Industry Experts Share the Leading Characteristics of a Winning Laundry Location
“Location, location, location.”
You’ve heard it hundreds of times. It’s the key to retail success. It’s your magic wand to laundromat riches. Just find that ideal location.
But what makes a “perfect location” so perfect? What actually goes into the site selection process? And, perhaps more importantly, what are the key characteristics of a dream laundromat location?
This month, we posed just those questions to some people whose livelihoods revolve around having the right answers:
Russ Arbuckle
Wholesale Commercial Laundry Equipment SE
Southside, Ala.
When viewing potential locations, the demographics are key. You often hear, “location, location, location,” but a location is worthless if the demographics don’t provide enough potential customers for a successful laundromat.
A large number of apartments doesn’t always translate into weekly, self-service customers, which are the backbone of the business for most owners. If there are hundreds of apartment units, but they are higher end and filled with young, single professionals, the self-service portion of the business will not fare well.
Of course, a location like that can be a great site for drop-off wash-dry-fold and/or pickup and delivery. However, if that’s the case, you don’t need to buildout with a lot of equipment and a huge footprint to run such an operation.
What I look for in locations are ease of ingress and egress, and low speed limits on the road customers use to get to the store. Also, the road preferably will have a turn lane to make it easy for customers to get to the laundromat.
Before Google, visibility also was an absolute must. However, now that customers can find your location through Google, the necessity for extremely high visibility has been diminished – as long as the location isn’t buried down a bunch of dark, winding alleyways, customers will find you.
By contrast, parking will always be a huge “must have.” Unless you’re in a densely populated urban area where walk-up traffic is going to drive most of your business, ample parking availability is needed. You can have the greatest demographics, with thousands of customers in your market – but, if they can’t find a place to park, they’ll go to a competitor that has parking.
Having additional “destination businesses” next to or nearby a laundry location is a great attribute. Although laundromats are themselves destination businesses, it certainly helps to have other anchor stores that customers will utilize when they come to do their laundry. This also can be a selling point when negotiating a lease, as you would be one of the few tenants where customers will spend at least in hour at your facility and can be spending money in your store while also spending money in the other tenants’ businesses.
The footprint and design of the space is another factor in determining whether a location is a winner. You can have all of the above characteristics, but if the shape and size of the building isn’t conducive to a laundromat, it could mean problems. For example, you need enough space behind the dryers; wide bulkheads for good maintenance; multiple entrances that don’t interfere with the traffic flow inside the store; and convenient areas for vending, changers, card-value stations, folding and seating.
Also, it helps to have a footprint that enables you to focus on the smooth flow of traffic within the store, especially on its busiest days.
Yvette Morton Williams
Wash & Spin Coin Laundry
Atlanta
A dream location depends on many factors. The ones I’ve listed here, if available, will improve your chances of success:
Densely populated area. No matter how great of a laundromat you build, there’s only so much revenue to be generated in sparsely populated areas. A smaller, older laundromat in the middle of a lot of people will likely do better than most larger, modern facilities in rural areas.
Close proximity to a high-traffic business with similar target demographics. Think Dollar Tree. I love when customers find my stores because they were going somewhere unrelated to the laundromat. If they can knock out two birds with one stone, they may be more likely to become a regular laundry customer.
Abundant parking. If they can’t park, they’ll simply keep driving. Who wants to lug all of their laundry a great distance?
A large space (4,000 square feet or greater) with low rent (assuming the space will be leased). A large space will accommodate more customers. Today’s laundromats are larger with higher capacity equipment than those of yesteryear. If you have strong negotiating skills and can lock down a great long-term lease, you will have the stability to grow a profitable business.
Also, a larger location will permit more machines without compromising aisle width. The ability to spread out and easily navigate a space will draw more customers than an over-equipped, ill-designed competitor.
And keeping more of your profits, versus paying them to a landlord, may make the difference between the levels of continued reinvestment/time between retooling and/or time needed to save to open another location.
