August 4, 2023 • 33 mins
Splash Carwash (Arksansas) President and CEO Paul Stagg joins host Kevin Zalaznik on the latest episode of the Modern Car Wash Podcast. Paul shares invaluable insights on his experience in the industry, establishing a brand identity, managing family involvement in the business, expansion strategies, labor management, and more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:11):
All right everyone.
Welcome back to the Modern CarWash Podcast.
Now, normally I am joined by myco-host Shane Groff, who is on
assignment today.
So, Just flying solo.
And our guest today is Paul Stagfrom Splash Car Walk in
Arkansas.
Paul, thanks for joining us.
Happy to do it.
So, I, uh, I've actually, I'vemet your son, Matt.
(00:32):
Um, I.
T twice now.
I've, uh, I met him in a meetingand then also at, uh, at the,
this year's I c a show and alsoJustin in your marketing
department.
I've, I've had a fewconversations with him and, uh,
just two lovely people.
And, uh, the thing that I takefrom both of them is how
passionate they are.
(00:52):
Um, about the industry and I'msure that kind of trickles down
from you.
So, uh, you know, I was readingan article, uh, that you were
featured in and one of yourquotes was, what's important to
me is not the p and l this monthor this quarter, it's that we
win and I got the sense fromboth Matt and Justin.
That's, that's kind of theculture there at Splash.
(01:15):
Uh, can you just elaborate onthat?
Um, yeah.
I think we're able to make, withthat approach, we're able to
make, uh, more look at things,uh, more long term.
And, um, you know, what'simportant to me is to have a
strong company and, uh, like saythat we're gonna win.
(01:36):
In, in today's competitiveenvironment, you wanna do things
that, that differentiateyourself.
And in order to do that, youhave to make decisions that are
more, a little bit more longterm, such as how much you
invest in your people, you know,the, the, and just if you're an
(01:58):
operator, if you're a trueoperator.
Yeah, you build your car washesa little differently.
I mean the, from the, the pumprooms to just the way you
install the equipment, thingslike that.
Because you're doing it from theperspective of I have to clean
this facility.
Yeah.
I'm saying it, you know, longterm.
Yeah.
(02:19):
Yeah.
It's funny, we, uh, a few yearsago we built a car wash.
Uh, it was right at 2020.
And we have the largest backroom.
Uh, and it just makes it so mucheasier to get through and
manage.
I, you could probably drive acar through it.
And then you look at some of theolder sites.
Where, uh, you know, you'regoing sideways trying to get
(02:42):
through.
Yeah.
Kind of remind Yeah.
You can touch both sides.
Both walls.
Yeah.
Exactly.
Exactly.
So, uh, can you just give us alittle bit of background on your
company, how many tunnels youhave?
I know you have some quickloops.
Um, just a general overview.
Yeah, well we've been inbusiness for, well close to 30
years now, and so as the carwash has evolved, uh, in
(03:06):
general, the types of washes wehave have changed.
So we've got, we've got a few.
Of the older self serves andautomatics, but most of ours
are, uh, express and we have, sowe have right now, uh, I think
we have 15 locations that carwashes that are open and 10 oil
(03:27):
changes.
Okay.
Um, couple of the oil changesare free standing, but most of
them are on property adjacent tothe car wash or integrated into
the same building as the carwash.
Okay.
Of the 15 washes, I believe wehave six that are flex model and
(03:48):
the rest are express.
Uh, going forward we will do,uh, probably one flex a year
and, you know, five or sixexpresses.
It's interesting the, um, fromour, from Hoffman carwash
standpoint, uh, and maybe thisis a regional thing, it might be
a state thing.
Uh, controlling labor is.
(04:10):
One of our, the things that wefocus on the most or one of our
biggest struggles, so a fullservice or even a flex service
where you're adding staff issomething that we've kind of
shut away from, um, and havekind of almost gone all in on
the express model.
I.
Do you see that in Arkansas oris it just kind of, maybe not
as, I mean, minimum wage here,it continues to skyrocket.
(04:33):
Um, so curious what, how Wellit, it's certainly the path that
all of our competitors havetaken is just express, but at
minimal labor.
Um, and I think they're smart todo that because, um, if, if
you're, if you're buildinglocations, you know, in a large
(04:54):
geographic area, I, I wouldthink it would be very difficult
to manage that number ofemployees.
Um, we like the flex because itgives us an opportunity to have
more touch points with thecustomers and.
It's an opportunity to buildrelationships with customers,
(05:16):
but with the opportunity comesresponsibility.
I.
Yeah, if you're gonna do itwell, yeah, okay.
Just because you have theopportunity to build
relationships doesn't meanyou're going to succeed in that.
So it's, it's a lot moredifficult, but it's a way we can
differentiate and if we arestaying close to home, we, it,
(05:37):
we can act, we can actually dothat.
Plus, having been in thebusiness a long time, having had
some full service washes, um,there's a void there and.
We like that we have the abilityto fill it.
So your, the flex model thatyou've gone to, and correct me
if I'm wrong, it seems like, uh,the, I think the most recent one
(06:00):
I've seen is I don't, it was anold Walmart or an old, uh, store
mm-hmm.
That has a, uh, tile wash andthen has a belt for, uh,
interior cleaning and then alsofree vacuums as well.
Yeah, we actually,coincidentally, we, we came
(06:20):
across two opportunities, uh,about the same time.
They were both 35,000 squarefoot buildings.
One was, um, an old Walmartneighborhood market where they,
they, they had that unit andthey built a Supercenter not far
away, so they closed that one.
And then the other one was anold, was a trampoline park.
(06:43):
Trampoline.
Yeah, it was, um, out food,trampoline building and, uh,
covid hit and that of course,that just devastated their
business there.
So we had the opportunity totake two of these at one time.
I do not recommend doing that.
The way the timing worked outwith Covid, it, it got
(07:05):
compressed and, uh, it wasquite, uh, an ordeal doing that.
But now that I have'em, I'm gladI do.
But yeah, one, one of them is asyou described, and then the, uh,
the one that was a trampolinepark that's in Little Rock.
It's what we refer to as ourChanel store.
(07:25):
It's, it's on Chanel Avenue, butit actually has two tunnels, 24
indoor free vacuums, and twodetail belts.
Okay.
What's nice about your sites is,um, uh, it, there's, when you
look at it, you have the.
