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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED JUNE 30, 1999
                        COMMISSION FILE NUMBER 1-14510

                           PRECISION AUTO CARE, INC.

            (Exact name of registrant as specified in its charter)

                  VIRGINIA                               54-184785
        (State or other jurisdiction               (IRS Employer ID No.)
      of incorporation or organization)


             748 MILLER DRIVE, S.E.
               LEESBURG, VIRGINIA                             20175
     (Address of principal executive offices)              (Zip Code)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (703) 777-9095

          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                     None

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                    COMMON STOCK, PAR VALUE $.01 PER SHARE
                               (Title of class)

Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X  NO __
                                              -

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. __

The aggregate market value of the voting stock held by non-affiliates of the
Corporation at September 14, 1999 was $10,187,004 based on the closing price of
$2.00 per share. As of that date, 5,093,502 shares of Common Stock were issued
and outstanding.

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE
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                               TABLE OF CONTENTS

Explanatory Note: Certain information called for by Items 6, 7, 7A, 8 and 14 of
this Annual Report on Form 10-K cannot be obtained on a timely basis by the
Registrant without unreasonable effort or expense. A Form 12b-25 filing is being
made by the Registrant with respect to these Items.

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PART I        Item 1.    Business                                                                                        4
              Item 2.    Properties                                                                                     12
              Item 3.    Legal Proceedings                                                                              13
              Item 4.    Submission of Matters to a Vote of Security Holders                                            13

PART II       Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters                          13
              Item 6.    Selected Financial Data                                                                        13
              Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations          13
              Item 7A.   Quantitative and Qualitative Disclosure about Market Risk                                      14
              Item 8.    Financial Statements and Supplementary Data                                                    14
              Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure           14

PART III      Item 10.   Directors and Executive Officers of the Registrant                                             14
              Item 11.   Executive Compensation                                                                         17
              Item 12.   Security Ownership of Certain Beneficial Owners and Management                                 20
              Item 13.   Certain Relationships and Related Transactions                                                 21

PART IV       Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K                                23
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                          FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 (the "Securities Act") and Section 21E of the
Securities Exchange Act of 1934. When used in this report, the words
"anticipate," "believe," "estimate," "expect," "intend" and "plan" as they
relate to Precision Auto Care, Inc. or its management are intended to identify
such forward-looking statements. All statements regarding Precision Auto Care,
Inc. or Precision Auto Care, Inc.'s expected future financial position, business
strategy, cost savings and operating synergies, projected costs and plans, and
objectives of management for future operations are forward-looking statements.
Although Precision Auto Care, Inc. believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, no assurance can
be given that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations reflected in the forward-looking statements herein include, among
others, the factors set forth under the caption "Business-- Risk Factors,"
general economic and business and market conditions, changes in federal and
state laws, and increased competitive pressure in the automotive aftermarket
services business.

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                                    PART I
ITEM 1. BUSINESS

OVERVIEW

     Precision Auto Care, Inc. ("Precision Auto Care" or the "Company") is a
provider of automotive maintenance services with franchised and Company-operated
centers located in the United States and in certain international locations. The
Company's services are provided to automobile owners and focus on those high
frequency items required to properly maintain the vehicle on a periodic basis.
The Company offers these services through three "Precision" brands that are
intended to be complementary:

          .    Precision Tune Auto Care provides automotive maintenance services
               which require relatively short service times including engine
               performance, oil change and lubrication and brake services. At
               June 30, 1999, these services were provided at 542 Precision Tune
               Auto Care centers owned and operated by franchisees and one owned
               and operated by the Company.

          .    Precision Auto Wash provides self-service and touchless automatic
               car wash services. The advanced operating systems used at
               prototype Precision Auto Wash centers permit remote monitoring
               and administration of operations. The no-touch car wash
               technology employed in Precision Auto Wash centers also provides
               a high-quality wash with less risk of vehicle damage than
               traditional car wash systems. At June 30, 1999, there were 24
               Company-owned car wash centers and 18 franchised car wash
               centers.

          .    Precision Lube Express provides convenient fast oil change and
               lube services. Because Precision Lube Express centers consist of
               "above ground" configured modular buildings manufactured and sold
               by the Company, operations can commence more quickly and with
               less capital investment than is the case for many competitors. At
               June 30, 1999, there were 14 Precision Lube Express centers owned
               and operated by franchisees and six owned and operated by the
               Company. As of that date there were also 17 Lube Depot centers
               operated by franchisees, some of which are expected to become
               Precision Lube Express centers.

     The Company supports its franchisees and Company-owned centers by
distributing certain automotive and car washing parts and supplies, and
manufacturing and distributing pre-fabricated modular buildings and car wash
equipment and chemicals.

     The Company, a Virginia corporation, was incorporated in April 1997, but
through predecessors has been in the automotive maintenance services business
for over twenty years. The first Precision Tune was established in 1976 to
provide quick, convenient and inexpensive engine tune-ups. Franchising of
Precision Tune centers began the next year. As changes in automotive technology
reduced the need for traditional tune-ups, Precision Tune expanded its menu of
offered automotive maintenance services to include oil changes, fuel injection
service, air conditioning service, cooling system service, brake service and
more diagnostic services. In September 1996, Precision Tune's name was changed
to Precision Tune Auto Care to reflect the shift in emphasis.

     The Company is the result of the November 1997 combination of WE JAC
Corporation (the owner of Precision Tune Auto Care) and nine other automotive
maintenance services companies in connection with the Company's initial public
offering (the "IPO Combination"). In March 1998, the Company acquired the holder
of the master franchise agreement for Precision Tune Auto Care in Mexico and
Puerto Rico.

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OPERATIONS

PRECISION TUNE AUTO CARE

Precision Tune Auto Care is an automotive maintenance service provider
specializing in quality maintenance services that require relatively short
service times. At June 30, 1999, these services were provided at 542 Precision
Tune Auto Care centers owned and operated by franchisees and one owned and
operated by the Company. The automotive care services provided by Precision Tune
Auto Care centers include the diagnosis, maintenance and repair of ignition
systems, fuel systems, computerized engine control systems, cooling systems,
starting/charging systems, emissions control systems, engine drive train
systems, electrical systems, air conditioning systems, oil and other fluid
systems, and brake systems.

PROTOTYPE CENTER. The current prototype Precision Tune Auto Care center is a
free-standing building with six to eight service bays, two to four of which are
drive-through and include pits to facilitate fast oil change and lubrication
services. Approximately 42% of the Company's existing domestic Precision Tune
Auto Care centers have at least six service bays. Franchisees typically develop
Precision Tune Auto Care centers either by entering into a build-to-suit lease,
under which the landlord constructs the center and leases it to the franchisee,
or by purchasing land and building the facility. The Company typically seeks
sites in commercial areas with a minimum population of 50,000 people within a
five mile radius and 24-hour drive-by traffic of at least 20,000 cars. Exclusive
of real estate, the estimated capital required to open a prototype Precision
Tune Auto Care center ranges from $140,000 to $200,000.

RETAIL MARKETING. Precision Tune Auto Care's marketing objectives at the retail
level are to increase sales, enhance first-time customers' experiences, and
bolster customer retention efforts. To further these objectives, Precision Tune
Auto Care has developed and implemented a marketing plan containing programs and
materials for use by Precision Tune Auto Care centers. The plan includes
targeted marketing programs designed to reach key market segments, in-store
merchandising materials designed to enhance retail sales and first time customer
trials, and other local marketing materials (e.g., second car discounts, service
reminder cards, and ATM receipt coupons) designed to generate customers and
improve customer retention.

TRAINING AND OPERATIONAL SUPPORT. A significant element of Precision Tune Auto
Care's commitment to service is its training program for franchisees. New
franchisees are required to successfully complete 80 hours of initial training
at the Company's national training center in Leesburg, Virginia. The Company
also offers a full line of technical training, including courses on engine
performance, fuel systems and emissions, automotive electronics, fuel injection,
and brake certification. These courses, which include both classroom and
hands-on training, are designed to allow franchisees and service center
technicians to maintain and update their technical capability to service today's
more technically complex vehicles. Upon opening a new center, training crews are
onsite for at least the first two business days to assist in the startup
process.

Management also has developed the Precision Information Network ("PIN"), a
proprietary point of sale computer system, and has made this system available to
franchisees. The latest version of PIN is a Windows-based system which employs
touch-screen technology and is designed to be user friendly. The PIN system
provides reports on productivity, cost of goods, labor, inventory and line of
service information, and includes a marketing database module that facilitates
the tracking of customer information for the development of direct mail
marketing campaigns and other marketing strategies. Remote-location polling of
information and electronic ordering from the Company's parts and equipment
division are features currently under development. Approximately 46% of the
Company's domestic franchised centers have installed a version of the PIN
system.

FRANCHISE MARKETING. The Company (through a Predecessor Company) has marketed
franchises for Precision Tune Auto Care centers since 1977. The Company's
franchise sales process includes advertising in appropriate franchise and
business publications, conducting franchise sales seminars, and maintaining a
home page on the Internet through which interested parties may submit a
franchise inquiry. Prospective franchisees are asked to complete a Confidential
Qualifications Report, which serves as the initial screen to determine whether a
prospect is qualified. The Company seeks individuals with management experience
who will commit full time to the operation of their franchise and who have a
minimum of $50,000 and $150,000 in liquid assets and net worth, respectively.

Precision Tune Auto Care's area development system has played a significant role
in the Company's franchise development efforts. Under this system, Precision
Tune Auto Care has entered into area development agreements that grant area
developers the right and obligation to develop franchises on Precision Tune Auto
Care's behalf within specific geographic regions for stated periods of time.
Franchise agreements within the area are between the Company and the franchisee.
The area developer typically receives up to one-half of the initial franchise
fee, one-half of the subsequent royalty revenues and one-half of franchise
renewal and transfer fees. After the creation of a franchise, the area developer
performs most of Precision Tune Auto Care's franchisor obligations. Generally,
the Company is free to establish and operate Company-owned centers in areas in
which it has granted development rights to area developers. In that event the
Company is required to pay the area developer amounts equal to the royalty
payments that the area developer would otherwise receive if the center was being
operated by a franchisee. As of June 30, 1999, 23 area developers had an
ownership interest in a total of 136 Precision Tune Auto Care centers
(representing 33% of the total number of centers) and provided support to
another 220 centers.

OPEN AREA DEVELOPMENT. Precision Tune Auto Care's current strategy is also to
pursue the direct development of open areas in which area developers have not
been granted rights. To facilitate this strategy, the Company has formed a
franchise development team to pursue Precision Tune Auto Care's open area
development plan. This plan, which includes direct franchising and the
development of Company-owned stores for ultimate sale under the Turnkey Program
discussed below, addresses such factors as market demographics, development
resources (e.g., advertising and public relations vehicles, developers of
commercial real estate), criteria for initial center development, and criteria
for additional center development. Based on these factors, a specific expansion
strategy for each target area is developed. The

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Company believes that significant expansion potential exists in areas not
controlled currently by area developers.

PRECISION AUTO WASH

The Company is the owner, operator and franchisor of technologically-advanced
self-service and touchless automatic car wash centers. At June 30, 1999, there
were 24 Precision Auto Wash centers owned and operated by the Company. As of
that date, there were 18 franchised car wash centers.

The Company believes that the Precision Auto Wash system represents the
state-of-the-art in modern touchless automatic and self-service car washing
capabilities.

The computer-based operating system the Company developed for use in its car
wash centers includes the following features:

     .    Computerized control of the wash system which allows the operator to
          change time cycles, and equipment functions, and to monitor the status
          of operations, quickly, easily and cost-effectively, from a remote
          location on a laptop personal computer.

     .    The ability for customers to quickly and easily contact a central
          national customer help center on a dedicated toll-free number in the
          event of an equipment malfunction.

     .    A frequent wash card system, utilizing bar-code technology, rewards
          customers with free washes based upon wash frequency, while collecting
          valuable marketing data.