Little competition within close proximity. Depending on the demographics, some locations will support multiple, high-revenue laundromats close together. However, in an ideal world, there would not be many laundromats close to your location.
Carol Dang
Elite Business Investments
Valley Village, Calif.
Demographics. It’s important to know where your customers are, how many are renters and the income levels, as well as how average household size.
Visibility and building. It’s critical to be able to see the site – that it’s not hidden by another building, large trees, etc. With an existing building, I would want a lot of glass frontage. There also should be plenty of parking, and the ability for the parking lot to be well-lit.
Ingress and egress. It should be easy to get in and out of the location. If there are large islands in the road, one-way directional signals and so on, those will impede your customers from easily getting into the parking lot, and it can deter them from coming in.
Signage. If it’s an existing location, signage is key – and it should be highly visible from all directions. In a new buildout, you will want to make sure that you’re able to install a pole sign, as well as signage above the actual laundromat.
Surrounding businesses. It’s crucial to know what types of businesses are around the site. I wouldn’t want to any bars or liquor stores adjacent to the site, as they can attract the wrong crowd and may make some of your customers feel uncomfortable or unsafe. It’s also important to understand the competition in the surrounding area – what do their stores look like, what are their vend prices, and are they busy?
Ted Ristaino
Yankee Equipment Systems
Barrington, N.H.
Working-class, apartment-dwelling families. A successful laundromat begins with a healthy number of families who live in a multi-housing setting in your desired location. The household income should indicate that some family members are gainfully employed. The family income level would ideally be in the middle- to lower-middle-class category. This information is available through a demographic report.
Such reports begin by designating the city and street address of the location, in addition to how many families and people live in that market area. For instance, a densely populated urban area would draw from a quarter-mile to one-and-a-half miles from the laundromats, a suburban location may draw from one to three miles, and a rural location could draw from three to 10 miles away. The demographic report will show the number of families, the various levels of household income and the average family size for each distance.
A store needs families who are getting their clothes dirty at work, at school, at a playground, etc. How many families are needed depends on the size of the store plan. And keep in mind that all of the people in a given location are already washing their clothes somewhere – so the challenge will be to convert them your laundry business.
Competition. Not all stores will compete at the same level, because not all stores are in the same condition. A deep dive into each one is important.
How many stores are there? How old are they? How many pieces of equipment are in each one? What sizes of equipment are offered? Are the stores attended or unattended? Are the stores clean? Are the restrooms clean? What services do they offer? How busy are they? How many machines are out of order?
These are a few of the questions to be answered. In all likelihood there will be at least one main competitor with a modern, well-run laundry and a few fair to poor stores. It also will be beneficial to find out if anyone else is building or planning to build a store nearby.
In addition, if there are large apartment complexes nearby, they likely will have laundry rooms in them. Many will offer only small washers and dryers, but more are offering larger machines as well these days. Consider them as competition, too.
Legal, utilities and structure. A few more factors to review early in the process are items that may be taken for granted but should be vetted. First, clarify that the location is zoned properly for a laundromat. Next, ask about any water/sewer impact fees that may apply to new construction. These fees can be quite steep. Also, investigate what size sign can be constructed and where can it be displayed. Lastly, since a laundromat is a heavy consumer of water, electricity and gas, be sure that these utilities are available in the volumes necessary to support the equipment to be installed. If the location is rural, make certain the town sewer is available.
A more visible building condition is the floor. If the floor is situated over a basement, the installation requirements will change, or so-called “soft-mount” washers will be required.
Access. Since laundry customers will be carrying in baskets and bags of clothes, easy access to the store is critical. In most locations, free parking near the store is important. Customers should not have to cross the street with their laundry. Once out of the car, street or parking lot level entry is needed. Stairs either up or down are not advisable. And, of course, an automatic door will enhance the access as well.
