Overview
Government regulation and intervention in the carwash industry seems to take three forms; water use policies, environmental policies, and employment practices.

Obviously, carwash businesses are highly dependent on water usage and availability. Widespread drought in Southern and Western states in recent years has led to a greater desire among state and local elected officials to regulate water usage. In Virginia, a Dillon Rule state, the General Assembly has ceded some regulatory authority to local governments in an effort to give localities more tools to deal with drought conditions. There is some evidence that this trend will continue for the foreseeable future, which will result in greater variance in local water ordinances from locality to locality. This trend is adverse to carwash operators in a political environment where policy makers do not understand that carwashes actually use less water than folks who wash their cars at home.

Environmental regulations also have some bearing on carwash operations. Some contaminants contained in runoff from carwash facilities are considered hazardous wastes and must be handled in a very specific manner to comply with state regulations. Hazardous waste handling and disposal is highly regulated and it is critical that operators monitor changes in these regulations to avoid problems with compliance. Many, if not most, carwashes also have water reclaimers which require underground tanks to remove grit and contaminants. These tanks must be regularly inspected by government regulators in many states.

Employment practices in carwash facilities are governed by OSHA standards and are mostly a federal issue. Federal minimum wage requirements also impact carwash operations. State regulations regarding employment practices (i.e., right-to-work states vs. union states), workers compensation, and state and/or local minimum wage standards also impact operators.

At the local level, carwash operators may face similar challenges to restaurants, nightclubs and other businesses. Conditional Use Permits and other regulatory hurdles can affect an owner's ability to conduct business.