AUTOMOTIVE JIFFY LUBE INNOVATORS

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AUTOMOTIVE JIFFY LUBE
INNOVATORS LAUNCH
CAR CLEANING FACILITIES
Cleaning
Up in a
Billion-Dollar
Marketplace
PHOTOGRAPHY: EXCHANGE MAGAZINE
BY PAUL KNOWLES
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FEATURE STORY
George, left and
Peter Walsh at
Suds Express
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FEATURE STORY
he board room walls at the
Waterloo head office of QLO
Management Inc. are decorated
with Robert Bateman prints ... and one
water colour of a building with the
sign, “Lube Shop.” That painting hangs
over the President’s chair. It may not
be the most expensive piece of art in
the room, but it is the most important.
Because that Lube Shop is where their
car servicing enterprise began for Peter
and George Walsh.
Twenty-nine years ago, in 1977, the
Walsh brothers launched their Lube
Shop in Hespeler. They did it on the
strength of a good idea, and the unusual faith of some financial backers.
Today, their company operates 18
Jiffy Lube shops, as well as two of the
most innovative car cleaning operations anywhere – Suds Express. Two,
and counting – they have plans for
expansion, both on a local and a franchise level.
The Walshes got into the automotive
lubrication business after Peter – now
president of the company – heard of
the new concept of a fast fuel oil
change business, in 1976. At that time,
T
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JULY/AUGUST 2006
he was on the road as a franchise
salesman for Pizza Delight, logging
50,000 miles (80,000 kilometers) a
year. In those days of less efficient
motors, that meant a lot of oil changes.
And in that era, an oil change would
mean leaving your car at the shop for a
day. That was a day of business lost to
a salesperson.
So the idea of a quick, while-youwait oil change appealed to Walsh; it
seemed like “a really good idea.” But
he and George immediately extrapolated the idea from a personal time-saver
to a proposed business venture.
The first challenge was finding
financing. George – now Vice President, Finances – and Peter sold every
conceivable asset, including a car and
a motorcycle, to raise the gargantuan
sum of $15,000. They found a site in
Cambridge.
Peter Walsh knew they needed more
financing, so he sought a mortgage.
The lender, not surprisingly, wanted to
see a business plan, so Walsh essentially invented one, including a construction figure of $50,000. The
$35,000 mortgage was granted, and no
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PROFESSIONAL JANITORIAL
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Specializing in Commercial,
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Peter Walsh, president of Suds Express, sold every concievable asset, including a car and motorcycle.
one was more surprised than Walsh
when the construction cost totalled out
at $49,750.
However, that did not include equip-
“Cambridge has
supported us from Day
One, for 29 years.”
ment, but the Walsh brothers then convinced Castrol Oil to give them $10,000
worth of equipment in exchange for a
contract that the Lube Shop would use
Castrol products. Finally, after getting
several rejections, they found a friendly
– and perhaps naive – bank manager
who agreed to loan them $7,000 in
start-up costs.
The Walshes were in business, and
the business took off, immediately. The
key was the new efficiency: “It was fast.
You didn’t have to drop off your car.”
The partners praise the people of
Cambridge for their support and loyalty
– “Cambridge has supported us from
Day One, for 29 years. Our facility
there made money from Day One.
Without that support, we would not be
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Suds Express – a multi-million dollar car cleaning operation, part of a surprising, multi-billion
dollar North American marketplace. The Walsh
brothers plan to open about three more in
Waterloo Region and Guelph.
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where we are today.”
Peter Walsh promises “to do something for that community. We’ll be getting into that process this fall.”
Perhaps because of that success,
Cambridge was also chosen as the
“We recognized years
ago that throwing old oil
filters into landfill sites
was not a environmentally
friendly way to go.”
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.
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home of the new, high-tech, glitz and
glamour Suds Express car cleaning centre, linked to a new Jiffy Lube on Hespeler Road. The Walshes are every bit
as excited about Suds as they were, 29
years ago, about their first Lube Shop.
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FEATURE STORY
They have come a long way since
1977. Their business grew through a
number of changes of name and even
ownership, as partners came and then
departed.
By 1988, the Walshes had 16 Lube
Shops. That year, Quaker State
acquired a 50% share of the company,
and the brand was changed to Minit
Lube. In 1996, the brand was changed
to Q-Lube. Not long after that, Penzoil
bought Quaker State, and in 2001, the
outlets became Jiffy Lubes.
Eventually, Shell bought Penzoil, but
prior to that, also in 2001, the Walshes
had re-acquired full ownership of their
stores. Today, they own and operate 18
Jiffy Lube outlets, but retain a relationship with the other Jiffy Lube franchises. The Walshes own warehousing and
recycling facilities that serve other Jiffy
Lubes. They currently supply 30 outlets,
importing supplies from around the
world, providing transportation to the
outlets, and then loading the returning
trucks with recyclables.
Recycling is a major part of the automotive lubrication business. And the
Walshes were ahead of the pack in this
area: “We recognized years ago that
throwing old oil filters into landfill sites
was not a environmentally friendly way
to go.”
Today, all the used filters are drained
of oil – which is then re-used in
hydraulic equipment, among other
applications – and the filters are recycled for the metal.
