*Make assumptions if needed and put a clear table calculating the break even as well as analysis

Robojet Car Wash Drew Ebel was contemplating buying an automated car wash franchise as a family business. His wife Caroline, their two kids, Jasmine and Luke, and their dog, Lilly, were a close-knit family that were tired of the bureaucracy of corporate and government jobs. The dual career family had saved $200,000 in cash. Drew, who was 62, could cash in some of his retirement accounts to free up another $200,000. These monies would be used for a down payment. Drew and Caroline needed to develop a business plan stating the strategy and mission of their business, evaluate the economics of the business using break-even analysis, select a site and buy the property, and start up the business with an idea of providing superior customer service--a premium car washing experience using automation. Drew had a Bachelor's Degree in Mechanical Engineering and Caroline earned a Bachelor's Degree in Accounting. Drew and Caroline collected information on the cost of the franchise shown in Case Exhibit 4.1. Available Information Collected to Date Investment costs are shown in Exhibit 4.7. Variable costs are estimated to be $15.16 per vehicle per year. Variable costs included in this estimate account for four full-time employees plus the manager, environmental fees and disposal, office expense, insurance, and some accounting, attorney, routine maintenance, and advertising expenses. We assume that the car wash operates 300 days per year. The average price of a wash is $22 per car. Drew and Caroline had good estimates of price and variable costs, but were puzzled as to what was a good fixed cost estimate. Detailing vehicles, dent repair, and windshield repair are a separate on-site department. These services generate an estimated net profit of $130,000 per year. Subtitle Paragraph RoboJet Car Wash-Investment Costs Styles Type of Investment Cost and Related Information Site (premium location in high traffic intersection) $300,000 to $600,000 Equipment Automated car wash system $300,000 $5,000 Initial parts inventory Detailing, dent, and windshield repair equipment Other equipment (cash register, televisions for waiting area, telephone, online hookup) $7,000 $6,000 Building $250,000 $50,000 Car wash assembly line (tunnel) building Detailing garages Lobby and office complex Pole sign and advertising board(s) Licenses, inspections, building permits, incorporation fee, attorney, architect, engineer, environmental impact report, and utilities to $45,000 $8,000 $50,000 Activa Go to Start-up Cash on Hand Property and building dosing, title insurance, land survey, filing fees, appraisal, vending license and occupation fees, and environmental audits $50,000 to $100,000 $5,000 $1,251,000 Total Investment Costs: *Mortgage (assuming investment cost of mortgage) $6,000 per month Act GOT The key factor in a cuccessful car wach hueinece ie location. This includes cite location traffic The key factor in a successful car wash business is location. This includes site location, traffic density and patterns, and the demographics of the surrounding area. Based on ZIP code analysis, one promising location showed a high net worth for residents in the area. For that area, they estimated demand to be between 10,000 and 14,000 car washes per year. The closest full-service car wash business to this new location was 5.2 miles away. Drew and Caroline wondered what other characteristics make for a successful car wash service. Some car wash conveyors are designed with a capacity to process up to 100 cars per hour, but most car wash conveyors operated in the 30 cars per hour or less range. The speed of the conveyor can be changed in most car wash systems depending on demand, weather, and degree of dirt on vehicles. Keeping the robots operating is a struggle, and all car wash owners have stories of losing a high demand day of sales because of machine breakdowns and parts shortages