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AUTOMOTIVE JIFFY LUBEINNOVATORS LAUNCH CAR CLEANING FACILITIES

Cleaning Up in aBillion-DollarMarketplaceBY PAUL KNOWLES

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FEATURE STORY

George, left and Peter Walsh at Suds Express

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FEATURE STORY

TThe board room walls at theWaterloo head office of QLOManagement Inc. are decorated

with Robert Bateman prints ... and onewater colour of a building with thesign, “Lube Shop.” That painting hangsover the President’s chair. It may notbe the most expensive piece of art inthe room, but it is the most important.Because that Lube Shop is where theircar servicing enterprise began for Peterand George Walsh.

Twenty-nine years ago, in 1977, theWalsh brothers launched their LubeShop in Hespeler. They did it on thestrength of a good idea, and the unusu-al faith of some financial backers.

Today, their company operates 18Jiffy Lube shops, as well as two of themost innovative car cleaning opera-tions anywhere – Suds Express. Two,and counting – they have plans forexpansion, both on a local and a fran-chise level.

The Walshes got into the automotivelubrication business after Peter – nowpresident of the company – heard ofthe new concept of a fast fuel oilchange business, in 1976. At that time,

he was on the road as a franchisesalesman for Pizza Delight, logging50,000 miles (80,000 kilometers) ayear. In those days of less efficientmotors, that meant a lot of oil changes.And in that era, an oil change wouldmean leaving your car at the shop for aday. That was a day of business lost toa salesperson.

So the idea of a quick, while-you-wait oil change appealed to Walsh; itseemed like “a really good idea.” Buthe and George immediately extrapolat-ed the idea from a personal time-saverto a proposed business venture.

The first challenge was findingfinancing. George – now Vice Presi-dent, Finances – and Peter sold everyconceivable asset, including a car anda motorcycle, to raise the gargantuansum of $15,000. They found a site inCambridge.

Peter Walsh knew they needed morefinancing, so he sought a mortgage.The lender, not surprisingly, wanted tosee a business plan, so Walsh essen-tially invented one, including a con-struction figure of $50,000. The$35,000 mortgage was granted, and no

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one was more surprised than Walshwhen the construction cost totalled outat $49,750.

However, that did not include equip-

ment, but the Walsh brothers then con-vinced Castrol Oil to give them $10,000worth of equipment in exchange for acontract that the Lube Shop would useCastrol products. Finally, after gettingseveral rejections, they found a friendly– and perhaps naive – bank managerwho agreed to loan them $7,000 instart-up costs.

The Walshes were in business, andthe business took off, immediately. Thekey was the new efficiency: “It was fast.You didn’t have to drop off your car.”

The partners praise the people ofCambridge for their support and loyalty– “Cambridge has supported us fromDay One, for 29 years. Our facilitythere made money from Day One.Without that support, we would not be

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Suds Express – a multi-million dollar car clean-ing operation, part of a surprising, multi-billiondollar North American marketplace. The Walshbrothers plan to open about three more inWaterloo Region and Guelph.

JULY/AUGUST 2006 l exchangemagazine.com l 17

“Cambridge has

supported us from Day

One, for 29 years.”

Peter Walsh, president of Suds Express, sold every concievable asset, including a car and motorcycle.

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where we are today.”Peter Walsh promises “to do some-

thing for that community. We’ll be get-ting into that process this fall.”

Perhaps because of that success,Cambridge was also chosen as the

home of the new, high-tech, glitz andglamour Suds Express car cleaning cen-tre, linked to a new Jiffy Lube on Hes-peler Road. The Walshes are every bitas excited about Suds as they were, 29years ago, about their first Lube Shop.George Walsh, Vice President, Financial had to raise the gargantuan sum of $15,000.

Shawn Walsh – a second Walsh generation is now part of the business.

“We recognized years

ago that throwing old oil

filters into landfill sites

was not a environmentally

friendly way to go.”

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They have come a long way since1977. Their business grew through anumber of changes of name and evenownership, as partners came and thendeparted.

By 1988, the Walshes had 16 LubeShops. That year, Quaker Stateacquired a 50% share of the company,and the brand was changed to MinitLube. In 1996, the brand was changedto Q-Lube. Not long after that, Penzoilbought Quaker State, and in 2001, theoutlets became Jiffy Lubes.

Eventually, Shell bought Penzoil, butprior to that, also in 2001, the Walsheshad re-acquired full ownership of theirstores. Today, they own and operate 18Jiffy Lube outlets, but retain a relation-ship with the other Jiffy Lube franchis-es. The Walshes own warehousing andrecycling facilities that serve other JiffyLubes. They currently supply 30 outlets,importing supplies from around theworld, providing transportation to theoutlets, and then loading the returningtrucks with recyclables.

Recycling is a major part of the auto-motive lubrication business. And theWalshes were ahead of the pack in thisarea: “We recognized years ago thatthrowing old oil filters into landfill siteswas not a environmentally friendly wayto go.”

Today, all the used filters are drainedof oil – which is then re-used inhydraulic equipment, among otherapplications – and the filters are recy-cled for the metal.

One of the Walsh’s Jiffy Lube shopsis located in Hamilton, and that busi-

ness provided the site for an experi-ment in a new approach to car clean-ing. The first Suds was opened there in2002, but Peter Walsh is the first toadmit that it took a while to work outthe kinks. Once the system was per-

fected, they opened the Cambridgefacility in February of this year.