     .    Through its exclusive integrated voice, LED display and video
          instruction features, the system provides the customer with step-by-
          step instructions on how to operate the system.

     .    A grace period feature permits the customer to continue the wash cycle
          by inserting additional quarters after his or her initial time has
          expired.

     .    A bonus time feature allows customers more time per coin during off-
          peak hours.

PROTOTYPE CENTER. There are two types of prototype Precision Auto Wash centers:
(i) the "Classic," a stand-alone facility consisting of one automatic and four
self-service car wash bays; and (ii) the "Junior," a one-bay automatic car wash
facility to be located on the same site as a Precision Tune Auto Care center or
a Precision Lube Express center. The "Classic" Precision Auto Wash Center is
designed to be placed on a half-acre lot. Exclusive of real estate, the
estimated initial investment to open a "Classic" Precision Auto Wash center
ranges from $52,600 to $669,000. The initial investment required for a "Junior"
Precision Auto Wash, exclusive of real estate, ranges from $40,100 to $420,500.

RETAIL MARKETING. The Company believes that Precision Auto Wash will enjoy
significant benefits from consumer recognition of the "Precision" brand name. At
present, marketing initiatives at the retail level include (i) a grand opening
ceremony to publicize the opening of each new center, (ii) frequent usage/swipe
card system to encourage repeat business, (iii) direct mail marketing, (iv)
quarterly newsletter publication and distribution to customers, (v) advertising
on the back of grocery store receipts, (vi) customer appreciation days, and
(vii) fleet account solicitation.

TRAINING AND OPERATIONAL SUPPORT. A three-day formal pre-opening training
program is required for all Precision Auto Wash franchisees prior to the opening
of a center. Precision Auto Wash provides its franchisees with an operations
policy and procedures manual, and performs a thorough center evaluation on a
quarterly basis. Precision Auto Wash centers participate in "mystery shopper"
and customer service programs. Field operations, marketing and training support
are provided by Company personnel.

FRANCHISE MARKETING. Prospective Precision Auto Wash franchisees are recruited
and granted franchises in accordance with the same processes and techniques that
are used to recruit and license prospective Precision Tune Auto Care
franchisees. As a method of capturing the market of existing car wash owners,
this past fiscal year the Company began a program for existing car wash owners
to participate in the various benefits and supports offered by the Precision
Auto Wash system at reduced fees. Area developers who agree to become a
Precision Auto Wash area developer in their territory are paid a portion of the
initial franchisee fee and continuing royalty in consideration for assisting in
the development and ongoing support of a Precision Auto Wash center. It is
anticipated that Precision Auto Wash franchisees generally will purchase
equipment manufactured by the HydroSpray Car Wash Equipment Co., Ltd.
("HydroSpray") and Worldwide Drying Systems, Inc. ("Worldwide"), subsidiaries of
the Company, and the operational system package from the Company.

PRECISION LUBE EXPRESS

Precision Lube Express is the owner, operator and franchisor of centers which
provide fast automobile oil change, lubrication, filter replacement and related
basic services. Precision Lube Express centers also check and fill vital fluids,
and conduct vehicle safety inspections, including inspection of exhaust systems.
Precision Lube Express offers its customers air filters, PCV valves, breather
filters, wiper blades and assorted engine additives. Precision Lube Express
centers top off vital fluids between customer's oil changes at no charge. At
June 30, 1999, there were 14 Precision Lube Express centers owned and operated
by franchisees and 6 owned and operated by the Company. As of that date

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there were also 17 Lube Depot centers operated by franchisees, some of which are
expected to become Precision Lube Express centers.

The Company believes that the "above-ground" configuration of the modular
Precision Lube Express building manufactured and sold by the Company enables
Precision Lube Express operators to commence operations more quickly and with
lower levels of initial investment than many of its competitors. Unlike
traditionally constructed fast oil change and lube centers which include an
in-ground service pit, the Company's modular centers can be relocated or
expanded quickly. In addition, the modular Lube Express building can be located
on a relatively small piece of property. Unlike certain of its competitors,
Precision Lube Express centers generally do not perform differential fluid
changes, radiator flushes or other automotive maintenance or repair work.
Accordingly, the Company believes that this enables Precision Lube Express
operators to provide services more inexpensively than their competitors because
Precision Lube Express operations require less skilled labor. Because the
Precision Lube Express building is modular and relatively small, it can
sometimes be located on the same site as a Precision Auto Wash center, as well
as other retail locations.

Precision Lube Express marketing emphasizes the basic "hassle-free" fast oil
change and lube services provided by Precision Lube Express.

PROTOTYPE CENTER. The prototype Precision Lube Express Center consists of a one
or two bay unit. The size of the site will depend on the size of the center,
with 50 feet by 100 feet the minimum required for a one-bay unit. Exclusive of
real estate, the estimated initial investment to open a Precision Lube Express
prototype Center ranges from $132,000 to $253,000.

RETAIL MARKETING. The Company believes that Precision Lube Express will enjoy
significant benefits from consumer recognition of the "Precision" brand name.
The Company believes retail sales should be further stimulated by cross
marketing opportunities generated through Precision Lube Express's association
with Precision Tune Auto Care and Precision Auto Wash.

Specific marketing initiatives at the retail level include (i) VIP cards,
granting customers special rates and other benefits, (ii) point-of-sale
marketing materials, including frequent usage cards that provide customers with
free oil changes to encourage repeat business, (iii) radio and print media
advertising, and (iv) direct mail marketing.

TRAINING AND OPERATIONAL SUPPORT. Precision Lube Express provides a one-week
training program that franchisees are required to complete successfully before
opening a Precision Lube Express center. The program addresses the following
areas: computer system operations, lubrication equipment training, center
operations, customer service, and advertising.

The Company actively supports its Precision Lube Express franchisees. Each
center receives operational visits similar to Precision Tune Auto Care centers
and are included in mystery shopper and customer service programs. Field
operations, marketing and training support are provided using the existing
Precision Tune Auto Care structure, with area developer personnel or corporate
personnel, as applicable.

FRANCHISE MARKETING. Prospective Precision Lube Express franchisees are
recruited and granted franchises in accordance with the same processes and
techniques that are used to recruit and license prospective Precision Tune Auto
Care franchisees.


MANUFACTURING AND DISTRIBUTION

The Company's manufacturing and distribution operations account for a
significant portion of the Company's revenues. As more fully described below,
these operations allow the Company to promote uniform quality of supplies and
equipment used in each "Precision" center. The Company does not rely heavily on
any single supplier for the supply of any materials, such as oil, equipment or
raw materials or components the Company utilizes in its manufacturing
operations.

PRECISION TUNE AUTO CARE. Precision Automotive Components ("PAC") is a
distributor of automotive parts and equipment located in Winchester, Virginia.
PAC currently sells a complete line of quality ignition parts, oil and air
filters, brake parts, diagnostic equipment, signage, and other items necessary
and incidental to the outfitting and operation of Precision Tune Auto Care
centers as well as oil and air filters, spare parts and other supplies to
Precision Lube Express centers and Precision Auto Wash centers.

PRECISION AUTO WASH. HydroSpray, a Company subsidiary, manufactures, distributes
and sells the car wash equipment used in the Precision Auto Wash system. The
Company believes that the HydroSpray equipment package is a leading car wash
equipment package on the market because it includes such unique features as an
integrated computer system that controls the auto wash system and allows remote
dial-in access for system status reports and the diagnosis of maintenance
problems along with its recently redesigned automatic tower and track which
adjusts to the size of each vehicle. HydroSpray will sell equipment to Precision
Auto Wash franchisees and to other third parties for installation in car wash
centers that are not franchised or otherwise affiliated with Precision Auto
Wash. HydroSpray's operations principally include the assembly of parts that
have been manufactured by suppliers to HydroSpray specifications. This assembly
process is conducted at HydroSpray's 40,000 square foot manufacturing facility
located in Cedar Falls, Iowa.

National Auto Chemicals blends and distributes the chemical solutions used in
Precision Auto Wash centers including the "Mean Green" presoak and other
solutions of the type which are required in the Precision Auto Wash system.
National Auto Chemicals makes its chemicals and supplies available to Precision
Auto Wash franchisees and other third parties who are not franchisees or
otherwise affiliated with Precision Auto Wash.

Worldwide manufactures and distributes drying systems for installation in
automatic car washes. Worldwide's dryers are available to

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Precision Auto Wash franchisees and other third parties who are not franchisees
or otherwise affiliated with Precision Auto Wash. Worldwide's operations are
conducted out of a 9,600 square foot leased plant outside Denver, Colorado.

PRECISION LUBE EXPRESS. Precision Building Solutions Incorporated ("PBSI")
manufactures and installs the modular building and equipment system used by
Precision Lube Express centers. PBSI conducts these manufacturing operations at
a 27,000 square foot facility located in Mansfield, Ohio. PBSI also sells its
modular buildings to third parties for various commercial applications. The
buildings are delivered, installed, field-tested, and outfitted with all of the
supplies and tools necessary to commence operations immediately. Most
installations are complete within three to five business days from the date of
receipt, thus providing competitive time and cost advantages over traditional
construction. PBSI purchases parts from third-party suppliers which are
manufactured to the PBSI's specifications.

The Company is not dependent upon any single supplier and the parts and
materials the Company uses in connection with its manufacturing process can be
obtained from a variety of suppliers.

FRANCHISING ACTIVITIES

PRECISION TUNE AUTO CARE. The Company sold 4 Precision Tune Auto Care centers to
franchisees under its Turnkey Program in the year ended June 30, 1999. As of
June 30, 1999, substantially all of the Company's Precision Tune Auto Care
centers were owned and managed by franchisees. Precision Tune Auto Care's
franchises have been sold during the preceding years under franchise agreements
that vary in detail as the Precision Tune Auto Care's franchise program has
evolved. Royalty rates in existing franchise arrangements range from 6% to 7.5%.
Currently, the Precision Tune Auto Care's standard franchise agreement requires
payment to the Company of an initial franchise fee of $25,000 and a continuing
royalty of 7.5% of weekly gross receipts. In addition, the franchisee is
required to contribute to or expend 9% of weekly gross receipts on advertising,
1.5% of which is currently paid into the national advertising fund and 7.5% of
which is spent locally. The current standard form franchise agreement has an
initial term of ten years and provides for five year renewal options.

The Company has implemented a program under which qualified franchisees are
eligible to have their royalty rate reduced to 6% if they satisfy certain
criteria. Under the program, franchisees are also provided with an incentive to
purchase additional Precision Tune Auto Care franchises. Any franchisee who has
owned and operated a center for at least one year in accordance with this
program will be charged an initial franchise fee of $15,000 for a second
franchise and $10,000 for each additional franchise purchased, provided certain
conditions are met.

Under its current form of franchise agreement, the Company has a continuing
obligation to provide technical and administrative support, supervisory
services, centralized advertising, and training and related support to its
franchisees. In certain regions, the Company has delegated these duties to area
developers under its area developer system.

Upon non-renewal and transfer, the Company has the first right to purchase the
operating assets and obtain an assignment of leased facilities in certain cases.
In certain situations, the Company will repurchase franchise rights. The
decision to repurchase is made solely at the Company's discretion and is not a
contractual obligation. The Company also periodically obtains possession of some
franchisees' franchise rights by exchanging for such rights notes payable or
other consideration, or by exercising rights outlined in the Franchise
Agreements.

The Company also enters into master franchise agreements to develop
international markets. At the present time, the Company has master franchise
agreements in Taiwan, Singapore, Indonesia, Oman, the Bahamas, Curacao/Aruba,
Jamaica, the Dominican Republic, St. Croix, Peru, Brazil and El Salvador.
Generally, the master franchisee pays a license fee and is required to develop
Precision Tune Auto Care centers in accordance with an agreed upon schedule
within the defined area. Franchise agreements within the area are between the
master franchisee and the unit franchisee. The master franchisee is required to
perform all of the obligations of the franchisor including training,
administrative and operational support, and the Company generally receives 20%
of the initial franchise fee and up to one-third of ongoing royalty fees.

