Speaker 1We did $1,025,000 last year. Wow. I would never drive by a laundromat and think, that place makes a million bucks a year.
Speaker 2Yeah, I know. It blew my mind. He comes to us and he's like, hey, I think this laundromat thing 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 $250,000. Yeah, yeah, yeah. Our sales during COVID. Through the roof. Even all these horrible times. Still, like, laundromats. Gotta wash your clothes.
Speaker 1People 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 going to learn all that and more. And would you believe one machine makes over $30,000 a year? So let's go meet Tyler.
Speaker 2Laundry Spot, this is Hamilton. This is our newest store. We had two tenants in here. There was a Liberty Tax and 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. Yeah, a thousand percent. You just had to let the leases expire. Exactly. Yeah, we couldn't just boot them out, you know. Yeah. So we gutted the whole thing on the outside. The ethos, everything is brand new. It was down to the studs in here. You can salt cut the floor for the drains and the plumbing and the bulkheads. If you're looking out of 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 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 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, commercial. Yeah. Most people don't have the space, to be honest. I mean, most laundromats are two, maybe 3000 square feet. This is 8000. 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. Pounders, what we call we go by pounds. Also, you can go by baskets. You know, this could fit eight 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. So much bigger do they get than these? So for like laundromats, they don't really get bigger than these. You start to get in bigger equipment when you get into commercial, like Las Vegas commercial hotel processing plants. 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. So laundry comes in one end, goes out the other clean. 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.
Speaker 3Mm hmm.
Speaker 2So with this, with this equipment, we can modify how fast it spins, how much water goes in, how long it runs, you know, extra pre-wash, extra rinse, whatever. We can modify that all on the back end from the cloud. We don't even have to be here to do that. We can do that from our, our, our laptops. So the consumer does not need to put their own detergent in here. No. Is that, 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. Yeah. 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. I think this week alone, we have 55 star reviews just about this equipment. Yeah. Cause 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 in our franchise. We'll get it. Franchisees will get it in the thirties. 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 six, seven turns a day. That's a laundromat term. You know, how many times is this a specific washer started per day? So 130 bucks 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 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.
Speaker 1What would you say your gross margin is on, on that 25 bucks for your detergent, your water and your electricity?
Speaker 2So our utilities run under 10%. That's wild. 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, even up to 30%.
Speaker 3Yeah.
Speaker 2So that gives us an edge because people think, oh, you guys are more expensive than all the other laundromats in the era. We're really not. Yeah. Because. How do you consider that? Not when you consider how efficient we are, we're able to price the same. And so, oh, that's a compelling argument. We're able to do a lot of things that we don't even know how to do, but we're able to do a lot of things that we don't even know how to do. Yeah. You know, they're not more expensive than where I was. I'm never going back there.
Speaker 1Yeah. Now, I know this machine is an outlier. This is your biggest machine. Yeah. Right? Yeah. There's a lot of machines. Yeah. I'm just thinking from my like lizard brain here, this will make you like $28,000 to $30,000 of profit every year. Yes. And I'm guessing this will last you 30 years, right? So it absolutely could.
Speaker 2Yeah. 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 in laundry? And that's when we would upgrade. What would we swap this out with? I don't know, to be honest, 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 a new technology here, but you just never know what's going to come about. And so that's how we review, we view replacing equipment and things like that.
Speaker 1It'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 a million dollars over its life or 500,000 or 30,000 a year. Like no matter how you slice and dice it, that's impressive because there's a lot of machines in here.
Speaker 2I know it's funny. You know, everybody's like, you know, our numbers are great, obviously. And 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.
Speaker 1What is the population?
Speaker 2Hamilton, I think is 60,000, somewhere around there. There's thousands of cities. I know. 60,000 people. So yeah, for the franchises, 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 competition, the bar is so low. Yeah. It's like, you can go in and own that city with three laundry spots, no problem. Yeah. And so it's funny. I love looking at the different cities as we're talking to. Prospects.
Speaker 1I'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 a laundry spot, I would say probably two.