Kind of like the indoorAstroTurf grass area.
(07:46):
You have areas for the kids.
It really, you, you thought ofeverything in the sense of like
making it such a greatexperience, not just getting
your car cleaned, but makingsure that you're, the kids are
entertained.
I see.
Like free coffee, everything.
Um, uh, how much time andconsideration did you go into
that?
Or did you still, or were youinspired from.
(08:09):
Something else that you had seensomewhere?
Well, we, we've seen a lot ofcar washes.
Uh, there's some really nice carwashes in the us.
Uh, we went to Washington, DCand, and some other areas where
there's some really great carwashes.
Um, the, the originalinspiration came from, from,
(08:31):
from Europe, from Amsterdam and,and western Germany.
And, uh, I went there in 2015and fell in love with, you know,
the, the belts and the epoxyfloors and the stainless.
And so, um, anyway, I broughtthat back.
(08:53):
I.
Uh, and actually built afacility in Rogers, a 14,000
square foot new building.
And, uh, so that's where theidea originated.
Yeah.
It's, you know, in doing theresearch for this and, uh,
different areas where, um, I'vecome across your bio or
different articles, it seemslike that European, uh, it
(09:16):
becomes a talking point almost.
And it seems like you've, you'vetook a lot of inspiration from.
Going to see those models orthose car washes in Europe.
Um, you know, 2015, you've beenin the industry a long time.
You go, I'm assuming 2015 is thefirst time you'd gone over to
see it.
Well, were you kind of in awe?
Is it?
(09:36):
Oh, I was in awe and.
Here's the thing.
Every all of the features that Iput into the washes, they don't,
um, you know, they don'tnecessarily translate into more
revenue.
(09:56):
Okay.
There's not a direct correlationbetween having brick pavers in
the building or having oxy flooror any of those sorts of things.
What it does, it's, it's, it'severy little detail I can think
of that would help us, um, winwhen competition comes to town.
(10:20):
And if I'm planning on owning itfor 40 years, you know, then the
cost of those things, it's theway I justify, let's just put it
that way, justify the expenseand, um, You only get one chance
to do that.
(10:42):
I'll always, that's, that's, andI'm not bragging, you know what
I mean?
That's not all blessing.
But if everybody's going here,there's something in me that
wonders what's over here.
And, um, sometimes that's a goodthing and, and sometimes it's
not a good thing, but, um, Youknow, when I first started, uh,
(11:08):
in Arkansas, what existed wasmetal buildings, uh, for self
surveys.
And then you had automatics atgas stations.
And I saw, I traveled up toMissouri and I saw, uh, car
washes built on prime propertythat were really nice looking
self surveys with all the bellsand whistles and.
(11:32):
Automatic.
It's it, and I just have alwaysfelt like people like nice
things and, you know, peoplelike a choice.
You can go to a less expensivewash.
Um, or you, you can go tosomething that's more upscale.
I've always felt like I'd rathercompete on, you know, not rather
(11:56):
compete based on price.
Sure.
Sure.
It's, uh, I heard a greatanalogy one time, and it was, if
everyone, if everyone based adecision on, um, on price, then
there would be no Mercedes, noBMWs, or, you know, so it's
mm-hmm.
The quality, it's the, uh, howyou make people feel about it,
(12:16):
that, that really can drivethem, uh, as far as the choices
that they make.
Hmm.
Um, you touched on, you know,when you, you were first
starting out and, um, I believethe, the first your introduction
to the car wash was the ArkansasCar Wash Systems.
Is that correct?
Yeah.
When I first started, it wasmore of a sales, um, uh, sales
(12:38):
company.
So we had a line of equipmentand we, uh, we built, I built a
car wash from my brother in a,in a town of 3000 people.
Uh, three self surveys, oneautomatic in 1995.
And people passing through wouldsee that.
They would call us and say,would you do one for me in this
(13:00):
town or this town, or this town?
So we did about 50 of those for,for people where we built them
and service them, just like, youknow, we were just a
distributor.
We did a couple of our own carwashes.
And, um, and then as theindustry evolved, it, it, uh, We
(13:21):
wound up building the, uh,boomerang franchise, which wound
up being about 20 expresstunnels in Arkansas and the
states that touched Arkansas.
Um, but I had partners in itand, um, I wanted to just go
back to just doing my, beingmore of an operator than the
(13:42):
developer.
So I sold that company and thenthat's when I, that was probably
2008.
And then I just started doing myown.
Yeah.
So is your, uh, what path didyour brother take?
My brother built several selfserves and, uh, and then I wound
(14:03):
up buying him out about 2016.
Okay.
All right.
So, uh, uh, the Boomerangfranchise, uh, uh, was kind of
your introduction into.
The Express Tunnel model.
Um, and then, but did you feel,you felt more like you were a
(14:25):
developer at that point?
Oh, I definitely was adeveloper.
Um, we would, we would, ourcompany, our company had
investors and, but, but, but,uh, anyway, we, all the
employees were mine.
Okay.
The, the, the investors andwhich I was one of that owned
(14:47):
the, the 20 car washes.
Those companies had noemployees.
So we, we, we did thedevelopment, we serviced it, we
had all the employees, we didall that.
And, um, it just wasn't really asustainable model, not one that
(15:07):
was, Was really, um, it was justtoo cumbersome.
So I sold out of that and thenas I said, just did my own
thing.
Yeah.
So when you, when you startedSplash, was the idea like,
alright, let's just get leaner,let's be more efficient, um, and
kind of now you're truly workingfor yourself in this now, now
(15:30):
I'm an operator.
That's why I transitioned intoreally being an operator and,
um, Uh, primarily I'd saybecause I didn't want to be
responsible for, I didn't wantto have that burden of being
responsible for the successbecause I took it personally.
It was personal to me thateverybody was successful and,
(15:55):
um, and, uh, it's just I wouldrather not have that.
I would rather be able to, Make,just be free to make decisions
that are more long-term innature.
Yeah.
So a lot of times, uh, a lot ofthe guests on and, and through
Tom Hoffman and um, that we haveon, we, we see a lot of like,
(16:18):
uh, second or third generationmm-hmm.
Operator where you're stillfirst generation, um, in Splash.
So, uh, I know Matt's involvedand you have a daughter involved
as well.
Yeah, my daughter is Chief HumanResource Officer, Natalie, but
it, it really kinda goes beyondthat.