PRECISION AUTO WASH. The Company sold 11 car wash centers to franchisees under
its Turnkey Program in the year ended June 30, 1999. The Company is also
aggressively marketing Precision Auto Wash franchises. The standard franchise
agreement for Precision Auto Wash franchisees will require the payment of an
initial franchise fee between $1,500 and $15,000 depending upon whether or not
the franchisee is an existing car wash owner. Franchisees will be required to
pay royalties on a yearly basis between $4,000 and $9,000

Franchisees may also be required to contribute a monthly amount between $75 and
$150 to a national advertising fund and an additional amounts to a local
advertising cooperative. In addition, a franchisee will receive franchise
protection within a specified area. Precision Auto Wash franchise agreements
have an initial term of ten years and provide for five-year renewal options.

PRECISION LUBE EXPRESS. The Company sold 1 lube center to a franchisee under its
Turnkey Program in the year ended June 30, 1999. The standard franchise
agreement for Precision Lube Express franchisees requires the payment of an
initial franchise fee of $12,500. Franchisees are required to pay continuing
royalties of 5% of weekly gross receipts. Precision Lube Express franchisees
also are required to contribute an amount equal to 2% of their monthly gross
receipts to a national advertising fund and an additional amount of their gross
receipts royalties to a local advertising cooperative. The franchise agreements
have an initial term of ten years and provide for five-year renewal options.
Certain Precision Lube Express franchise agreements (namely those inherited in
connection with the IPO Combination) have terms that vary with the standard
agreement now in use.

PRECISION TURNKEY PROGRAM. In addition to the direct franchising activities
discussed above, pursuant to which franchisees select a site and subsequently
develop a Precision Auto Care center on the site, the Company operates a
Precision Turnkey Program. Under this

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program, franchisees purchase either existing Company-owned centers or recently-
developed centers from the Company. At the time the franchisee purchases the
center, the franchisee also purchases a franchise license (pursuant to which the
franchisee agrees to pay royalties to the Company on the same basis as
franchisees who execute the Company's current standard form of franchising
agreement) as well as the center's assets and goodwill. The program is designed
to enhance franchising sales by providing readily available and immediately
operational sites of Company-selected locations.

COMPETITION

The Company encounters competition in all aspects of its business, including the
sale by Precision Tune Auto Care, Precision Auto Wash and Precision Lube Express
centers of automotive maintenance and repair services, self-service and
automatic car wash services and fast oil and lubrication services, respectively.
The Company believes that automobile dealerships, including recently emerging
national and regional new and used auto dealerships, represent Precision Tune
Auto Care's principal competitors. Other Precision Tune Auto Care competitors
include tire companies and regional under-the-hood service specialists. National
competitors within Precision Tune Auto Care's market include Sears Auto Center
and the automotive maintenance centers operated by Goodyear, Firestone and
Penske, among others. Its regional competitors include All Tune and Lube (East
Coast), EconoLube and Tune (West Coast), Tunex International, Inc. (Rocky
Mountain region), Tune-Up Masters and Speedee Oil Change and Tune-Up (Southern
region), among others. The Company believes that the greater technical
complexity of today's vehicles provides a substantial barrier to entry for
competitors in the "under-the-hood" segment of the automotive care services
industry.

Precision Auto Wash competes not only with other self-service automobile car
washes but with car wash services provided by full-service tunnels, exterior
only tunnels, hand washes, oil company washes, and do-it-yourself car washing.

Precision Lube Express also competes in the service segment of the automotive
aftermarket industry. According to the American Oil Change Association, an
estimated 650 million oil changes are performed annually in cars and light
trucks. These oil changes are performed by individuals or are performed
professionally. Professional oil changes are performed in all types of
automotive aftermarket outlets including fast oil change and lubrication
facilities such as those operated by the Company, car dealerships, and gasoline
stations. On a national level, Precision Lube Express competes with a number of
major oil manufacturers dominating the fast lube market. These include Pennzoil
Company (Jiffy Lube International, Inc. and Q-Lube Inc.), Valvoline
Company/Ashland Oil Inc. (Instant Oil Change) and Texaco Inc. (Express Lube),
among others. In addition, Precision Lube Express competes with regional fast
oil and lubrication operations including All Tune and Lube, EconoLube and Tune,
Tunex International Inc. and Speedee Oil Change and Tune-Up, among others.

The Company believes that the Precision Tune Auto Care, Precision Auto Wash and
Precision Lube Express centers all compete on the basis of customer awareness
through advertising, service, convenience and location and, to a lesser extent,
on price. The Company believes that the potential ability to offer all of the
services provided by each of the operations at one center or in centers in close
proximity to one another will be a significant competitive advantage.

The Company's HydroSpray subsidiary competes with many other manufacturers of
self-service and touchless automatic car wash equipment manufacturers. Many of
these competitors are larger and well-established. The Company's competitors
include, but are not limited to, Mark VII Industries, Inc., Ryko, PDQ and many
smaller businesses. Some of these companies are well capitalized and have long
standing relationships with large oil companies who frequently purchase their
equipment for installation at car washes located on or adjacent to gasoline
stations.

GOVERNMENTAL REGULATION

FRANCHISING REGULATION. The Company is subject to federal, international and
state laws and regulations, including the regulations of the Federal Trade
Commission as well as similar authorities in individual states, in connection
with the offer, sale and termination of franchises and the regulation of the
franchisor/franchisee relationship. The failure by the Company to comply with
these laws could subject the Company to liability to franchisees and to fines or
other penalties imposed by governmental authorities. From time to time, the
Company experiences periods during which sales are restricted while it registers
updates of its disclosure material with various states. Such delays may have an
adverse effect on the Company's ability to offer and sell franchises. In
addition, the Company may become subject to litigation with, or other claims
filed with state, federal or international authorities by, franchisees or area
developers based on alleged unfair trade practices, implied covenants of good
faith and fair dealing or express violations of agreements. Accordingly, the
failure of the Company to comply with applicable franchise laws and regulations
could have a material adverse effect on the Company's financial condition and
results of operations.

ENVIRONMENTAL REGULATION. Precision Tune Auto Care and Precision Lube Express
centers store new oil and handle large quantities of used automotive oils and
fluids. Precision Auto Wash centers use chemicals in the washing process. These
chemicals, along with oils, fluids and other chemicals washed off of the vehicle
are collected with the waste water from the car wash process. As a result of
these activities, the Company, its franchisees and area developers are subject
to various federal, state and local environmental laws and regulations dealing
with the transportation, storage, presence, use, disposal and handling of
hazardous materials and hazardous wastes, discharge of stormwater, and
underground fuel storage tanks. If any such substances were improperly released
or improperly stored on the Company's property or the property of any
franchisee, including leased properties, or if the Company were found to be in
violation of applicable environmental laws and regulations, the Company could be
responsible for clean-up costs, property damage and fines or other penalties,
any one of which could have a material adverse effect on the Company's financial
condition and results of operations.

TRADEMARKS

                                       9
<PAGE>

The Company has registered (subject to certain limited exceptions) a number of
trademarks and service marks with the United States Patent and Trademark Office,
including "Precision Tune Auto Care," "Precision Auto Wash" and "Precision Lube
Express." The Company's failure to obtain trademark and service mark
registration could have a material adverse effect on the Company's operations.
The Company has also registered and made application to register trademarks in
foreign countries where master franchise licenses have been granted.

SEASONALITY

Seasonal changes may impact various sectors of the Company's businesses and,
accordingly, the Company's operations may be adversely affected by seasonal
trends in certain periods. In particular, severe weather in winter months may
make it difficult for consumers in affected parts of the country to travel to
Precision Tune Auto Care, Precision Lube Express and Precision Auto Wash centers
and obtain services. Severe winter weather and rainy conditions also can
adversely impact the Company's sale, installation and use of car wash equipment.
Conversely, the Precision Auto Wash business is favorably impacted by less
severe winter weather conditions as demand for the Company's car wash service
increases substantially in winter months.

RISK FACTORS

The Company's business and an investment in its Common Stock are subject to
certain risks, including the following:

LIMITED OPERATING HISTORY. The Company is in only its second year of operations
as a combined entity. While a predecessor of the Company has been in business
since 1976, the Company as currently constituted, acquired the majority of its
assets in November 1997 as the result of a combination of nine automotive
maintenance services companies in connection with its initial public offering.
There can be no assurance that the Company's management will be able to
successfully manage the operations of the combined entity.

COMPETITION. The automotive services industry is highly competitive. Direct
competitors exist for each of the Company's businesses, Precision Tune Auto
Care, Precision Auto Wash, Precision Lube Express and the Company's
manufacturing and distribution divisions and subsidiaries.

The Company believes that automobile dealerships, including recently emerging
national and regional new and used auto dealerships, represent the principal
competitors for Precision Tune Auto Care and Precision Lube Express; however,
the Company also competes with national and regional fast oil change and lube
companies, major oil manufacturers, local service stations, and local, regional
and national automobile maintenance and repair service providers. See
"Business--Competition". Competitors for the services provided by Precision Auto
Wash include regional and local car wash operators. The Company believes the
principal competitive factors in the markets serviced by each of its business
units are location, name recognition and reputation, quality of service and
price.

The Company also competes with some of those noted above and with other parties
in the sale of franchises. Competitive factors include startup costs, royalty
rates, franchisee support and the financial performance of existing centers.
With respect to the sales of supplies and equipment for franchisees, competition
is based on availability, price, ability to provide prompt delivery and the
quality of support services.

The Company's manufacturing and distribution division competes with a number of
manufacturers and distributors of automotive and car wash supplies and
equipment. Many of these competitors are large and have a substantially longer
operating history than the Company. In addition, although the Company does not
intend to sell its complete proprietary automated car wash system to
unaffiliated car wash centers, the Company sells certain car wash equipment to
car wash centers unaffiliated with the Company. The sale of car wash equipment
to unaffiliated car wash centers could increase the level of competition in the
Company's car wash business, allow the Company's competitors to compete more
effectively with the Company or reduce the Company's ability to distinguish
itself from its competitors. See "Business--Operations--Manufacturing and
Distribution."

Certain competitors in each of the areas discussed above have greater financial
resources than the Company, and there can be no assurance that the Company or
individual Precision centers will be able to compete effectively. See
"Business--Competition."

                                       10
<PAGE>

RELIANCE ON FRANCHISING. Franchise royalties are a significant component of the
Company's revenue base. Therefore, the Company depends upon the ability of its
franchisees to promote and capitalize upon the "Precision" brand and the
reputation the Company believes it enjoys for quality and value. There can be no
assurance that the Company or its area developers will be able to recruit and
retain franchisees with the business abilities or financial resources necessary
to open Precision Tune Auto Care, Precision Auto Wash and Precision Lube Express
centers on schedule or that the franchisees will conduct operations profitably.
In addition, to the extent that franchisees finance their operations with
secured indebtedness, the Company's rights to receive franchise royalties would
be effectively subordinated to the rights of franchisees' lenders. See
"Business--Operations."

AUTOMOTIVE TECHNOLOGY ADVANCES. The demand for the services offered by the
Company's Precision Tune Auto Care and Precision Lube Express centers could be
adversely affected by continuing developments in automotive technology.
Automotive manufacturers are producing cars that last longer and require service
and maintenance at less frequent intervals. For example, some manufacturers now
recommend that consumers change oil at 10,000 mile intervals and replace spark
plugs and other engine components at 100,000 miles, a significant increase from
the mileage intervals recommended for earlier models and those currently
recommended by most manufacturers. The demand for the Company's services also
could be adversely affected by longer and more comprehensive warranty programs
offered by automobile manufacturers. The Company believes that a majority of new
automobile owners have their cars serviced by a dealer during the period the car
is under warranty. In addition, advances in automotive technology may require
the Company to incur additional costs to update its technical training program
and upgrade the diagnostic capabilities of its centers.