Speaker 2Two 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 four over the years. Put like out of business? Yeah. Really? Yeah. Out of business.
Speaker 1You've opened four.
Speaker 2Yeah. And 11 have gone out of business. In our area. In our area, yes. Yeah. Yeah. That's wild. Yeah. So I'm not like proud of that. No, sure. But it's just like, you know, hey, if you do what's right by the customer, you give them a better experience. Are any residents complaining?
Speaker 1No, they have a better experience. Exactly. Exactly. And that's what business is. Like you provide a better experience. Right. And if the competitors can't keep up, then that's a free market economy.
Speaker 2Right. Exactly. And 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 bags. 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? We're 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? 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. we can search it in our database, run reports on anything we want to 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 in 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 pounders up here. Yeah. So we expect, you know, 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
Speaker 1they have an eye for this. Like they've probably been coming to a laundromat for years, right?
Speaker 2Yeah. 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. 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 got picked 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 want to 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
Speaker 1on 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
Speaker 2consumer. 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 shirt. It can all look different capacity wise. Yeah. 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 and 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 they get others in addition? That is 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 five times. Let's give you an extra wash or anything like that we can create on the system. Okay. 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 want to mess with that and maybe not bring those customers in? Yeah. You got to remove all the friction 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 want to collect quarters. You know, I don't want to have to lug quarters to the bank. Not, well, what does the customer want? Yeah. And so we're all about, what does the 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, a lot of headbutting on. Do you manage your own vending machine and make them 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 attendance that stuff was expiring. And so we were like, Hey, 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. So do these do meaningful revenue? I mean, obviously it's going to be a minority, but yeah. So, you know, we get to the revenue breakdown of on average of our stores. Other revenue is probably, you know, in the three to 5% range, depending on store and that's vending that's, you know, ATM that's over the counter. This supports that. Yeah.
Speaker 1Yeah. 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
Speaker 2won'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
Speaker 1to make more money on that. Right. Cause that's tied. Like your, your markup on that isn't going to be great. Oh yeah. Exactly. This is, could be like white labeled. It is white labeled. Yeah.
Speaker 2This is laundry spot. You know, we, uh, a great manufacturer in the U S that we work with a great partner, let us white label their amazing chemicals. So yeah. Yeah. Our profit margin's on there. I think 80%, if I were to guess. Yeah. Not probably more like 40. That's I don't even think that's that high. Yeah. Wow. Probably 20, 20%. 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, how many employees do you have here on average at any given time at any given time, this store will go up to maybe six at a time, which is probably high for a laundromat. I mean, very volume, very high. Cause 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. Mm-hmm and so most of the time we'll have one attendant just kind of helping. Yeah. Helping cleaning, doing some drop off. Cause we'll still do people will come in and drop it off. So we still do a small amount of that weekends, usually two, just cause 50% of the self-service revenue is done on Saturday and Sunday. Oh, wow. Okay. Yeah. Out of the week. Yeah. So 50% of the other five 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, yeah. Yeah. Yeah. How are
Speaker 1these guys making money on this? What's the busy time of day? It's usually morning, you know,
Speaker 2mid morning and then evenings during the weekend. It's it's like you drop your kids off at school, come to lunch or after dinner or after dinner on the weekends. I mean, nonstop. Yeah. I mean, every machine's in here running. So it's funny. Like, so you're at full capacity sometimes. So yeah. Someday Saturday and Sunday. Yeah. Some people are waiting for, you know, 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. Our revenue is higher than summer. And then holiday season, people are saving money for Christmas and
Speaker 1all those things. Especially in the colder season or in the colder climates. Yeah. Right. You got
Speaker 2a 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.