One of the Walsh’s Jiffy Lube shops
is located in Hamilton, and that busi-
ness provided the site for an experiment in a new approach to car cleaning. The first Suds was opened there in
2002, but Peter Walsh is the first to
admit that it took a while to work out
the kinks. Once the system was per-
Car washing is a
“multi-billion-dollar
business in
North America.”
fected, they opened the Cambridge
facility in February of this year.
Walsh can be surprisingly enthusiastic in his discussion of the business of
cleaning cars. He talks of experiencing
a car-care epiphany. “In the 90s, we
discovered that Canada was so far
behind in car cleaning.” Behind in what
way, exactly? As it turned out, behind
in every way – technology, facilities,
vision, you name it.
Car cleaning operations in this country “were basically oil company operations and old car washes that nobody
had invested in since the 50s and 60s.”
That was not true, south of the border.
So, in 1999, Peter Walsh, Director of
Marketing Dianne Hinds and others
from the company attended an event
that would be well under most people’s
radar – the huge, international car
wash show in Nashville. They learned
that car washing is a “multi-billion-dollar business in North America.” Yes,
“multi-billion.”
That seemed an inspiring concept.
The Walshes and their team started to
visit state of the art car cleaning facilities across the United States, from Los
Angeles to Chicago to Lancaster, Pennsylvania (better known for its Amish
culture). They were convinced, and
decided to launch their first Suds in
Hamilton.
They chose the steel city because of
their very strong Jiffy Lube operation
there. Says Peter, “Jiffy Lube was successful there from Day One. No one
across Canada was even close to them.”
Their Suds was not the same immediate success, however. “We were
rookies in the car wash business. We
did not understand it. We made some
poor decisions,” says Peter, with
remarkable candor. “For the first two
years, we had nothing but one problem
after the other. We rebuilt a lot of the
place over those two years.”
Their perseverance paid off. “The
Hamilton car wash has become
extremely successful, as well.” And
they used all their hard-earned learning
to build a Cambridge Suds that solved
all those problems in advance.
The Walshes and their team can talk
for hours about the high-tech car
cleaning facility. Perhaps that is not too
surprising – the Cambridge Suds cost a
whopping $7 million, and that level of
investment should spark some emotional response. The Walshes expect to
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They plan to open “probably three
more” facilities like the Cambridge
Suds/Jiffy Lube business in
Waterloo Region and Guelph.
recoup their investment in the first three
years, although Peter Walsh says the
Jiffy Lube facility that is part of the site is
“ahead even now,” and the sales at the
Suds operation are exceeding projections in the five-year business plan.
The promotional material for the
Cambridge facility waxes eloquent
about “the extraordinary sky-lit tunnel
car wash” (which stretches 180 feet),
“the moving floor through the interior
cleaning facility, the high-tech service
bays, and the spacious relaxing customer lounge.”
The new, three-acre location
includes three facilities – Suds Express,
Jiffy Lube and the full service Suds
Detail, which is managed by Peter
Walsh’s son, Shawn, one of three
Walsh siblings.
Peter tends to talk about Suds as
though it is a theme park, or an entertainment complex. “It’s a fun place to
go,” he says, and he laughs that one of
the minor maintenance challenges is
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cleaning the windows of the customer
lounge, because children leave fingerand nose-prints on the window as they
take in the action.
He also argues that the service is
affordable, because the high-tech facility is efficient. Suds offers price points
across the grid, from a $7.43 exterior
cleaning to a $159.95 “Bumper to
Bumper Package” at Suds Detail. The
lowest price for exterior and interior
cleaning at Suds Express is $23.21. The
process takes 12 to 15 minutes,
although the Walshes point out that
since it is a team job, each car receives
about 35 minutes of cleaning attention.
Of all the customers who buy only
exterior cleaning, 56% actually opt for a
higher-end, $11.96 package. Walsh
says this shows “there was a real market for a great quality car wash.”
There’s also a real market for timesaving service. That was the key to
success, 29 years ago, and is again a
major motivation for Suds Express cus-
JULY/AUGUST 2006
tomers. Says Walsh, “today, everybody
is so busy.”
It seems that the lessons learned in
Hamilton have paid off handsomely in
the new Cambridge operation. For
example, the .7 acre Hamilton site saw
continual traffic problems which do not
occur 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 up
41% at the adjacent Jiffy Lube since
Cambridge Suds opened, with lots of
cross-promotional deals.
Walsh says that the level of service
offered is “new for Canadians,” but he
argues Canadians are hungry for it.
The Walshes have a thriving car
service empire. They employ 225 people at their 18 locations, including 50
full- and part-time in Cambridge. Their
goal is growth; Peter Walsh says they
plan to open “probably three more”
facilities like the Cambridge Suds/Jiffy
Lube business in Waterloo Region and
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FEATURE STORY
Guelph, over the next five years.
They are also in discussion with Shell,
owner of Jiffy Lube internationally, about
franchising Suds operations across the
continent. Nothing has been signed as
yet, but Peter Walsh confides that
“they’re very interested in the concept.”
All of this is still in the planning
A well-oiled corporate
machine, positioned
to clean up in a billiondollar marketplace.
stage; with Cambridge and Hamilton
now running smoothly, it’s time for a
major strategic planning session.
That’s slated for this fall.
Odds are good the strategic plan will
see further development of 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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