Are We Seeing the Rise of the Large-Format Mega-Laundry?
Dave Menz is admittedly a bit consumed with the laundromat business.
“Since 2010, I’ve been obsessively studying and researching the industry, and networking with those within it,” explained Menz, who added that the enormous new facility he’s currently building on the east side of Cincinnati is simply a natural evolution for him and his laundry chain. “At Queen City Laundry, we always want to be on the cutting edge. We want to teach and partner with the best. As I’ve evolved from a successful unattended operator into a full-service laundry center owner, the economies of scale and improved operations have been enormous. Now that some major players within the tech space have recognized the opportunities in the laundromat industry, I think the sky is the limit, and I’m honored to be a part of it.”
Menz’s new facility will be a 9,000-square-foot laundry center located on a 1.7-acre commercial parcel with an adjacent four-bay car wash. The space will be split into a 6,000-square-foot retail laundromat and a 3,000-square-foot employee area for processing, management and storage.
The new Queen City Laundry will offer customers a variety of payment options, from dollar coins and loyalty cards to credit/debit cards and phone pay. In addition, the store’s amenities will include a children’s play area, granite counters, an ozone sanitization system, high-speed Wi-Fi, big-screen televisions, comfortable seating, 12-foot aisles, ample folding space, high-extract washers, excess parking, drop-off laundry and drycleaning services, and pickup and delivery.
“Having purchased the real estate in this great location, we believe we already had the business model to utilize the space,” Menz noted.
In New Jersey, Kevin Adkins’ 8,200-square-foot Dirty Laundry laundromat boasts 84 washers, ranging from 20- to 90-pound capacities, complemented by 94 dryer pockets.
“We pivoted to larger store sizes to remain competitive and to adapt to evolving customer trends,” Adkins said. “We give high priority to customer satisfaction, and it has never led us down a wrong path. We believe strongly that ‘the customer is always right,’ and that mantra has resulted in increased revenues and profit margins at our larger stores.”
Dirty Laundry has separated itself from other local laundries with convenient and highly desirable locations in apartment-dense, heavily trafficked neighborhoods, according to Adkins.
“We’re highly visible and easily accessible from a main artery of the cities we do business in, with ample parking and square footage to grow our customer base,” he explained. “Our stores are outfitted with upscale amenities – such as laptop tables and Wi-Fi access; charging stations; canopied, outdoor seating; spacious layouts for social distancing; video gaming; a wide variety of well-stocked food, beverage and snack vending options, as well as state-of-the-art laundry equipment with all the latest bells and whistles.”
To sustain an ongoing customer base, maintain its competitive advantage and continually offer cutting-edge machinery and customer experiences, Adkins pointed out that the chain updates its laundry equipment every seven to 10 years.
Dirty Laundry’s second-largest store is “only” 6,500 square feet, yet it still features an impressive equipment mix of 162 machines, including 76 washers.
For Tom Benson, who owns World’s Largest Laundromat in the Chicago suburb of Berwyn, the decision to “go big” had been made for him.
“The store was this size when I bought it,” he admitted. “However, I would only have considered buying a laundromat this size. The fact that it was, legitimately, called World’s Largest was one of the reason’s I bought it in the first place.”
The more than 13,000-square-foot laundry features 158 washers and 140 dryer pockets. In addition, the store offers its customers free doughnuts every morning, free coffee all day long and, prior to the pandemic, was ordering 30 pizzas every Wednesday night for its mid-week evening customers.
“A machine out of order is barely noticeable,” Benson said. “The size of our bilingual staff results in flexibility and very few shifts not being completely covered. There’s also plenty of parking here, with more than 100 spots within a half block of one of our five entrances. There’s plenty of room to have a multiple of every size of machine possible, and room for customers to feel some sense of privacy, too. It’s easy for a customer to find four or five washers right next to each other.
“We also have a large vending area with booths and a spacious children’s area,” Benson said. “We have a large and growing wash-dry-fold business. We sell soap and anything else related to washing clothes. And we even offer a delivery service for customers who are confined to their homes.”
The 24-hour laundromat employs 24 attendants and two mechanics, which serve more than 6,000 customers every week.
Not to be outdone, Navil Manzur owns and operates Indyland II, an 18,000-square-foot laundry business in Indianapolis.
Featuring a total of 74 washers and 79 dryer pockets, the store – a former bowling alley – maintains a relaxed, wide open atmosphere where every customer has his or her own space to tackle the week’s laundry. In addition, the laundromat includes eight big-screen televisions and a number of pool tables and foosball tables scattered throughout the store. In fact, it’s not unheard of for some area residents to stop in just to shoot a few games of pool.
