CHICAGO — Whether it be a franchise, licensing, or a partnership, investor interest in ready-made laundry services solutions appears to be on the rise.
For a business model already generally seen as being recession-resistant, the labeling of laundry services as “essential” during the coronavirus pandemic has only served to ratchet up the attraction of investors looking for solid business opportunities.
And it doesn’t hurt that younger consumers—dare I say, millennials—who value time and are willing to pay more for convenience are embracing app-based laundry pickup and delivery.
In this article divided into three parts, American Coin-Op unboxes a random handful of these ready-made solutions to examine what they provide to investors or partners and illustrate why there is a place for such offerings in the laundry industry.
EXPRESS LAUNDRY CENTERS®
Continental Girbau started this national brand and proven turnkey vended laundry services entity with distributor and store owner input and ongoing assistance a dozen years ago, according to Joel Jorgensen, Continental Girbau vice president of sales.
“Let me first say that it is not a franchise. It is a corporate-owned brand,” he explains. “Express Laundry Centers® operate under a licensing agreement allowing our business partner to use registered trademarks and exclusive equipment and business service concepts with no franchise fees. Express Laundry Centers offer a proven model, branding, marketing and operational training.”
The model also allows total owner control over the laundry and its management, preserving local appeal, says Jorgensen, describing it as “complete independence.”
An Express Laundry Center is designed to deliver the maximum turnover and profit using the least amount of utilities and cost per square foot possible. High-performance, moisture-removing Continental Girbau washers create shorter dry times. They also offer automatic chemical injection and are ozone-compatible, so owners can simply add sanitization and/or the convenience of detergent and softener injection if they choose.
“Express Laundry Center is a ‘center,’ not a laundromat,” Jorgensen says. “It is designed and branded to support multi-level laundry services with broad demographic appeal,” including full-service wash/dry/fold, student laundry, drop-off dry cleaning, dry/fold only, and self-service.
“This ‘center’ focus allows owners to generate multiple revenue streams and better penetrate their demographic for greater total revenue.”
Time for an investor to develop a vended laundry depends on many factors, but an Express Laundry Center generally can be completed in a year or less, according to Jorgensen. The investor’s local Continental Girbau distributor guides them in every aspect of vended laundry development, including demographic studies, pro forma assessment, financing assistance, equipment mix recommendations, customer flow, installation, training, and marketing support.
Investors don’t have to create their own brand, because Express is a “proven and national identity and all the branding, logo, graphics, as well as website and signage templates, are done.” There are hundreds of Express Laundry Centers in operation across the country, according to Jorgensen.
“Historically, franchised laundries have not lasted and succeeded,” he says. “But, the Express Laundry Center brand has succeeded for more than a dozen years because power remains with the owner, who can control the laundry to appeal to local needs.”
Tech-enabled laundry pickup and delivery (PUD) service HappyNest is not a franchise but a partnership with individual laundromat owners, says CEO John MacKrell. The company recently announced that it has grown to 76 U.S. laundromat partners servicing customers across 29 states and Washington, D.C.
“We do not sell anything or try and get our partners to agree to a long-term contract,” he says. “We recruit our partners. Our goal is to drive significant additional pickup and delivery laundry revenue to independent owners. HappyNest is responsible for all the marketing, software, technology, and customer service. Our local partners are responsible for the pickup, production, and delivery of laundry.”
There are no upfront or ongoing fees, no markets, or customer service or credit card costs, according to MacKrell. HappyNest also provides a van subsidy to its laundromat partners. The company launches most laundromat operators in its program in two to three weeks.
“We have to invest in our partners every day. If we are not successful in generating customers, we will lose money,” MacKrell says. “Our revenue share model aligns our interests with our partners’ interests. We do not collect any fees, so our success is only determined by our partners’ success. Our customer service team, tech team, marketing team, and marketing spend are all supported by our share of the revenue.”
Laundromat owners appreciate the HappyNest model because operating requirements are limited, he says.
“We recruit high-quality operators because they know how to get the job done. Once we set service and define what areas we should market to, we move forward together. Our partners all operate differently, but they all do a great job satisfying the customer.”
But the HappyNest model isn’t for every laundromat business, according to MacKrell.
“Someone who wants to manage their own marketing dollars and wants to handle their own customer service would probably be better with one of the other fee-based software packages available in the market,” he says.
Partnerships enable organizations to grow faster than they would on their own, according to MacKrell, and that’s attractive to companies in a variety of industries, including the laundry industry.
Check back Tuesday for Part 2!