Curb appeal. A great form of free advertising is a well-lit building with large, storefront windows displaying washers and dryers with clothes tumbling inside of them – the interior of the store is visible to pedestrians, as well as vehicles driving by.
This type of curb appeal pays dividends throughout the life of a laundromat. Windows, lighting and signage let the community know that the store is open and ready for business. Of course, the reverse is true, too. A poorly lit store with a limited view of what’s happening inside warns people to stay away.
In addition to the advertising benefit, there is a safety element to lighting and visibility. When the public can easily view what’s going on in a store, the chances of criminal behavior decrease.
Wade Hickok
Big Waves Laundromat
Santa Monica, Calif.
High population density. The higher the population density, the more potential customers. If you have a nice laundromat and you market it correctly, you can hit revenue levels that would be nearly impossible in areas with low or medium population density. Here in Los Angeles, I like to see at least 10,000 people per square mile within a three-mile radius of a potential location.
High percentage of renters. Most people who own homes have their own washers and dryers. Those machines might be terrible in comparison to your commercial-grade machines, but they’re actually your biggest competitor. The more renters in a geographic location, the larger number of people you will have in your area who actually need a laundromat on a regular basis.
Attended operation. Customer service is where you can stand out from the competition. It’s difficult to do so when there is no human interaction between your customers and your machines. A quality attendant will help customers find the right machines, resolve technical issues and ensure that customers leave happy. And if customers leave happy, they’ll be back.
A footprint of at least 2,000 square feet. A larger laundromat allows for more revenue-generating equipment. However, don’t pack it so full of washers and dryers that people can’t move around. All things being equal, it requires just as much effort and resources to run a laundromat with 40 machines as it does to run one with 80 machines.
Ample parking. Your job as a laundromat owner is to make it as easy as possible for customers to show up at your business, fill a few laundry carts – and spend money. Lack of parking adds friction to this process at the very first step. No amount of customer service can help customers who never enter your store, because they can’t find parking.
Bob Eisenberg
BFE Consulting Group
Blue Bell, Pa.
Assuming the demographics are favorable for a laundromat and competition is weak, here’s my wish list:
Parking, parking, parking. To attract the bigger customers who spend the most money, you need not just ample parking, but excellent parking.
A storefront that is wider than deep. In other words, if you have a 3,000-square-foot space, you’d prefer it be 50 feet wide and 60 feet deep, rather than 20 feet wide and 150 feet deep. This provides much better visibility from the street.
Visibility. Your dream laundromat would be located on a busy street, and in the front of the shopping center – not on the side or toward the back. Laundromats located on the side or in back can work, but they require more marketing.
Good work flow. The store should be designed so that a customer can come in, get a card or coins, get a washer, get a dryer, find a folding table, and be out the door in a smooth, efficient manner that works best for him or her. With that said, having enough folding space is vital – and having too little of it is a major bottleneck in many laundromats across the country.
Karl Hinrichs
HK Laundry Equipment
Armonk, N.Y.
With laundromats, investors are typically spending $150,000 and more on improvements to the building. They need the very best location to maximize their return on that investment:
Traffic counts. The best locations are on heavily trafficked roads with great visibility and “street appeal.” This will market the laundromat on a continuous basis – it’s like having a huge billboard and advertising the business in front of thousands of cars per day, year-round.
Convenience. You need to make it as easy as possible for customers to visit and use the store. The location should provide easy in and out access onto the heavily trafficked road. A traffic light is a major plus.
Also, the location should offer plenty of convenient parking – and the closer it is to the store’s front entrance the better. Additionally, an automatic door can be a huge convenience for customers carrying loads of laundry.
Purchasing groceries is a weekly repetitive task, just like washing clothes. One of the best possible locations for a laundromat is next to a major supermarket, because customers can save time by washing their clothes and shopping for food at the same time. The bottom line is to make it as easy and convenient as possible for the customer.
Finding a Great Site. Here are some key steps to finding a great site:
Visit the local department of public works to find out where the sewers are located, as this will help define your target area.
