October 27, 2025 • 51 mins
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I sat down with Tyler Purcell, who owns four laundromats while also running a wealth management firm managing over $250 million. We talked about how he grew The Laundry Spot brand into a multi-million dollar operation that’s put 11 competitors out of business, and how he’s modernizing an old, forgotten industry. Tyler shared the full economics of the laundromat business, how much it costs to open one, what they net per location, and why he calls it a “bulletproof” business. We broke down his grand opening strategy that ramps stores to $500K revenue month from day one, his approach to commercial laundry and residential pickup, and why he believes laundromats are still years behind the car wash industry in innovation.
You can find Tyler on X at https://x.com/TylerPurcell24 and on LinkedIn at https://www.linkedin.com/in/tylerpurcell-balancewealth/.
Enjoy!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
And I'm like, well, can I see how well it does?
And he's like, yeah, here's my books, Take a look.
And I looked and I was like, wow, did not expect that.
That's so interesting. I'm just fascinated by this
business. People have to have clean
clothes. We're already at like a 500K
that first month. Wow.
It's just so resistant to anything economic wise or
pandemic wise. It's just a crazy bulletproof
(00:21):
business with great margins. Have you put any other
competitors out of business? Yeah, we've put 11 out of
business. Holy cow.
Not that you're counting. It's a badge of honor.
Welcome to the Kerner Office, your one stop shop for watching
me chase all of my shiny objectsin real time.
(00:42):
Today I interviewed Tyler Purcell and he owns 4
laundromats. In addition, he has a full time
job running a wealth management firm.
He's a busy guy and he loves both of his things so he won't
quit either one of them. But he's an open book when it
comes to the laundromat business.
He answered every question I threw at him.
Hard numbers, net profits, how he does his research when he
opens a facility, how he puts competitors out of business,
(01:05):
what ideas he's seeing in the laundry industry that anyone
could capitalize on even if theydon't have much money, where the
industry's headed, where people are failing.
I hope you like this. Please like and subscribe, share
with your friends so more peoplecan quit their jobs.
All right, enjoy. How, why and when did you make
the big jump from financial planning to laundromats?
And I know you're still doing financial planning, right?
(01:26):
Yeah, yeah. So financial planning practice
is growing like crazy. I tell everybody the two best
jobs. I have that and then I have
laundromats. We manage about 250 million.
We've grown about by about 30 million this year.
So probably our best year ever. That's always been the main
thing. That's what I love doing.
Not that I don't love laundromats, but I don't see
myself ever giving this up to fully do laundromats.
(01:46):
We can get into that later. All right, So what first planted
that seed about laundromats in your head?
Yeah, so it's actually a family business, but not on my side. 10
years ago started dating my wifefound out her dad had a
laundromat. Didn't really think anything of
it. He's like, oh, now we're
definitely getting married. Yeah, I've been watching Cody
(02:08):
Sanchez and I heard this is good.
Yeah, he's loaded, just just collects quarters all day.
No, he's a smart guy. He was in and had his own PNC
insurance practice, was into some commercial real estate.
So I'm like, hey, it must be a good business.
Never thought about wanting to get in the laundromat business
or anything like that. Fast forward four years down the
(02:29):
road, we get married. About a year into to marriage,
he approaches us and then also his son and says, hey, I think I
have a good thing going. Do you guys want to team up and
open more laundromats? And I'm like, ah, laundromats,
not sexy. Like I was 28 at the time I
think when he approached. Your ego talking, your ego was
(02:49):
responding. Yeah, I'm like, do I want to be
a laundromat owner? Like, yeah, it probably not,
right? I want to do something cool,
right? VCPE stuff.
I'm a numbers guy. So I'm like, well can I see how
well it does? He's like, yeah, here's my
books, take a look. And I looked and I was like,
wow, did not expect that. I think that location was doing
like 250 net at that time for a single laundromat location.
(03:13):
I'm like man, if we could have 5-10 of these, you know that's a
Dang good business. So that's how we started.
Came up with the name Laundry Spot.
