From Branded Concept Stores to Franchise Opportunities, Laundromat Investors Have Never Had More Choices
“I hate that word ‘franchise.’ It always makes me think of French fries.” – Sigourney Weaver
French fries? Yes. Cheeseburgers? Definitely.
Dirty laundry? Maybe not so much.
Obviously, there’s no equivalent to McDonald’s or Burger King within the laundromat industry. In fact, the few attempts to franchise national or regional laundromat business models through the years have fallen flat.
Despite this history, there has been a flurry of related activity in the industry of late – everything from branded stores and licensed concepts to turnkey laundromat packages and full-blown laundry franchises.
For example:
- Clean Laundry – a licensed laundromat brand and concept –announced the addition of new locations in Texas, Arizona and Wisconsin. The brand, which is a business unit of Clickstop Inc., has reported two stores opening soon in Austin, Texas. In addition, the company will be opening new laundromats in the Phoenix and Milwaukee markets.
- Speed Queen revealed the construction of its flagship laundromat in support of the brand’s franchise model. The 12,250-square-foot store, located in Chicago, is scheduled to open this spring and will feature an array of equipment, with washer capacities ranging from a single load to 100 pounds and dryers up to 45 pounds.
- At the end of last year, laundromat franchise WaveMAX Laundry signed its 100th development agreement. In addition, the company plans to have more than 50 WaveMAX facilities up and running by 2022. Recent agreements have been signed to bring the brand to New Orleans and Houston, and the franchise reported immediate plans to expand into New Mexico and central Florida.
- The first Tide Laundromat recently opened for business in Chicago, on the city’s far north side. According to the Procter & Gamble brand, it is a part of Tide’s strategic focus “to bring innovation and new technologies to the out-of-home laundry services industry.” Tide noted that the new store boasts “a revolutionary new laundromat experience that eliminates guesswork from laundry – with smart-dosing machines that provide the perfect amount of detergent and softener in every wash.”
Clearly, there are some new companies as well as a few familiar names tossing their hats into the ring when it comes to the current disruption within the laundromat industry.
Not specifically a franchise, Clean Laundry – a business unit of multi-brand merchant Clickstop Inc. – is a licensed laundromat brand and store concept. Equipped with state-of-the-art machines, the Clean Laundry business model features mobile app payment options, free Wi-Fi access for customers, large-screen HDTVs, USB charging stations throughout the stores and other amenities.
“Forget everything you know about a wash-and-fold laundromat,” said Ethan Akin, who co-founded the Clean Laundry concept with his father, Phil. “Our mission is to deliver a clean, safe and modern laundry service experience that is unlike any other.”
The father-son team opened its first laundromat in Waterloo, Iowa, in 2014. Today, the brand boasts more than 20 locations across the United States.
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Phillipe Christodoulou, the founder of the Eco Laundry Company, started out in corporate America, but a higher calling led him to a month of reflection in the mountains of Chiang Mai in Thailand. It was there that he realized his purpose to merge business with environmental consciousness, which led to the establishment of Eco Laundry – where the welfare of the planet and the satisfaction of its customers are at the core of the company’s philosophy.
True to its mission to go green, the franchised locations offer reusable and eco-friendly laundry bags, feature the most energy-efficient machines, utilize recycled materials in store construction and lean heavily on wind energy.
According to JustBusiness.com, the initial franchise fee for an Eco Laundry location is $30,000, with an initial investment of at least $230,000.
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Express Laundry Centers is national brand and “turnkey vended laundry services entity,” which was established by equipment manufacturer Girbau North America with distributor input and ongoing assistance 12 years ago.
“Let me first say that it is not a franchise or a corporate-owned brand,” stressed GNA Vice President of Sales Joel Jorgensen. “Express Laundry Centers operate under a licensing agreement allowing our business partner to use registered trademarks and exclusive concepts with no franchise fees. Express Laundry Centers offer a proven model, branding, marketing and operational training.”
Currently, there are more than 130 branded Express Laundry Center locations throughout North America. The minimum cash requirement is 30 percent equity of overall debt service.
“Lenders also look for additional cash as a reserve, based on the anticipated ramp-up period of the store,” Jorgensen explained. “Cash returns are conservatively more than 20 percent, and sometimes significantly more. Of course, cash returns vary based on the market and investment.”