(16:40):
Those are my two blood children,but I have a group of, uh, five
or six other young guys that arelike children to me.
I mean, these are young guysthat are super sharp and they
are really what's driving thecompany.
(17:01):
I don't make any decisions.
Uh, I don't want to go anywherethat these guys don't wanna go.
I don't mean geographically, Ijust mean in, in leading the
company.
And I tell them that, um,although I may own all the
stock, I'm gonna treat you likeyour owners.
I don't want you, I want thecaliber of people that want the
(17:23):
same things outta life that Iwant.
I wanna make sure that they cansee a pathway that they can
achieve their goals at thiscompany.
And so in that regard, it's morethan just my son and my
daughter.
It's all of these young leaders.
Yeah.
How so how difficult is it to,uh, you clearly trust these
people?
(17:44):
Um, did, are these people whohave kind of come up in your
industry?
Maybe they started.
Well actually, um, I can't takecredit for recruiting all of
them because, um, two of themare my son's brother-in-laws.
Okay.
Okay.
(18:04):
So they're connected by family.
Another one has been bestfriends since the third grade.
Another one was a collegefraternity brother.
I mean, these are all.
Highly qualified people.
They're not in our companybecause I needed a job.
They're in our company becausethey trusted, even though it's a
car wash that we're just, thatwe're more than a car wash.
(18:26):
Yeah.
And so, um, we're very fortunateto have the people that we have.
Yeah, that's, that's incredible.
It's, um, and for you to be ableto trust, I mean, this is your
baby, right?
But to, to have the trust inthem to say, you know what,
guys, like, we're all in thistogether.
Uh, we have the goal and soforth.
(18:47):
So kudos to you on that one.
Um, so can you talk about your,the makeup of the company, uh,
how many employees you have?
Um, kind of your, uh, hierarchy,I guess, if you would.
Yeah.
We, we have over 300 employeesnow.
Um, you know, our growth plans,I will say this, uh, we, we've
(19:12):
been like, I'm a go, go, go,push, push, push, let's go.
Uh, but I've actually, we'vegrown too fast, to be honest
with you.
And what we're finding is, Likewe have high standards.
At least we profess we have highstandards and we really do
desire that.
(19:34):
But at the rate we have grown,we, we, we can't sustain that if
we don't slow down some.
So I've been very intentionalabout our core values and our,
and really what we're all about.
I've made the statement to amanager before, back when I was
more involved in the day-to-dayoperations.
(19:55):
We post our core values, and Ihave mentioned that if I need to
take that down for a couple ofweeks, I can, you know, but we
put these up for us, not for ourcustomers.
And so it's just dawned on merecently, uh, that, that maybe
(20:15):
we've gone a little too fast.
We need to slow down to makesure that we can really do what
we say we're gonna do.
How did you come to arealization do you think?
Done?
Um, just by seeing some thingsthat we weren't doing as well as
we should be doing.
And then realizing the reasonwe're not doing them is because
(20:37):
we're going too fast.
And so, um, I.
Anyway, we're, we're, we'regonna address that.
And I don't want anybody to getburned out, like do we?
Everybody talks about theirculture, and I tell you what,
what I hear from other operatorsis very encouraging because so
(21:01):
many people are genuinelyfocused on this now, and I think
it's gonna help our industry.
It's gonna, it's gonna changethe public's perception of our
industry.
So I'm very happy about that.
And so it's just a matter ofgoing back and addressing you,
you, you know, making sure youcan do what you think you can.
(21:24):
Yeah.
How, how do you think your, uh,your company culture has changed
over the last, say, 10 years, ifit has at all?
I'm very pleased with ourcompany's culture.
We're, we're really good.
It's just, It is just aconstant, if you're really
serious about it, you're gonna,and you're really looking at it
and examining it.
You're gonna see places that youneed to shore up and, uh, see
(21:49):
some course corrections.
Um, we've had to do that acouple of times when, when
there's pressure to hire people.
You got new stores opening andthere's pressures to hire
people.
There's a temptation to take ashortcut in your voting process.
Um, we did that for a couple ofmonths.
(22:13):
We saw the results of it.
We went back and addressed itand we won't do that again.
Yeah.
You know, just things like that.
So when you're building newstores and you're looking for
leaders in those stores, are youhiring outside or is it all kind
of home grown?
We do not hire outside anymore.
We've done that.
I'm not saying we wouldn't everdo it.
(22:33):
Yeah.
But we, I can't remember thelast time we went outside to
hire a manager.
Okay.
That's one of the good thingsabout growth is there's a clear
pathway to, to hire all thebright.
You know, people, you can,because there's a path for, for
that.
(22:54):
So that's one of the positive ofgrowing I know here.
So, uh, in the last five years,we've opened eight stores, um,
and kudos to our HR department,our training department, our
operations people like that's.
(23:14):
I remember sitting in meetings,and that's a concern, is, okay,
we're gonna open four stores inthe next year and a half.
Who's gonna run these stores?
Who, who are the people thatwe're gonna identify?
And it's that long game that youkind of talked about is making
sure that you have the, youknow, not to use the sports
analogy, but I will, but havingthe minor league team that
(23:34):
you're developing players in,That can move up and step into,
um, uh, you know, the rightposition.
And with that though, like, andit sounds like you did this as
well, is that there are timeswhere you're gonna have to make
tough decisions and maybe walkback something that you had to
do.
Um, but it just seems from my,from here listening to the talk,
(23:56):
like how important I guess, Uh,how far out are you thinking as
far as this long-term plan?
Is it 10 years?
Is it 50 years?
W what's that look like?
Well, to me it's more about theday to day.
Yeah, you have to have a vision,but it's, it's making sure that
the things you're doing todayare gonna position you for
(24:17):
success later on.
Like we, um, we were producingand.
I'm just being honest.
I'm just kinda showing you thatall the good and the bad.
But we did a fantastic job withour news, our company
newsletters.
I mean, they were very proud ofthose.
(24:37):
It was really hard to open a lotof stores and still maintain a
quarterly newsletter to thatdegree.
And uh, and so we had to make achoice, but I think that those
company newsletters.
Uh, were so important for thepipeline of, of, uh, attracting,
(25:00):
you know, new employees because,uh, the things we were doing,
the team building, that sort ofthing, uh, we're gonna have to
redouble our efforts on thatbecause if you don't do the
right things today, You know,you won't be prepared for the
future.