LABOR AVAILABILITY. The provision of high quality maintenance services by
Precision Tune Auto Care centers requires an adequate supply of skilled labor.
In addition, the operating costs and operating revenues of such centers may be
adversely affected by high turnover in skilled technicians. Trained and
experienced automotive technicians are in high demand. Accordingly, a center's
ability to increase productivity and revenues could be affected by its inability
to maintain the employment of skilled technicians necessary to provide the
center's services. There can be no assurance that Precision Tune Auto Care or
its franchisees will be able to attract and maintain an adequate skilled labor
force necessary to efficiently operate these centers or that labor expenses will
not increase as a result of a shortage in the supply of skilled technicians,
thereby adversely impacting the Company's financial performance.

DEPENDENCE ON MANAGEMENT AND KEY PERSONNEL. The Company's success depends to a
significant extent on the performance and continued services of senior
management and certain key personnel. The Company believes these individuals
possess the necessary experience in acquiring, integrating, developing,
financing and operating the various types of Precision Auto Care centers and the
Company's related franchising and manufacturing and distribution activities, as
well as managing a company intending to implement an aggressive acquisition
program. The loss of the services of one or more of these key employees could
have a material adverse impact on the Company's financial condition and results
of operations. The Company has employment agreements with certain key
executives. Each of the employment agreements contains certain noncompetition
provisions that survive the termination of employment in certain circumstances.
The Company also has obtained certain noncompetition agreements from several
other members of management and key personnel who are not subject to employment
agreements. However, there can be no assurance that such noncompetition
agreements will be enforceable.

RELIANCE ON AREA DEVELOPERS. The Company relies, in part, on the assistance of
area developers to identify and recruit franchisees, to assist in the
development of a center, and to support franchisees' continuing operations. Most
area development agreements specify a schedule for opening the respective
"Precision" centers in the territory covered by the agreement. In the past, the
Company has selectively agreed to extend or waive the development schedules for
certain of its area developers and there can be no assurance that area
developers will be able to meet their contractual development schedules.
Although the Company also has added the resources to directly franchise in open
areas, the development schedules of the Company's area developers will remain a
part of the basis of the Company's expectations regarding the number and timing
of new center openings.

The Company will depend on its area developers to promote the Precision Tune
Auto Care, Precision Auto Wash and Precision Lube Express franchises in their
territories. The Company initially encountered some resistance to the
introduction of the Precision Auto Wash and Precision Lube Express brands. For
example, some area developers resisted the Company's efforts to offer Precision
Lube Express franchises or open Company-owned centers in areas covered by
Precision Tune Auto Care area subfranchisor agreements.

The Company believes that its area developers and the Company have substantially
resolved any concerns expressed by its area developers. There can be no
assurance, however, that the Company will not become subject to legal
proceedings or otherwise expend Company resources in connection with disputes
concerning the Company's ability to offer and sell Precision Lube Express and
Precision Auto Wash franchises or open Company-owned centers in areas covered by
Precision Tune Auto Care area subfranchisor agreements. It also may be difficult
for the Company to enforce its area subfranchisor agreements or to terminate the
rights of area subfranchisors who fail to meet development schedules or other
standards and requirements imposed by the Company, limiting the ability of the
Company to develop the territories of such subfranchisors. Any such disputes or
difficulties could increase the costs of the Company's operations or otherwise
adversely affect the Company's financial condition and results of operations.
See "Business--Operations."

SEASONAL NATURE OF PORTIONS OF THE BUSINESS. Seasonal changes may impact various
sectors of the Company's businesses and, accordingly, the Company's operations
may be adversely affected by seasonal trends in certain periods. In particular,
severe weather in winter months may make it difficult for consumers in affected
parts of the country to travel to Precision Tune Auto Care, Precision Lube
Express and Precision Auto Wash centers and obtain services. Severe winter
weather and rainy conditions also can adversely impact the Company's sale,
installation and use of car wash equipment. Conversely, the Precision Auto Wash
business is favorably impacted by less severe winter weather conditions as
demand for the Company's car wash service increases substantially in winter
months.

                                       11
<PAGE>

CONTROL BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS. As of September 14, 1999,
directors of the Company, executive officers of the Company, and shareholders
beneficially-owning more than 5% of the Company's outstanding Common Stock, in
the aggregate beneficially owned approximately 63% of the Company's outstanding
Common Stock. Accordingly, these persons have substantial influence over the
affairs of the Company, including the ability to influence the election of
directors, the outcome of votes by the Company's shareholders on major corporate
transactions, including mergers, sales of substantial assets, acquisitions and
going-private transactions, and other matters requiring shareholder approval.

FRANCHISING REGULATION. The Company is subject to federal, international and
state laws and regulations, including the regulations of the Federal Trade
Commission as well as similar authorities in individual states, in connection
with the offer, sale and termination of franchises and the regulation of the
franchisor/franchisee relationship. See "Business--Government Regulation." The
failure by the Company to comply with these laws could subject the Company to
liability to franchisees and to fines or other penalties imposed by governmental
authorities. From time to time, the Company experiences periods during which
sales are restricted while it registers updates of its disclosure material with
various states. Such delays may have an adverse effect on the Company's ability
to offer and sell franchises. In addition, the Company may become subject to
litigation with, or other claims filed with state, federal or international
authorities by, franchisees or area developers based on alleged unfair trade
practices, implied covenants of good faith and fair dealing or express
violations of agreements. Accordingly, the failure of the Company to comply with
applicable franchise laws and regulations could have a material adverse effect
on the Company's financial condition and results of operations.

ENVIRONMENTAL REGULATION. Precision Tune Auto Care and Precision Lube Express
centers store new oil and handle large quantities of used automotive oils and
fluids. Precision Auto Wash centers use chemicals in the washing process. These
chemicals, along with oils, fluids and other chemicals washed off of the vehicle
are collected with the waste water from the car wash process. As a result of
these activities, the Company, its franchisees and area developers are subject
to various federal, state and local environmental laws and regulations dealing
with the transportation, storage, presence, use, disposal and handling of
hazardous materials and hazardous wastes, discharge of stormwater, and
underground fuel storage tanks. If any such substances were improperly released
or improperly stored on the Company's property or the property of any
franchisee, including leased properties, or if the Company were found to be in
violation of applicable environmental laws and regulations, the Company could be
responsible for clean-up costs, property damage and fines or other penalties,
any one of which could have a material adverse effect on the Company's financial
condition and results of operations. See "--Government Regulation."

RISKS OF INTERNATIONAL OPERATIONS. International operations comprised
approximately 14% of the Company's consolidated net revenue during the fiscal
year ended June 30, 1999. International operations are subject to risks such as
currency exchange rate fluctuations, unique legal and regulatory requirements,
political and economic uncertainties, difficulties in staffing and managing
foreign operations, differences in financial reporting, differences in the
manner in which different cultures do business, operating difficulties and other
factors. The many difficulties and risks inherent in international operations
could result in a material adverse impact on the Company's business, financial
condition and results of operation.

YEAR 2000 COMPLIANCE. The Company has assessed and will continue to assess the
impact the Year 2000 issue will have on its reporting and operating systems. In
connection with upgrading its operational, financial and management systems, the
Company is in the process of converting its financial and operations software
from a system that the Company believes is not Year 2000 compliant to a
LAN-based system the manufacturer of which has represented is Year 2000
compliant. Although the Company does not anticipate that the Year 2000 issue
will have a significant impact on its business, unanticipated Year 2000
compliance problems of the Company, its vendors or suppliers could potentially
have a material adverse effect on the Company's business, financial condition
and operating results.

ITEM 2. PROPERTIES

The Company's corporate headquarters are located in approximately 24,000 square
feet of leased office space in Leesburg, Virginia pursuant to a lease that
expires in 2002. The Company also leases 32,000 square feet in Winchester,
Virginia pursuant to a lease that expires in 2002. The Winchester facility
houses PAC, which warehouses the parts that are distributed to the Company's
Precision Tune Auto Care operation.

The Company conducts its HydroSpray car wash equipment manufacturing operations
from a 40,000 square foot Company-owned facility located in Cedar Falls, Iowa.

The Company conducts its Worldwide Drying Systems car wash drying equipment
manufacturing operations from a 9,600 square foot leased facility outside of
Denver, Colorado.

The Company conducts its car wash chemical blending and distribution operations
from an 8,000 square foot Company-owned facility located in Columbus, Ohio and
operates its modular building manufacturing facility from a 27,000 square foot
Company-owned building located in Mansfield, Ohio.

The Company believes that the manufacturing facilities described above will
provide the Company with sufficient manufacturing capacity for the foreseeable
future.

The Company's rental obligations on its headquarters and leased warehouse and
manufacturing facilities was approximately $493,700 for the

                                       12
<PAGE>

year ended June 30, 1999. The Company owns the underlying real estate for two
Company-owned car washes and mortgages the underlying real estate for 24
Company-owned centers which includes one auto care center, one lube center, 17
wash centers, and five lube/wash combinations. The rent expense associated with
Company-owned and franchised centers for the year ended June 30, 1999 of
$1,050,000 is the net amount after allowing for $969,000 of sublease income.

In the opinion of management, the Company's current space is adequate for its
operating needs.

ITEM 3. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to routine litigation in the
ordinary course of business, including contract, franchisee and
employment-related litigation. In the course of enforcing its rights under
existing and former franchisee agreements, the Company is subject to complaints
and letters threatening litigation concerning the interpretation and
applicability of these agreements, particularly in case of defaults and
terminations. None of these routine matters, individually or in the aggregate,
are believed by the Company to be material to its business or financial
condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

The Company's common stock, par value $.01 per share ("Common Stock") is
publicly traded on the Nasdaq Stock Market ("Nasdaq") and is quoted under the
symbol "PACI." On August 16, 1999, the Company's listing was moved from the
Nasdaq National Market to the Nasdaq SmallCap Market. The Company's continued
listing on the Nasdaq SmallCap Market is contingent upon Nasdaq approval.

As of September 14, 1999, there were 205 record holders of Common Stock. The
number of record holders was determined from the records of the Company's
transfer agent and does not include beneficial owners of Common Stock whose
shares are held in the names of various securities brokers, dealers and
registered clearing agencies. The Company estimates that there are approximately
1,000 shareholders.

The following table sets forth the high and low sales prices on the Nasdaq for
the Common Stock during the fiscal years ended June 30, 1999 and June 30, 1998,
respectively. To date, the Company has not paid any dividends and does not
anticipate paying any dividends in the foreseeable future. The terms of the
Company's credit agreement also restrict the Company from paying any dividends.

FISCAL YEAR ENDED JUNE 30, 1999

QUARTER                  HIGH                     LOW
-------                  ----                     ---
First                    $ 10 3/8                 $ 4 5/8
Second                      5 7/8                   2
Third                       3                       1 5/8
Fourth                      3 1/16                  2

FISCAL YEAR ENDED JUNE 30, 1998

QUARTER                  HIGH                     LOW
-------                  ----                     ---
First*                   n/a                      n/a
Second*                  $ 9 1/16                 $ 7
Third                      11                       8 5/8
Fourth                     11                       9 3/4

* The Company's Common Stock began trading on the Nasdaq on November 6, 1997.

ITEM 6. SELECTED FINANCIAL DATA

Information responsive to this Item cannot be obtained on a timely basis by the
Registrant without unreasonable effort or expense and is the subject of a Form
12b-25 filing made by the Registrant. The Registrant intends to supply this
information under cover of a Form 10-K/A amendment to this Form within fifteen
calendar days.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

                                       13
<PAGE>

Information responsive to this Item cannot be obtained on a timely basis by the
Registrant without unreasonable effort or expense and is the subject of a Form
12b-25 filing made by the Registrant. The Registrant intends to supply this
information under cover of a Form 10-K/A amendment to this Form within fifteen
calendar days.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Information responsive to this Item cannot be obtained on a timely basis by the
Registrant without unreasonable effort or expense and is the subject of a Form
12b-25 filing made by the Registrant. The Registrant intends to supply this
information under cover of a Form 10-K/A amendment to this Form within fifteen
calendar days.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information responsive to this Item cannot be obtained on a timely basis by the
Registrant without unreasonable effort or expense and is the subject of a Form
12b-25 filing made by the Registrant. The Registrant intends to supply this
information under cover of a Form 10-K/A amendment to this Form within fifteen
calendar days.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

Not applicable.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Company's Articles of Incorporation classifies the Board of Directors into
three classes, as nearly equal in number as possible, with terms which expired
or will expire at the Annual Meetings of Shareholders in 1998, 1999, and 2000
respectively. After the initial rotation is complete, one class of directors
will be elected at each subsequent Annual Meeting of Shareholders to serve
three-year terms.