Speaker 1How 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
Speaker 2you 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, 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 attendants 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, you can see almost the whole store if you're standing at this table or standing at the POS. Yeah. That's awesome. That's cool. And then the, 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 have eyeballs on it. I think we have 40 some cameras in the store. So more than your local bank, this location does about 21% revenue comer and 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 gonna 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. Yeah. 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 move 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 dollar a pound up to two 50, $3,
Speaker 1a pound, depending on the account. I mean, you'll be closing in on a hundred thousand a month just
Speaker 2in commercial from this one. Look. Yeah. Yeah. Wow. I, I see commercial as a huge thing going forward. So 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 into contracts. I haven't talked to anybody, any business owner who has a laundry need that's
Speaker 1happy with their commercial service. Yeah. It's one of those industries. It's it's one of the industries that like nobody's happy. Yeah. Well, in the name of your business lends to both, you can kind of live in both worlds. Right. It's not laundromat. 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
Speaker 2outreach or 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, something crazy, but we got business owners in the community to come here for that. I think we had 50, 60 people here for that party. And so, 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 two weekends in a row free laundry. 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. Sure. Like, the second weekend is probably going to be. They post about it online and then it gives them. It gives them a whole week. So, we did two 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 their laundry.
Speaker 1Well, how long have you been open here?
Speaker 2November will be our fourth full year.
Speaker 1Okay. Well, so, this was the first location where you did two free weekends? Yeah, yeah, yeah. Then it's about to be your best location. Yeah, exactly. 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.
Speaker 2What 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? Yeah. How is 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.
Speaker 1Oh, the DSI?
Speaker 2Yeah. For sure. Yeah. So, we've been working on this for three 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 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 in to a new store, hook it up to the tubing, and basically we're off and running.
Speaker 1So, what percentage of laundromats around the United States has direct soap injections?
Speaker 2It'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 eight different options. So, right now, we have three detergents, three softeners, one bleach. We could add one more. I don't even think any systems out there right now have that many options. Most of them are one, maybe a couple. Like, you can detergent 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 industry talk, probably, about this machine. 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. What is an ozone system? Yeah. So, ozone is like natural sanitization. It's O3. So, like in a lightning storm, when the rain and the lightning hits and it electrifies the molecules and you smell that fresh rain smell, that's ozone. So, we use it for mold restoration. 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 a detergent. It's just, wow, this store smells clean and fresh. Everyone loves the smell of fresh laundry, right? We're working on a 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? Now, it's not a business we want to be 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. Yeah. Like, we want to be embedded there, do good work for them, you know, be a good referral source.
Speaker 1So, for something like this, what do you charge and what do you pay for, like, one shirt?
Speaker 2So, yeah, shirts are, like, $7. I think. And we get 50% of the top line.
Speaker 1You charge $7 and you pay $3.50, give or take? Yeah.
Speaker 2Yes, exactly. For a shirt. Yeah. 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 piece of business there.
Speaker 1Yeah. So, from what I understand, you have a whole other career. This isn't even your main thing. Yeah. How is that positive?
Speaker 2Yeah, 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.
Speaker 1How can people finance these if they don't have much cash?
Speaker 2Yeah. So, the SBA. 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. Sure, sure. 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. 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 career, you know, and then I'd be at the store at 6 p.m. and closing up. Our drivers would call off. I was up at 4 a.m. 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. Yeah. Yeah. Yeah. Yeah. Yeah. Put the work in if you want a successful laundromat. It's not just going to do it for you.
Speaker 1You can get it to the point where it's more passive than it was, right, but not fully passive.
Speaker 2Exactly. It weren't a good spot, I'd say, but still, it's not 100%, you know, passive, like people like to say. I mean, I still want to grow the business. You got to be very active. Things just aren't going to take care of themselves. Yeah. All right.
Speaker 1So, we probably come across some characters in this business.
Speaker 2What'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. You know, walk me over to the customer. I'll tell them they need to take him 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, 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.
Speaker 1So, at a place like this, you could put down $300,000. And then it will net you back $300,000 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?
Speaker 2Yeah, 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 doesn't get much better than that for a retail physical type business. You know, I'd say if this is a game you want to 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 going to get. Yeah. Tell me what a zombie mat is.
Speaker 1What does that have to do? With a new location.