(25:20):
And I feel really good aboutwhere we are in, you know,
recommitting to some of thosethings.
So, uh, for those who don'tknow, uh, and you could see
these newsletters, they're onclean, clean car fast.com, which
is, uh, right, the Splashwebsite.
Um, they're, they're incrediblyin depth.
They're a great look at the, uh,the company and the insight.
(25:41):
And I, I could definitely seethem.
And I think they serve thepurpose as a recruiting tool,
and they certainly are.
Um, president, I was gonna askyou about that because when you,
when you're on the site, youcould see that there, there
seems to be a lag in kind ofwhen they were let produce, but
now we, now I, now I know theanswer.
Um, yep.
You know, for us, uh, hiring upuntil about, I don't know, six
(26:03):
months ago, ha was an issue asjust far as, um, uh, employee
availability or just findingpeople.
Uh, at this point we're around95%, fully staffed, 96, 97.
So we're pretty pleased withthose numbers.
Did you have similar experiencescoming out of Covid and even up
until maybe like a year ago?
(26:25):
I'll tell you, I think, I thinkit has gotten it, it has gotten
more challenging, but I reallybelieve it's because of, um, I
really believe part of it isbecause it's a reflection of us,
(26:47):
uh, having to open so many newstores and we didn't prepare the
soil like we were before.
Right.
And I really believe it's likeanything else.
If you do the fundamentals, ifyou keep doing the right things,
(27:08):
You'll get the payoff down theroad, but when you take
shortcuts, it's going to show upsomewhere.
And so we're staffing ourstores.
We have a great HR team.
Um, we just have to make surethat we do the blocking and
tackling every day to make surewe're prepared.
(27:31):
Yeah.
For that success, is there,what's, uh, what keeps you up at
night?
I don't know that anything keepsme up at night, but I always
want to, I wanna make sure ourpeople are taken care of.
Okay.
I don't wanna, and that's, itgoes back to being prepared and
(27:52):
I wanna make sure that all ofour people are supported well,
all of our leaders, and that,um, from.
The guys I depend on to theguys, you know, below them and,
and, and just make sure I givegood leadership and guidance
because I've got the right guyson the, on the team.
(28:14):
Uh, just gotta make sure I'mdoing the right thing.
So as an industry as a whole,um, I think we've seen a lot of
changes, uh, over the last fewyears, but what, what's to come?
What do you think, what mostexcites you when you think of,
uh, the next few years in thecar wash industry?
Well, um, it's, it's, it'sgrowing up.
(28:36):
It's getting more sophisticated.
Um, there are more sophisticatedpeople involved in the industry
now.
Um, in some regard.
I think the thing I.
That's gotta be interesting overthe next five years is the
groups, uh, that have come inand, and grown rapidly and, and
(28:58):
purchased car wash groups andgroups of car washes and, um,
that are more financial.
We, um, savvy, uh, is whatdrives them is, I mean, they
have to have a return.
Uh, they're motivated by a more.
(29:19):
If they take a more short termview than the family operations,
the guys that I know that arein, in business as family, you
know, units.
And so if, if you don't plan toown something for more than four
or five years, the way you takecare of that is gonna be
(29:41):
different than somebody who.
Plans on handing it down totheir son or grandson or
whatever.
And so, um, I wonder if some ofthese stores don't start, um,
reflecting some of thepriorities.
Um, so that'll be interesting.
(30:02):
So as a, as a, uh, operator atheart, um, you know, we're h in
development, Hoff in car wash,and then innovate it.
Um, we are, I think we viewourselves as a very like, tech
front company.
Um, you know, I think sometimeswe will, we refer to ourselves
as more of an IT company thanlike in the service industry.
(30:25):
How has Splash incorporatedtechnology into what you do?
Um, may, maybe not evennecessarily in the tunnel, but
just, um, is there anythingthere that, that kind of cites
you or, uh, surprises you?
Well, for one thing, you'retalking to the wrong guy, but,
uh, I'll tell you what I try todo is I try to, uh, network
(30:48):
with, with people like, uh, likeyour company that.
That, uh, knows more about thisthan I do, and I just, I just
pick p pick, uh, you know, the,their brain and try to, uh, put
my guys in touch with, uh, theright people to make sure that
we're, um, keeping up with allthat.
(31:11):
I am very interested, I do wantour company to be on the cutting
edge of that just like I do inany other aspect, whether it's,
you know, the building, the lookof the building, and.
Our people, all that sort ofthing.
Um, on the technology side, Iwanna make sure that we're
upfront on that as well.
(31:31):
And I depend on my people to dothat, and I try to connect them
to people that can help'em.
So we always, so I, where I'mtrying to, I think I forgot last
episode, just to have a little,uh, lighthearted conversation at
the end about, you know, uh, I'mcurious to pick your brain about
what you are possibly watchingon TV current.
Okay.
(31:52):
Is there a show that you'rebinge watching or something
that, um,'cause I'm alwayslooking for recommendations.
Well, you're probably not gonnaget a good one from me.
Okay.
I do watch tv, but it's mainlyjust to put my mind in neutral.
Okay.
Not for excitement.
It's, it's not, I watch, uh, theBritish mysteries.
(32:13):
Okay.
And it's just a way that I can.
Just relax.
Yeah.
How does, does your wife getinvolved in that too?
She, uh, no, she does not watchTV at all.
She doesn't understand how I canwatch tv.
She is always doing something.
Yeah.
So, so our, uh, this is seasonthree, this, uh, of the podcast.
And, um, the first episode Ihad, we had just finished a
(32:38):
series and I'm like, ah, what.
What can I watch?
And, uh, I'm kind of, I don'twatch too much tv, but we
always, we're always looking forsomething.
So I'm always curious, uh, uh,where, where, where it leaves
it.
But those, I'll tell you, the,the British, those shows,
whether it's, uh, soap opera ormystery or whatever it is, like
they're just, they're a wholeother, uh, animal all unto
(33:01):
itself.
So that's, that's fantastic.
Yeah, that's what I like.
It takes me away.
Right.
So it's excellent.
I.
Paul, this has been incredible.
Um, I'm so excited to see whathappens to your company the next
couple years.
I'm glad that the Hoffman familyhas developed a relationship
with you as well.
Um, it's just incredible to hearyou speak and uh, what you have
(33:26):
planned, and I really appreciateyou taking the time to jump on
and have this conversation.
