The Most Overlooked $1M Business Every Town Needs - Ep. #334

We did $1,025,000 last year.

Wow. I would never drive by a laundromat and think that place makes a million bucks a year.

Yeah, I know. It, it blew my mind. He comes to us and he is like, hey, I think this laundromat thing is, is a good business. I didn't really know anything about laundromats. You know, I used one in college. Crappy. I'm like, this can't be a good business. And I was like, well, can you show me the books? Like, does this thing make money? And he, you know, slid it over. I took a look and I was like, whoa, I'm in. I'm sold. One location was doing $250K. Yeah. Yeah. Yeah. Our, our sales during COVID through the roof. Even all these horrible times, still like laundromats, gotta wash your People gotta wear clothes.

So recession resistant, certainly AI resistant, certainly automation resistant. How can people finance these if they don't have much cash? So a couple years ago, I met a guy on the internet that claimed to own laundromats that profited over $400,000 a year, and I didn't believe him. So he said, come see for yourself. Here I am, Cincinnati, Ohio, flew here from Dallas just to see how do you open a million-dollar laundromat and how do you find the perfect location? Today we're gonna learn all that and more. And would you believe one machine makes over $30,000 a year? So let's go meet Tyler.

Laundry Spot. This is Hamilton. This is our newest store. We had 2 tenants in here. There was a Liberty Tax and like a check cashing place. So we had to wait till they got out. That's why we didn't open up till 2022.

But you bought this with the intent to turn it into this retail? Yeah.

1,000%.

You just had to let the leases expire.

Exactly. Yeah. We couldn't just boot 'em out, you know? So yeah.

Yeah.

So we gutted the whole thing on the outside. The EIFS, everything is brand new. It was down to the studs in here. Saw cut the floor for the, the drains and the plumbing and the bulkheads. If you're looking out at the store, it's kind of a mirror image of each other. And the reason we did that is obviously the commercial, which we'll talk about later, we can block half of the store off.

That's cool.

Yeah. So slowest days of the week for laundromats, Tuesdays, Wednesdays, Thursdays, middle of the week. So that's when we block this off and process a lot of the commercial, a lot of the pickup and delivery.

Okay.

And so this just gives us nice quick access for the attendants to make sure, hey, customers aren't coming over here while we're, we're processing laundry. That's why we have it as a mirror image. We're able to do that. Everything that the customer needs is over on this side. So we got obviously, you know, what we call the money wall back there where they can get their cards. Customer service is still accessible. So there was a lot of thought that went into this, this one on the commercial side, because I see that as like a huge growing piece of laundromat revenue going forward.

Commercial?

Yeah, the commercial. Yeah. Most people don't have the space, to be honest. I mean, most laundromats are 2, maybe 3,000 square feet. This is 8,000.

Wow.

My father-in-law, David, who is the OG of Laundry, you know, started the first laundromat in 2006. He likes to say there are a handful of sexy things in this laundromat. Our new equipment is one of them. So we are the only laundromat in the United States that's not a manufacturer that has their own washer. The only one. So it's super cool. Most laundromats, the biggest they have is this 80-pounder is what we call it. We go by pounds. Also, You can go buy baskets. You know, this could fit 8 small baskets of laundry.

Okay.

This 130 is something that barely any laundromats in the US will have. This is a monster machine. You know, if you want to take a peek in here, look how much you can fit. And the nice thing about these machines is you can fill it all the way to the top. Most people think, oh, you can only put this much in here. It's not gonna get my clothes clean. No, as long as there's like a hand that you can put at the top.

Yeah.

You can stuff it full.

How much bigger do they get than these?

So for like laundromats, they don't really get bigger than this. Yeah. You start to get in bigger equipment when you get into commercial, like Las Vegas commercial hotel processing plants.

Yeah.

They'll have, you know, 500-pound machines. They'll have tunnel washers, which are million-dollar washers that are 40 feet long that just go nonstop.

Hmm.

So laundry comes in one end, goes out the other clean. Yeah. It's pretty amazing. So maybe someday we'll have a tunnel washer at one of the laundry spots. But the cool thing is this equipment, we can do auto-dosing or direct soap injection on. We can do custom cycles on here. Mm-hmm. So with this equipment, we can modify how fast it spins, how much water goes in, how long it runs, you know, So if they want extra pre-wash, extra rinse, whatever, we can modify that all on the backend from the cloud. We don't even have to be here to do that. We can do that from our laptops.

So the consumer does not need to put their own detergent in here?

No.

Is that confusing to them?

It's something new. Like we have to educate them. So right now we have someone, an attendant in store who that's all they're focused on. Talking to customers about our new equipment, you know, explaining it to them, bringing them over here, doing the same thing I'm doing for you. So it's just an education piece, but we've gotten amazing reviews so far. This week alone, we have 50 5-star reviews just about this equipment.

Yeah.

Because we just put this in last week.

So.

Oh, wow. Yeah.

And it's, it's getting good usage.

Oh, yeah. Oh, yeah.

And what did this cost you?

List price for this machine would be about $55,000.

Okay.

We'll get it, and our franchise will get it, franchisees will get it in the 30s.

Okay.

You know.

And how long will this take to pay off?

This bad boy, we're hoping in the first year.

Wow.

Yeah. On average, you know, we run about 6, 7 turns a day. That's a laundromat term. You know, how many times is this specific washer started per day?

$130 a day, give or take.

Yeah, yeah, at $22. And that's base price on this machine. Yeah. So, you know, again, you can do a heavy duty cycle. As we walk through here, you know, let's just say we want to pick heavy duty. We come to our, our detergent selection. We have a classic detergent, we have sensitive, you know, no fragrance. Then we also have a high lavender scented detergent. Of course. So just go classic. And over here you can see the receipt adds it up as you're going on. Color safe bleach, you know, if we want it or not. And then softener, same thing. We have a few options there. And then we can get to even more adders. Hey, Do you want an extra pre-wash? Do you want an extended wash? Do you want an extra rinse? Sure, let's do an extended wash. You go here and now as you can see, $24.25, swipe your card, start the machine.

What would you say your gross margin is on, on that $25 for your detergent, your water, and your electricity?

So our utilities run under 10%. That's revenue. Yeah.

So that's insane.

And that's because this equipment, it will weigh the clothing, put the exact amount of water it needs in there. It's very efficient.

Yeah.

And that's a benefit of newer, nicer equipment. For a lot of laundromats who have been around for a long time and they have equipment that's 20 years old, their utilities may be 20, 25.

Yeah.

Even up to 30%.

Yeah.

So that gives us an edge because people think, oh, you guys are more expensive than all the other laundromats in the area. We're really not. Yeah. Because—

You consider that—

Not, not when you consider how efficient we are. Yeah. We're able to price the same. And so, oh, that's a compelling argument. Customer walks in here, sees this.

Yeah.

You know, they're not more expensive than where I was. I'm never going back there.

Yeah. Now I know this machine is an outlier. This is your biggest machine.

Yeah.

Right?

Yeah.

There's a lot of machines there. Yeah. I'm just thinking from my like lizard brain here, this will make you like 28 $30,000 of profit every year.

Yes.

Right. And of, I'm guessing this will last you 30 years, right?

Like, so it absolutely could.

Yeah. If you maintain it and everything.