Speaker 2Yeah, zombie mat, that's 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 just eats itself away. They're walking dead. They're walking dead. Exactly. They don't know they're out of business yet. They don't know. And so, 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, let's see. I started doing this. This is about 10 years ago. It's a family business. So, my father-in-law had two 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. He's done all sorts of things in his career. Super smart guy. Knows what he's 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, trying to figure out what type of car wash he wanted to build. Someone said, hey, go check out this guy up 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. He's got a nice, beautiful tunnel, but he's like, when a part goes down in here, the whole thing's down. Yeah. I'm not making any money until it's back up and running. He said, with my laundromats over here, I can have one, two, three, five machines down. I'm still making money. And something clicked in his head, and he was like, all right, laundromats, you know, these are the way I'm going.
Speaker 1You 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. Yeah. 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? Just because of who they are. Yeah. But for him to say, I'm in both industries, this one that you want to get into, car washes, and this other one that he wasn't even looking at, this one sucks. You're looking at two. But this one, like it's very unbiased feedback. 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.
Speaker 2Yeah. So 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 the nicest guy ever, but he's a businessman killer. Well, that's confident. Yeah, it is. So built the laundromat, the first laundromat from scratch. It was called Express Laundry at that point. Okay.
Speaker 1- No experience in the space.
Speaker 2- No experience in the space, 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. They're all amazing. So that's when that relationship budded, helped him get that store up. I think it was within six months. What gave him the confidence to do that? He's just, he's a confident guy. I mean, he owned a very good performing PNC insurance agency. He's owned commercial real estate. He's owned multifamily. He was a police officer at one point. He's like us, right? He's just entrepreneurial. Like he's never going to lose. He's going to figure it out.
Speaker 1Well, and in this industry, like you need to be where the people are, right? It's not a restaurant where there's a thousand of them in a city. Like people already have the habit of going to that block to do their laundry.
Speaker 2Exactly. 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. Everybody is weird about their laundry. Yeah. For sure. Condition 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- Sorry, what city was this? Middletown. So this is our North stores. Yeah. Our two North stores are in Middletown. Okay. He was right across the street at this point. The first one was right next to him. This one was right across the street. Built that building from the ground up and that was called Coin Laundry. So again, back then there wasn't really- There was no branding for laundromats, right? 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.
Speaker 1See, I look at that as an AB test, right? Because these are two stores in the same market, mile and a half apart. 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 business. 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?
Speaker 2So you know what's funny about that? And we touched on this earlier, Carl. Card versus coin. First store was card only. Second store was coin only. Yeah. He literally had an AB test and- So it wasn't just the name, it was how- Exactly. How he accepted payment and the coin store performed better.
Speaker 3Yeah.
Speaker 2So eventually it turned into hybrid, accepting both and all that. But testing from store one to store two, to store three, to store four, we're always testing and seeing what makes the most sense, what works the best. So he got those two stores open, amazing business. Me and my wife get married about 10 years ago. He comes to us. And he's like, hey, I think this laundromat thing is a good business. Do you guys want to team up and open up more of these things? I'm a finance guy. I'm a numbers guy. That's my career. And I didn't really know anything about laundromats. 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? Does this thing make money? Do these things make money? And he slid it over. I took a look, and I was like, whoa. I'm in. I'm sold. If one location, and I think at this point he was doing 250K. 60K, bottom line. Across both combined? Yeah, yeah. Wow. No, no, no. Each. Each. Wow. Holy cow. Yeah. So I was like, whoa, this is crazy. We can expand on this for sure. So came together. That's when we created the Laundry Spot brand, and then rebranded those two 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 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 was the founding, you know, the OG of laundry. Yeah. 20 years of laundromat experience. Like, you can't replace that. Right. And so we're laundromat operators at heart. We know how to run a laundromat.
Speaker 1Yeah. So how did the first year or first month of that first location go that you guys went in on together?
Speaker 2It went really well. That was our Fairfield location. We did the weekend grand opening, you know, within, I think it was six months. That was our best performing self-service monthly run. Like, we were already the best performing self-service store. 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 $14 a square foot, 4,400 square feet. But we have, the original lease was 10 years with five five-year options after that. Okay. So 35 years if we want. And that's what we want, long-term leases.
Speaker 1Yeah. You got a lot of money in here.
