Zips Car Wash filed for bankruptcy protection in Texas on Wednesday, aiming to reduce its $279 million debt and hand control of the company to its lenders.
As one of the largest privately owned car wash chains in the U.S., Zips operates over 260 locations under its own name, as well as Jet Brite and Rocket Express. The company cited rising interest rates, increasing labor costs, and growing competition in the car wash industry as the main reasons for its financial troubles. The U.S. market has seen about 900 new car wash sites open annually for the past five years, intensifying the competition.
Zips entered bankruptcy with $654 million in debt and just $1 million in cash. The company’s lenders have agreed to provide an additional $30 million to support its bankruptcy restructuring process.
Founded in 2004 in Arkansas, Zips expanded rapidly between 2015 and 2022, particularly in the southeastern U.S. In 2020, it was acquired by private equity firm Atlantic Street Capital.
Based in Plano, Texas, Zips currently operates in 23 states and employs 1,800 people. The company washes around 24 million cars each year and reported $303 million in revenue in the last 12 months.
Before filing for bankruptcy, Zips sold several of its locations, including six in Orlando, Florida, for $58 million. It also expects to complete a $20 million sale of its St. Louis locations early in the bankruptcy process.
Zips plans to complete its bankruptcy restructuring and emerge from Chapter 11 within two to three months.
The case is being heard in the U.S. Bankruptcy Court for the Northern District of Texas, under the case number 25-80069.
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