SUN CITY WEST, Ariz. — You have your eye on a store across town that you’d like to buy, but what don’t you know about it? There are many questions to be answered before you can get serious about making an offer or signing a deal.
As my experiences were based on leased stores, I’m focusing on that particular arrangement here. Let’s conclude:
SITE/STORE CHARACTERISTICS & VALUATION
Stay away from locations next to restaurants, depending on what they cook. I would avoid certain restaurants that emit strong odors because your dryers can suck those odors right in, and customers will freak out. They may like the aroma of barbecued food, but not on their finished laundry!
You’ve probably already checked out competing mats in the neighborhood. However, if you are looking at a mat in an urban neighborhood with lots of apartment houses, check out just how good their laundry rooms are. Some are now being built as mini-laundromats with TVs, triple loaders, etc. That’s your real competition.
Then there’s the parking situation. Of all retail places, laundromats have a greater need for parking than other stores. Also, you want there to be enough unoccupied spots so customers don’t get shut out. It can be frustrating for you and your customer when there’s no parking available nearby. Some will come back, but many will just find another mat with better parking.
Automatic doors would be another convenience related to getting in and out of a laundry.
How would you describe the mat’s overall condition, including the equipment and the infrastructure? If it’s a little bit old or showing signs of wear and tear, calculate what you can do to clean it up at a reasonable expense. (About the equipment, people seem to care about the washers more than the dryers.)
Everything should look like you would wash and dry your own baby’s clothes there. If not, that could be an opportunity for you to clean it up. Tally up what it would cost you to reasonably bring it up to par, then use this info in your negotiations.
What payment method — coin or card — is available? Since the beginning, laundromats vended either coins or tokens. There are pros and cons for either coins or cards. It’s looking more and more these days like coins will eventually fade away.
Nowadays, there are lots of payment systems available. At this point, you may like to see the mat with a system that takes some kind of credit payments but can accept coins.
As far as store valuation, the general rule of thumb is three to five times the net operating income. Some will be more, some will be less, depending on store condition, age of equipment and, of course, the lease.
Drop-off service is not computed the same as a self-service operation, and the same goes for pickup and delivery. Service work involves a lot more time, money and attention, so the dollar-for-dollar value there is not as great as a mat that’s 100% self-serve.
So, you see, there are many questions to be answered. I suggest visiting Facebook and joining the laundromat groups there. You can ask other operators their experiences. You’ll often get differing opinions, so look for a consensus on any question you ask.
And I’d even start asking AI chatbots (ChatGPT gets a lot of attention but there are others) to answer any questions. They can be amazingly accurate.
Here’s wishing you all the best in your laundromat quest.
Miss an earlier part? Part 1 — Part 2
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
