This Laundromat Makes $3 Million?

He went from $0 to a laundromat that does 3 million in revenue in one year. Yep, he did. So I gave him 100k to grow a laundry empire, or I guess a laundry mat rocket ship. Introducing. Drumroll, please. The Fold Laundry. They're projected to bring in a cool $3 million. And on their path to what Mark CEO says will be 50 million. We're gonna break down their business so you can see how they did it and how we can too. Who knew folding clothes, that stuff your mom didn't want you to leave on the ground? It's pretty profitable. So profitable, in fact, check it out. They got like 10 vans over here, all to deliver this laundry that they're throwing around inside of these washing machines at the fold. Today, we're going to talk about money, light it up and have some fun. We're dancing the morning sun wild. When you think about it, like, you used to have an actually cool job, right? You used to do, like, kayaks and fishing gear. What a cabin. What made you want to own a laundromat?

We thought folding dirty laundry would be more fun. We were young professionals. The service didn't exist. And this was around the same time that Uber was coming out. All these delivered to you services.

Yeah.

That didn't exist for laundry. It was really novel at the time.

Yeah.

And we were kind of one of the first movers in the industry. And now it's proven to be this established revenue stream for laundromats.

Shake for me, baby Shake up for me, baby Shake for me, baby, baby, baby. Let's. Let's break this down a little bit. How many pounds of laundry you guys do? It's like an elephant. How many times?

Yeah, we do six to ten thousand pounds a night.

All of these are running, basically. What's the percentage you guys use every night?

At night, we use 100% of the machines. The machines are spinning 24.

7. And how many of these bad boys do you guys have?

We have about 164 machines total.

What does one of these cost you?

They're expensive. That's a used car right there. And they're getting more expensive. An average washer will cost between 3 and $10,000.

$3,000. But I guess the cool part is that you can finance them.

You can finance it. They last 10 to 15 years.

Yes.

You beat the hell out of them. Like us. Ours are probably gonna last closer to 80,000.

Eight to ten. Okay. Eight to ten years. Three to ten K. So it's like a Honda.

There's Laundromat blenders. That'll go up to 10. But yeah, traditional SBA works. You can, you can find us at. Well for five years.

So these are clean or dirty?

These are clean.

These are clean. All right. Should we see what's in here?

Yeah, let's pull some laundry. We got a lot to do.

Okay. Hold some laundry, huh? There's so many things people don't like about laundromat, right? It's like, you know, they break all the time. They're too expensive right now. So let's break into some objections. Let's start with first. Doesn't everybody have one of these bad boys at home? Why does anybody need these?

People come to Laundromat to either get it done for them or to use the high capacity machines. These are really well cared for. It's big, bright, clean and safe for the four keywords. That's laundromat marketing.

And do you think that market's going away of people coming into the Laundromat to do it themselves?

I think if you looked at it as a whole, it might be shrinking. But what's growing faster than the self service is shrinking is the full service. So when I see laundromats 10 years from now, it's not the per car wash comparison. Like it's not the car wash at the gas station. It's all grungy that you run it through yourself. It's the Mr. Car Wash where there's 60 employees in uniform doing it for you. So I think laundromats are growing bigger and they're trending towards more full service.

Mr. Car Wash went public to the tune of. I don't even remember. Was it a couple buildings?

I don't know. It was massive. And they're popping up everywhere.

Massive. Yeah. We'll put the numbers up here. This is a business that multiple private equity firms have owned. All of these private equity firms independently made money on both the sale of it and then some sort of dividend or distribution. And they took this old car wash model that used to be the way to like these nice ones where as you mentioned, they're tucked, you know, shirts are tucked in whole, everything stacked, same experience every single time. Almost like a franchise or a McDonald's or whatever. And you guys think that something similar is going to happen with laundromats.

Boring business. Layer on toe technology, layer on full service. It's exactly the Mr.