With the ELC model, all the branding, logos and graphics, as well as website and signage templates, are done. As a result, investors don’t need to create their own. When an investor wants signs printed or a website developed, they can contact their local distributor and Continental Creative Services for a quote to produce and customize those marketing pieces.
There’s also a training module component and other resources that distributors utilize to train investors in laundromat operation.
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The North Carolina team behind venture-backed 2ULaundry has launched LaundroLab, a modern laundromat franchise concept that it says provides a safe, welcoming and convenient customer experience, while creating new business opportunities for entrepreneurs.
LaundroLab aims to become the first nationally recognized laundromat brand.
Alex Smereczniak and Dan D’Aquisto founded on-demand laundry service 2ULaundry in 2016 to cater to busy professionals and families, raising $10 million in venture capital. Within two years, 2ULaundry had expanded beyond Charlotte and across the Southeast.
By 2018, 2ULaundry needed a new kind of facility to manage the thousands of pounds of laundry being managed daily in Charlotte. They worked with Electrolux to create The Laundry Room, designed to bring innovation to laundromats.
Now, the LaundroLab model is open to business owners and investors across the Southeast.
“The Laundry Room was initially intended to support the growth of 2ULuandry, but it also allowed us to test a completely new concept in the traditional laundromat market,” explained CEO Smereczniak. “We look forward to bringing our innovative service model, eco-friendly machines and industry-leading technology to markets across the country.”
LaundroLab franchisees will receive a business playbook, technology assets, education and support from a team with a long track record, and a well-regarded brand to build their business, according to the company.
“Our corporate store in Charlotte grew about 10 percent year over year through the COVID-19 pandemic, further proving that this is one of the most economically stable industries for business owners,” noted co-founder D’Aquisto. “We’re excited to open up the opportunity to take part in our growth by providing franchisees with a playbook and bespoke model to become successful ‘laundropreneurs.’”
LaundroLab has one corporate store and is currently building its first franchise location. Franchisees require $250,000 in liquid assets, and the first franchise license is $49,500. If a franchisee buys multiple licenses at once, there is an increasing discount of license fees, going to $39,500, $29,500, $24,500 and $19,500 for the second through fifth licenses, respectively.
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Maytag is one of the most well-known names in laundry. However, the company doesn’t offer a traditional franchise opportunity, rather it provides machinery and other resources necessary to run successful stores. In addition to providing the equipment, Maytag can help owners with store design, layout and branding.
“The adoption of Maytag Equipped Laundry stores takes on many different shapes and sizes,” explained Mariane Kingston, senior brand manager of commercial laundry at Whirlpool Corp. “As a result of not being a true franchise model, we don’t keep a separate record of which owners are taking advantage of Maytag Equipped Laundry marketing options. However, we are excited with the growth we see in our international markets for the Maytag Equipped Laundry offering. In some regions, we even see large custom showrooms distributors have built to help celebrate this store model.”
Kingston added that the company’s most recent branded laundromat opened last December with a drive-through service, and other such models are opening in Latin America this spring.
“Because we don’t operate a true franchise model, there’s no cash requirement to build a Maytag store,” she said. “We offer any mix of products and services to our store owners, and they’re able to reap the benefits of our brand at any level, as long as 100 percent of the equipment are Maytag Commercial Laundry machines.”
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Another very familiar laundry equipment brand is Speed Queen, which is jumping into the franchising game full tilt.
“While we have developed and perfected the Speed Queen Laundromat franchise over the last few years, it’s truly the result of our more than a century of industry leadership,” said Dan Bowe, general manager of North America franchising and retail operations for Speed Queen Laundromats. “The Speed Queen model will change the perceptions of what people think a laundromat looks like.”
Speed Queen Laundromats feature the latest technology, including touchscreen controls, app-based payment and rewards programs for frequent customers, according to the company. In addition, the stores’ washers and dryers provide customers the flexibility to tailor cycles to their specific needs.
“As the leader in commercial laundry, nobody has more expertise to deliver a truly turnkey solution,” Bowe explained. “We are excited to be able offer this opportunity to investors who want to take advantage of the revenue potential of laundromats, but with a more hands-off approach.”
Currently, five Speed Queen Laundromats are open for business, with another 20 at various stages in the process slated to open later this year.
“Investors should hold $300,000 in liquidity and have a net worth of $1.5 million,” Bowe said. “The persisting pandemic has showed us the importance of this essential business, and the continued cash-on-cash ROI of 20 percent to 35 percent has been widely accepted as the benchmark expectation.”