Well, I'm happy to do it.
I've enjoyed it.
Alright, thanks so much.
Okay.
All right everyone.
Welcome back to the Modern CarWash Podcast.
Now, normally I am joined by myco-host Shane Groff, who is on
assignment today.
So, Just flying solo.
And our guest today is Paul Stagfrom Splash Car Walk in
Arkansas.
Paul, thanks for joining us.
Happy to do it.
So, I, uh, I've actually, I'vemet your son, Matt.
(00:32):
Um, I.
T twice now.
I've, uh, I met him in a meetingand then also at, uh, at the,
this year's I c a show and alsoJustin in your marketing
department.
I've, I've had a fewconversations with him and, uh,
just two lovely people.
And, uh, the thing that I takefrom both of them is how
passionate they are.
(00:52):
Um, about the industry and I'msure that kind of trickles down
from you.
So, uh, you know, I was readingan article, uh, that you were
featured in and one of yourquotes was, what's important to
me is not the p and l this monthor this quarter, it's that we
win and I got the sense fromboth Matt and Justin.
That's, that's kind of theculture there at Splash.
(01:15):
Uh, can you just elaborate onthat?
Um, yeah.
I think we're able to make, withthat approach, we're able to
make, uh, more look at things,uh, more long term.
And, um, you know, what'simportant to me is to have a
strong company and, uh, like saythat we're gonna win.
(01:36):
In, in today's competitiveenvironment, you wanna do things
that, that differentiateyourself.
And in order to do that, youhave to make decisions that are
more, a little bit more longterm, such as how much you
invest in your people, you know,the, the, and just if you're an
(01:58):
operator, if you're a trueoperator.
Yeah, you build your car washesa little differently.
I mean the, from the, the pumprooms to just the way you
install the equipment, thingslike that.
Because you're doing it from theperspective of I have to clean
this facility.
Yeah.
I'm saying it, you know, longterm.
Yeah.
(02:19):
Yeah.
It's funny, we, uh, a few yearsago we built a car wash.
Uh, it was right at 2020.
And we have the largest backroom.
Uh, and it just makes it so mucheasier to get through and
manage.
I, you could probably drive acar through it.
And then you look at some of theolder sites.
Where, uh, you know, you'regoing sideways trying to get
(02:42):
through.
Yeah.
Kind of remind Yeah.
You can touch both sides.
Both walls.
Yeah.
Exactly.
Exactly.
So, uh, can you just give us alittle bit of background on your
company, how many tunnels youhave?
I know you have some quickloops.
Um, just a general overview.
Yeah, well we've been inbusiness for, well close to 30
years now, and so as the carwash has evolved, uh, in
(03:06):
general, the types of washes wehave have changed.
So we've got, we've got a few.
Of the older self serves andautomatics, but most of ours
are, uh, express and we have, sowe have right now, uh, I think
we have 15 locations that carwashes that are open and 10 oil
(03:27):
changes.
Okay.
Um, couple of the oil changesare free standing, but most of
them are on property adjacent tothe car wash or integrated into
the same building as the carwash.
Okay.
Of the 15 washes, I believe wehave six that are flex model and
(03:48):
the rest are express.
Uh, going forward we will do,uh, probably one flex a year
and, you know, five or sixexpresses.
It's interesting the, um, fromour, from Hoffman carwash
standpoint, uh, and maybe thisis a regional thing, it might be
a state thing.
Uh, controlling labor is.
(04:10):
One of our, the things that wefocus on the most or one of our
biggest struggles, so a fullservice or even a flex service
where you're adding staff issomething that we've kind of
shut away from, um, and havekind of almost gone all in on
the express model.
I.
Do you see that in Arkansas oris it just kind of, maybe not
as, I mean, minimum wage here,it continues to skyrocket.
(04:33):
Um, so curious what, how Wellit, it's certainly the path that
all of our competitors havetaken is just express, but at
minimal labor.
Um, and I think they're smart todo that because, um, if, if
you're, if you're buildinglocations, you know, in a large
(04:54):
geographic area, I, I wouldthink it would be very difficult
to manage that number ofemployees.
Um, we like the flex because itgives us an opportunity to have
more touch points with thecustomers and.
It's an opportunity to buildrelationships with customers,
(05:16):
but with the opportunity comesresponsibility.
I.
Yeah, if you're gonna do itwell, yeah, okay.
Just because you have theopportunity to build
relationships doesn't meanyou're going to succeed in that.
So it's, it's a lot moredifficult, but it's a way we can
differentiate and if we arestaying close to home, we, it,
(05:37):
we can act, we can actually dothat.
Plus, having been in thebusiness a long time, having had
some full service washes, um,there's a void there and.
We like that we have the abilityto fill it.
So your, the flex model thatyou've gone to, and correct me
if I'm wrong, it seems like, uh,the, I think the most recent one
(06:00):
I've seen is I don't, it was anold Walmart or an old, uh, store
mm-hmm.
That has a, uh, tile wash andthen has a belt for, uh,
interior cleaning and then alsofree vacuums as well.
Yeah, we actually,coincidentally, we, we came
(06:20):
across two opportunities, uh,about the same time.
They were both 35,000 squarefoot buildings.
One was, um, an old Walmartneighborhood market where they,
they, they had that unit andthey built a Supercenter not far
away, so they closed that one.
And then the other one was anold, was a trampoline park.
(06:43):
Trampoline.
Yeah, it was, um, out food,trampoline building and, uh,
covid hit and that of course,that just devastated their
business there.
So we had the opportunity totake two of these at one time.
I do not recommend doing that.
The way the timing worked outwith Covid, it, it got
(07:05):
compressed and, uh, it wasquite, uh, an ordeal doing that.
But now that I have'em, I'm gladI do.
But yeah, one, one of them is asyou described, and then the, uh,
the one that was a trampolinepark that's in Little Rock.
It's what we refer to as ourChanel store.
(07:25):
It's, it's on Chanel Avenue, butit actually has two tunnels, 24
indoor free vacuums, and twodetail belts.
Okay.
What's nice about your sites is,um, uh, it, there's, when you
look at it, you have the.
Kind of like the indoorAstroTurf grass area.
(07:46):
You have areas for the kids.
It really, you, you thought ofeverything in the sense of like
making it such a greatexperience, not just getting
your car cleaned, but makingsure that you're, the kids are
entertained.