Car Wash. Yeah. Mark, you gonna make me do all this folding by myself? This is how CEOs work. Not something I thought I'd be doing as a private equity investor, but you know what? When all the other investors say that they don't do value add, I just want to know, are they helping you fold underwear? Because I think the answer is no. Here we go. Full service. This is actually full service. And do you get really particular, like. Like how. Of course.

SOP on how to fold everything. So part of your training. It's actually a digital sop so we send you the chapter before the first day of class, and you have to learn how to fold them for you.

No way. So am I failing?

Every pair of underwear, every bra, every towel has an exact way same way.

Okay, wait. We should probably go see how the pros are doing it, right? Okay. Como es el proceso? How does this work? She was basically saying that the process is all about showing the same love that you would for your own clothes so that the mamas can come and take care of their kids and show them some love. So at your house, is it this clean? I. Dude, it is not this clean in my house. These ladies over here who are all folding as we're talking, like, they probably know the people that they're folding laundry on better than anything else. Like, this is an important number for you guys. This is super important number of sex toys you found in laundry. Overall.

If Vegas had a line on it over. Under 20, I'd take the over. Yeah, you learn a lot about. You learn a lot about people folding their laundry. We've seen it all. You know, we've seen. We see the stains in the sheets. We see the holes in the underwear. We see everything you accidentally leave in your pockets and we have to take out. So luckily, standard operating procedures for all of it. But yeah, you definitely learn a lot about people doing the dirty work.

Hysterical. So I guess you get clean clothes and maybe clean sex toys on accident. Full service is what we're delivering here. Yeah.

The future of laundromats. Laundromat, folks, it probably looks like for you, it probably looks like nothing. This is what laundromat owners love. Massive exhaust pipes, good construction and space. So every. Every square foot in here is usable for us. This is an on deck circle for our production line is that warehousers move it from point A to point B, and this is point C. So every square foot is utilized.

So most people buy their from Costco. Right, right. And you guys, what do you do? How does this work?

This is we bulk. We've got wholesale suppliers. We pump our own gallons. So even, you know, top Tier laundromat owners doing pickup and delivery will still go pay that disgusting Procter and Gamble markup. If you're looking at cost centers for a laundromat or wash and fold service, soap and labor are big. So we were able to get in wholesale with a soap distributor and pump our own soap. You want to pump some soap?

Yeah, I want to pump some soap.

When you start your shift, pump your gallon. And this is how you escape the 600% markup. The Procter and Gamble license.

600%. Look at this. Dirty businesses. All right, Samuel, we have to be done. There's no world in which I can pump any more of this last drop. I'm an investor here. We can't be wasting soap. Pretty good.

So a typical laundromat owner spends a bulk of their time just moving quarters to and from machines and taking cash to the bank.

Right.

Save you a ton of time if you put a card system in. 90% of our laundromat transactions are through credit card. Customer comes in, they will swipe their credit card to add balance. And they'll get an internal economy laundry card which they can use to start all the machines.

Do you have to empty this every day?

Our managers empty it every second or third day to move it to the safe to.

Okay, how do we get it out so we don't break it?

So we're going to press this yellow button. We're going to pull the canister out.

Woo. Look at this. And then. And then we just take it out like this.

Exactly.

Okay. This is. Oh, no.

Need.

My house. My playing. My car. Oh, no. The money on my mind. Oh, no. The money got my mind. So now we're going into the delivery side of the house, which is basically where you do the most stuff. And that's how you get to that fancy $3 million in revenue number this year. All right, so we come into this warehouse. I like it.

How many laundromats have this much space?

So this is like full of what.

Clean laundry that's going to get delivered today.

Pretty heavy.

It is about rate price.

Okay, $50. Another outlet. 50 bucks. 50 bucks. All right. So you basically get it delivered in through the front door and then you put it into. How the does it go? You tell me. The process.

Dirty laundry comes in, clean laundry goes out. So we've got different racking locations. So basically this is all so a driver doesn't have to run around and look for Sally J's order. It's all warehoused through our software to exactly the Pick location that they need to go to.

So delivery driver comes in, grabs the bags. 50 bags each, about 250 stops a day.