Walsh can be surprisingly enthusias-tic in his discussion of the business ofcleaning cars. He talks of experiencinga car-care epiphany. “In the 90s, wediscovered that Canada was so farbehind in car cleaning.” Behind in whatway, exactly? As it turned out, behindin every way – technology, facilities,vision, you name it.

Car cleaning operations in this coun-try “were basically oil company opera-tions and old car washes that nobodyhad invested in since the 50s and 60s.”That was not true, south of the border.

So, in 1999, Peter Walsh, Director ofMarketing Dianne Hinds and othersfrom the company attended an eventthat would be well under most people’sradar – the huge, international car

wash show in Nashville. They learnedthat car washing is a “multi-billion-dol-lar business in North America.” Yes,“multi-billion.”

That seemed an inspiring concept.The Walshes and their team started tovisit state of the art car cleaning facili-ties across the United States, from LosAngeles to Chicago to Lancaster, Penn-sylvania (better known for its Amishculture). They were convinced, anddecided to launch their first Suds inHamilton.

They chose the steel city because oftheir very strong Jiffy Lube operationthere. Says Peter, “Jiffy Lube was suc-cessful there from Day One. No oneacross Canada was even close to them.”

Their Suds was not the same imme-diate success, however. “We wererookies in the car wash business. Wedid not understand it. We made somepoor decisions,” says Peter, withremarkable candor. “For the first twoyears, we had nothing but one problemafter the other. We rebuilt a lot of theplace over those two years.”

Their perseverance paid off. “TheHamilton car wash has becomeextremely successful, as well.” Andthey used all their hard-earned learningto build a Cambridge Suds that solvedall those problems in advance.

The Walshes and their team can talkfor hours about the high-tech carcleaning facility. Perhaps that is not toosurprising – the Cambridge Suds cost awhopping $7 million, and that level ofinvestment should spark some emotion-al response. The Walshes expect to

FEATURE STORY

Car washing is a

“multi-billion-dollar

business in

North America.”

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recoup their investment in the first threeyears, although Peter Walsh says theJiffy Lube facility that is part of the site is“ahead even now,” and the sales at theSuds operation are exceeding projec-tions in the five-year business plan.

The promotional material for theCambridge facility waxes eloquentabout “the extraordinary sky-lit tunnelcar wash” (which stretches 180 feet),“the moving floor through the interiorcleaning facility, the high-tech servicebays, and the spacious relaxing cus-tomer lounge.”

The new, three-acre locationincludes three facilities – Suds Express,Jiffy Lube and the full service SudsDetail, which is managed by PeterWalsh’s son, Shawn, one of threeWalsh siblings.

Peter tends to talk about Suds asthough it is a theme park, or an enter-tainment complex. “It’s a fun place togo,” he says, and he laughs that one ofthe minor maintenance challenges is

cleaning the windows of the customerlounge, because children leave finger-and nose-prints on the window as theytake in the action.

He also argues that the service isaffordable, because the high-tech facili-ty is efficient. Suds offers price pointsacross the grid, from a $7.43 exteriorcleaning to a $159.95 “Bumper toBumper Package” at Suds Detail. Thelowest price for exterior and interiorcleaning at Suds Express is $23.21. Theprocess takes 12 to 15 minutes,although the Walshes point out thatsince it is a team job, each car receivesabout 35 minutes of cleaning attention.

Of all the customers who buy onlyexterior cleaning, 56% actually opt for ahigher-end, $11.96 package. Walshsays this shows “there was a real mar-ket for a great quality car wash.”

There’s also a real market for time-saving service. That was the key tosuccess, 29 years ago, and is again amajor motivation for Suds Express cus-

tomers. Says Walsh, “today, everybodyis so busy.”

It seems that the lessons learned inHamilton have paid off handsomely inthe new Cambridge operation. Forexample, the .7 acre Hamilton site sawcontinual traffic problems which do notoccur at the 3-acre Cambridge facility.

Business is good at Cambridge Suds,and the spin-offs are even better –Walsh reports that oil changes are up41% at the adjacent Jiffy Lube sinceCambridge Suds opened, with lots ofcross-promotional deals.

Walsh says that the level of serviceoffered is “new for Canadians,” but heargues Canadians are hungry for it.

The Walshes have a thriving carservice empire. They employ 225 peo-ple at their 18 locations, including 50full- and part-time in Cambridge. Theirgoal is growth; Peter Walsh says theyplan to open “probably three more”facilities like the Cambridge Suds/JiffyLube business in Waterloo Region and

They plan to open “probably three

more” facilities like the Cambridge

Suds/Jiffy Lube business in

Waterloo Region and Guelph.

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JULY/AUGUST 2006 l exchangemagazine.com l 21

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FEATURE STORY

Guelph, over the next five years.They are also in discussion with Shell,

owner of Jiffy Lube internationally, aboutfranchising Suds operations across thecontinent. Nothing has been signed asyet, but Peter Walsh confides that“they’re very interested in the concept.”

All of this is still in the planning

stage; with Cambridge and Hamiltonnow running smoothly, it’s time for amajor strategic planning session.That’s slated for this fall.

Odds are good the strategic plan willsee further development of a well-oiledcorporate machine, positioned to cleanup in a billion-dollar marketplace.

A well-oiled corporate

machine, positioned

to clean up in a billion-

dollar marketplace.

Business expansion is definitely in the plans for the Walsh brothers.

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