Yeah, exactly. And we take great care of our equipment, but how we view things is we've always been on the forefront of the leading technology in the laundromat industry. So we don't look at it as like, how long could this last? We look at it as like, what's the next big thing?

Sure.

In laundry. And that's when we would upgrade.

What would we swap this out with?

I don't know, to be honest. Yeah. Because this is like alien technology for the laundromat industry. So like touchscreens was a big one when that came aboard. We were the first, one of the first adopters. 450G spin, you know, High spin, high extract. That was fairly new 10 years ago. We were one of the first adopters. Dosing, we're like one of the first adopters for that. So it's like, I think we're pretty well set for like new technology here, but you just never know what's gonna come about. And so that's how we review, we view replacing equipment and things like that.

It's just like, to me, I'm just like, okay, we're in Hamilton, Ohio, a city I've never heard of. And this machine could gross or net you $1 million over its life.

Yeah.

Or $500,000. Yeah. Or $30,000 a year. Like no matter how you slice and dice it, that's, that's impressive. 'Cause there's a lot of machines in here. I know. It's funny.

You know, everybody's like, you know, our numbers are great, obviously, and we'll, we'll talk about that later. But I'm like, we're in Hamilton, Ohio, people. We're not even in Cincinnati proper or like Dallas.

What is, what is the population?

Hamilton, I think, is 60,000, somewhere around there.

There's thousands of cities.

I, I know.

60,000 people.

So yeah, for, for the franchise, as we're talking with people who are interested, we're looking at cities, you know, in Alabama.

Yeah.

That are similar to a Hamilton, Ohio, where like—

Roll Tide.

The, the competition, the bar is so low.

Yeah.

It's like you could go in and own that city with 3 laundry spots, no problem.

Yeah.

And so it's, it's funny, I love looking at the different cities as we're talking to prospects.

I'm a total geography nerd and population nerd. So an average city of 60,000 with similar demographics to this, how many laundromats total could it support, give or take?

So for laundry spot, I would say probably 2.

2 laundry spots.

Yeah. So like for instance, in Hamilton, we are the number one laundromat, but there's still a handful of other smaller ones still hanging around.

Yeah.

We've put out 11 laundromats with our 4 over the years. Put like out of business. Yeah. Yeah. Out of business.

You've opened 4.

Yeah.

And 11 have gone out of business.

In our areas. Yeah. Yeah.

Yeah. That's wild.

Yeah. So I'm not like proud of that, but it's just like, you know, hey, if you, if you do what's right by the customer, you give them a better experience.

Are any residents complaining? No, they have a better experience.

Exactly.

Exactly. That's what business is like. You provide a better experience. And if the competitors can't keep up, then that's a free market economy.

Right, exactly. And that's, that's how we view it. Hey, maybe your laundromat was great 20 years ago and you took good care of your customers and you made a lot of money, but you never put money back into it for the customer. And they could have. Exactly. So super excited about this. Great reviews so far from customers. Excited to see the numbers when, you know, a whole store is full of these.

But I'm sure— so would you, would you do that? Ones this big?

We're all about crazy ideas. So I've thrown an idea about like a Laundry Spot XL. Like it's a smaller store, but maybe they're all large machines, something maybe we'll test in the future. But as of right now, you need a good mix, right? Like not everybody has enough clothes to fill this. So we want to make sure customers have that wide array of sizes and prices.

Now, How did you know that there was demand for a machine this big here?

Our data. I mean, we can run data, anything you could think of.

How do you get that data? Like, are you asking people or surveys? No.

So our, our, our, we know every quarter, we know every cycle, we know every single piece of data that comes through this machine on the backend.

Yeah.

So we can search it in our database, run reports on anything we wanna know, see what machine is turning the most, where it is in the store. Does it matter, you know, larger, smaller? But our data suggests our old 80-pounders, which was the biggest before we had this, did one turn per day more than on average than our other equipment. You know, it's anecdotally when we talk to customers, they want big equipment, but we also see it in the data. It's plain and clear. All the other equipment is sitting right here on turns per day and the 80-pounder's up here.

Yeah.

So we expect, you know, the, the 130 and the 100 to do even, even more turns. So customers, when they walk in here, it's kind of like shock factor. Like, whoa, I've never seen anything this big in a laundromat.

So. Because they have an eye for this. Like they've probably been coming to a laundromat for years, right? Yeah.

It catches their eye right when they walk in. You know, a new customer walks in, they're looking around the store and they're like, what is that thing? You know, and they walk back here. And another cool feature on our equipment is this indicator light.

Mm-hmm.

So you know how you go to a parking garage and you're driving around and you see, oh, green light, there's a spot open or not open? Same thing here. When you start this machine, this will turn blue to make sure, you know, people know it's running, it's not available. When different things are going on, you know, say you've got pick the detergent, when that is going on, you'll get a notification here. This will also flash so the customer knows, hey, I'm getting my detergent right now. It's going in there, you know, because if it, if you didn't have some sort of indicator, it would be a little tough to kind of see Exactly when that went in. So we just wanna make sure customers know they're getting what they're paying for, they're getting that experience. So that's a cool feature that, you know, we have on our new equipment.

Very cool. Well, I like that it shows 13 loads.

Yeah.

Because to me it's like, what does 130 pounds mean?

Exactly, exactly.

I know it's industry speak, but for the consumer, they're like—

Exactly. You have to make it understandable for the consumer. So yeah, throwing the baskets on there is a big thing.

Yeah.

There's no other really way to quantify it. Again, what's 130 pounds of laundry? Well, it depends. You got towels, you got jeans, you got dry fit shirts. They can all look different capacity-wise. Yeah. In the baskets. makes it a little bit more easy for people to check out. At all Laundry Spots, you can pay by quarter, you can pay by our loyalty card, you can pay debit, credit card, Apple Pay, tap to pay, whatever. We don't discriminate on how you want to pay. We prefer customers use our loyalty card. One, they get discounts. So when you use our loyalty card right now, you get free dry credits every time you wash. Customer adds money to their loyalty card, they come over here, swipe to start a machine, automatically goes on their card. When they go to dry, those credits get taken off first. So they usually, they can dry about half their load for the credits they get. Yeah.

Is that the only discount they get or do they get Others in addition to that?

And that is the, the one we're running right now. We can change those.

Okay.

Anytime we want. So we can run, hey, you add $20, you get an extra dollar or $2 or $5, however, any sort of promo.

Yeah.

Any sort of, hey, you've washed 5 times, let's give you an extra wash or anything like that we can create on the system.

So is there much of a margin difference between drying and washing?

Yeah, you make a lot of your money, most of your money on washing. I mean, it's not even close.

Yeah.

I think our split is somewhere dryers end up being 10 to 15% of washer revenue. And our washers are so awesome that people don't have to dry very long.

Yeah.

And a lot of older mats, dryer revenue may be higher because they have to dry for an hour.

Yeah.

Whereas you can get out of here in 20, 30 minutes. A question that people always ask is like, okay, what's your usage between loyalty card and all the other options? Because there are stores out there that are card only and there's diehard fans of card only. Hey, I don't have to mess with quarters. Well, we've come to find out over the years, like we want to give customers options even though we have great options. We have a discount card. You can pay however you want. 28% of our customers still use quarters.

Wow.