Yeah. So seven to 10 drivers, seven to 10 vans. We're all over town, 40 miles in every direction. It's the nice thing about the delivery component is that most laundromats are constrained by a 3 to 5 mile radius for all their customers. And we're going out to every neighborhood and we can go grab customers in hired socioeconomic neighborhoods and bring them back to us.

You're really supply chain minded. Which is one of the things I think is so cool is basically you guys think about laundromats like people think about an Amazon warehouse. You know, from point A to point B, there are people that have only one job, which is wild. One of the jobs may be pushing this like I am into Samuel. Samuel, watch out. And pushing this into the warehouse full of bags. And then it might be, what else? What are the other ones that they do over there?

This is a warehouse. This is logistics business. Yeah, it's all assembly line based. We have inbound loader loads dirty laundry into washing machines. Outbound loader loads clean laundry into dryers from the washing machine. And the folders fold. And we've got positions for warehousing too. They're just moving bags to where they need to be in the warehouse. Everybody has a job and one job only. And it's assembly line. We run 22 hours a day.

Wild. 22 hours a day. Super cool, isn't it? Who thought laundromat owners weren't that smart? Get some brains in here.

Passive income, right? Super passive.

Yeah. This will kind of be like in the future. Your thesis is that as common as it is to get pizza delivered, it'll be like, have somebody else do your laundry. Yeah, I could totally see that because my husband and I were actually staying today. We did laundry last night and we were like, time to do laundry. 45 minutes to an hour. Time to fold laundry. Four to six business days, like located on my bed or in the closet or wherever. And so yeah, it's kind of embarrassing. And there's only two of us. I couldn't imagine with kids and like little monsters running around getting dirty all the time. Right. That makes perfect sense to me.

It doesn't need to be a permanent lifestyle change. Most of our customers, customers use it as a get out of jail free card, not a weekly subscription. So life comes up, you're traveling, kids are busy, you fell behind. It's a get out of jail free Card. It's a one time service.

Yeah.

It doesn't have to be mixed. It's never going to replace your washer and dryer. Yeah, but it's a.

It's.

It's like ordering pizza. All right. When you don't want to cook, you have an easy get out of jail free card to take care of the chore for you.

I love that. Mario, you told me that you had a ridiculous story about something you picked up yesterday. What was the deal?

We pick up trash bags full of clothes when they're first time customers. When we got to the location, the gentleman left a trash bag plus an extra trash bag, and we brought one of the bags back in with dirty diapers.

Oh, no.

Crazy storyline.

Did you have to wash them?

No, no, no, no.

Actually, the boss didn't make you wash them.

We got back to the shop and everyone was laughing.

What'd you do before this?

So I've sold cars for about 12, 14 years. And then I got into the delivery business just because I kind of wanted time to myself and I was tired of chasing the sale. I came across the fold. One of the owners that I met, I could just relate with him. You know, they come from a sport background, and then the way they're building the business, I was intrigued by it. So at that point, I. I committed.

Yeah. Nice to meet you. I think it's about time to deliver some laundry. What do you guys think? Let's. Let's go show up at somebody's house in Austin and, yeah, give him some laundry bags. Now, I'm not gonna actually drive it because I think that part's kind of illegal. But I'm gonna get in and then our main man Mario's actually gonna drive me there.

You guys ready? By.

Delivery. Special delivery. The fold. Yeah. Logos out. Okay. Excuse me. Pardon me. Delivery.

Take a picture, get delivered.

Good to go.

That's a wrap under Max, baby. All right, until next time. Do you know why I invest in small businesses? Well, look what's happening here in this world. There's no politics, no tech workers complaining about how their sleeping pod isn't warm enough, no crying circles. These are normal, everyday humans just like you and me. And I want to see them win. I want our operator to have a better life. The people needing to use this place to do it safely and with a little love thrown in. If it's true that small businesses are the lifeblood of this country of ours, if we buy them and invest in them and support them, it's just one less Walmart. On the street, and that is a story I can get behind.