I see.
Like free coffee, everything.
Um, uh, how much time andconsideration did you go into
that?
Or did you still, or were youinspired from.
(08:09):
Something else that you had seensomewhere?
Well, we, we've seen a lot ofcar washes.
Uh, there's some really nice carwashes in the us.
Uh, we went to Washington, DCand, and some other areas where
there's some really great carwashes.
Um, the, the originalinspiration came from, from,
(08:31):
from Europe, from Amsterdam and,and western Germany.
And, uh, I went there in 2015and fell in love with, you know,
the, the belts and the epoxyfloors and the stainless.
And so, um, anyway, I broughtthat back.
(08:53):
I.
Uh, and actually built afacility in Rogers, a 14,000
square foot new building.
And, uh, so that's where theidea originated.
Yeah.
It's, you know, in doing theresearch for this and, uh,
different areas where, um, I'vecome across your bio or
different articles, it seemslike that European, uh, it
(09:16):
becomes a talking point almost.
And it seems like you've, you'vetook a lot of inspiration from.
Going to see those models orthose car washes in Europe.
Um, you know, 2015, you've beenin the industry a long time.
You go, I'm assuming 2015 is thefirst time you'd gone over to
see it.
Well, were you kind of in awe?
Is it?
(09:36):
Oh, I was in awe and.
Here's the thing.
Every all of the features that Iput into the washes, they don't,
um, you know, they don'tnecessarily translate into more
revenue.
(09:56):
Okay.
There's not a direct correlationbetween having brick pavers in
the building or having oxy flooror any of those sorts of things.
What it does, it's, it's, it'severy little detail I can think
of that would help us, um, winwhen competition comes to town.
(10:20):
And if I'm planning on owning itfor 40 years, you know, then the
cost of those things, it's theway I justify, let's just put it
that way, justify the expenseand, um, You only get one chance
to do that.
(10:42):
I'll always, that's, that's, andI'm not bragging, you know what
I mean?
That's not all blessing.
But if everybody's going here,there's something in me that
wonders what's over here.
And, um, sometimes that's a goodthing and, and sometimes it's
not a good thing, but, um, Youknow, when I first started, uh,
(11:08):
in Arkansas, what existed wasmetal buildings, uh, for self
surveys.
And then you had automatics atgas stations.
And I saw, I traveled up toMissouri and I saw, uh, car
washes built on prime propertythat were really nice looking
self surveys with all the bellsand whistles and.
(11:32):
Automatic.
It's it, and I just have alwaysfelt like people like nice
things and, you know, peoplelike a choice.
You can go to a less expensivewash.
Um, or you, you can go tosomething that's more upscale.
I've always felt like I'd rathercompete on, you know, not rather
(11:56):
compete based on price.
Sure.
Sure.
It's, uh, I heard a greatanalogy one time, and it was, if
everyone, if everyone based adecision on, um, on price, then
there would be no Mercedes, noBMWs, or, you know, so it's
mm-hmm.
The quality, it's the, uh, howyou make people feel about it,
(12:16):
that, that really can drivethem, uh, as far as the choices
that they make.
Hmm.
Um, you touched on, you know,when you, you were first
starting out and, um, I believethe, the first your introduction
to the car wash was the ArkansasCar Wash Systems.
Is that correct?
Yeah.
When I first started, it wasmore of a sales, um, uh, sales
(12:38):
company.
So we had a line of equipmentand we, uh, we built, I built a
car wash from my brother in a,in a town of 3000 people.
Uh, three self surveys, oneautomatic in 1995.
And people passing through wouldsee that.
They would call us and say,would you do one for me in this
(13:00):
town or this town, or this town?
So we did about 50 of those for,for people where we built them
and service them, just like, youknow, we were just a
distributor.
We did a couple of our own carwashes.
And, um, and then as theindustry evolved, it, it, uh, We
(13:21):
wound up building the, uh,boomerang franchise, which wound
up being about 20 expresstunnels in Arkansas and the
states that touched Arkansas.
Um, but I had partners in itand, um, I wanted to just go
back to just doing my, beingmore of an operator than the
(13:42):
developer.
So I sold that company and thenthat's when I, that was probably
2008.
And then I just started doing myown.
Yeah.
So is your, uh, what path didyour brother take?
My brother built several selfserves and, uh, and then I wound
(14:03):
up buying him out about 2016.
Okay.
All right.
So, uh, uh, the Boomerangfranchise, uh, uh, was kind of
your introduction into.
The Express Tunnel model.
Um, and then, but did you feel,you felt more like you were a
(14:25):
developer at that point?
Oh, I definitely was adeveloper.
Um, we would, we would, ourcompany, our company had
investors and, but, but, but,uh, anyway, we, all the
employees were mine.
Okay.
The, the, the investors andwhich I was one of that owned
(14:47):
the, the 20 car washes.
Those companies had noemployees.
So we, we, we did thedevelopment, we serviced it, we
had all the employees, we didall that.
And, um, it just wasn't really asustainable model, not one that
(15:07):
was, Was really, um, it was justtoo cumbersome.
So I sold out of that and thenas I said, just did my own
thing.
Yeah.
So when you, when you startedSplash, was the idea like,
alright, let's just get leaner,let's be more efficient, um, and
kind of now you're truly workingfor yourself in this now, now
(15:30):
I'm an operator.
That's why I transitioned intoreally being an operator and,
um, Uh, primarily I'd saybecause I didn't want to be
responsible for, I didn't wantto have that burden of being
responsible for the successbecause I took it personally.
It was personal to me thateverybody was successful and,
(15:55):
um, and, uh, it's just I wouldrather not have that.
I would rather be able to, Make,just be free to make decisions
that are more long-term innature.
Yeah.
So a lot of times, uh, a lot ofthe guests on and, and through
Tom Hoffman and um, that we haveon, we, we see a lot of like,
(16:18):
uh, second or third generationmm-hmm.
Operator where you're stillfirst generation, um, in Splash.
So, uh, I know Matt's involvedand you have a daughter involved
as well.
Yeah, my daughter is Chief HumanResource Officer, Natalie, but
it, it really kinda goes beyondthat.
(16:40):
Those are my two blood children,but I have a group of, uh, five
or six other young guys that arelike children to me.
I mean, these are young guysthat are super sharp and they
are really what's driving thecompany.