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One of the world’s most recognized names in actually doing laundry also has entered the industry with a heavily branded and stylized laundromat concept.
“Only Tide could deliver this type of convenience in your hometown laundromat,” said Grace Riggenbach, senior brand director at Tide. “America’s number one detergent knows our consumer better than anyone – and we have almost 75 years of experience in delivering the ultimate clean. So, when you step into a Tide Laundromat, you’ll be met with the promise of the best laundry products and a speedy experience that will have you coming back for more.”
The new store also features a Tide Laundromat app and loyalty program, Tide Rewards. The app indicates machine availability, thus eliminating the inconvenience of showing up to the store only to find no machines available. In addition to cash and coin-based payment, the Tide Laundromat app enables mobile payments. When laundry loads are completed, customer notifications are available.
“When we started researching laundromats, we knew right away what consumers needed,” explained Arpan Patel of Tide. “People were spending too much time in crowded, dirty locations and going home with clothes that weren’t clean to our standards. This is where Tide steps in – eliminating the guesswork, cleaning up the stores and getting you home faster.”
The Tide Laundromat business model stresses clean restrooms, comfortable common areas and modern woodgrain finishes, according to the brand. Additionally, detergents from Tide and Gain, fabric softeners from Downy and Gain, and Bounce dryer sheets are included with every wash.
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Growing laundromat franchise WaveMAX is actively seeking investors to expand its multi-unit franchise business. The company boasts its own proprietary approach to site selection. This includes a comprehensive review of area demographics – such as population density, renter mix and income – as well as an analysis of the proper size of store based on those demographics and an assessment of traffic and flow patterns.
The company’s exclusive relationship with Electrolux means that WaveMAX franchisees can take advantage of preferred pricing on all equipment. In addition, financing is available to cover 65 percent to 75 percent of the project costs.
The minimum franchise fee for the first unit is $49,950, according to smallbiztrends.com. For the second unit, it’s $24,950. All units thereafter are $15,950.
WaveMAX franchisee James Allen, who signed a milestone 100th agreement with the company, is bringing the franchise to New Orleans. The brand anticipated a grand opening of this store during the second quarter of 2021.
“The first time I set foot inside a WaveMAX, I thought to myself, ‘New Orleans needs this,’” explained Allen, who serves as executive director and COO for a local law firm. “The services and experience customers feel in a WaveMAX facility are unparalleled, bar none. This will no doubt be an incredible asset to the community, and I’m looking forward to leading the charge on this development.”
“We’ve kept our foot on the gas ever since we started franchising,” said Mike Roberts, CEO of WaveMAX Laundry, in a recent PlanetLaundry report.
Founded in 2012 and franchising since 2017, WaveMAX – based in Jacksonville, Fla. – currently has 19 locations open throughout eight states.
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According to smallbiztrends.com, Zoom Express is a laundromat franchise that positions itself as “a bright, clean laundry facility that garners a ton of repeat customers.” Zoom Express offers traditional self-service laundry operations, as well as wash-dry-fold services. Zoom Express locations accept card and mobile payments. And franchisees will benefit from a Zoom Express Laundry mobile app, where customers can load credits and use it to operate the stores’ machines.
Headquartered in Dallas – with locations in Michigan and Texas – the company’s initial franchise fee is $39,500, with a total upfront investment between $675,000 and $1.5 million.
Is the Time Just Right?
So, why the interest in the laundromat industry? And why now? Why do so many think their standardized, turnkey business models will be the ones to succeed where others have failed?
“Nobody in the industry has more firepower behind them – technology, experience, company-owned stores to pilot marketing activities – than Speed Queen,” Bowe noted. “That stable of tools is a definite game-changer in making the franchise model much more accessible and successful. I think the other difference is that today’s investors want more of a turnkey approach.
“Quite simply, there are not enough hours in the day for investors to perform all the tasks – marketing, training staff and so on – that are included in developing and running a successful laundromat business,” he continued. “New investors coming to this business are used to the franchise model, so familiarity is a significant advantage. Best of all, our franchise model is built for scale.
“Strength of distribution can only take an independent owner so far. The franchise model fills that gap in terms of elements a distributor cannot legally provide – operation processes and manuals, marketing roadmaps and so on. The franchisee also benefits from the strength of the franchise group, as well as our company-owned stores sharing best practices and successful marketing campaigns. It’s an ongoing relationship where we solve any pain points because of the vested interest.”