Do you wanna mess with that? No. And maybe not bring those customers in?

Yeah. You gotta remove all the friction.

All the—

Of receiving money.

Exactly. And what's weird is the laundromat industry has been very inward looking. What's easy for me as owner?

Sure.

Oh, I don't wanna collect quarters.

Yeah.

You know, I don't wanna have to lug quarters to the bank. Not, well, what does a customer want?

Yeah.

And so we're all about what does a customer want? And so you can pay however you want when you come to a Laundry Spot. So that's something that's an industry, you know, back and forth and a lot of headbutting on.

Do you manage your own vending machine and ATM or do you—

We manage the laundry supplies in the vending machine. We found that the snacks and drinks was such a headache for our attendants that stuff was expiring. And so we were like, hey, let's—

It's a different business.

It's a different business. We're like, hey, let's outsource this. This is easy enough for them to fill and track. And those things don't expire all the time. But yeah, snacks, drinks. We have a gentleman who does that for us. Yeah.

Do these do meaningful revenue? I mean, obviously it's going to be a minority.

Yeah. So, you know, we get to the revenue breakdown of on average of our stores. Other revenue is probably, you know, in the 3 to 5% range depending on store. And that's vending, that's, you know, ATM, that's over the counter.

But this supports that. Yeah. Like you kind of have to have this.

Exactly. Yeah. I mean, again, customer experience. Yeah.

You know, because if you remove that machine, your revenue here is going to drop because some people won't have their stuff.

Exactly. Now that's all soap. So as we put more of those in here and eventually this becomes fully direct soap injection, we won't need soap in there.

Because you're going to make more money on that, right? Because that's tied. Like your markup on that isn't going to—

Oh yeah. Yeah, exactly.

Whereas this could be like white labeled.

It is white labeled. Yeah. This is Laundry Spot. You know, we— a great manufacturer in the US that we work with, a great partner. Let us white label their amazing chemicals. So yeah, our profit margin's on there.

I think 80%, if I were to guess. Yeah. Now probably more like 40%.

That's, I don't even think that's that high.

Yeah. Wow.

Probably 20%, 30%.

But it's a name brand and people recognize it.

Our goal is to get people to love the Laundry Spot brand.

Yeah.

Our detergents, our softeners, the smells, our equipment, our swag.

Yeah.

You know, that's—

How many employees do you have here on average at any given time?

At any given time, this store will go up to maybe 6 at a time, which is probably high for a laundromat. Very, I mean, very high because we're doing a volume of the commercial, which you'll see in a second.

What about just on this floor?

There's one store that we don't even do commercial at. And so most of the time we'll have one attendant.

Just kind of helping.

Yeah, helping cleaning, doing some drop-off because we'll still do— people will come in and drop it off. So we still do a small amount of that. Weekends, usually 2, just because 50% of the self-service revenue is done on Saturday and Sunday.

Oh, wow. Yeah.

Out of the week. Yeah.

So 50% the other 5 days?

Yeah, exactly.

Wow.

You come in here on a Wednesday, which is our slowest day of the week, you'd be like, man, this place How are these guys making money? Yeah, yeah, yeah. How are these guys making money on this?

What's the busy time of day?

It's usually morning, you know, mid-morning, and then evenings.

Okay.

During the weekend, it's—

It's like you drop your kids off at school, you come to laundry.

Exactly.

Or after dinner.

Or after dinner. On the weekends, I mean, nonstop. There's a full— Yeah, I mean, every machine's in here running. So it, it's funny, like—

So you're at full capacity sometimes?

Some, yeah. Some days, Saturday and Sunday. Yeah. Some people are waiting for big machines, you know, it's crazy. So the fluctuations, even the months of the year, summer's very slow, you know, less clothing, smaller clothing.

Yeah.

Spring and fall, Fall, our revenue is higher than summer. And then holiday season, people are saving money for Christmas and all those things.

Especially in the colder season or in the colder climates.

Yeah. Right. You got a sweatshirt and a t-shirt and pants and, you know, whatever else you're wearing, extra pair of socks. Once back to school hits, that's where it kind of starts ramping up until about November.

Okay. How much do you take into consideration customer data? If I'm running this place and I see it's getting more full more often, I'm looking at the zip codes of my customers. And it's like, if I see in the data, wow, I could support another store 10 miles down the road. Do you look at that much?

So customer data is very hard in our industry. The only way we can get it is if they do the loyalty card and agree to put their information in there, which a lot of people get the loyalty card, but we don't force them.

No, you shouldn't.

To put their information in. So again, the subset of information we have on our customers, it's almost insignificant.

Yeah.

What we do do is we test mailers in different areas, have them bring the card in to get free wash, and we see where they're at. And then we see, okay, how many people are new who have never come here from this area? That helps us get a gauge. One thing we're big on is when the tenants are working or processing, they have a good view of the store because we don't want a customer to come up and walk to the front and nobody's helping them out. You know, I mean, it sticks out, right? Exactly.

Yeah.

I mean, you can reason— you can see almost the whole store if you're standing at this table or standing at the POS.

That's cool.

And then the TVs up there were a nice touch we thought of. Can see everywhere in the store, the parking lot. You know, if something's going on, we have eyeballs on it. I think we have 40-some cameras in this store. So more than your local bank. This location does about 21% revenue in commercial.

Wow.

It's our largest commercial laundromat.

And how does it rank on consumer on all your locations?

It's our second highest self-serve, but it's going to be the first here soon. This is our newest store. This is our flagship. This is the only store that has even some of our new equipment in that all franchisees will have going forward.

So it's your newest and your best, really?

By far. Yeah, by far.

Well, that's encouraging.

Yeah. But yeah, we moved 30 pounds a month through here. We have a new commercial account this month that will add probably another 20,000. So we'll be doing maybe 50,000 pounds in August outta here, which is just insane.

A month?

Yeah, in a month in August.

What does that equal in revenue?

Uh, depends. Commercial pricing's all over the board depending on what we're washing, how much of it we're washing, but anywhere from $1 a pound up to $2.50, $3 a pound depending on the account.

Wow. I mean, you'll be closing in on $100,000 a month just in commercial. From this one location.

Yeah. Yeah.

Wow.

I, I see commercial as a huge thing going forward. Something we're gonna focus on for Laundry Spot because your competition out there are the big dogs and they're not community rooted like laundromats are. They're not flexible. They lock you into contracts. I haven't talked to anybody, any business owner who has a laundry need that's happy with their commercial service. Yeah.

It's one of those industries.

It's, it's one of the industries that like nobody's happy with.

Yeah. Well, and the name of your business lends to both. You can kind of live in both worlds, right? It's not laundry.

Right.

Laundry spot. It could be either one.

Right.

Are you intentional about finding these commercial accounts? Like, oh, do you have a salesperson? Are you doing outreach or are they coming to you?

So our GM does a lot of that. So we do get some inbound. Our GM is big in the community. It's, it's joining your local chambers. It's talking to the business owners. You know, when we opened this store, we had a VIP red carpet grand opening, catered food, open bar, music at a laundromat.

Wow.

You know, like something crazy. But we got business owners in the community to come here for that.

Yeah.

I think we had 50, 60 people here for that party. And so, Wow. Get the word out, you know, meet other business owners who have a laundry need, all those things. So it's a lot of boots on the ground type of stuff.