(17:01):
I don't make any decisions.
Uh, I don't want to go anywherethat these guys don't wanna go.
I don't mean geographically, Ijust mean in, in leading the
company.
And I tell them that, um,although I may own all the
stock, I'm gonna treat you likeyour owners.
I don't want you, I want thecaliber of people that want the
(17:23):
same things outta life that Iwant.
I wanna make sure that they cansee a pathway that they can
achieve their goals at thiscompany.
And so in that regard, it's morethan just my son and my
daughter.
It's all of these young leaders.
Yeah.
How so how difficult is it to,uh, you clearly trust these
people?
(17:44):
Um, did, are these people whohave kind of come up in your
industry?
Maybe they started.
Well actually, um, I can't takecredit for recruiting all of
them because, um, two of themare my son's brother-in-laws.
Okay.
Okay.
(18:04):
So they're connected by family.
Another one has been bestfriends since the third grade.
Another one was a collegefraternity brother.
I mean, these are all.
Highly qualified people.
They're not in our companybecause I needed a job.
They're in our company becausethey trusted, even though it's a
car wash that we're just, thatwe're more than a car wash.
(18:26):
Yeah.
And so, um, we're very fortunateto have the people that we have.
Yeah, that's, that's incredible.
It's, um, and for you to be ableto trust, I mean, this is your
baby, right?
But to, to have the trust inthem to say, you know what,
guys, like, we're all in thistogether.
Uh, we have the goal and soforth.
(18:47):
So kudos to you on that one.
Um, so can you talk about your,the makeup of the company, uh,
how many employees you have?
Um, kind of your, uh, hierarchy,I guess, if you would.
Yeah.
We, we have over 300 employeesnow.
Um, you know, our growth plans,I will say this, uh, we, we've
(19:12):
been like, I'm a go, go, go,push, push, push, let's go.
Uh, but I've actually, we'vegrown too fast, to be honest
with you.
And what we're finding is, Likewe have high standards.
At least we profess we have highstandards and we really do
desire that.
(19:34):
But at the rate we have grown,we, we, we can't sustain that if
we don't slow down some.
So I've been very intentionalabout our core values and our,
and really what we're all about.
I've made the statement to amanager before, back when I was
more involved in the day-to-dayoperations.
(19:55):
We post our core values, and Ihave mentioned that if I need to
take that down for a couple ofweeks, I can, you know, but we
put these up for us, not for ourcustomers.
And so it's just dawned on merecently, uh, that, that maybe
(20:15):
we've gone a little too fast.
We need to slow down to makesure that we can really do what
we say we're gonna do.
How did you come to arealization do you think?
Done?
Um, just by seeing some thingsthat we weren't doing as well as
we should be doing.
And then realizing the reasonwe're not doing them is because
(20:37):
we're going too fast.
And so, um, I.
Anyway, we're, we're, we'regonna address that.
And I don't want anybody to getburned out, like do we?
Everybody talks about theirculture, and I tell you what,
what I hear from other operatorsis very encouraging because so
(21:01):
many people are genuinelyfocused on this now, and I think
it's gonna help our industry.
It's gonna, it's gonna changethe public's perception of our
industry.
So I'm very happy about that.
And so it's just a matter ofgoing back and addressing you,
you, you know, making sure youcan do what you think you can.
(21:24):
Yeah.
How, how do you think your, uh,your company culture has changed
over the last, say, 10 years, ifit has at all?
I'm very pleased with ourcompany's culture.
We're, we're really good.
It's just, It is just aconstant, if you're really
serious about it, you're gonna,and you're really looking at it
and examining it.
You're gonna see places that youneed to shore up and, uh, see
(21:49):
some course corrections.
Um, we've had to do that acouple of times when, when
there's pressure to hire people.
You got new stores opening andthere's pressures to hire
people.
There's a temptation to take ashortcut in your voting process.
Um, we did that for a couple ofmonths.
(22:13):
We saw the results of it.
We went back and addressed itand we won't do that again.
Yeah.
You know, just things like that.
So when you're building newstores and you're looking for
leaders in those stores, are youhiring outside or is it all kind
of home grown?
We do not hire outside anymore.
We've done that.
I'm not saying we wouldn't everdo it.
(22:33):
Yeah.
But we, I can't remember thelast time we went outside to
hire a manager.
Okay.
That's one of the good thingsabout growth is there's a clear
pathway to, to hire all thebright.
You know, people, you can,because there's a path for, for
that.
(22:54):
So that's one of the positive ofgrowing I know here.
So, uh, in the last five years,we've opened eight stores, um,
and kudos to our HR department,our training department, our
operations people like that's.
(23:14):
I remember sitting in meetings,and that's a concern, is, okay,
we're gonna open four stores inthe next year and a half.
Who's gonna run these stores?
Who, who are the people thatwe're gonna identify?
And it's that long game that youkind of talked about is making
sure that you have the, youknow, not to use the sports
analogy, but I will, but havingthe minor league team that
(23:34):
you're developing players in,That can move up and step into,
um, uh, you know, the rightposition.
And with that though, like, andit sounds like you did this as
well, is that there are timeswhere you're gonna have to make
tough decisions and maybe walkback something that you had to
do.
Um, but it just seems from my,from here listening to the talk,
(23:56):
like how important I guess, Uh,how far out are you thinking as
far as this long-term plan?
Is it 10 years?
Is it 50 years?
W what's that look like?
Well, to me it's more about theday to day.
Yeah, you have to have a vision,but it's, it's making sure that
the things you're doing todayare gonna position you for
(24:17):
success later on.
Like we, um, we were producingand.
I'm just being honest.
I'm just kinda showing you thatall the good and the bad.
But we did a fantastic job withour news, our company
newsletters.
I mean, they were very proud ofthose.
(24:37):
It was really hard to open a lotof stores and still maintain a
quarterly newsletter to thatdegree.
And uh, and so we had to make achoice, but I think that those
company newsletters.
Uh, were so important for thepipeline of, of, uh, attracting,
(25:00):
you know, new employees because,uh, the things we were doing,
the team building, that sort ofthing, uh, we're gonna have to
redouble our efforts on thatbecause if you don't do the
right things today, You know,you won't be prepared for the
future.
(25:20):
And I feel really good aboutwhere we are in, you know,
recommitting to some of thosethings.