The terms of four directors will expire at the 1999 Annual Meeting: Messrs.
Allen, Ibrahim, Keller and Zamensky ("Class II Directors"). One Class II
Director, Gerald Zamensky, has decided not to stand for re-election. The Board
of Directors has nominated Mauricio Zambrano V. to serve as a Class II Director.

The Class II Director nominees have been nominated for election for a three-year
term expiring at the Annual Meeting in 2002. The terms of the other eight
directors will continue as indicated below. Dates of service listed below
include service with predecessors of the Company.

                     DIRECTORS WHOSE TERMS EXPIRE IN 1999
                    AND NOMINEES FOR TERMS EXPIRING IN 2002


<TABLE>
<CAPTION>
NAME                            PRINCIPAL OCCUPATION             ADDITIONAL INFORMATION
----                            --------------------             ----------------------
<S>                             <C>                              <C>
Woodley A. Allen                President, Allen Management      Mr. Allen served as Chief Financial Officer of EZ
Director since 1991             Services, Oakton, VA             Communications, Inc. from March 1973 to May 1992.
Chairman-Audit Committee        (management consulting
Age 52                          firm)

Bassam N. Ibrahim(3)            Partner, Burns, Doane,           From June 1994 to August 1996, Mr. Ibrahim was with Popham,
Director since 1993             Swecker & Mathis, LLP,           Haik, Schnobrich & Kaufman. From June 1990 to June 1994, Mr.
Age 37                          Alexandria, VA (law firm)        Ibrahim was with Mason, Fenwick & Lawrence.

Arthur Kellar(1)(2)             Retired                          Mr. Kellar served as Chairman of the Board of WE JAC
Director since 1991                                              Corporation, the Company's predecessor, from April 1992 to
Chairman-Organization and                                        September 1994. Mr. Kellar served as Chairman of the Board of
  Compensation Committee                                         EZ Communications, Inc. from June 1992 to April 1997.
Age 77

Gerald A. Zamensky              Manufacturing Consultant         Mr. Zamensky served as a Director of Miracle Industries, a
Director since 1997             (self-employed)                  predecessor company from 1991 to November 1997. He also served
Age 58                                                           as President and Chief Executive Officer of Southeastern
                                                                 Plastics, Inc. from 1975 to 1995.

Mauricio Zambrano V.            Vice President, Dessarollo       Mr. Zambrano serves as a director of Cemex, S.A. de C.V.
New Nominee 1999                Integrado, S.A. de C.V.
Age 53
</TABLE>


                     DIRECTORS WHOSE TERMS EXPIRE IN 2000

<TABLE>
<S>                             <C>                              <C>
Lynn E. Caruthers(3)            General Partner, Caruthers       Ms. Caruthers has served as Chairperson of the Board of WE JAC
Director since 1991             Properties, Ltd.,                Corporation, the Company's predecessor, since September 1994.
Chairperson of the Board;       Arlington, VA (commercial
</TABLE>

                                       14
<PAGE>

<TABLE>
<S>                             <C>                              <C>
Chairperson of the              real estate developer)
  Executive Committee
Age 47

William R. Klumb                Vice President,                  Mr. Klumb previously served as Vice President of Operations
Director since 1997             Car Wash Division                of the Car Wash Division since November 1997. Additional
Age 41                                                           biographic information appears on page 15.

Bernard H. Clineburg(1)         President, United                Mr. Clineburg served as a Director of George Mason Bankshares,
Director since 1993             Bankshares; Chairman and         Inc. and The George Mason Bank from October 1990 to April 1998.
Age 50                          CEO, United Bank
                                (Virginia), Fairfax, VA

Effie L. Eliopulos              Owner and operator of            Ms. Eliopulos serves as Vice President of National Automotive
Director since 1997             retail rental centers,           Chemical. She also served as Chairperson of Miracle Industries
Age 60                          Cambridge, OH                    Inc., a predecessor company,  from 1991 to November 1997.


</TABLE>


                     DIRECTORS WHOSE TERMS EXPIRE IN 2001

<TABLE>
<S>                             <C>                              <C>
Charles L. Dunlap(1)            President and Chief              Mr. Dunlap previously served as President, Chief Operating
Director since 1998             Executive Officer                Officer and Director of Crown Central Petroleum Corporation.
Age 56                                                           Additional biographic information appears on page 15.

Richard O. Johnson              President, JJ-AGRO, Inc.,        Mr. Johnson serves as a Director of the following companies:
Director since 1997             Zanesville, OH (farming and      First National Bank of Zanesville, National Gas and Oil
Age 71                          farm services)                   Company, and Muskingun Livestock, Inc.

Harry G. Pappas, Jr.(2)         Chief Financial Officer,         Mr. Pappas operated his own financial consulting firm between
Director since 1996             Partners First Holdings,         July 1992 and November 1997. He served as Chief Financial
Age 52                          LLC, Linthicum, MD (credit       Officer of WE JAC Corporation, the Company's predecessor, from
                                card company)                    February 1997 to May 1997. Mr. Pappas served as Chief Financial
                                                                 Officer of Youth Services International, Inc. from September
                                                                 1994 to May 1995 and Chief Financial Officer of Meridian
                                                                 Healthcare from July 1993 to May 1994. He currently serves as a
                                                                 Director of Creditrust Corporation.

George A. Bavelis(1)            Chairman, President and          Mr. Bavelis has served as Chairman and President of Coin Op.
Director since 1997             Chief Executive Officer,         Vending Co. since 1983. He also serves as Chairman of the Board
Age 62                          Pella Co., Columbus, OH          of Sterling Bancorp and a Director of Heartland Bancorp.
                                (real estate development
                                firm)
</TABLE>

(1) Member -- Executive Committee
(2) Member -- Finance and Audit Committee
(3) Member -- Organization and Compensation Committee


EXECUTIVE OFFICERS OF REGISTRANT

CHARLES L. DUNLAP, age 56, was named President and Chief Executive Officer in
October 1998, and has been a member of the Board of Directors from that date.
From April 1997 until October 1998, Mr. Dunlap was an independent business
consultant. From June 1996 to October 1998, Mr. Dunlap served as a director of
the Clipper Group, a wholly-owned subsidiary of Credit Suisse -- First Boston.
Mr. Dunlap also served as an advisor to the Chairman of the Board of the Clipper
Group regarding the merger of TruckStops of America and National
Auto/Truckstops. From 1991 to 1996, he served as President, Chief Operating
Officer and a Director of Crown Central Petroleum, a petroleum refiner and
retail marketer with annual revenues of approximately $1.8 billion.

JERRY L. LITTLE, age 53, was named Senior Vice President and Chief Financial
Officer in May 1999. From 1982 to May 1999, Mr. Little was the President and
owner of J.L. Little, Inc. in Clifton, Virginia., a consulting firm performing
financial, business and tax advisory services to a variety of businesses.

WILLIAM R. KLUMB, age 41, was named Vice President of the Car Wash Division in
June 1999. Previously, Mr. Klumb was Vice President Car Wash Operations of WE
JAC Corporation, the Company's predecessor, from November 1997 through May 1999.
He had been President of Rocky Mountain I since March 1987 and President of
Rocky Mountain II since it was incorporated in September 1988. He also served as
Managing Member of Ralston Car Wash Ltd. since its formation in 1991. Each of
these entities became wholly-owned subsidiaries of the Company as a result of
the IPO Combination in November 1997.

JAIME J. VALDES, age 41, was named Senior Vice President -- Latin America in
April 1998. From July 1992 until March 1998, Mr. Valdes was the Operating
Partner of Promotora de Francquicias Praxis S.A. de C.V., the Precision Tune
Auto Care master franchisee for Mexico and Puerto Rico.

                                       15
<PAGE>

JOHN T. WIEGAND, age 37, became Vice President of North American Operations in
June 1998. Mr. Wiegand joined WE JAC Corporation, the Company's predecessor, as
Director of Field Operations in August 1996. From January 1990 through August
15, 1996, Mr. Wiegand was Director of Sales and Product Management for Precision
Automotive Components Manufacturing and Distribution (PAC), a division of the
Company.

KEVIN B. ROONEY, age 37, was named Vice President of Franchise Development in
July 1997. Mr. Rooney joined WE JAC Corporation, the Company's predecessor, as
Director of Franchise Development and Marketing in April 1997. From December
1995 to April 1997, Mr. Rooney was Executive Director of Franchise Development
for Decorating Den Systems, Inc. in Bethesda, MD. He joined Decorating Den
Systems, Inc. as District Manager in 1988 and was later named National Division
Manager in April 1994.

PETER TAHINOS*, age 40, was named Vice President of Marketing and Advertising in
September 1997. Mr. Tahinos joined WE JAC Corporation, the Company's
predecessor, as Director of Marketing and Advertising in October 1992. From July
1991 to September 1992, Mr. Tahinos served as an Account Supervisor with the
advertising agency, Weinstock, White & Associates in Philadelphia, PA. Before
that, Mr. Tahinos spent nearly 6 years with MARC Advertising, an advertising
agency located in Pittsburgh, Pennsylvania.

ELIOT G. BOWYTZ, age 31, was named Corporate Secretary in April 1999. Mr. Bowytz
was named Assistant General Counsel in February 1996. Mr. Bowytz joined WE JAC
Corporation, the Company's predecessor, as Staff Attorney in May 1995. From
November 1993 to May 1995, he was Manager of Capital Market Projects for the
Aries Group, LTD., in Arlington, Virginia

JOHN N. TARRANT, age 31, was named Controller in April 1999. Mr. Tarrant joined
WE JAC Corporation, the Company's predecessor, as Financial Analyst in September
1996. From April 1996 until September 1996, he was the Financial Analyst for LCI
International in McLean, Virginia. From July 1995 until April 1996, he was an
Accountant for Rosenblum, Gloss, Niad & Dietz in Rockville, Maryland. From May
1993 until June 1995 he was an Analyst for Joseph & Pietrafesa in Syracuse, New
York.

KARL W. BYRER, age 53, was named Vice President of Business Development in
January 1999. Prior to that, he was Vice President of Car Wash Development, a
position he assumed with the merger and formation of the Company. From November
1989 until the merger in 1997, he was owner and president of the Karl Byrer
Group, a Denver car wash consulting and equipment supply company.

* Mr. Tahinos has recently submitted his resignation effective October 1, 1999.


            SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers to file reports of ownership and
changes of ownership with the SEC and the Nasdaq Stock Market. The Company
believes that during the period from July 1, 1998 through June 30, 1999, its
directors and executive officers complied with all applicable Section 16(a)
filing requirements, except as follows: (i) initial Form 3's for Messrs.
Wiegand, Tahinos, Little, Byrer, Marshall, Rooney, Tarrant, Leslie and Bowytz as
newly appointed executive officers were not filed on a timely basis; (ii)
Messrs. Allen, Bavelis, Caruthers, Clineburg; Ibrahim, Johnson, Kellar, Pappas,
and Zamensky, each a director of the Company, was delinquent in reporting the
grant of a restricted stock award on Form 4; (iii) Messrs. Dunlap, Klumb,
Wiegand and Tahinos, each an executive officer of the Company, was delinquent in
reporting the grant of a restricted stock award on Form 4; (iv) Ms. Eliopulos
and Messrs. Kellar and Bavelis, each a director of the company, was delinquent
in reporting the grant of a restricted stock option on Form 4; and (v) Form 5's
for each of the Company's directors and executive officers were not filed on a
timely basis.