Yeah.

You know, calling referrals. So this store was the first time we did 2 weekends in a row free laundry. Hmm.

Because it worked so well?

My thought is, okay, when we did one free laundry weekend, like, okay, people found it. They maybe told some people Saturday, like, hey, come tomorrow. Well, I'm like, well, if we gave everybody a whole week to tell everybody they knew.

Yeah, sure.

Like the second weekend is probably gonna be—

They post about it online and then it gives them—

It gives them a whole week. So we We did 2 here and it was just absolute chaos. But our theory is we just need to get people in the door. Yeah. Literally, if we just get people in the door, they're not going back to the other laundromat. Well, how long have you been open here? November will be our 4th full year.

Okay. Well, so this was the first location where you did 2 free weeks?

Yeah. Yeah. Yeah.

And it's about to be your best location.

Yeah, exactly.

And they're habit-driven, I'm sure. So once they fall in love with this, there's no better, nicer laundromat in the area.

They're customers for life.

What percent higher are your prices than the guy down the road?

We're actually underpriced on some of our machines compared to some people in Hamilton, which is crazy to think about. That's what we do when we go into a market. We look at the pricing.

Yeah.

Because we don't want to be more expensive. We want to go in, give the customer a better experience, and then be like, oh, this is the same price? Like, yeah, how's that possible? What reason would they have to go back to their other laundromat? There is none. The sexiest thing that you'll see today, a soap injection machine that we've been working on.

Oh, the DSI?

Yeah, for sure. Yeah. So we've been working on this for, for 3 years. We think we've perfected the system. So, you know, everything looks nice and easy out there on the machine, right? You just select, oh, okay, I want detergent, I want classic, or I want, you know, high fragrance, and it just comes right to my machine. Well, this is the brain and the brawn that gets it out there. So we, we spent a lot of time, a lot of effort, great partner who helped us build this machine. And again, this is a trucks-to-bucks system. We bring it into a new store, hook it up to the, the tubing, and basically we're off, off and running. So—

What, what percentage of laundromats around the United States has direct soap injection?

It's not even a percentage. I think there's like 15.

Wow.

And it's not even as many options as ours. So ours, we can put up to 8 different options. So right now we have 3 detergents, 3 softeners, 1 bleach. We could add 1 more. I don't even think any systems out there right now have that many options. Most of them are 1, maybe a couple, like you get detergent and a softener or just a detergent. This is a key, key differentiator for us as Laundry Spot. So yeah, there'll be a lot of, uh, industry talk probably about this machine.

So yeah, very cool.

This is proprietary to Laundry Spot. The company we work with will not do this for anyone else.

Yeah.

We've got our ozone systems there.

So, uh, what is an ozone system?

Yeah, so ozone, ozone is like natural sanitization. It's O3. So like in a lightning storm when the rain and the lightning hits and electrifies the molecules and you smell that fresh rain smell, that's ozone. So we use it for mold restoration, fire restoration. Customers can select an ozone cycle on the washers. You got dirty football, stinky football, gym equipment, whatever, totally gets the scent out. I mean, Literally wipes out any scent outside of just a fresh, clean smell.

I didn't know that was a thing.

Yeah. So customers love it. Also a reason why our store smells so good.

I was going to mention that actually.

Yeah. It's not—

It's the first thing I noticed.

It's not a detergent. It's just, wow, this store smells clean and fresh.

Everyone loves the smell of fresh laundry.

Yeah.

Right.

We're working on proprietary laundry spot ozone system too. So stay tuned for that.

Okay.

Another thing that we added was dry cleaning because we had so many customers say, hey, I'm dropping my clothes off here. Can I drop my dry cleaning off? Well, now it's not a business we want in. But if we're getting all these customers asking it and they're loyal Laundry Spot customers, why not? So we went out, we wholesale dry cleaning. You'll see some there. We do fire departments, police departments. Again, part of our local community. Like we want to be embedded there, do good work for them, you know, be a good referral source.

So. So for something like this, what do you charge and what do you pay for like one shirt?

So yeah, shirts are like $7, I think. And we, we get 50% of the top line.

You charge $7 and you pay $3.50, give or take?

Yeah. Yes, exactly.

Sure.

Yep. And we just take it in. And then when our drivers are out delivering our laundry to our customers, they drop it off at the dry cleaner.

Yeah.

And so super simple, easy, but again, adds another revenue source. And now we're up to, I think, 300, 400 pieces a month in dry cleaning.

Wow.

So, you know, nice little, nice little piece of business there.

Yeah. So from what I understand, you have a whole other career. This isn't even your main thing. How is that possible?

Yeah, this started as a side business. Wealth management is my career. It's what I've been doing ever since. We have great employees here. We have a GM, an assistant GM that are amazing, that take a lot of the daily operations. And then also we can do a lot of stuff remote. Our camera system, our reporting system, our door system, alarm system, everything can be done remote. You know, that helps us a lot to be able to run it, you know, not be here every day.

These can't be super cheap to open. How can people finance these if they don't have much cash?

Yeah, so the SBA is an option. You know, a lot of laundromat owners, they do financing through SBA.

It's like up to 90% financing, right? Yeah, but that's not something we recommend.

We're not big, like, no money down type of people. You know, we want to manage the debt. Again, like you said, these are expensive to open, so we don't want some crazy debt load. Most manufacturers, equipment manufacturers, have their own financing. And then also Eastern Funding, which is a good partner of ours, they do laundromats and car washes. Like, that's their thing. And so they know the business well. They do a lot of financing similar to this. So there's a few options.

What is the dumbest mistake that new laundromat owners make in year 1?

Oh man, I think a big one is just thinking this business is passive. It's like any other business. You got to put work into it. I remember when I first got into it, I was having to work shifts at Fairfield because all the employees called off before we had our GM and AGM. I mean, I would work my, my career, you know, and then I'd be at the store at 6 PM and closing up. Our drivers would call off. I was up at 4 AM driving to pick up a commercial load, you know. So I think expecting a laundromat to just run itself—

Better expectations, more realistic.

More realistic expectations. You've got to put the work in if you want a successful laundromat. It's not just going to do it for you.

You can get it to the point where it's more passive than it was, right? But not fully passive.

Exactly. We weren't a good spot, I'd say, but still, it's not, it's not 100%, you know, passive.

Yeah.

Like people like to say, I mean, I still wanna grow the business. You gotta be very active. Things just aren't gonna take care of themselves.

So.

Yeah.

All right. So we've probably come across some characters in this business. What's the craziest thing that's ever happened in this store?

Oh man. One of the grand opening weekends for this store, a customer comes up to me and says, there's a dog in here. And I'm like, okay. Oh, okay. Like, here, I'll, you know, walk me over to the customer. I'll tell 'em they need to take 'em outside. And she's like, no, it's a dead dog. And I was like, what do you mean a dead dog? And she's like, come here. She walks me over there. A customer found a dog they lost in their clothing and they were loading the laundry and didn't even know it was in there. And I was like, we have got to get this out of here.

That's disgusting.

Customers were like—

Must have been tiny, right?

Yeah, it was a tiny dog, which is crazy. They must have had so much clothing. The dog got trapped and passed away. Sad story, but crazy story. Wild story.

