Zips Car Wash files for bankruptcy to restructure $279M debt
The company has faced mounting financial pressures from rising interest rates, higher labor costs and increased competition.
Zips Car Wash filed for bankruptcy protection in Texas as the company is seeking to reduce its debt by $279 million and shift control of the business to its lenders.
Operating more than 260 car wash locations across the United States under brands such as Zips, Jet Brite, and Rocket Express, Zips has faced mounting financial pressures from rising interest rates, higher labor costs, and intensifying competition in the U.S. car wash industry. Over the past five years, approximately 900 new car wash sites have opened each year, contributing to a highly competitive market.
At the time of filing, Zips reported a staggering $654 million in debt, with only $1 million in cash on hand, as reported by Reuters. To support the restructuring, the company's lenders have agreed to provide an additional $30 million in loans.
Founded in 2004 in Arkansas, Zips experienced rapid growth between 2015 and 2022, with most of its locations based in southeastern U.S. states. In 2020, Zips was acquired by the private equity firm Atlantic Street Capital.
Before filing for bankruptcy, Zips sold off several locations, including sites in Orlando, Florida, and St. Louis, Missouri. The company raised $58 million from the sale of six locations in Orlando and expects to close a $20 million sale of its St. Louis properties early in the bankruptcy process.