Speaker 2Got 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 the laundromat out of here. Yeah. Per month. What does that shake out to? 14 bucks a foot. That's like 4,600 bucks 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 bucks a square foot during the last five-year option. So like one or 2%. It's crazy. For five years. So I'm like, at that point, that lease is almost going to be an asset because you're not going to find anywhere 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 want to 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 are the costs? So I got to speak FDD numbers. The range is kind of wide, again, depending on size of store. But, you know, our FDD says 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?
Speaker 1And that's not including real estate? Not including real estate. That's assuming- White box. You're leasing and first last month is part of that.
Speaker 2Exactly. 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 two biggest pieces are obviously the equipment. You know, you're going to spend upwards of possibly depending on the size, you know, $1.1 million in equipment. The nice thing is that's bonus depreciation is back. You know, you can take all that and hear one 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. Those are going to be the two 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 four 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. And then we're like, well, we're going to have to do it. And then we're going to fix it up when I could just go across the street the same way he did with his other two 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.
Speaker 3Yeah.
Speaker 2The problems you run into in older laundromats, infrastructure may not be great. 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 do things. So yeah, we've done away with ever wanting to do that. So.
Speaker 1So let's say with a store like Fairfield, you spend a million and a half to open it. If things go well, five years later, what could you sell it for? I'm trying to like compare and contrast buy versus build.
Speaker 2Yeah. So our laundromats, we could sell five to six X probably. Five years later, eight, nine million.
Speaker 1This store does 421 last year, bottom line. Well, let's say Fairfield, something more along the lines of average as opposed to outlier.
Speaker 2Yeah. I mean, Fairfield could go for around 2 million. Okay. Yeah, yeah.
Speaker 1And then what would something like Fairfield cashflow every year? Fairfield does high threes net. Wow. And what did you pay to open Fairfield specifically? Fairfield was 1.1 million.
Speaker 2Okay. But again, that was 2019.
Speaker 1Right, right. So 1.1, you run it for five years and let's say you cashflow 1.3 along the way. So you get your money back and you're going to spend it for three or four years. Is that accurate?
Speaker 2Yeah, yeah. The payback is usually like-
Speaker 1You're back to zero, right? Now you've got an asset that's paid off basically. And on year five, 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 five years from that location. Yeah. 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?
Speaker 2That's a tough question. I mean, it depends what equipment's in there. Six 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.
Speaker 1And then you'd pay two for it, right? Let's say one and a half. You put 500 into it. Crappy laundromats are going for 3X. Yeah.
Speaker 2I mean, it's crazy. Like the multiples are crazy right now. So you're not going to get anything for under 3X right now.
Speaker 1So after buying it and giving it a facelift, you're into a 2 million instead of the 1.1 that you were into it originally. Yeah. And then you're still able to sell it for the same amount.
Speaker 2And you've 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 not going there. Yeah.
Speaker 1You know, just start from scratch. Yeah. Now, if someone is more like they don't have a million dollars 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?
Speaker 2So there's a lot of influencer stuff going on right now with laundromats, right? Like 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 in an old crappy laundromat. Most people overpay for them. They quickly realize like, oh, this isn't passive at all. 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. Yeah. 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. You're going to make millions. I have a gripe with basically anything that's ever called passive. Yeah. I mean, I hate that. I'm still looking. Yeah, I hate that. That's my favorite part. 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
Speaker 1so fairfield 1.1 to open what did the five-year ramp look like what was year one year two year
Speaker 2three 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 grade opening weekend that first quarter we were opened after that we uh were at a hundred thousand dollars in self-serve revenue quarter a month a quarter yeah wow okay so you know four hundred thousand dollar track and run rate yeah at the end of the fourth 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
Speaker 1this is your fourth store so you were probably pretty accurate with your point yeah we it wasn't just pie in the sky
Speaker 2super 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 uh pretty quickly what you'll find is self-service matures at like year two or three for for a laundromat because again there's only so much pie in our one two three mile radius and you kind of hit that at about year two or three yeah what is a mature
Speaker 1year two or three location look like? Like year five, year eight, like do you still see growth?