So at a place like this, you could put down $300K and then it will net you back $300K every year. Where else do you find math like that? I mean, you're an investment guy, you're a finance guy. Where else does that return like that even exist?

Yeah, I think there's a lot of good businesses out there. But, you know, when you're looking at our margins at 40, 41%, it honestly It doesn't get much better than that for a retail physical type business. You know, I'd say if this is a game you wanna be in now, software companies and things like that, you can have a higher margin. But as far as a customer-facing retail spot, it's about as good as you're gonna get. Yeah.

Tell me what a zombie mat is. What does that have to do with a new location?

Yeah, zombie mat. That's a, a funny name for stores who have never put money back into themselves. So basically how it got the name zombie is like a zombie, it just eats itself away.

They're walking dead.

They're, they're walking dead.

Exactly. They don't know they're outta business yet.

They don't know. And so they, they've got that name and because the owner, has never put money back in, probably didn't keep that money sitting around to put back in in case someone like us comes around. Easy to put those type of people out of business.

Okay. What is the story of Launderspot?

So, um, let's see. I started doing this about 10 years ago. It's a family business. So my father-in-law had 2 laundromats. First one started in 2006. It's kind of a funny story how he got into the laundromat business. So I'll start there. He's a super entrepreneurial guy, has done all sorts of things in his career. Super smart guy, knows what doing. He wanted to open up a car wash, bought some land, was like, you know, going around looking at different car washes, talking to different people, you know, trying to figure out what type of car wash he wanted to build. Someone said, hey, go check out this guy up, uh, north near Cleveland, see what you like. He has a great car wash. He has a laundromat attached to it too. So it's a pretty cool, unique thing. So he goes up there, you know, he's looking at everything, talking to the owner, and the owner is like, don't get into the car wash business. You know, he's got a nice, beautiful tunnel, but he's like, when a part goes down in here, the whole thing's down. Yeah. No, I'm not making any until it's back up and running. He said, with my laundromats over here, I can have 1, 2, 3, 5 machines down. I'm still making money. And I, and something clicked in his head and he was like, all right, laundromats are the way I'm going. So.

You see, that's really good feedback because oftentimes I tell people, don't ask someone in the industry how they like the industry because if it's really good, they might steer you away. They're also like super biased and it's probably all they know and all they see. And like the negatives are top of mind. And so they might dissuade you from entering the industry incorrectly. You know what I'm saying?

Right.

Just because of who they are.

Yeah.

But for him to say, I'm in both industries.

Yeah.

This one that you want to get into, car washes, and this other one that he wasn't even looking at.

Right.

This one sucks, the one that you're looking into. But this one, like, it's very unbiased feedback.

Yeah.

Yeah. If he truly didn't want new competitors, then he would say they both suck, stay away.

Right, right, right.

So if I were him, I would really take that to heart.

Yeah. So he, he did. And so he bought some different land right next to the best laundromat in town.

And that was on purpose.

That was on purpose. He's, he's the nicest guy ever, but he's a businessman killer. Well, it's confident. Yeah, it is. So built the laundromat, the first laundromat from scratch. It was called Express Laundry at that point.

Okay. No experience in the space.

No experience in the space. Had a great distributor partner, which we still work with today and is a huge part of the franchise.

Distribute as in someone to sell some machines?

Yep. So, you know, that's who we get the machines through, services the machines if you need anything, you know, high-level parts, installs them, all that thing. So we have a great relationship with their team. Uh, they're all amazing. So that's when that relationship Helped him get that store up. I think it was within 6 months.

What gave him the confidence to do that?

He's just a, he's a confident guy. I mean, he owned a very good performing P&C insurance agency. He's owned commercial real estate. He's owned multifamily. He was a police officer at one point. He, he's like us, right? He's just entrepreneurial. Like he's never gonna lose. He's gonna figure it out.

Well, and in this industry, like you, you need to be where the people are.

Right.

Right. It's not a restaurant where there's 1,000 of 'em in a city. Yeah. Like people already had the habit of going to that block to do their laundry.

Exactly. And, and laundry habits are hard to change. Even us who may not use the laundromat all the time, even at home, we're very weird about our laundry. Yeah. Everybody is weird about their laundry. Yeah, for sure. The location is so important. So built that one up, put that guy out of business. 2008 comes around, he wants another one, goes a mile and a half down the road, goes to the second best performing laundromat in the city and gets his—

What, sorry, what city was this?

Middletown. So this is our north stores. Yeah. Our 2 north stores are in Middletown.

Okay.

He was right across the street at this point. Um, the first one was right next to it. This one was right across the street. Built that building from the ground up. Um, that was called Coin Laundry. So again, you know, back then there wasn't really branding for laundromats, right? Like you, you saw a lot of coin laundries, you saw a lot of laundromats, you saw maybe an Express Laundry or something similar, but there was no brands.

See, I look at that as an, as an A/B test, right? Because these are 2 stores in the same market, mile and a half apart. You've, if you call one Coin Laundry, one Express Laundry, and you basically do the same thing and you suddenly see, man, this Coin Laundry is getting a lot more Maybe there's something to this name. Maybe my third one is going to be Coin Laundry, and maybe I change Express Laundry to Coin Laundry, you know?

So, you know what's funny about that? And we touched on this earlier, card versus coin. First store was card only. Second store was coin only.

Yeah.

He literally had an A/B test.

And so it wasn't just the name, it was how he—

How exactly how he accepted payment and the coin store performed better.

Yeah.

So eventually turned it to hybrid, you know, accepting both and all that. But testing from store 1 to store 2 to store 3 to store 4 were always Always testing, you know, and seeing what makes the most sense, what works the best. So he got those 2 stores open, amazing business. Me and my wife get married about 10 years ago. He comes to us and he is like, hey, I think this laundromat thing is, is a good business.

Mm-hmm.

Like, do you guys wanna team up and open up more of these things? I'm a finance guy, you know, I'm a numbers guy, you know, that's my career. And I didn't really know anything about laundromats. You know, I used one in college, crappy. Like, I'm like, this isn't, this can't be a good business. And I was like, well, can you show me the books? Like, does this thing make money? You know, do these things make money? And he, you know, slid it over. I took a look and I was like, whoa, you know, I'm, I'm in, I'm sold. Like if one location, and I think at this point he was doing $250K bottom line.

Across both combined?

Yeah.

Yeah.

Wow.

No, no, no.

Uh, each, each. Wow.

Yeah. Yeah. Holy cow.

Yeah. So I was like, whoa, this is, this is crazy. Like we can expand on this for sure.

Yeah.

So came together. That's when we created the Laundry Spot brand and then rebranded those 2 stores. Eventually we now have Hamilton and Fairfield. He's always been on the cutting edge of technology. And so that's kind of where we, you know, our mindset has always been like, hey, what is the newest thing that we could possibly do to make the laundromat experience better? You're seeing a lot of that today with the equipment we're sitting in front of. But he, he was the, the founding, you know, the OG of laundry. Yeah. I mean, 20 years of laundromat experience, like you can't replace that.

Right.

And so we're, we're laundromat operators at heart. We know how to run a laundromat.

Yeah. So how did the first year or first month of that first location go? that you guys went in on together?

Went really well. That was our Fairfield location. We did the weekend grand opening, you know, within, I think it was 6 months. That was our best performing self-service monthly run rate. Like we were already the best performing self-service store.

