ST. PAUL, Minn. — Randy and Tami Fett own four self-service laundries in the St. Paul, Minn., area. Like others, Randy was involved in a variety of businesses before embarking on his laundry career. It’s his family’s connection to the laundry business that’s a bit different.
One brother, Wayne, builds laundries and owns multiple stores. Another brother, James, owns a laundry. Randy’s sons assist him, and may eventually expand the number of stores the family operates.
All of this is taking place in Minnesota. Do we dare say a Gopher State laundry empire?GETTING ESTABLISHED
Randy Fett purchased his first store six years ago. He had been involved in farming, running a golf course, and commercial real estate. “I was looking for a less-employee-intensive business,” Fett recalls. “I like a cash business. [Owning laundries] is very appealing. This has been an excellent experience.”
Even though he pays great attention to his four stores, Fett is still involved with the golf and commercial real-estate ventures.
He credits one of his brothers, Wayne, with helping him get started in the laundry world. Wayne, who farmed with Randy, purchased an appliance store in a small Minnesota town. He eventually purchased a small laundry in the same town.
“My brother fixed the laundry up and the business soared,” he recalls. “Then, he sold it.”
Wayne now has five stores; he built four of them.
Fett lives 125 miles from his four stores. He, along with his wife, his sons, and a handful of employees, run the operation.
“I stop in at the stores twice a week. It takes two hours to drive to the stores.” About seven miles separate the four laundries.
Even though he has commercial real-estate experience, he has never sold a self-service laundry. While Wayne built most of his stores, he has only purchased existing stores. They range in size from about 3,000 square feet to 4,200 square feet, while his brother’s stores are in the 2,000-2,200-square-foot range.
Having a business background pays off when evaluating laundries. “Being a farmer, I can run numbers. I can look at stores and think about the improvements that I can make.
“The first store I purchased, half of the equipment was broke, even though it was fairly new. That owner had some issues. I fixed things up, cleaned the store, and added larger equipment a year later. People loved [the equipment], and the store took off!”
When evaluating a store, Fett examines the neighborhood (having a large population nearby never hurts, he says) and demographics. He also looks for a store doing a good volume.
He checks out the competition, and discovers what they are doing wrong. But he certainly doesn’t treat the competition as the enemy.
“The first thing I do with the competition is make a friend. I visit them and see what they are all about. Both of us are in the business to make money. We talk about the positives and negatives of the business.”
Like other successful owners, he doesn’t fear the competition. “I’m typically the price leader in the area. I offer quality service and always upgrade the stores. People have no problems with my equipment and like the store atmosphere.”
When adding a location, he prefers having his stores three to five miles apart. Parking is also a must. “I have a lot of parking at my stores.”
On closer examination, he studies the utilities cost for the store. “I see a lot of the stores doing 30 to 35 percent in utilities. I can bring those numbers down.”
There must be something to his analysis: He’s not surprised that all of his stores have done well. His four stores are his originals; none were sold due to poor sales. He also stresses the importance of being able to work with the vendors.
One of his stores is fully attended, two stores have an attendant on duty about two-thirds of the day, and one store has an attendant only during evening hours. None of his laundries are 24-hour stores.MULTIPLE MADNESS?
If you have enough trouble running one store, can you even conceive of running multiple stores? It isn’t a major issue for Fett.
When he decided on entering the laundry business, he planned on adding one store a year for four to five years, but a weak economy intervened, and financing became a struggle.
“Coin laundries aren’t a favorite with banks in terms of financing. Banks don’t understand this business.”
You might think that traveling to the stores, running different stores in different neighborhoods, or simply time management would be Fett’s greatest challenge. Guess again.
“Dealing with employees is a big problem with multiple stores,” he says. “In a perfect world, there would be no employees, but I need them to keep my stores clean and provide a customer-friendly atmosphere. They also help with security.”
One of his stores offered tanning, but he dropped this extra-profit center due to the negative publicity tying tanning to health problems. Only one of his stores offers drop-off service, and he admits that he would offer the service at some of the other stores — if it didn’t mean getting employees involved more.
“I don’t offer more drop-off service because getting the employees to handle it was too much of a hassle. If I was around the stores more, I could handle it. I just didn’t need the headache.”
One past attendant was brought in to handle the tanning service as well as drop-off service, but that didn’t work out well because she didn’t handle the tanning end well enough. Fett would even consider bringing in an independent contractor to handle drop-off service.
While Fett’s situation may have some of you thinking about the stress of running four stores, there are some benefits to having more than one store, he says.
Experience is one advantage. “Being able to run four stores makes it easier [if you add] a fifth store. So I’m always looking for another store, although I don’t need one. If they make money, I will buy. I even have two or three possibilities at this time.”
In addition, vendors, at certain times, will cut him a deal on bulk purchases. “I typically buy things once a year, so that I can get a good deal. My parts distributor, for example, offers a special.”
If you’re thinking about adding stores, and wondering if you can handle the chore by yourself, he offers this piece of advice: “I would say one person can handle about five or six stores. That’s just about as much as I could handle without taking on some help.”Check back Monday for Part 2 of this story.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected] .