Vended Laundry

Industry Overview

The term vended laundry is defined as commercial grade, self-service laundry equipment placed into service in a retail space. Vended laundries are also referred to as “coin laundries,” "coin-op laundries," "coin-operated laundries," or "Laundromats."  Laundromats generally occupy retail space on long-term leases (17-30 years) and generate steady cash flow over the life of the lease. Laundromats are unique small businesses in that they have no inventory or receivables. 

Laundromats range in market value from $75,000.00 to $1,000,000 and may generate gross revenues between $100,000 and $750,000 per year. Revenue is comprised of self-service use of washers and tumblers, dry-cleaning drop-off service, wash and fold drop–off service, and vended sales, which include soap, video games, pay phone, sodas and snacks. Business hours typically run from 7:00 a.m. to 11:00 p.m. seven days a week and some are open 24 hours a day.  New vended laundries are valued based on actual construction and equipment costs; while existing vended laundries are valued based primarily on revenues. Vended laundries are perfect examples of passive-income generators.

Vended laundries are one part of the self-service laundry business; the industry is actually comprised of two distinct segments. The first is vended laundries, and the second is represented by coin-operated machines located in apartment housing. This "apartment" segment of the business is referred to as the "multi-housing laundry business" or the "coin route business." These two segments frequently overlap; in more mature markets, the self service laundry business is estimated to be evenly split between the two. The self service laundry market consists of an estimated primary customer base of 89 million people living in rental housing, as of the 1990 U.S. Census. The secondary customer base consists of the non-rental population, which uses vended laundries only occasionally. The vended laundry industry is approximately 50 years old, and is primarily composed of individual owner/operators. No significant franchises are in operation at this time.

Industry growth is based on the demographics of population density, population mix, and population income. The more concentrated the population, the greater the need for quality vended laundry facilities. National and regional demographics indicate renters, the primary users of vended laundries, are the fastest-growing segment in the nation. As of the 1990 U.S. Census, 35.8% of the nation's 94.6 million households were renter occupied, up from 34% in 1980. The number of vended laundry stores built over the past 40 years has grown steadily as the population has increased and shifted to more concentrated areas. The end result has been a mature, stabilized industry with predictable rates of turnover and values of existing vended laundries; development of new "turn-key" facilities; and, equipment expansion and replacement. Today's vended laundry industry is a strong and vibrant one. Even more appealing is the fact that this dependable public service industry continues to grow and thrive. The demographic trends toward an even greater "apartment dwelling" segment of the population predict continued prosperity.

Who uses a Vended Laundry?

Who needs to wash clothes? The answer is everyone! Washing clothes is as necessary as food and shelter. So everybody should be busting down the door of your Laundromat to wash their clothes, right? Wrong! Everybody found a place to do their laundry last week. To get that market, you have to provide a better process to do their laundry. Better can be any of the following:

• more convenient location
• cleaner store
• nicer atmosphere & décor
• climate controlled (AC)
• additional services (attendant, Wash-Dry-Fold etc...)
• safer environment, etc...

A properly run and maintained Laundromat will draw customers because it will be providing the superior place to wash laundry. This Laundromat will be providing ease of operation, convenience, quicker washing time, better quality wash (results that can not be duplicated at home), safety and security.

With the emergence of the working woman, many homes have become 2 paycheck families. The most precious commodity for the working family is time. One of the reasons that the fast food chains have grown so rapidly is because the working Mom doesn't have time to make dinner. Now, instead of doing 8-15 loads of laundry a week, the family can now go to the Laundromat and get the whole wash done in under 2 hours, while doing some light shopping too.

Location! Location! Location!

While vended laundries are found in virtually all neighborhoods across the country, stores seem to perform exceptionally well in predominately renter-occupied areas. These areas are increasing in number with each year throughout the country. The intense population growth, coupled with the expansion of rental housing has increased the customer base for vended laundries. The market size grows proportionately to the increase in population. Revenues of a vended laundry a very consistent over time. The public will always need this basic health service...people always need to wash clothes!

For more information contact:

T & L
Phone (800) 423-7937
Sales Fax (704) 374-1004
 

1001-A N. Church Street
Charlotte, NC 28206

Primary Contact E-Mail: sales@washcycle.com

Another beautiful laundry by T&L!

View a photo gallery of laundries created by T&L!

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Why the Vended Laundry business?

The Vended Laundry Business has several advantages.  Here are just a few: 

Laundromats are a cash business. The advantages of a cash business are there are 'no checks in the mail', no inventory, no debts, and no account receivables because the customer pays in advance and supplies their own labor.

A vended laundry is a recession resistant business. Vended laundries thrive in periods of both growth and recession. During periods of recession, when home ownership decreases, the self service laundry market expands as more people are unable to afford to repair, replace, or purchase new washers and dryers, or as they move to apartment housing with inadequate or nonexistent laundry facilities. Economic conditions have little effect on the overall volume of business. Some of the best times for Laundromats have been in times of economic down turn. Available monies are limited and people will defer purchasing and repairing household laundry equipment.

There are several major tax advantages that are available to the Laundromat owner including equipment depreciation and the deduction of any financing interest. These situations may lead to a very favorable tax position.

Basic Facts and Figures

The basic formula in buying a vended laundry is to put down at least 30 % (approximately $100,000-$175,000) and finance the balance over a 5-7 year note. This in conjunction with at least a 10 year lease will assure you a handsome return on your investment.  After the note is paid off, the store is all yours and then the real money starts coming into the business. Once above the break-even point, just a slight increase in volume creates a substantial profit.

What to expect from a Laundry Expert.

Obviously, you get what you pay for. The classic distributor is in the business of selling machines. It is his livelihood! However, a Laundry Expert is a solution provider.  He will show his sincerity with the attitude he takes towards you. The success of the venture will be of prime importance. He will be straightforward and honest, will indicate both the pros and cons of a situation, the competition, the demographics, and the potential pitfalls. In short, he will present you with a valid representation of the situation and do all that he can to provide for your success.

Here are a few services that T&L has available to all of our customers:

• Site Evaluation
• Proforma
• Demographics
• Assistance in Obtaining Financing
• Layout Design
• Work with Architects, Contractors, Building Inspectors, and Zoning Officials
• On-time Delivery of Equipment
• Complete, Quality Installation
• Provide a written parts and service warranty and stand behind it.
• Training on Operating and Servicing the Equipment

There are dealers out there that will promise the world and never deliver. As with everything today; it's the customer beware. Does the dealer come well recommended by customers and by suppliers?

T&L Equipment sincerely believes that it practices what it preaches. We keep our promises! Our success is clearly indicated by the fact that we have been business development partners in the new construction or renovation of vended laundries since 1976.   Our goal is to be known as the company that does it right the first time, meets your wants and needs, and has fun doing it.