Wow.

So that's kind of when we found like we were onto something, you know, that location's 4,400 square feet. That is our only leased location.

Okay. What is your lease there?

Yeah. So our lease there, it's, uh, $14 a square foot, 4,400 square feet, but we have, or the original lease was 10 years with 5 5-year options after that. Okay. So 35 years if we want. And that's what we want, long-term leases. Yeah.

So you got a lot of money in here.

Got a lot of money in it. You don't want the landlord to be able to just kick you out and be like, oh, I'll run a laundromat out of here.

Per month, what does that shake out to? $14 a foot?

It's like $4,600 a month or something.

Okay. That's not bad.

Yeah.

Yeah.

The crazy thing is the escalators and the options. I don't think we pay more than $15 a square foot during the the last 5-year option.

So like 1 or 2%.

Yeah. It's crazy.

For 5 years.

So I'm like, at that point, that lease is almost gonna be an asset.

Yeah.

Because you're not gonna find anywhere, right, that cheap at that point.

Right.

Lease versus own, we're agnostic. We look at both. You know, if a franchisee wants to own the building, sure, we can make that happen. We've done it. If you wanna lease, we can help you there as well. So keeping our eyes out for both.

Let's talk startup costs on the Fairfield location.

Yeah.

What did it cost?

So I gotta speak FDD numbers. The range is kind of wide, again, depending on size of store. But, you know, our FDD startup costs anywhere between $1.2 million all in to $2.2 million all in. Again, how big is your store? How much equipment is in there?

And that's not including real estate?

Not including real estate.

That's assuming—

White box.

You're leasing and first last month.

Exactly.

That's part of that.

Yep. That's just, hey, here's a white box. We got to turn it into a laundromat. You know, obviously we have to fix the plumbing, update plumbing, electrical a lot of the times and do all that. The 2 biggest pieces are obviously the equipment. You know, you're gonna spend upwards of possibly, depending on the size, you know, $1.1 million in equipment. Mm-hmm. The nice thing is that's bonus depreciation's back. You know, you can, you can take all that in year 1 if you want. It's a nice business for other business owners because you can offset some of that other income turning it into a laundromat, like all the utility updates and everything. That's the other big cost.

Mm-hmm.

Those are gonna be the 2 big line items that make up most of it.

Now, would you ever buy a laundromat and give it a facelift?

No. So there's a story on that too. Back when I first teamed up with Dave and my father-in-law, we thought like, hey, let's go buy a bunch of them, turn them into laundry spots so we can have a bunch at the same time. So we were close to buying a pack of 4 and doing all of our due diligence, you know, sale price, all the costs of us updating it to be what we want as a laundry spot. And, you know, all of a sudden I'm just like, why would we buy this, put all this money to fix it up when I could just go across the street the same way he did with his other 2 stores and just put it out of business. And again, that just solidified our mindset of like, hey, no, we're going to do it the way from the beginning that we want. Yeah. The problems you run into in older laundromats, infrastructure may not be great.

Yeah.

Again, they were smaller. The utility sizes may not be big enough. The layouts are weird. There's not space. A lot of times you see how much aisle space and it's comfortable for customers. A lot of times you would open one of these doors, you would run into the other door of a washer on the other side.

Yeah.

I mean, there's just no, nowhere to go.

Yeah.

Small bulkheads you can't get behind and and do things. So yeah, we've done away with ever wanting to do that.

So, so let's say with a store like Fairfield, you spend $1.5 million to open it. If things go well, 5 years later, what could you sell it for? I'm trying to like compare and contrast buy versus build.

Yeah. So our laundromats, we could sell 5 to 6x probably.

5 years later, give or take. $8, $9 million.

This store does $421 last year, bottom line.

Well, let's say Fairfield, something, something more along the lines of average as opposed to outlier.

Yeah. I mean, Fairfield could go Around $2 million. Okay. Yeah.

Yeah. And then what would something like Fairfield cash flow every year?

Fairfield does high 3s net.

Wow. And what did you pay to open Fairfield specifically?

Fairfield was $1.1 million.

Okay.

But again, that was 2019.

Right, right. So $1.1, you run it for, for 5 years and let's say you cash flow, you know, $1.3 along the way. So you get your money back in 3 or 4 years.

Yeah.

Yeah.

The payback is usually Back to zero.

Right now you've got an asset that's paid off basically. And on year 5, you could sell it for $2 million.

Yeah, about $2 million.

Give or take. Okay. So you basically, and then you profit along the way. So you're going to make like $2.5 million profit in 5 years from that location. Whereas if you were to have bought something like Fairfield, how much do you think you have to spend to give it the facelift to get it to where you want it to be?

That's a tough question. I mean, it depends what equipment's in there.

6 figures, certainly. Yeah.

I mean, you'd probably spend $500,000 at least. I mean, if you have to redo all of the equipment, you know, and then you'd pay to For it, right? Exactly.

Let's say 1.5.

Yeah.

You put $500,000 into it.

But crappy laundromats are going for 3x.

Yeah.

I mean, it's crazy. Like the multiples are crazy right now.

Yeah.

So you're not going to get anything for under 3x right now.

So after buying it and giving it a facelift, you're into it $2 million instead of the $1.1 million that you were into it originally.

Yeah.

And then you're still able to sell it for the same amount.

And you got to deal with all the customers who like don't know that it's new or, you know, like, oh, that was a crappy laundromat. You know, I'm Yeah. You know, just start from scratch.

Yeah. Now, if someone is more like, they don't have $1 million to start a brand new from scratch, do you think buying one, a smaller one could be a good option to get your feet wet in the industry?

So there's a lot of influencer stuff going on right now with laundromats, right? Like the, the hype is great. I love laundromats. I love the industry, but a lot of people don't handle their books like we do and track every single quarter that goes through. So verifying income and expenses is almost impossible at an old crappy laundromat. Most people overpay for them. Uh, they quickly realize like, oh, this isn't passive If you have older equipment, stuff is breaking all the time. You're constantly fixing equipment. Unfortunately, a lot of people who fall into that trap find themselves that they just bought themselves a job, like a low-paying job. You're netting $50,000 on a laundromat and you're working it like full-time. Like, that's not fun. That's my gripe with like a lot of the, oh, laundromats, passive income, buy an old one and throw a new floor and some paint up on it and you're going to make millions.

I have a gripe with basically anything that's ever called passive income.

Yeah. I mean, I hate that word.

I'm still looking for passive income.

Yeah. I hate that. That's my least favorite word, I think, out there. Because nothing is passive. I mean, we have a GM and an AGM and still not passive.

Yeah.

You know? Yes. It makes our job a lot easier, but it's work regardless. Like you still need to make sure the operation is running smoothly and doing what you want.

Okay. So Fairfield, $1.1 million to open. What did the 5-year ramp look like? What was year 1, year 2, year 3, as far as net profit is concerned?

Yeah. So with Fairfield, we, we ramp pretty quickly, which is nice. So just for instance, for this store, After our grand open, second grand opening weekend, that first quarter we were open after that, we, uh, were at $100,000 in self-serve revenue.

Quarter, a month? A quarter.

Yeah.

Wow. Okay.

So, you know, $400,000 tracking run rate.

Yeah.

