CAR WASH News
Car Wash
Grand Opening
This an article written by Chris Jenks, CFA | CEO of Amplify Capital Group, a Champions partner of International Carwash Association.
Recent headlines in the car wash sector have often carried a tone of strain. Coverage around platforms such as ZIPS Car Wash and Driven Brands has, at various points, centered on leverage, integration complexity, and public-market pressure.
The decision by Mister Car Wash to return to private ownership is fundamentally different.
This is not a story of distress.
It is a story of misalignment between a capital-intensive, long-duration business model and the short-term expectations of public markets.
The model works. It simply works better in the private domain.
Capital Intensity and a Misalignment of Time
Car wash at scale is inherently capital intensive. That reality is not a weakness of the sector; it is a defining feature.
The business requires significant upfront investment per site, meaningful real estate and construction costs, and elongated ramp periods that can extend 12 to 36 months. In return, well-executed platforms generate strong unit-level economics, predictable subscription-driven recurring revenue, and attractive long-term cash-on-cash returns.
The challenge is not the economics — it is the timing.
Public markets reward near-term earnings visibility, margin expansion, and quarterly EPS growth. Car wash value creation compounds over years, not quarters.
That mismatch has defined Mister’s experience as a public company.
De Novo Expansion Amplified the Pressure
Since its IPO, Mister leaned heavily into a de novo growth strategy rather than large-scale acquisition-driven expansion. This is largely attributed to the analyst community’s negative response to growth by way of levered roll ups.
While strategically rational over the long term, de novo growth introduces persistent near-term headwinds. Higher upfront build costs, prolonged margin drag during site ramp, and the continuous introduction of immature assets into the portfolio suppress consolidated margins and delay earnings realization.
By the most recent reporting period, Mister operated approximately 548 locations and generated over $1.05 billion in annual revenue. Estimated average unit volumes were approximately $1.9 million per site — among the strongest unit-level economics in the sector. Subscription penetration approached 80% of wash sales, supported by roughly 2.3 million Unlimited Wash Club members. Same-store sales growth remained positive at approximately 2.9% in 2025.
Yet despite this scale and operating performance, earnings failed to inflect meaningfully. EPS has hovered at approximately $0.41 per share since the company went public.
That stagnation — in the face of what appeared to be a high-growth retail story — proved difficult for public investors to reconcile.
Strong Units, Challenging Optics
At maturity, Mister’s locations produce attractive returns. However, when immature de novo units are continuously layered into the system, blended margins remain compressed.
The result is a perception problem rather than an economic one. Consolidated margins appear flat, earnings growth lags revenue growth, and valuation multiples compress.
Once multiple compression sets in, the advantages of being public erode quickly. Equity ceases to function as a compelling acquisition currency, limiting strategic flexibility. At the same time, the analyst community struggled to underwrite a leveraged roll-up model layered onto a capital-intensive base with long-dated return realization.
This dynamic reflects a broader incompatibility between public-market frameworks and operationally complex, capital-heavy consumer service platforms.
A Broader and Persistent Trend
Mister’s decision to go private should be viewed in a broader context.
Over the last decade, the number of publicly traded companies in the United States has declined materially — from roughly 5,000–6,000 companies ten years ago to approximately 4,000 today. Take-private activity has been steady across cycles and has encompassed companies of varying size and industry.
This is not a car wash-specific phenomenon.
Capital-intensive roll-up strategies across veterinary services, dental platforms, home services, and other consumer-facing sectors have increasingly found better alignment in private ownership structures. The rationale is consistent: long-term value creation, margin normalization over time, and freedom from quarterly earnings pressure.
Mister fits squarely within that pattern.
The Long View: Alignment, Optionality, and M&A Implications
Returning to private ownership realigns Mister’s capital structure with the realities of its operating model. Under private equity sponsorship, the company can underwrite value creation over a five- to seven-year horizon, accept temporary margin compression, and optimize leverage without public-market scrutiny. Private capital is structurally better suited to underwrite ramp curves and delayed payoff profiles.
Critically, this shift also has meaningful implications for car wash M&A.
Mister’s return to private ownership adds a credible and well-capitalized buyer back into a buyer pool that, at scale, remains relatively limited. With the ability to underwrite to longer investment horizons, Mister can be more aggressive in acquisition processes — both in pricing and in structure — than it could as a public company constrained by EPS dilution concerns. It also removes one of the most widely accepted comps in private market M&A, which has put a somewhat arbitrary ceiling on multiples in private market car wash M&A.
That dynamic matters in a sector where integration benefits compound over time and value is often realized well beyond the first year of ownership. This transaction should increase competitive tension in M&A processes for high-quality regional platforms and scaled single-site operators, while reinforcing the strategic depth of the buyer universe.
Conclusion
There remains substantial runway for consolidation in the car wash sector. The fundamentals — strong unit economics, recurring revenue, and defensible local scale — remain intact.
Value creation in this industry is real, but it takes time. Capital intensity is unavoidable. The returns are earned through disciplined execution, site maturation, and patient capital.
The business compounds over five to seven years. It simply does not report well over five quarters.
Mister Car Wash going private should not be viewed as a retreat. It is a strategic realignment — one that restores flexibility, reopens M&A optionality, and positions the company to pursue long-term value creation on its own terms.
In that context, the transaction is not only logical for Mister. It is emblematic of how capital is increasingly choosing to engage with consumer service platforms where intensity is real, ramp curves are long, and value is created over years — not quarters.