locations in the Lone Star State.

Los Angeles and New Jersey also are mentioned as desirable markets.

Reaction from both financial analysts and carwash operators has been mixed. Some have criticized the move as baffling and risky, while others have lauded it as a bold venture that could change the face of the carwash industry.

Operators have watched two similar attempts at national prominence from Mace Security International and Rapido Rabbit fail, and there certainly is no guarantee that P&G will succeed. Despite a corporate directive in 2003 to expand its reach from consumer products into service industries, P&G has yet to make a major impact.

But it also has learned lessons along the way and after a successful test with its two corporate sites, P&G has identified professional carwashing as a good fit for its operations and an appropriate extension of its Mr. Clean brand.

“One thing we know how to do at P&G is measure,” explains Pete McIndoe, brand manager for Mr. Clean Car Wash. “We created a benchmark study where we actually had some current measures from some local and leading carwashes and then used the same metric on our two washes. Our intent was to transform the industry and deliver much higher results from the consumer’s perspective, in terms of their wash experience.”

Mr. Clean customers gave high marks on wash quality, customer service and facility environment. In fact, McIndoe says the stores exceeded company goals, which speaks volumes for a company that has built its reputation on consumer brands and places a premium on positive consumer reaction and loyalty.

Customer success at its corporate sites translated into business profitability, which helped convince P&G that Mr. Clean Car Wash was a viable proposition that could attract entrepreneurs interested in a franchise model.

“In our second year, which just concluded June 30, we delivered double-digit growth despite a rather challenging economic environment where consumers were pinching pennies,” says McIndoe. “The good news is we were able to grow in the midst of that, so when the economy turns back we’re expecting to see that improve further.

“We always play to win. If we’re going to enter something, whether it’s laundry care or hair care, we like to be the number one or number two player — preferably both,” he continues. “We’re entering [the carwash industry] with an eye toward being the first national franchise and being the one that’s the leader.”

Magic Triad

Make no mistake, P&G has studied the failures of Mace and Rapido Rabbit and has assembled a team and built a model it believes has the chops to succeed on a national level. Calling it the Magic Triad, McIndoe identifies its components as franchising, carwashing experience and P&G’s branding prowess.

To help with franchising, P&G brought in Mail Boxes Etc. wizard Jim Amos, among others, to sit on its board of executives. Amos is the CEO of Tasti D-Lite and a former chairman of the International Franchise Association. He built Mail Boxes Etc. into an international retail power.

Bruce Arnett Sr. and Bruce Arnett Jr. founded the Carnett’s chain and have 50 years combined carwashing experience, including 11 years of regional franchising. Nine of the Carnett’s 14 carwashes were franchisees. The two carwash veterans are now Mr. Clean Car Wash’s CEO and COO, respectively, and will be instrumental on the operational side of the business.

P&G’s intangibles as a brand builder and first-rate marketer could very well be the X-factor in the Mr. Clean Car Wash venture. The carwash industry has never had a business the size of P&G operating in the market, nor has it seen a company with its consumer expertise. No doubt P&G’s confidence hinges greatly on its track record for building formidable brands, and the same is likely true for prospective franchisees prepared to invest between $2 million and $4 million and pay royalty fees of 6 percent.

If Mr. Clean Car Wash can replicate the consumer brand loyalty of many of P&G’s retail products and build on the early success of its corporate sites, then it stands a reasonable chance at national success by attracting investors who might otherwise opt to avoid paying franchise fees, royalty fees and marketing fees and build independent facilities.

“We are truly trying to focus on the consumer experience,” notes Bruce Arnett Jr. “We’re making sure that not only our footprint, but our procedures and operation, are all designed around the consumer experience, probably to a