PEMBROKE, Mass. — The industry model is that you set up a Laundromat and wait for people to come. Rick Rome might be redefining the model. His notion is to create a back-end component. That is, he believes in getting additional business through pick-up and delivery service.
“The industry average is four to five turns, right?” Rome says. “Thirty-minute cycles adds up to three hours usage. So if the store is open 12 hours a day and its machines are utilized three hours, that’s operating at 25% of capacity. Twenty-five percent spells doom in most industries. It shouldn’t be accepted in the Laundromat industry.”
The second part of Rome’s theory rests with the customer.
“Above all, the customer wants convenience,” he says. “I’m not just talking about upper-income families, but single parents, busy career people, folks who have large family commitments. All sorts of people. If you can provide a service that frees up their time and attention, you’ll win business.”
Rome marries the two notions by setting up a service of pick-up and delivery for laundry and dry cleaning service. To this end, he has created an app, called WashClub. The customer puts the app in his/her smartphone, requisitions clothes to be picked up for laundering and/or dry cleaning, specifies any special treatment, and dictates the terms of delivery.
The question is, does it work?
Three and a half years ago, Rome got tired of the Wall Street grind, quit his executive position, and bought a Laundromat in the Sunset Park section of Brooklyn. Quickly, he built up business, to where he now has 15 truck routes bringing in business. Two-thirds of the truck volume is laundry; one-third is dry cleaning (up from 10% drycleaning volume three years ago). Of the laundry volume, half is home and half is commercial. Moreover, his business has 15,000 accounts. These days, he picks up and delivers all over Brooklyn and into Manhattan.
As business began to take off, Rome got the idea that he could help other operators expand their volume. He created a business app that allows other operators—Laundromat owners, etc.—to do what he does. The operator buys his technology and becomes a licensee.
The customer portion of the app is called “front-facing.” This allows the customer to order pick-up. The business portions of the app are order processing/management, marketing, and logistics (how to route vehicles in the shortest amount of time). With this app, claims Rome, operators can pump up volume, gain higher capacity usage, and earn more profits.
So far, he has sold his package to 12 licensees, and eight more are in various stages to becoming members. So far, licensees do business in Chicago; Dallas; Atlanta; Virginia Beach; South New Jersey/Pennsylvania; Cleveland; Washington, D.C.; Birmingham; and Tuscaloosa. Rome believes his idea is the next wave of innovation in an industry that sorely needs new ideas.
Check back tomorrow for the conclusion!