Speaker 2Yeah. So you'll see, for instance, this store, this November will be our fourth year. We did top line 1,025,000 last year and bottom line 420. Wow. You know, 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.
Speaker 1I would never drive by a laundromat and think that place makes a million bucks a year or that place profits $400,000 a year. I know. It blew my mind. And they don't. Like most don't.
Speaker 2Right. Yeah. I mean, yeah, we're kind of at a different level than what's out there, but that's our goal going forward. Like we want million dollar laundry. 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 three 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 the location, specific location in the building. Mm-hmm. You know, this is a good one. Mm-hmm. 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.
Speaker 1What'd you spend to build this one? And then what are the numbers like today?
Speaker 2So this one, it's a little unique because we built during COVID. It was a little over budget on what we spent. Don't made a lot of sense for us. If I remember correctly, it was right around the $2 million mark. A lot of supplies were higher because of COVID. And all that stuff. Again, top line does $1,025,000. 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 like the secrets of site selection. Big thing we look at is like what laundromats are in an area. You know, if we see three, four, five, you know, in a nice little area, we're like, okay, there's a laundromat market there.
Speaker 1For us, we love to see laundromats. That's just been a successful formula for us. How much research do you do at how busy those three or four laundromats are? A lot.
Speaker 2You go hang out there. So, yeah. So, I'll just say I've 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. The 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 want to know everything about our competitors before we go in there. 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. So, even just relying on what we see there, we know we're going to 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 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. Yeah. 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 and 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, got to wash your clothes. People got to wear clothes. Yeah. Until we figure out self-washing clothes or something, you know, like.
Speaker 1So, recession resistant, certainly AI resistant, certainly automation resistant. I mean, they're building robots. There's several companies building robots that can fold laundry.
Speaker 2I'm talking to some of them. Like, 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.
Speaker 1Especially at this scale.
Speaker 2Yeah. One thing to have a robot on the home. Exactly. Yeah. And if that does happen, guess who's going to buy robots? Sure. Probably first. Right. Us. We're going to figure out how to get robots processing laundry faster, lower our costs. Right. You know, like, it's not going to put us out of business. It's going to help us get more efficient.
Speaker 1I'm trying to think of just a macro event that could negatively affect this business. But if something negatively affected this business, we'd have bigger problems. Yeah. I mean. Fish to fry.
Speaker 2Yeah. I think COVID was the closest to 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.
Speaker 1And the positives outweighed the negatives of, like, the social distancing. Exactly.
Speaker 2The ozone. The ozone. Yeah. I mean, people were telling people, disinfect everything. Like, oh, hey, look, we have ozone. It disinfects everything. Perfect.
Speaker 1Now, 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
Speaker 2that's 40 years old still running. And they're probably not maintaining it well. No. It's just built to last. Like, it's commercial. That's why they're expensive. Yeah. You know? It takes a beating every day. We're open seven days a week, eight to eight. Like, this equipment is running.
Speaker 1Yeah. 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.
Speaker 2Yeah. So, grand opening, usually we start three 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 it.
Speaker 1Every door direct mail?
Speaker 2Yep. 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. That went great. 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. A couple thousand bucks. A few thousand. Yeah, a few thousand bucks. So, we do that. About a month out is when we start hitting grand opening. Free laundry weekend's coming. We have the weekends on there. Blast that out. Two 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 here. We're getting Google reviews. That's another huge thing is like, how many five-star reviews can we get as quickly as possible? Why wouldn't you get a five-star review? They're not paying. Exactly. Easiest time to get a review. And so, it's a good thing. It's exhausting, but it's amazing. Again, I've cried with customers, people who haven't been able to wash clothes for six months because they've had to buy food instead of wash their clothes. And they come in here, they wash six months worth of clothes. They're like, thank you so much. Like, I mean, there's a lot of great stories that come out.
Speaker 1And if they never come back, they never spend it on with you, you've done a good for them. Exactly.