The store’s comfortable, spacious environment recently came in very handy, as Indyland II served as the host for the LaundryCares Foundation’s first in-person Free Laundry Day since the beginning of the COVID-19 pandemic.
“If there is a market for it, investors should go for a large laundromat,” Manzur suggested. “Laundry customers definitely prefer larger stores. There’s no waiting, and they don’t bump into each other while doing their laundry. If you have the customers, make it as big as you can.”
Trending Up
The trend toward larger laundromats across the country is following the pattern established years ago by major retailers, according to Ted Ristaino, chief operation officer for Yankee Equipment Systems in Barrington, N.H.
“Whether it’s books, office supplies, auto parts, hardware, wine, or other products and services, many segments have ‘gone big,’” noted Ristaino, whose company is currently building a mega-laundry in the New England market. “The new retail environment of more choices in a store is one driver of this trend. Another is the feeling that a given market is underserved with the current offerings of self-service laundries.
“Customers are attracted to the stores because of the perceived better selection of products and the ability to find what they need,” he continued. “In the self-service laundry segment, this translates into the availability of many more machines and more sizes of machines to process one’s laundry faster. As long as the stores are well-staffed and well-maintained, the trend promotes a positive image for the industry. Large stores put the laundromat industry in the same category as Home Depot, Best Buy, Barnes & Noble, Total Wine and so on, as an industry that is growing and healthy.”
“We live in a microwave society,” Adkins added. “People don’t want to wait in line for machines. They don’t want to spend hours upon hours in a laundromat. The larger laundromats are addressing the demand for faster service by providing more machinery with a good mix of machine sizes to accommodate varying load sizes for each family’s needs. Adapting to customer demand is good business. There’s room for both large and small stores in this industry, but survival is ultimately determined by current consumer preferences.”
Menz believes that, in large and medium-sized markets, the larger laundromat model will continue to be the trend, eventually resulting in less total stores across the industry.
“In the smaller markets, I think there likely will always be a need for smaller, self-service laundromats,” he said. “In my opinion, as we in the industry share information with each other, there’s more knowledge – and with better knowledge comes better operators and stronger operations. Through improved operations, additional revenue will be able to support added layers of management – and, capitalizing on excess capacity and a full-service ‘laundry center’ type of business model, owners will offer a higher level of service than a small-format laundromat can compete with. By this I mean that they will always offer a self-service product, but will also generate a good portion of their revenue with drop-off laundry and drycleaning, as well as pickup-and-delivery services.”
Benson believes the trend toward bigger and bigger laundromats is irreversible.
“Large laundromats offer more services, more flexibility, more staff, and are usually in more centralized and visible locations,” he stated. “More customers equal more referrals. In every area of the U.S. economy, bigger is better.
“Look at restaurants – small restaurants of 2,000 square feet or less are typically considered to be less desirable, while larger restaurants that are 10,000 square feet and larger are more popular. If you’re deciding on the options in downtown Chicago for dinner, that discussion will center around mainly large restaurants, not small ones.
For Speed Queen’s Dan Bowe, the trend toward larger stores is being driven by two factors.
“There’s an increased emphasis on large-capacity machines, with 60-, 80-, and 100-pound washer-extractors,” said Bowe, general manager of North America franchising and retail operations for Speed Queen Laundromats. “These sizes are the most popular among customers seeking to get in and out fast. Secondly, the customer experience is ultra-important in today’s laundries. That means utilizing more open space – customers appreciate being spaced out.
“However, it’s important to note that while larger square footage stores are popular, the footprint is still driven by the market and demographics – bigger is not always better. Good or bad for the industry always comes down to operations. Is the owner committed to delivering a great experience and a clean store? Big store or small, if owners aren’t committed and their staff members engaged, both sizes of laundromats could contribute negatively to our industry.”
What to Consider
What key factors must an owner consider before even attempting to build and run a so-called “mega-laundry?”
Like any new store, the first consideration needs to be people. Are there enough potential customers needing a laundromat in the chosen market to support a “mega-laundry?”
“Obviously, with more than 100 pieces of equipment, the demographic reach will exceed that of a 1,500- to 2,000-square-foot store, for example,” Ristaino said.
“A key factor for building or not building a mega-laundromat is location,” Manzur said. “If there is no market for it, a mega-store isn’t going to bring in enough customers. You need to study the area very closely.”
The next consideration are utilities. A “mega-laundry” will require volumes of natural gas and water, as well as sewer capabilities, far exceeding those of smaller stores. Is the necessary volume of these needed utilities available?