                                       16
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

                          SUMMARY COMPENSATION TABLE

The table below sets forth the compensation earned and paid to each Named
Executive Officer (including certain former executive officers of the Company)
who earned $100,000 or more during the periods presented. Amounts shown for a
portion of 1997 represent compensation for employment by WE JAC Corporation, the
Company's predecessor. Options grants shown for 1997 and a portion of 1998
represent grants by WE JAC Corporation which were assumed by the Company in
connection with the IPO Combination.

<TABLE>
<CAPTION>
                                                                                     RESTRICTED  SECURITIES
                                                                    OTHER ANNUAL     STOCK       UNDERLYING     ALL OTHER
NAME AND PRINCIPAL POSITION         YEAR    SALARY        BONUS     COMPENSATION     AWARDS      OPTIONS        COMPENSATION(1)
---------------------------         ----    ------        -----     ------------     ------      -------        ---------------
<S>                                 <C>     <C>           <C>       <C>              <C>         <C>            <C>
Charles Dunlap                      1999    $131,538(2)                              $118,750(3)    200,000        $1,615
  President and
  Chief Executive Officer
John F. Ripley                      1999    $108,702(4)                                                           $80,000(5)
  Former President and              1998     199,654       $100,000                                  87,762           279
  Chief Executive Officer           1997     181,734         63,438                                 100,000
Jaime Valdes                        1999    $120,000                                                 25,000
  Senior Vice President -           1998      21,250(6)                                              25,000
  Latin America
James A. Hay                        1999    $137,185(7)                                                           $13,526(8)
  Former Executive Vice President   1998     117,692                 $15,000(9)                      35,000           323
  North America
Arnold Janofsky                     1999    $117,623(10)                                                          $11,643(11)
  Former Senior Vice President and  1998     127,308         $9,646                                   3,500           600
  General Counsel                   1997     117,269                                                  4,000
</TABLE>

(1) Amounts represent the Company's matching contributions to the 401(k) Savings
Plan and severance payments as indicated below.
(2) Mr. Dunlap's employment with the Company began October 1998.
(3) Mr. Dunlap was awarded a grant of 50,000 shares of restricted stock on March
31, 1999 valued at $2 3/8 per share price. As of June 30, 1999, this grant was
worth $153,150 based on a $3 1/16 per share price. No dividends will be paid on
this award.
(4) Mr. Ripley resigned from the Company on October 21, 1998.
(5) The amount shown includes severance payments of $80,000.
(6) Mr. Valdes' employment with the Company began April 1998.
(7) Mr. Hay's employment with the Company was terminated effective June 2,
1999.
(8) The amount shown includes severance payments of $12,470.
(9) Mr. Hay's employment with WE JAC Corporation, the Company's predecessor
commenced on July 1, 1997. The amount shown is for the reimbursement of
relocation expenses.
(10) Mr. Janofsky's employment with the Company was terminated effective June 2,
1999.
(11) The amount shown includes severance payments of $10,693.

                                       17
<PAGE>

                       OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                                    POTENTIAL REALIZED VALUE
                                NUMBER OF                                                            AT ASSUMED ANNUAL RATES
                                SECURITIES                              WEIGHTED                     OF STOCK PRICE APPRECI-
                                UNDERLYING    % OF TOTAL OPTIONS        AVERAGE                     ATION FOR OPTION TERM(4)
                                                                                                    ------------------------
                                 OPTIONS      GRANTED TO EMPLOYEES      EXERCISE       EXPIRATION
NAME                            GRANTED(1)      IN FISCAL YEAR          PRICE(2)        DATE(3)       5%             10%
----                            ----------      --------------          --------        -------       --             ---
<S>                             <C>           <C>                       <C>            <C>         <C>            <C>
Charles Dunlap                    200,000           36.0%                3.475          03/31/09   $288,831       $834,692
John F. Ripley (5)                      -            0.0%
Jaime Valdes                       25,000           4.55%                2.375          03/31/09     63,857        134,708
James A. Hay (6)                        -            0.0%
Arnold Janofsky (6)                     -            0.0%
</TABLE>


     (1) Stock options exercisable into 549,375 shares of Common Stock were
     granted to all employees, non-employee directors of the Company and related
     parties as a group during the fiscal year ended June 30, 1999.

     (2) The exercise price is the "fair market value" of the Company's Common
     Stock at the date of grant as determined in good faith by the Company's
     Board of Directors.

     (3) Date shown is expiration date of latest grant. Options generally vest
     and become exercisable in annual installments of 33% of the shares covered
     by each grant commencing on the first anniversary of the grant date, and
     expire ten years after the grant date. Options granted in March 1999 also
     include an acceleration of vesting provision whereby, to the extent not
     previously vested, 25% of the options will vest when the Company's stock
     price closes at $4.00 per share, 75% will vest when the stock price closes
     at $6.00 per share, and 100% will vest when the stock price closes at $8.00
     per share.

     (4) The dollar amounts under the potential realizable values column use the
     5% and 10% rates of appreciation permitted by the SEC, and are not intended
     to forecast actual future appreciation in the stock price. Actual gains, if
     any, on stock option exercises are dependent on the future performance of
     the Company's Common Stock. There can be no assurance that the amounts
     reflected in this table will be achieved. The assumed rates are compounded
     annually to the full ten-year term of the options.

     (5) Mr. Ripley resigned from the Company on October 21, 1998.

     (6) Mr. Hay's and Mr. Janofsky's employment with the Company was terminated
     effective June 2, 1999.


                            YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                            NUMBER OF SECURITIES UNDERLYING
                                            UNEXERCISED OPTIONS AT JUNE 30,             VALUE OF THE UNEXERCISED IN-THE-MONEY
                                                        1999                                OPTIONS AT JUNE 30, 1999(1)
                                                        ----                                ---------------------------

NAME                                      EXERCISABLE        UNEXERCISABLE             EXERCISABLE            UNEXERCISABLE
----                                      -----------        -------------             -----------            -------------
<S>                                       <C>                <C>                      <C>                     <C>
Charles Dunlap                              25,000             175,000                $17,188                    $51,563
John F. Ripley (2)                          93,100                                                                     0
Jaime Valdes                                14,583              35,417                  4,297                     12,891
James A. Hay (3)                            14,999                   0                      0                          0
Arnold Janofsky (3)                         19,833                   0                      0                          0
</TABLE>

     (1) The closing price for the Company's Common Stock as reported by the
     Nasdaq Stock Market on June 30, 1999 was $3.0625. Value is calculated on
     the basis of the difference between the option exercise price and $3.0625,
     multiplied by the number of shares of Common Stock underlying the option.
     (2) Mr. Ripley resigned from the Company on October 21, 1998. His
     separation agreement provides that Mr. Ripley will have until October 1999
     to exercise 93,100 of his vested options. The remainder of Mr. Ripley's
     options have been terminated.
     (3) Mr. Hay and Janofsky were terminated from the Company effective June 2,
     1999. Unexercisable options held at the time they departed expired by their
     terms.

                                       18
<PAGE>

COMPENSATION OF DIRECTORS

          Directors who are employees receive no additional compensation for
serving as directors. The Company's recent cash flow difficulties have had an
impact on the compensation of non-employee directors. The Company's policy had
been for non-employee directors to receive: (i) $1,000 for each Board of
Directors meeting attended in person; (ii) $500 for each Board of Directors
meeting attended via telephone; and (iii) for members of Board Committees, $200
for each Committee meeting attended. In October 1998, the Board decided to
suspend payment of such fees. In March 1999, the non-employee directors agreed
to forgo payment of all fees owed for the fiscal year ended June 30,1999.
However, in lieu of such cash fees, the Board granted restricted stock awards of
5,000 shares of the Company's Common Stock to each of the following non-employee
directors: Woodley A. Allen; George A. Bavelis; Lynn E. Caruthers; Bernard
Clineburg; Bassam N. Ibrahim; Richard O. Johnson; Arthur Kellar; Harry G.
Pappas, Jr.; and Gerald A. Zamensky. Under the terms of each grant, each outside
director's right, title and interest to the 5,000 shares will not vest until the
third anniversary of the grant (i.e., March 2002). No portion of the restricted
stock award will vest and no shares will be issued prior to the third
anniversary unless the following conditions are satisfied: (a) if the Company's
stock price closes at $4.00 per share, 25% of the shares will become vested; (b)
if the Company's stock price closes at $6.00 per share, 75% will become vested;
and (c) if the Company's stock price closes at $8.00 per share, 100% of the
shares will become vested.

          Mr. Woodley Allen is due to be paid $10,000 per month for his services
as a special financial consultant to the Company from December 1998 through
January 1999. In addition, in December 1998, the Board of Directors awarded Mr.
Allen an option to purchase 10,000 restricted shares of the Company's Common
Stock with an exercise price of $3.625. The underlying shares are not registered
under the federal securities laws. The option expires December 31, 2008.

Employment Agreements

     General. In October 1998, the Company entered into an employment agreement
with Charles L. Dunlap pursuant to which Mr. Dunlap agreed to serve as President
and Chief Executive Officer for a period of three years. The agreement also
provides that Mr. Dunlap will serve as a member of the Company's Board of
Directors. Mr. Dunlap will receive a base salary of $200,000 per annum. Under
the terms of the employment agreement, Mr. Dunlap is required to maintain the
confidentiality of proprietary business or technical information he obtains in
the course of his employment with the Company, and he is prohibited from
competing with the Company in the United States during any time he is performing
duties for the Company and for a period of two years thereafter. In the event
Mr. Dunlap's employment is terminated by the Company other than for cause, or is
terminated by Mr. Dunlap for good reason (e.g., following a change of control of
the Company), Mr. Dunlap will be entitled to receive a severance benefit equal
to his base salary at the rate in effect at the time of termination for the
remainder of his initial term or 18 months, whichever is greater, and will be
entitled to receive any salary and benefits accrued, vested or unpaid as of the
date of termination. In the event of such termination, Mr. Dunlap also will be
entitled to receive a pro rata portion of his performance bonus.

          In June 1999, the Company entered into an agreement with Jerry L.
Little pursuant to which Mr. Little agreed to serve as Senior Vice President and
Chief Financial Officer. Mr. Little will receive a base salary of $20,000 per
month. In conjunction with Mr. Little's employment, Mr. Little was granted an
option to purchase 35,000 shares of the Company's Common Stock. These options
have an exercise price of $2.50 and vest as follows: 17,500 shares shall vest
upon the completion of the 1999 fiscal year end audit and filing of the SEC form
10K and the balance shall vest upon satisfactory completion of the installation
of the Company's financial software system unless the stock price achieves
certain price levels then a portion of the shares shall vest upon each
achievement. These options expire June 1, 2009. The agreement provides that
either Mr. Little or the Company may terminate the agreement by providing 90
days notice.

     Severance Arrangements. In October 1998, the Company entered into an
agreement with John (Jay) F. Ripley in connection with his resignation as
President and Chief Executive Officer of Precision Auto Care, Inc. Pursuant to
the terms of this separation agreement, Mr. Ripley is entitled to receive
payments of $10,000 a month until October 1999 for serving as a special advisor
to the Company. The Board of Directors also extended to October 1999 the period
of time Mr. Ripley has to exercise 93,100 of his vested stock options.

     In connection with reorganizing the Company in order to reduce costs and
provide for a more responsive management structure, the Company eliminated the
senior management positions occupied by Messrs. Hay and Janofsky and their
employment with the Company terminated effective June 2, 1999. Following the
elimination of these positions, Messrs. Hay and Janofsky advised the Company
that they believed that the severance benefit to which they are entitled under
their respective employment agreements is to be paid to them as a lump sum. The
Company believes that the terms of the agreements require the Company to
continue to make salary payments to the executives on a regular basis for the
proscribed period and not in the form of a lump sum payment. The Company is
presently holding discussions with these two executives concerning ways to
resolve the parties' differences.