“Some can run a successful laundromat, and they’re very good at it,” Smereczniak added. “Others are businesspeople who realize the opportunity available in this industry, but may not have the subject matter expertise to pull it all together. However, with our team, both of those skill sets are aggregated.
“The issue with franchising in the laundromat industry in the past was a lack of technology and transparency. With the innovations we have built, along with the enhancements Electrolux has made to its equipment, this issue no longer exists. Technology coupled with our proven pickup-and-delivery model allows for revenue optimization, tracking and machine utilization that the industry has never seen.”
From Kingston’s perspective, the flexibility of the Maytag Equipped Laundry model is one of its key advantages.
“Maytag Commercial Laundry supports a wide variety of store owners’ needs,” she explained. “We have tools to provide support if they are doing a partial replacement, or if they are going through full replacement or store openings. We also offer marketing materials for the brand, brand use guides and access to tools and calculators that help store owners uncover the ROI potential of their business.
“We intentionally don’t use a franchise model. We make all our services and materials available to our store owners and distributors, regardless of the type of store they’re opening. We don’t mandate the use of our materials – colors, machine mix, grand opening ideas – those are all up to our store owners.
“Our brand is recognizable, with decades of value backing it up. We know the power of a store filled with Maytag Commercial Laundry equipment, so we help store owners see how a custom mix, marketing and our service can benefit them.”
For Jorgensen, the Express Laundry Centers concept – which, again, isn’t a franchise – has already proven itself successful for more than a decade.
“The model allows total owner control over the laundry and its management – preserving local appeal,” Jorgensen pointed out. “Conversely, in the past, there have been corporate-owned models in which large corporations have owned and managed the laundries. Because of this, those businesses lost their local appeal and struggled with the management elements. When it comes to true laundry franchises, some have failed because many franchisees lost sight of their core business of laundry services, driving away key customer demographics.”
Jorgensen added that one of the strengths of the Express Laundry Center concept is that it’s truly a “center,” not simply a laundromat.
“It’s designed and branded to support multi-level laundry services with broad demographic appeal, such as full-service wash-dry-fold; student laundry service; drop-off drycleaning; partial service dry-and-fold only, trademarked Load & Leave; and self-service, in which customers complete their laundry in 60 minutes or less,” he said. “This ‘center’ focus allows owners to generate multiple revenue streams and better penetrate their demographic for greater total revenue.”
Although it would be a huge stretch to say that the COVID-19 pandemic has been in any way helpful to the laundromat industry, the essential nature of the laundry business has been forced into the spotlight due to the crisis. What’s more, new potential investors from other industries impacted by the virus may be more attracted to the relatively plug-and-play aspects of franchised or branded concept stores.
“Thanks to the Coin Laundry Association’s lobbying efforts, vended laundries were quickly reopened and deemed essential businesses,” Jorgensen said. “That brought new focus to the vended laundry industry, as well as increased investor appeal. The need for clean laundry never goes away. It’s a recession-resistant business that’s always running. The pandemic legitimized vended laundries as an investment. It also legitimized our ‘laundry center’ concept, as services such as residential pickup and delivery catapulted in growth and investor appeal.”
“Our 14 company-owned Speed Queen Laundromats’ record of success and stability over the last 12 months are an indicator of the strength of the industry and our unique offering,” Bowe surmised. “While the pandemic has created operational challenges, laundromats have fared exceptionally well on the revenue side.
“The biggest misconception is that a franchise is not affordable,” he continued. “The value provided the franchisee is worth the fee all day long. Again, they benefit from the transparency of the network – everyone has a vested interest. When our company-owned stores or another franchisee develops a successful process addition or marketing tactic, the group benefits. That’s a major advantage over the independent DIY model.”
No doubt, this is not the beginning of the end for the independent laundromat owner or the small-town mom-and-pop operator. Not even close. Those stores and those types of entrepreneurs built the laundry industry and remain the backbone of this business.
However, let’s not ignore what’s happening all around us. Those outside of the industry are beginning to take notice, and they’re investing in this essential business like never before. They’re offering more options for potential investors, creating additional revenue streams for laundry businesspeople, and providing new entry points to this industry.
All in all, more people are thinking about the laundromat business than even just a few years ago. And that’s got to be good news for everyone.