Next, identify the major, heavily trafficked roads within that area, and look for major supermarkets. You want to be near the best “value” supermarket for your demographic. You want your location near where your target demographic sleeps, where they buy their groceries, or between the two.
Additionally, call your local equipment distributor and get their opinion on your possible sites. Distributors visit laundromats every day, and they know exactly what a good location looks like – as well as an amazing location. Use them as a sounding board. A good distributor can serve as your “laundry consultant.”
Eric Pooler
Gold Star Cleaners
Brewer, Maine
My first consideration for a dream location is visibility. Your store must be visible to the general public, not hidden on the back side of a mall.
Years ago, I purchased an existing laundromat in just such a location. After a few years, I moved that store up the road a few miles into another strip mall – but, this time, on the front side of the center. Within two years, the volume went from $150,000 a year to $500,000 annually.
People must see your store. You can advertise until you’re blue in the face, but if prospective customers can’t see your laundromat, your potential is limited.
The second consideration is demographics – which includes traffic counts, household information, etc. Knowing exactly what works for the laundromat industry as far as household income, rental properties, numbers of people, and so on is absolutely key. You need to do the math and know your new store’s total gross estimates, which will be used many times in the process.
The Coin Laundry Association can be a vital asset for this, but you also need to do the work, understand demographics and rely on your projections. I’ve seen some very bad interpretations of this, which has cost some investors a lot of money.
Much goes into reading demographics, but the one thing you really need to look for are rentals. Renters will use an on-site laundromat 50 percent of the time – and, for the other 50 percent, they will go to the local laundromat.
When I say “local,” this means within a half- to one-mile radius, if you’re in a highly populated area with competition. Of course, in rural communities, you can look several miles out, due to the lack of competition and other available shopping hubs.
Nearby colleges, seasonal lake rentals, tourist areas and even bedroom communities can work as strong laundromat locations, but the best sites are in the heart of a lower income rental area.
If you want to open a laundromat in a bedroom community, that’s fine – but be sure to install mainly large equipment, because all the business you’re going to get are the comforters that won’t fit into the residents’ home washers.
The third consideration is parking availability. You’re missing the boat if you don’t have good parking – and a lot of it. I’m not talking about “walking-across-a-long-parking-lot” parking either. I mean upfront, “against-the-building, a-few-feet-away-from-your-door” parking. Try lugging two or three large laundry bags across a parking lot, and tell me what you think. You better have your inhaler handy.
The fourth consideration is rent or building cost. It would be nice to own the building, but sometimes it’s better to lock up an excellent location that is a rental.
When negotiating a lease, I want the total cost, all in, to be no more than 15 percent of the total gross. Some will recommend 20 percent, but I like to stick to my model. You’ll want to get at least a five-year lease, with three five-year options.
Avoid annual rent increases. Negotiate for increases only on the option years, and have it based on the average increase of the Consumer Price Index over the previous five years.
Triple net rent is not uncommon, but keep it within the 15 percent guideline, and the landlord should make previous triple net expenses for that location available for your review.
Also, before signing a lease, be certain that the site has sufficient concrete thickness to support your equipment mix, which should be no less than six inches. In addition, make sure the available sewer and water lines are sized appropriately for a laundromat operation.
The fifth consideration are impact fees – sewer impact fees, water impact fees on each washer, licensing fees, etc. You’ll need to spend some time with the city’s economic developer, and ask for every single fee the municipality has in reference to a new business.
Personally, I had an instance where I was moving a store and downsizing. The sewer impact fee was $84,000 for the new location, despite the fact I was replacing the existing laundromat with a smaller store with fewer machines and using less water. Unfortunately, the fees were based on the previous user in that location.
I fought my way through the bureaucracy and was lucky enough to be able to change the fee structure, getting my cost down to $17,000.
Don’t put the cart before the horse like I did – do your research, and you can find the perfect location at a reasonable price.