          Revised Employment Agreements. In March 1999, the Company granted
stock options and awards to certain executive officers. As a condition to the
grant of certain options, those executive officers that had entered into
employment agreements previously were asked to terminate these prior agreements
and enter into new employment agreements. In April 1999 and September 1999, the
Company entered into revised employment agreements with Jaime Valdes and William
R. Klumb respectively pursuant to which Mr. Valdes agreed to serve as Senior
Vice President - Latin American Division and Mr. Klumb as Vice President - Car
Wash Division for a period of three years beginning April 1, 1998 and August 26,
1997 respectively. Messrs. Valdes and Klumb will each receive a base salary of
$120,000 per annum. Under

                                       19
<PAGE>

the terms of the employment agreements, Messrs. Valdes and Klumb are required to
maintain the confidentiality of proprietary business or technical information
they obtain in the course of their employment with the Company, and are
prohibited from competing with the Company in the United States during any time
they are performing duties for the Company and for a period of two years
thereafter except that if Mr. Klumb's employment is terminated by the Company
other than for cause, or is terminated by Mr. Klumb for good reason, then Mr.
Klumb's non-competition covenant shall last for a period of time equal to the
lessor of 12 months or the remainder of his initial term (if it has not yet
expired) or the number of months remaining in any additional one-year term
arising thereafter. In the event Messrs. Valdes' or Klumb's employment is
terminated by the Company other than for cause, or is terminated by either one
of them for good reason (e.g., following a change of control of the Company),
the terminated officer will be entitled to receive a severance benefit equal to
his base salary at the rate in effect at the time of termination for the lessor
of the 12 months or the remainder of his initial term (if it has not yet
expired) or the number of months remaining in any additional one-year term
arising thereafter, and will be entitled to receive any salary and benefits
accrued, vested or unpaid as of the date of termination.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the shares of Common Stock beneficially owned by
(i) person known by the Company to beneficially own greater than 5% of the
Company's outstanding stock, (ii) each director of the Company, (iii) each
executive officer named in the table below labeled Summary Compensation Table,
and (iv) all directors and executive officers of the Company as a group. For
purposes of this table, and as used elsewhere in this Proxy Statement, the term
"beneficial owner" means any person who, directly or indirectly, has or shares
the power to vote, or to direct the voting of a security or the power to
dispose, or to direct the disposition of, a security. Except as otherwise
indicated, the Company believes that each individual owner listed below
exercises sole voting and dispositive power over their shares.

<TABLE>
<CAPTION>
                                                      Amount of          Percentage of Outstanding
                                                      ---------          -------------------------
Name of Beneficial Owner                        Beneficial Ownership           Common Stock
------------------------                        --------------------           ------------
<S>                                             <C>                      <C>
Five-Percent Stockholders:
SAFECO Corporation/(1)/                                 1,215,500                  16.54%
Avenir Corporation/(2)/                                   713,500                  10.42%
Roberto Zambrano V., Mauricio Zambrano V.                                           7.82%
David Zambrano V. & Daniel Zambrano/(3)/                  520,421
William P. Stiritz/(4)/                                   500,000                   7.54%

Directors and Executive Officers:
Lynn E. Caruthers/(5)/                                    140,581                   2.29%
Charles Dunlap/(6)/                                       108,333                   1.75%
John F. Ripley/(7)/                                       105,050                   1.69%
Jaime Valdes/(8)/                                          64,004                   1.04%
William R. Klumb/(9)/                                      61,429                      *
John T. Wiegand/(10)/                                      27,250                      *
Peter Tahinos/(11)/                                        23,584                      *
James A. Hay/(12)/                                          3,161                      *
Arnold Janofsky/(13)/                                       3,725                      *
Woodley A. Allen/(14)/                                     28,000                      *
George A. Bavelis/(15)/                                    93,317                   1.52%
Bernard H. Clineburg/(16)/                                 17,500                      *
Effie L. Eliopulos/(17)/                                  269,562                   4.38%
Bassam N. Ibrahim/(18)/                                    18,850                      *
Richard O. Johnson                                         61,497                   1.00%
Arthur Kellar/(19)/                                       210,029                   3.41%
Harry G. Pappas, Jr./(20)/                                 31,000                      *
Gerald A. Zamensky/(21)/                                  104,641                   1.71%
All directors and executive officers as a group         1,426,225                  21.84%
   (23 persons)/(22)/)
</TABLE>

* Represents less than 1%.

(1) As reported in Schedule 13G (Amendment No. 2) filed with the Commission on
February 12, 1999. Includes shares held by SAFECO Common Stock Trust, SAFECO
Resource Series Trust and SAFECO Asset Management Company. Safeco Corporation's
business address is SAFECO Plaza, Seattle, Washington 98185.

(2) As reported in Schedule 13G (Amendment No. 1) filed with the Commission on
February 11, 1999. Avenir Corporation's business address is 1725 K Street, NW,
Suite 410, Washington, DC 20006.

                                       20
<PAGE>

(3) As listed in the Company's stock transfer records. The shares are held in
the names of the listed individuals as joint tenants. The business address for
each such reporting person is P.O. Box 1499, Olmito, Texas 78575.

(4) As reported on Schedule 13D filed with the Commission on December 31, 1997.
Does not include 10,000 shares owned by Mr. Stiritz's son, of which Mr. Stiritz
disclaims beneficial ownership. Mr. Stiritz's business address is 10401 Clayton
Road, Suite 101, St. Louis, Missouri 63131.

(5) Includes a restricted stock award of 5,000 shares and includes 24,500 shares
held by CARFAM Associates and 77,938 shares held by Caruthers Properties, Ltd.,
limited partnerships in which Ms. Caruthers holds limited partnership interests
and options to purchase 10,000 shares which Ms. Caruthers may exercise within 60
days.

(6) Includes a restricted stock award of 50,000 shares and includes 58,333
options to purchase shares that are exercisable within 60 days.

(7) Mr. Ripley resigned from the Company on October 21, 1998. Includes options
to purchase 93,000 shares that are exercisable within 60 days.

(8) Includes options to purchase 14,583 shares that are exercisable within 60
days.

(9) Includes a restricted stock award of 10,000 shares and includes 13,333
options to purchase shares that are exercisable within 60 days.

(10) Includes a restricted stock award of 15,000 shares and includes 11,000
options to purchase shares that are exercisable within 60 days.

(11) Includes a restricted stock award of 10,000 shares and includes 13,000
options to purchase shares that are exercisable within 60 days.

(12) Mr. Hay's employment with the Company was terminated effective June 2,
1999.

(13) Mr. Janofsky's employment with the Company was terminated effective June 2,
1999.

(14) Includes a restricted stock award of 5,000 shares and includes 20,000
options to purchase shares that are exercisable within 60 days.

(15) Includes a restricted stock award of 5,000 shares and includes 4,500
options to purchase shares that are exercisable within 60 days.

(16) Includes a restricted stock award of 5,000 shares and includes 10,000
options to purchase shares that are exercisable within 60 days.

(17) Includes 20,458 options to purchase shares that are exercisable within 60
days.

(18) Includes a restricted stock award of 5,000 shares and includes 10,000
options to purchase shares that are exercisable within 60 days.

(19) Includes a restricted stock award of 5,000 shares and includes 35,000
options to purchase shares that are exercisable within 60 days.

(20) Includes a restricted stock award of 5,000 shares and includes 12,500
options to purchase shares that are exercisable within 60 days.

(21) Includes a restricted stock award of 5,000 shares and includes 47,176
shares held by Mr. Zamensky's spouse.

(22) Includes restricted stock awards of 130,000 shares and includes 373,597
options to purchase shares that are exercisable within 60 days of executive
officers and directors.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In November 1997, certain directors either directly or through affiliated
entities, were granted options to purchase certain properties and lease them
back to the Company (the "Hellenic Options"). Hellenic, LLC, a limited liability
company partially owned by directors George A. Bavelis (15.12%) and Effie L.
Eliopulos (15.12%) held the Hellenic Options on the real estate relating to nine
car wash centers. In March 1999, in a non-related party transaction, the Company
entered into an agreement to sell the real estate related to the Hellenic
Options. As consideration for the waiver of the Hellenic Options the Company
agreed to grant Hellenic LLC the option to purchase 25,000 shares of the
Company's Common Stock at an exercise price of $2.00. The underlying shares have
not been registered under the federal securities laws. Subsequently, Hellenic
LLC assigned portions of this restricted stock option to its members, of which,
George A. Bavelis and Effie L. Eliopulos received options for 4,500 shares and
9,000 shares of the Company's Common Stock, respectively.

In October 1998, all of the Company's directors except Messrs. Clineburg and
Pappas participated in the creation of a limited liability company formed for
the purpose of loaning the Company $2 million in a subordinated debt financing.
The loan was initiated by these directors and subsequently incorporated as a
requirement of the Company's existing credit facility. The loan bears interest
at a rate of 14% per annum and its terms call for the rate of interest to be
increased in the event of a default by the Company on this loan or on any of the
Company's senior indebtedness. As of August 15, 1999, these directors agreed to
remove all defaults and defer current interest through December 31, 1999. The
loan due date has been amended to November 1, 2000, and the directors have
agreed to accept the Company's stock in lieu of the outstanding accrued interest
through August 15, 1999.

                                       21
<PAGE>

In January 1999, the Company borrowed $5.0 million from Arthur Kellar, a
director of the Company, pursuant to the terms of a Subordinated Debenture (the
"Subordinated Debenture"). The Subordinated Debenture was initiated by the
directors of the Company and subsequently incorporated as a requirement of the
Company's existing credit facility. The Subordinated Debenture bears interest at
a rate of 15% per annum and its terms call for the rate of interest to be
increased in the event of a default by the Company. As an inducement for the
purchase of the Subordinated Debenture, the Company agreed to issue Mr. Kellar
options to purchase 25,000 shares of the Company's Common Stock at an exercise
price equal to $2.00. The Company also agreed to pay Mr. Kellar a financing fee
at the maturity of the Subordinated Debenture in the amount of $50,000. In May
1999, the Shareholders approved the issuance of shares of the Company's Common
Stock in order to pay the interest and fees on the Subordinated Debenture. These
shares were not registered under the federal securities laws. This loan is
currently in default. The Company is presently negotiating terms under which the
loan will be restructured. It is the Company's intention to further request the
approval of an issuance of the Company's Common Stock to Mr. Kellar based on
past accrued interest.

In June 1998, the Company entered into a contract to sell a parcel of
real-estate located in Greenwood, Indiana to Precision Ventures, LLC.
("Precision Ventures") for $260,000. Precision Ventures also purchased two
franchises from the Company to operate at that location for $26,000. Precision
Ventures is partially owned by Andrew Zamensky (25%) who is the son of Gerald
Zamensky, a director of the Company. The Company acquired the property in
December 1997 for $220,000. The fairness of the negotiated sales price was
approved at the time of the transaction by John F. Ripley, the former Chief
Executive Officer of the Company. In June, 1998, the Company received $26,000 of
the sales price for the real estate. The balance was due on or before November
30, 1998 under a promissory note. No interest was being charged on the note due
to the fact that the land is not yet zoned for the operation of a car wash and
quick oil change and lube business. Due to the fact that zoning was delayed, the
promissory note was not paid until July 1999 for a reduced amount of $223,000.
The reduction in purchase price was approved by Charles Dunlap, the Company's
current Chief Executive Officer.