At the end of the 4th quarter of that year, we were at $155,000.

Wow.

So tracking for $620,000.

What did you forecast on day zero?

We performed better than what we forecasted.

And this is your 4th store, so you were probably pretty accurate with your forecast.

Yeah, we, we, we—

It wasn't just pie in the sky. No, no, no. conservative.

We, we projected this to be our best store.

Yeah.

So we weren't far off. But again, I think the double grand openings helped things ramp up even faster. But Fairfield was very similar, you know, ramped up pretty quickly. What you'll find is self-service matures at like year 2 or 3 for, for a laundromat. Because again, there's only so much pie in our 1, 2, 3-mile radius, and you kind of hit that at about year 2 or 3.

Yeah. What does a mature location look like? Like year 5, year 8? Like, do you still see growth?

Yeah. So you'll see For instance, this store, this November will be our 4th year. We did top line $1,025,000 last year and bottom line $420,000.

Wow.

You know, there's, there's a few things. New customers are still trickling in. Obviously commercial is growing. We raise prices like any business. There's that as well.

I would never drive by a laundromat and think that place makes a million bucks a year or that place, place profits $400,000 a year.

I know it blew my mind.

And they don't like most don't. Right. Yeah.

I mean, you're, yeah, you're, we're kind of at a different level than what, what's out there, but that's our goal going forward. Like we want million-dollar laundry, every, we want Laundry Spots to be million-dollar stores.

Yeah. What about this one told you it would be the best?

The demographics lined up. So that was one thing. Like we have data on 3 stores already. You can almost see the revenue demos that we look at. Like, okay, this is going to be a good one. But also just location, specific location in the building. You know, this layout, this rectangular shape is like ideal.

Yeah.

We don't want long skinny laundromats. You'll see a lot of those out there in shopping centers. Like this is perfect for a layout. Lots of space. Tons of parking. It's another thing.

What'd you spend to build this one? And then what are the numbers like today?

So this one, it's, it's a little unique because we built during COVID and it was a little over budget on what we spent. Still made a lot of sense for us. If I remember correctly, it was right around the $2 million, $2 million mark.

Okay.

A lot of supplies were higher because of COVID and all that stuff. Again, top line does $1.25 million.

What did it do the first year in profit and revenue?

I think We did mid-700s first year. Yeah. First year open.

All right. Give me, give me like the, the secrets of site selection.

Big thing we look at is like what laundromats are in an area. You know, if we see 3, 4, 5, you know, in a nice little area, we're like, okay, there's a laundromat market there for us. Yeah. We love to see laundromats. That's just been a successful formula for us.

How much research do you do at how busy those 3 or 4 laundromats are?

A lot.

You go hang out there.

So, yeah. So I'll just say I've, uh, got a lot of water readings in my day on competitors. Yeah. But yeah, we do a lot of research. Obviously, you know, we start by, okay, what's in the area? Google Reviews. We go there, spend a day there, do our laundry there.

Read the meter.

Yeah.

Check and see. Gallons divided by this.

Exactly. What's the pricing? We know these machines use this much water.

Okay.

We can kind of get a gauge on the revenue, take notes. What's good about it? What's bad about it? I mean, yeah, we definitely wanna know everything about our competitors before we go in there. And that's how we get a good gauge on, okay, we know what these stores are kind of doing. We know what the market is, but we also know we grow the market.

Yeah.

So even just relying on what we see there, we know we're gonna grow. Then, hey, Let's look at the demographics. Let's see where they match up. Let's see exactly where the demographic pockets are. So could we be a little closer than that block to who we really serve? Then let's try to do that. You know, a lot of people would be like, oh, there's a new apartment complex coming down the road for me. Like, could be perfect there. I'm like, probably not.

Yeah.

We don't want new.

No.

We want the apartment. We want the 1990s apartment. Yeah. You know, that probably has shared laundry in the basement and the owner doesn't take care of it at all. And these people need to go to a laundromat. Older homes, right? You know, older, smaller homes. If things break, they may not have money to fix them. You know, they come to our laundromat, they're like, well, this is a way better experience.

Yeah.

You know, I can get in and out quick and I'm never going to pay to fix my stuff or get new stuff.

Yeah.

I mean, COVID, our numbers went through the roof.

Yeah.

Because one, people are washing things more frequently because they're worried. Two, we have ozone. So ozone kills COVID. So people were like, people were like, we're washing everything in ozone.

People that had their own units were probably coming.

Yeah, exactly.

Yeah.

Our sales during COVID through the roof. Yeah. Even all these horrible times, you know, still like laundromats, gotta wash your clothes. People gotta wear clothes.

Yeah.

Until we figure out self-washing clothes or something, you know, like—

So recession resistant, certainly AI resistant, certainly automation resistant. I mean, they're building robots. There's several companies building robots that can fold laundry.

I'm talking to some of them.

Yeah.

Again, we're always on the front edge. Like, how can we make this better? Most are pretty far away from catching up to what we can do.

Especially at this scale.

Yeah.

It's one thing to have a, a robot in the home.

Exactly.

Yeah.

And if that does happen, guess who's gonna buy robots?

Sure.

Probably first.

Right. Us.

We're gonna figure out how to, how to get robots processing laundry faster, lower our costs.

Right.

You know, like it's not gonna put us outta business. It's gonna help us get more efficient.

I'm trying to think of just a macro event that could negatively affect this business, but if something negatively affected this business, we'd, we'd have bigger problems.

Yeah.

I mean, fish to fry.

You'd think COVID was the closest it because, oh, can't go in rooms together and all that. But thankfully we were an essential business, so we got to stay open.

And the positives outweighed the negatives of like the social distancing.

Exactly. The ozone. Yeah. I mean, people were telling people disinfect everything like, oh, hey, look, we have ozone. It disinfects everything. Perfect.

Now, how, I know you're going to swap out equipment and maintain it well, but if you didn't, how long does this stuff last? You spend a million bucks on this stuff.

Oh, this would, I mean, this stuff would last 20 years. You'll see equipment in stores that's 40 years old, still running.

And they're probably not maintaining it well either.

No, it's just It's just built to last. Like it's commercial. That's why they're expensive. Yeah. You know, it's, it takes a beating every day. We're open 7 days a week, 8 to 8. Like this equipment is running.

Yeah. Running. So we talked about secrets of site selection. What about the secrets of the grand opening? Because it seems like you guys are doing something different.

Yeah. So grand opening, usually we start 3 months out. We start to do like a coming soon. You know, we do mailers, we start getting in the chambers, building some buzz. We get in publications.

We do Door direct mail. Yep. Is that what you're doing? Yep. Yep.

Yep. We just mail out flyers, say grand opening coming soon. Here we held the VIP grand opening, you know, about a month out. Mm-hmm. That went great. So red carpet, red carpet. We had a guy playing guitar in the corner. We had open bar. Wow. Catered food, door prizes. So that was amazing.

What do you spend on that?

The VIP event? It wasn't, I mean, it wasn't bad. Couple thousand bucks. Few thousand. Yeah, a few thousand bucks. So we do that about a month out is when we start hitting grand opening, free laundry weekends coming. We have the, the weekends on there. Blast that out. 2 weeks, we do it again. Free laundry weekend, you know.

Only on the weekend.