Speaker 2It's a win-win. Yeah. I helped them out a ton in their eyes and, you know, super appreciative for it. So, like, that's a cool part. Like, when we come into a community, we're not coming here to, like, rate them. We're not those type of people. We're giving them a better service. Because most of the laundromats they go to are crappy. Who wants to go wash their clothes in a moldy, smelly washing machine? That's not a dignified experience.
Speaker 1Yeah. Well, you're not even charging more. Yeah. Exactly. You don't have to price gouge them.
Speaker 2We'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 donate a lot. We do free laundry for shelters and, you know, all these things. We try to... 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 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 big focus. What are your employee costs? Like, what do you pay for, like, the lowest level up to
Speaker 1a GM?
Speaker 2So, labor costs are actually our biggest cost. Yeah. As a... As a chunk of revenue, they're around 20% of our revenue overall. Mm-hmm. We started at about 15 bucks an hour. Wow. For the lowest level? The lowest level. Yeah. Brand new attendant coming in. Just someone helping people and... Yeah. Playing in, helping, folding. So, anyone, you know, can come, apply, get in at that rate. Mm-hmm. We have attendants slash managers who we give a little bit more responsibility, making up to $22 an hour. We have good employee loyalty.
Speaker 3Yeah.
Speaker 2We have some employees at some of the older stores that have been there 15 years. Wow. Our GM and AGM have both been here eight years and five years. Again, we pay them pay well, we treat well. That's important to us, you know, customers and employees.
Speaker 1How many competitors did you say have gone out? the 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 seven employees. Your four locations open and each one has on average how many? 10, 12 part-time employees. Each? Each. Yeah. Wow. So you're bringing 40, 50 jobs? Yeah. 40, 50 part-time jobs. To the area that lost seven jobs because of you? Maybe. Probably not even that Right. It's a net job gain to a large degree.
Speaker 2For sure. Yeah. And we pay them well too. It's not like we pay them $750, which is minimum wage in Ohio.
Speaker 1Right. Wow. Okay. Now let's talk utilities, water and electric. What does that look like?
Speaker 2They're a little, utilities overall are a little under 10%. So like right around nine and a half. 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 in the soap out. Opposite effect. Opposite effect. So most people don't understand that.
Speaker 1From you, from a cost perspective, if you want their clothes to be cleaner, you spend less money.
Speaker 2Exactly. 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 seen people pour half a jug of detergent in there. I'm like, you do not need to do that. You'll see all it is is suds. 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 soap? So yeah, again, better experience. Hopefully we saved them some cost. Insurance, I'm sure, is minimal. Insurance, not bad. No, not, I mean, negligible. On the grand scheme of things.
Speaker 1What other costs are there? Property taxes? Not bad. Yeah, minimal. Anything else that we're missing? Maintenance for pans and bands. But they're new machines, so.
Speaker 2Exactly. Yeah. Most of our, you know, our oldest machines right now are at the first store when we first redid it. They're eight years old. So those are our oldest machines at any store right now.
Speaker 1Yeah. What does the future look like for you?
Speaker 2Yeah, so we have. What does growth look like? Yeah, the franchise is live. Started in January. We've sold 36 units. Wow. Across the U.S. so far. 36 territories? Yeah, 36 territories. Across how many markets? There's some in Florida, some more in Ohio, Kentucky, Alabama. What city? I like an element of surprise when we come to a market, so I'm not going to tell you what city. But that will be, a laundry spot will be coming to Alabama soon, Indianapolis, talking to people, you know, all over the place.
Speaker 136 units in eight months. That's incredible. How many laundromats are there in the U.S.?
Speaker 2So the number that everybody likes to say is 30,000. But that's like what you can find. Yeah. A lot of laundromats are out there. Don't have a Google business page. Honestly, there'd be more. Don't have websites. Yeah. So most people think there's like 40,000. I mean, that's still a huge market. 40,000 laundromats out there.
Speaker 1So, I mean, there could be well over 1,000 laundry spots. Yeah. Maturity. Like that would be our goal. Yeah. You know.
Speaker 2Do 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. Yeah. You have our link, you know, throw it in the comments. 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.
Speaker 1Yeah, 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 five-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.
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