In June 1998, the Company sold a Company-owned auto care center located in
Denver Colorado to Inter-Ventures, LLC ("Inter-Ventures") for $220,000.
Inter-Ventures is partially owned by William B. Klumb (25%) and Effie L.
Eliopulos (16.67%). Mr. Klumb is an officer and director, and Ms. Eliopulos is a
director of the Company. The Company acquired the center which it had been
operating under a management agreement since February 1997 in June 1998 for
$106,200. The fairness of the negotiated sales price was approved at the time of
the transaction by James A. Hay, a former executive officer of the Company. The
Company has been paid the purchase price in full. In relation to this
transaction and due to the fact that the Company was not able to assign the then
current lease to Inter-Ventures, the Company agreed to pay Inter-Ventures the
sum of $19,150 which represents the value of the higher monthly rental over the
old lease or a credit of $25,000 to be used against franchise operating fees
and/or purchase of supplies and equipment from the Company's subsidiary and that
the Company would offer its guaranty in lieu of the individual principals. In
addition, the Company agreed to pay the attorneys' fees of Inter-Ventures
related to the negotiation of a new lease, which amounted to $4,387.13. The
Finance and Audit Committee approved and the Company's Board of Directors
(without the participation of Mr. Klumb and Ms. Eliopulos), ratified the offset
/ credit and payment of attorneys' fees. William B. Klumb (25%) and Effie L.
Eliopulos (16.67%) are partial owners of Inter-Ventures, LLC ("Inter-Ventures").
In conjunction with this center, Inter-Ventures pays the Company approximately
$4,000 per month for franchise royalties, inventory and supplies associated with
these operations.

Bassam N. Ibrahim, a director of the Company, is a partner in Burns, Doane,
Swecker & Mathis, LLP, an Alexandria, Virginia law firm that performs legal
services for the Company related to intellectual property protection. Fees paid
to the firm by the Company in the fiscal year ended June 30, 1999 did not exceed
five percent of the firm's gross revenues.


                                       22
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

     1.   Financial Statements

          Information responsive to this Item cannot be obtained on a timely
basis by the Company without unreasonable effort or expense and is the subject
of a Form 12b-25 filing made by the Company. The Company intends to supply this
information under cover of a Form 10-K/A amendment to this Form 10-K within
15 calendar days.

     2.   Financial Statement Schedules

          Information responsive to this Item cannot be obtained on a timely
basis by the Company without unreasonable effort or expense and is the subject
of a Form 12b-25 filing made by the Company. The Company intends to supply this
information under cover of a Form 10-K/A amendment to this Form 10-K within 15
calendar days.

          All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.

(b)  Reports on Form 8-K

     The Company did not file any reports on Form 8-K during the three-month
period ended June 30, 1999.

(c)  Exhibits

3.1  Articles of Incorporation of the Company included as an exhibit to the
Company's Registration Statement on Form S-1 (No. 333-34439) filed August 27,
1997, are incorporated herein by reference.

3.2  By-laws of the Company included as an exhibit to the Company's Registration
Statement on Form S-1 (No. 333-34439) filed August 27, 1997 are incorporated
herein by reference.

4.1  Subordinated Debenture dated January 25, 1999, in the principal amount of
$5,000,000, included as an exhibit to the Company's Current Report on Form 8-K,
filed February 1, 1999, is incorporated herein by reference.

4.2  Amended and Restated Loan Agreement between the Company and certain of its
subsidiaries wholly-owned or controlled by it and First Union National Bank,
included as an exhibit to the Company's Current Report on Form 8-K filed March
31, 1999, is incorporated herein by reference.

10.1 Plan of Reorganization and Agreement for Combination of Business dated as
of August 27, 1997, by and among the Company, WE JAC Corporation, Miracle
Industries, Inc., Lube Ventures, Inc., Rocky Mountain Ventures, Inc., Rocky
Mountain Ventures II, Inc., Miracle Partners, Inc., Prema Properties, LLC,
Ralston Car Wash, LLC and KBG LLC, included as an Exhibit to the Company's
Registration Statement on Form S-1 (No. 333-34439) filed August 27, 1997, is
incorporated herein by reference.

10.2 Loan and Security Agreement between the Company and its designated
subsidiaries and Signet Bank, now known as First Union National Bank, dated as
of November 12, 1997, but incorporating on a composite basis the terms of
Amendment No. 2 dated as of May 12, 1998, included as an exhibit to the
Company's Amended Annual Report on Form 10-K/A filed September 28, 1998, is
incorporated herein by reference.

10.3 Amendment No. 3 to Loan and Security Agreement between the Company and its
designated subsidiaries and First Union National Bank dated October 1, 1998,
included as an exhibit to the Company's Amended Annual Report on Form 10-K/A
filed September 28, 1998, is incorporated herein by reference.

10.4 Second Consolidated, Amended and Restated Revolving and Acquisition Line of
Credit Promissory Note by the Company and its designated Subsidiaries in favor
of First Union National Bank dated October 1, 1998, included as an exhibit to
the Company's Amended Annual Report on Form 10-K/A filed September 28, 1998, is
incorporated herein by reference.


<PAGE>

10.5   Employee Stock Purchase Plan, included as an exhibit to the Company's
Registration Statement on Form S-8 (No. 333-49097), filed April 1, 1998, is
incorporated herein by reference.

10.6   Employee Stock Option Plan, included as an exhibit to the Company's
Registration Statement on Form S-8 (No. 333-47169), filed March 2, 1998, is
incorporated herein by reference.

10.7   Employment Agreement between the Company and John F. Ripley, dated June
17, 1998, included as an exhibit to the Company's Amended Annual Report on Form
10-K/A filed September 28, 1998, is incorporated herein by reference.

10.8   Employment Agreement between the Company and James A. Hay, dated August
27, 1997, included as an exhibit to the Company's Registration Statement on Form
S-1 (No. 333-34439) filed August 27, 1997 is incorporated herein by reference.

10.9   Employment Agreement between the Company and Arnold Janofsky, dated
August 27, 1997, included as an exhibit to the Company's Registration Statement
on Form S-1 (No. 333-34439) filed August 27, 1997, is incorporated herein by
reference.

10.10  Employment Agreement between the Company and Grant G. Nicolai, dated
August 27, 1997, included as an exhibit to the Company's Registration Statement
on Form S-1 (No. 333-34439) filed August 27, 1997, is incorporated herein by
reference.

10.11  Employment Agreement between the Company and John F. Moynahan, dated June
8, 1998, included as an exhibit to the Company's Amended Annual Report on Form
10-K/A filed September 28, 1998, is incorporated herein by reference.

10.12  Employment Agreement between the Company and Peter Kendrick, dated August
27, 1997, included as an exhibit to the Company's Registration Statement on Form
S-1 (No. 333-34439) filed August 27, 1997, is incorporated herein by reference.

10.13  Employment Agreement between the Company and Jaime J. Valdes dated March
31, 1998, included as an exhibit to the Company's Amended Annual Report on Form
10-K/A filed September 28, 1998, is incorporated herein by reference.

10.14  Independent Contractor Agreement between the Company and Ernest S. Malas
dated November 12, 1997, included as an exhibit to the Company's Amended Annual
Report on Form 10-K/A filed September 28, 1998, is incorporated herein by
reference.

10.15  Subscription and Stock Purchase Agreement dated as of March 31, 1998, by
and among the Company, Precision Auto Care Mexico I, S. de R.L. de C.V., and
Promotora de Franquicias Praxis, S.A. de C.V., included as an exhibit to the
Company's Current Report on Form 8-K, filed April 15, 1998, is incorporated
herein by reference.

10.16  Agreement with John F. Ripley, dated October 21, 1998, included as an
exhibit to the Company's Amended Quarterly Report on Form 10-Q/A, filed November
20, 1998, is incorporated herein by reference.

10.17  Employment Agreement with Charles L. Dunlap, dated October 21, 1998,
included as an exhibit to the Company's Amended Quarterly Report on Form 10-Q/A,
filed November 20, 1998, is incorporated herein by reference.

10.18  Subordinated Debenture Agreement with Board LLC, dated October 15, 1998,
included as an exhibit to the Company's Amended Quarterly Report on Form 10-Q/A,
filed November 20, 1998, is incorporated herein by reference.

10.19  1998 Employee Stock Purchase Plan included as an exhibit to the Company's
Quarterly Report on Form 10-Q, filed February 16, 1999, is incorporated herein
by reference.

10.20  1998 Outside Directors' Stock Option Plan included as an exhibit to the
Company's Quarterly Report on Form 10-Q, filed February 16, 1999, is
incorporated herein by reference.

10.21  Mortgage Finance Documents (Heartland Bank), dated March 8, 1999,
included as an exhibit to the Company's Quarterly Report on Form 10-Q, filed May
17, 1999, is incorporated herein by reference.

10.22  1999 Employee Stock Option and Restricted Stock Plan, included as Exhibit
A to the Company's definitive Proxy Statement for the Special Meeting of
Shareholders held on May 25, 1999, is incorporated herein by reference.

*10.23 Revised Employment Agreement dated April 20, 1999, between the Company
and Jaime Valdes.

*10.24 Revised Employment Agreement dated September 27, 1999, between the
Company and William R. Klumb.

*10.25 Amended and Restated Loan and Security Agreement dated as of February 1,
1999, between the Company and its designated subsidiaries and First Union
National Bank.

                                       24
<PAGE>

* 10.26 Third Consolidated, Amended and Restated Revolving and Acquisition Line
  of Credit Promissory Note by the Company and its designated subsidiaries in
  favor of First Union National Bank dated February 1, 1999.

* 10.27 Loan Agreement dated as of May 17, 1999, by and between FFCA Acquisition
  Corporation and the Company.

* 10.28 First Amendment dated May 13, 1999, to Amended and Restated Loan and
  Security Agreement between the Company and its designated subsidiaries and
  First Union National Bank.

* 10.29 Employment Agreement dated June 1, 1999, between the Company and Jerry
  Little.

* 21.    Significant Subsidiaries of the Company.

* 24.    Powers of Attorney.

  _____________________

* Filed herewith

                                       25
<PAGE>

                     (THIS PAGE INTENTIONALLY LEFT BLANK)

                                       26
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on September 28, 1999.


                                      PRECISION AUTO CARE, INC.


                                      By: /s/ CHARLES L. DUNLAP
                                          -------------------------------------
                                          Charles L. Dunlap
                                          President and Chief Executive Officer
                                          (Duly Authorized Officer)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
                       SIGNATURE                                       TITLE                                      DATE
                       ---------                                       -----                                      ----
                 <S>                                     <C>                                               <C>
                 /s/      *                              Chairperson of the Board                          September 28, 1999
                 ---------------------
                  LYNN E. CARUTHERS


                 /s/ CHARLES L. DUNLAP                   President, Chief Executive Officer and            September 28, 1999
                 ---------------------
                                                           Director (Principal Executive Officer)
                  CHARLES L. DUNLAP


                 /s/ JERRY L. LITTLE                     Senior Vice President and Chief Financial         September 28, 1999
                 ---------------------
                                                           Officer (Principal Financial Accounting
                  JERRY L. LITTLE                          Officer)

                                                         Director                                          September 28, 1999
                          *
                 ---------------------
                  WOODLEY A. ALLEN

                                                         Director                                          September 28, 1999
                          *
                 ---------------------
                  GEORGE A. BAVELIS

                                                         Director                                          September 28, 1999
                          *
                 ---------------------
                  BERNARD H. CLINEBURG

                                                         Director                                          September 28, 1999
                          *
                 ---------------------
                  EFFIE L. ELIOPULOS

                                                         Director                                          September 28, 1999
                          *
                 ---------------------
                  BASSAM N. IBRAHIM

                                                         Director                                          September 28, 1999
                          *
                 ---------------------
                  RICHARD O. JOHNSON
</TABLE>

                                       27
<PAGE>

              SIGNATURE                        TITLE            DATE
              ---------                        -----            ----
                                             Director       September 28, 1999
               *
     -----------------------
         ARTHUR KELLAR

                                             Director       September 28, 1999
               *
     -----------------------
         HARRY G. PAPPAS, JR.

                                             Director       September 28, 1999
               *
     -----------------------
         WILLIAM R. KLUMB

                                             Director       September 28, 1999
               *
     -----------------------
         GERALD A. ZAMENSKY



*By: /s/ ELIOT G. BOWYTZ
     -----------------------
         Eliot G. Bowytz
         Attorney-in-Fact
         (Upon the Authority of a Power-of-Attorney filed as Exhibit 24 to this
         Annual Report.)

                                       28