Yep. Only on the weekend. Coming soon. You know, here are the dates. And then we get to the free laundry weekends and, you know, there's 20 people waiting outside our doors. Everybody is here.

Yeah.

Every employee we have, all the owners, you know, we're, we're here. We're getting Google reviews. That's another huge thing is like, how many 5-star reviews can we get as quickly as possible?

Why wouldn't you get a 5-star review? They're not paying.

Exactly. Easiest time to get a, to get a review. And so it's exhausting, but it's amazing. Again, I've cried with customers. Yeah. People who haven't been able to wash clothes for 6 months because they've had to buy food instead of wash their clothes.

Wow.

Yeah. And they come in here, they wash 6 months worth of clothes.

Yeah.

They're like, thank you so much. Like, I mean, there, there's a lot of great stories that come out.

And if they never come back, they never spend the time with you, you've done it good for them.

Exactly. It's a win-win. I, I, yeah, I helped them out a ton in their, in their eyes and, you know, super appreciative for it. So like, that's a cool part. Like, yeah, when we come into a community, we're not coming here to like rate 'em. We're not those type of people. We're giving them a better service cuz most of the laundromats they go to are crappy.

Yeah.

Who wants to go wash their clothes in a moldy, smelly wash Yeah. That's not a dignified experience. Yeah.

Well, you're not even charging more.

Yeah, exactly. Exactly.

You don't have to price gouge them.

That's what it's— I mean, we're not price gouging them. We're like, hey, we're here. We're giving you a better experience. You deserve it.

Yeah.

You don't need some subhuman experience just because you don't have a bunch of money.

Yeah.

We give back to the communities a lot. We, uh, we donate a lot. We do free laundry for shelters and, you know, all these things. We try to donate monetarily to local charities and things. So like, it's important. Like, we want to give back. We don't just want to, yeah, gouge a community, you know. And we want to be viewed as like, man, Laundry Spot is our— they're here for us, not they came in town and just, you know, want to get all of our money. I mean, we pay our employees well. They're all in the community. So yeah, that's a, that's a big focus.

What are your employee costs? Like, what do you pay for like the lowest level up to a GM?

So labor costs are actually our biggest cost.

Yeah.

As a, as a chunk of revenue, they're around 20% of our revenue overall.

We started about 15 Wow. For the lowest level?

The lowest level. Yeah. Brand new attendant coming in.

Just someone helping people.

Yeah. Cleaning, helping, folding. So anyone, you know, can come apply, get in at that rate. We have attendants slash managers who we give a little bit more responsibility, making up to $22 an hour. We have good employee loyalty.

Yeah.

We have some employees at some of the older stores that have been there 15 years.

Wow.

Our GM and AGM have both been here 8 years and 5 years. Again, we pay well, we treat well. That's important to us, you know, customers and employees.

How many competitors did you say have gone out of business?

11.

I'd be curious to see the net job gain from all that because they probably weren't employing very many people at all.

Mostly not. Mostly they weren't employing any.

Let's say it's a net loss of 7 employees. Your 4 locations open and each one has on average how many?

10, 12 part-time employees each. Each. Yeah.

Yeah. So you're bringing in 40, 50 jobs.

Yeah, 40, 50 part-time jobs.

To the area that lost 7 jobs because of you.

Maybe. Probably not even that many.

Right. It's a net job gain to a large degree.

For sure. Yeah.

Yeah.

And we pay them well too. It's not like we pay them $7.50, which is minimum wage in Ohio.

Right. Wow. Okay. Now let's talk utilities, water and electric. What does that look like?

They're a little— utilities overall are a little under 10%. So like right around 9.5%. And the reason is very efficient equipment on all fronts. Water, our equipment will weigh the load, put the exact amount of water, puts the exact amount of detergent as well based on that weight. And that's another benefit to customers when they come in here and they want to use their own soap. They glug, glug.

Yeah.

They think more soap equals cleaner, which that is incorrect. Soap's job is to bind to the dirt and then get pulled out in the rinse cycle. Well, if you have too much soap, it holds the dirt and it sticks to the clothes, therefore not getting all the dirt and the soap out.

Opposite effect.

Opposite effect. So most people don't understand that.

From you, from a cost perspective, if you want their clothes to be cleaner, you spend less money.

Exactly. And we tell them, hey, if you use our equipment with dosing, you might even save money depending on how much soap you usually use.

Yeah.

So it's a convenience factor and possibly even a savings factor for you.

Yeah.

Yeah. I mean, I've I've seen people pour half a jug of detergent in there. I'm like, you, you do not need to do that. You'll see all, all it is is suds. Yeah. And they'll come to us and be like, it didn't rinse all the suds out.

I'm like, yes, there's too many suds.

Yeah, there's too many. So you put way too much. Do you see that thing there that says a tiny little bit of, yeah, of soap? So yeah, again, better experience. Hopefully we save them some cost.

Mm-hmm. Insurance, I'm sure is minimal.

Insurance, not bad. No, not, I mean, negligible on, on the grand scheme of things.

What other costs are there? Property taxes?

Not bad.

Yeah, minimal. Anything else that we're missing?

Maintenance for pans and pans.

But they're newer machines, so.

Exactly.

Yeah.

Most of our, you know, our oldest machines right now are at the first store when we first redid it. They're 8 years old. So those are our oldest machines.

Yeah.

At any store right now.

Yeah. What does the future look like for you?

Yeah. So we have—

What does growth look like?

Yeah. The franchise is live, started in January. We've sold 36 units.

Wow.

Across the US so far.

36 territories?

Yeah. 36 territories.

Across how many markets?

There's some in Florida, uh, some more in Ohio, Kentucky, Alabama. That's why, what city? I like an element of surprise when we come to a market. So I'm not gonna tell you what city, but that will be a Laundry Spot. We'll be coming to Alabama soon. Indianapolis, talking to people, you know, all over the place.

Wow. 36 units in 8 months. That's incredible. How many laundromats are, are there in the US?

So the, the, the number that everybody likes to say is 30,000.

Okay.

But that's like what you can find.

Yeah.

A lot of laundromats are out there and don't have a Google Business page.

There's gonna be more.

Don't have websites. Yeah. So most people think there's like 40,000. I mean, that's still a huge market.

So, I mean, there could be well over 1,000 laundry spots.

Yeah.

At maturity.

Like, that would be our goal.

Yeah.

You know.

Do you plan to open more corporate stores?

As of right now, we're not looking just because, again, we want to make sure our franchisees are being taken care of. Don't know what the future holds, you know, again, but this has been like our main focus the last year or two.

Yeah. Well, if people want to learn more, where should they go?

Yeah, just go to our website. I, yeah, you have our link, you know, throw it in the comments. Uh, just reach out. I think this video was very educational and this is the first video or anything public that we've given someone A full behind-the-scenes tour.

So right here.

So you got it, man.

Okay. So thank you, Tyler.

Yeah, absolutely. Thank you.

Hey guys, if you're still listening to this, it's probably because you haven't had a chance to take your AirPods out. You're still mowing the lawn. You're still driving, what have you. If you're still here with me, I would really, really love and appreciate a 5-star review on Spotify, Apple, or wherever you get your podcasts. It would mean a lot if you want to go the extra mile, share this episode with a friend that might have an interest in starting a business. It would mean a ton. Hope you have the best day of your life today.