A third consideration is capital. Clearly, mega-stores are capital-intensive. A large infusion of cash is required to build and operate such laundromats.
“Bigger is not necessarily better,” explained Bowe, who’s company recently opened a 12,250-square-foot franchised location with 256 washers and dryers in Chicago. “Size of the laundromat always needs to be a market- and demographics-driven decision. Owners need to be grounded in the fact that larger stores will increase staffing requirements. I also would recommend they invest in a payment system, as dealing with coins in these larger store environments significantly increases management needs – more cash creates more safety issues and opportunities for theft.”
“Location, location, location,” Adkins stressed. “Traffic count, convenience, ease of access, high visibility, high walk scores, a healthy mix of low-income renters and middle-income earners, large or growing ethnic and immigrant populations, destination attractions, and sustainability are all attributable to the most important factor – which, again, is location.”
For Menz, the focus needs to be on five factors:
- Education
- Location
- Demographics
- Leadership ability
- Business acumen
“All five of those must be top of mind,” he stated. “As entrepreneurs, we can do and learn anything, if we want it bad enough. However, the status quo of collecting quarters and paper processes aren’t going to get it done. The old saying – ‘if you keep doing what you’ve always done, then you’ll keep getting what you’ve always gotten’ – is not true. We must grow and evolve, or the industry will pass us by. If you have the will, the information is now available and out there in the industry to show you how to succeed with a large-scale operation.”
Benson was to the point: “If you can’t afford it, don’t build it. If the demographics don’t include enough multiple rental units, don’t build it. If you can’t walk and chew gum at the same time, don’t build it.”
Why So Large?
What are the main advantages of building and operating ever larger and larger laundromats?
The first one is product variety and quantity, Ristaino said.
“While smaller stores may offer the same types of machines, they obviously don’t have the same number of them,” he noted. “For example, a smaller store may have two 80-pound washers in its mix as their ‘giant washers,’ while a mega-store may have 10 80-pounders and five 100-pounders.”
Next, a mega-laundry will have tremendous curb appeal.
“Most mega-stores are free-standing buildings, often on the sites of former retail operations,” Ristaino pointed out. “So, lighting, signage, parking and so on will make the laundromat stand out from the smaller stores located in strip centers.”
Lastly, since a large store has such a vast amount of equipment, it can offer a wider array of services – from traditional wash-dry-fold to pickup and delivery, valet service for hotels and other accommodations, without impacting machine access for their self-service customers.
“Customer satisfaction, more turns, greater capacity and efficiency are some of the key advantages,” Adkins stated. “Bigger stores allow for spacious layouts for social distancing and customer comfort, especially families with small children present – as well as a marked reduction in overall time spent doing laundry or waiting for machines to free up.”
According to Menz, the primary advantages of building large are economies of scale in operations, such as staffing and layers of on-site management, as well as modernized layouts that allow for proper throughput.
“Larger stores help eliminate that empty trip for customers arriving to find no machines available,” Bowe pointed out. “They create a better customer experience – more space to move around, which is particularly important during the social distancing of the current pandemic. Large stores give the owner greater flexibility to offer more large-capacity machines to complement single-load units. Additional machines also ensure capacity for wash-dry-fold without impacting a laundry’s self-service business.”
How Big is ‘Too Big?’
The trend toward larger laundries begs the question – where does it stop? What’s the limit to how large a laundromat can get?
“I’m sure there’s a limit, but it’d need to be based on a proper market analysis,” Menz said. “I’d say, in most markets, a store like the one I’m building in the 9,000-square-foot range is probably near the top.”
Adkins put it this way:
“If a significant number of your machines are not turning regularly, you’re too big,” he said. “There’s a delicate balance between machine availability and busy-ness. Busy-ness is the goal, but availability is also important, because we do not want customers leaving our store with their dirty laundry. The perfect or proper balance between availability and busy-ness is your size limit – your sweet spot. An increased number of machines should boost turn times and profits accordingly. If turn times are not increasing, you’re too big.”
It’s all a question of demographics and what the market will support, as well as the technology to manage the business, according to Bowe.
“If you’re collecting quarters in these ‘super stores,’ your management workload is going to be significantly different than if you’re a cashless, app-based payment store,” he said.
“I don’t know what is ‘too big’ for a laundromat,” Ristaino said. “I suppose there’s a limit. After all, trees only grow so high. Having been in this industry for more than 40 years, I remember building our first 4,000-square-foot laundromats and thinking they were huge. Then, we built 6,000-square-foot stores, wondering how successful they would be – and they were very successful. At the end of the day, the customers will determine what, if anything, is ‘too big.’”