So, uh, for those who don'tknow, uh, and you could see
these newsletters, they're onclean, clean car fast.com, which
is, uh, right, the Splashwebsite.
Um, they're, they're incrediblyin depth.
They're a great look at the, uh,the company and the insight.
(25:41):
And I, I could definitely seethem.
And I think they serve thepurpose as a recruiting tool,
and they certainly are.
Um, president, I was gonna askyou about that because when you,
when you're on the site, youcould see that there, there
seems to be a lag in kind ofwhen they were let produce, but
now we, now I, now I know theanswer.
Um, yep.
You know, for us, uh, hiring upuntil about, I don't know, six
(26:03):
months ago, ha was an issue asjust far as, um, uh, employee
availability or just findingpeople.
Uh, at this point we're around95%, fully staffed, 96, 97.
So we're pretty pleased withthose numbers.
Did you have similar experiencescoming out of Covid and even up
until maybe like a year ago?
(26:25):
I'll tell you, I think, I thinkit has gotten it, it has gotten
more challenging, but I reallybelieve it's because of, um, I
really believe part of it isbecause it's a reflection of us,
(26:47):
uh, having to open so many newstores and we didn't prepare the
soil like we were before.
Right.
And I really believe it's likeanything else.
If you do the fundamentals, ifyou keep doing the right things,
(27:08):
You'll get the payoff down theroad, but when you take
shortcuts, it's going to show upsomewhere.
And so we're staffing ourstores.
We have a great HR team.
Um, we just have to make surethat we do the blocking and
tackling every day to make surewe're prepared.
(27:31):
Yeah.
For that success, is there,what's, uh, what keeps you up at
night?
I don't know that anything keepsme up at night, but I always
want to, I wanna make sure ourpeople are taken care of.
Okay.
I don't wanna, and that's, itgoes back to being prepared and
(27:52):
I wanna make sure that all ofour people are supported well,
all of our leaders, and that,um, from.
The guys I depend on to theguys, you know, below them and,
and, and just make sure I givegood leadership and guidance
because I've got the right guyson the, on the team.
(28:14):
Uh, just gotta make sure I'mdoing the right thing.
So as an industry as a whole,um, I think we've seen a lot of
changes, uh, over the last fewyears, but what, what's to come?
What do you think, what mostexcites you when you think of,
uh, the next few years in thecar wash industry?
Well, um, it's, it's, it'sgrowing up.
(28:36):
It's getting more sophisticated.
Um, there are more sophisticatedpeople involved in the industry
now.
Um, in some regard.
I think the thing I.
That's gotta be interesting overthe next five years is the
groups, uh, that have come inand, and grown rapidly and, and
(28:58):
purchased car wash groups andgroups of car washes and, um,
that are more financial.
We, um, savvy, uh, is whatdrives them is, I mean, they
have to have a return.
Uh, they're motivated by a more.
(29:19):
If they take a more short termview than the family operations,
the guys that I know that arein, in business as family, you
know, units.
And so if, if you don't plan toown something for more than four
or five years, the way you takecare of that is gonna be
(29:41):
different than somebody who.
Plans on handing it down totheir son or grandson or
whatever.
And so, um, I wonder if some ofthese stores don't start, um,
reflecting some of thepriorities.
Um, so that'll be interesting.
(30:02):
So as a, as a, uh, operator atheart, um, you know, we're h in
development, Hoff in car wash,and then innovate it.
Um, we are, I think we viewourselves as a very like, tech
front company.
Um, you know, I think sometimeswe will, we refer to ourselves
as more of an IT company thanlike in the service industry.
(30:25):
How has Splash incorporatedtechnology into what you do?
Um, may, maybe not evennecessarily in the tunnel, but
just, um, is there anythingthere that, that kind of cites
you or, uh, surprises you?
Well, for one thing, you'retalking to the wrong guy, but,
uh, I'll tell you what I try todo is I try to, uh, network
(30:48):
with, with people like, uh, likeyour company that.
That, uh, knows more about thisthan I do, and I just, I just
pick p pick, uh, you know, the,their brain and try to, uh, put
my guys in touch with, uh, theright people to make sure that
we're, um, keeping up with allthat.
(31:11):
I am very interested, I do wantour company to be on the cutting
edge of that just like I do inany other aspect, whether it's,
you know, the building, the lookof the building, and.
Our people, all that sort ofthing.
Um, on the technology side, Iwanna make sure that we're
upfront on that as well.
(31:31):
And I depend on my people to dothat, and I try to connect them
to people that can help'em.
So we always, so I, where I'mtrying to, I think I forgot last
episode, just to have a little,uh, lighthearted conversation at
the end about, you know, uh, I'mcurious to pick your brain about
what you are possibly watchingon TV current.
Okay.
(31:52):
Is there a show that you'rebinge watching or something
that, um,'cause I'm alwayslooking for recommendations.
Well, you're probably not gonnaget a good one from me.
Okay.
I do watch tv, but it's mainlyjust to put my mind in neutral.
Okay.
Not for excitement.
It's, it's not, I watch, uh, theBritish mysteries.
(32:13):
Okay.
And it's just a way that I can.
Just relax.
Yeah.
How does, does your wife getinvolved in that too?
She, uh, no, she does not watchTV at all.
She doesn't understand how I canwatch tv.
She is always doing something.
Yeah.
So, so our, uh, this is seasonthree, this, uh, of the podcast.
And, um, the first episode Ihad, we had just finished a
(32:38):
series and I'm like, ah, what.
What can I watch?
And, uh, I'm kind of, I don'twatch too much tv, but we
always, we're always looking forsomething.
So I'm always curious, uh, uh,where, where, where it leaves
it.
But those, I'll tell you, the,the British, those shows,
whether it's, uh, soap opera ormystery or whatever it is, like
they're just, they're a wholeother, uh, animal all unto
(33:01):
itself.
So that's, that's fantastic.
Yeah, that's what I like.
It takes me away.
Right.
So it's excellent.
I.
Paul, this has been incredible.
Um, I'm so excited to see whathappens to your company the next
couple years.
I'm glad that the Hoffman familyhas developed a relationship
with you as well.
Um, it's just incredible to hearyou speak and uh, what you have
(33:26):
planned, and I really appreciateyou taking the time to jump on
and have this conversation.
Well, I'm happy to do it.
I've enjoyed it.
Alright, thanks so much.
Okay.
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