He rebranded his store Laundry Spot and now we have 4
locations. I don't know why I'm making this
connection right now, but like to think that a laundromat would
be making 250 net when like a subway sandwich location, the
(03:36):
average one Nets like 3550 grandright?
And there's 35,000 of them. And it's like when the average
business owner or wannabe business owner goes to think of
like what should I do? What should I start?
They don't think laundromat, they think something that's
probably less profitable. Why do you think that is?
Do you think it's because they're primarily in low income
communities? So a lot of there's like a
(03:58):
selection bias where a lot of the people that might be able to
start one of these just don't live in that world.
It's not familiar to them. Yeah, I think you're spot on
there. Also, the laundromat industry is
probably 10 years behind any other industry as far as
innovation. Most people think when they
think laundromats, they think, oh, the 25 year old laundromat
(04:18):
down the street from me, that's dirty, there's crime there,
drugs, and it never kind of evolved.
And so I think of it as now, finally the industry is coming
along. It's like where car washes were
10 years ago and now you see, you know, there's a car wash on
every block. Interesting.
That's true. So I kind of view it like, hey,
(04:38):
we're five years behind the car wash industry, but it's coming.
I mean, there's a lot of money coming to the laundromat space
right now. So let's do that for a SEC.
Compare the and contrast the carwash in the laundromat industry.
Because on the surface I get that.
I remember car washes were like no one thought of them and now
they're everywhere. And I went on an 80 mile bike
ride around DFW, like around allsome of the fastest growing
(05:00):
suburbs in the country. And there was, I forget the name
of it, but there was one car wash brand that I saw like 4
going up, 4 brand new on one bike ride.
And I wasn't even looking for them.
And I'm like, holy cow, someone is on to something.
But then I think, OK, well, rich, poor, middle class,
they're all driving cars. What percentage of the
population is actually using a laundromat on a weekly basis?
(05:24):
20% Thirty. Yeah, probably not even to be
honest. So, you know, that's a a big
thing. People are like, oh,
laundromats, No one uses laundromats anymore, right?
Everyone has washer dryer in their home.
The funny thing is they don't think about them breaking,
right. We have people every day coming
to our store who are like, hey, my washer's down.
People who live in high class neighborhoods who are upper
(05:47):
middle class and they come and do they do, they do their
laundry at our store because it's nice, clean, they feel
safe. It's attended.
We're pulling in people who aren't the normal laundromat
users, so we probably pull a bigger percentage of what your
normal laundromat would. But the demographics, they're
all across the board, right? We offer drop off laundry.
That's upper middle class peoplewho have big families who don't
(06:08):
have the time. They want to outsource that.
So we offer all sorts of services on top of just the
self-service part of it. I think there are a lot of
similarities. One is the the depreciation,
right like car washes, you can depreciate a ton of the
equipment. Same with laundromat.
One of the great things is you open up a laundromat and you
have $800,000 worth of laundry machines.
You can depreciate all that. We could bonus depreciate it if
(06:29):
you want to. So that's a huge benefit that
both of those have one major difference at.
And why it's funny because my father-in-law actually looked at
car washes at one point. And the main difference was
when, you know, SHIT hits the fan, people are still washing
their clothes, right? When the economy is down, they
still got to wash their clothes.They may come a little bit less
(06:51):
often. People are cutting your monthly
subscription at the car wash, right?
Like, yeah, it's probably one ofthe first things to go.
People have to have clean clothes.
And I've been doing this for seven years now.
And I've, I've seen a few ups and downs, right?
COVID business didn't change. It actually exploded during
COVID. And so it's just so resistant to
(07:15):
anything economic wise or pandemic wise, right?
Like it's just a crazy bulletproof business and that's
with great margins. And so that's why we prefer that
over something like a car wash. It's funny as you talk about it,
I'm maybe for the first time making the connection between
your business and my business and mobile home and RV park
business, right? Because when we went through
(07:36):
COVID, we didn't see anything because a rent is like top of
mind first. The month rolls around and they
got to pay rent first, right? And so that came to us as mobile
home and RV park owners that that's a non negotiable.
They can't get kicked out of their house.
Whereas like you said, the monthly car wash subscription,
the Netflix subscription, those other nice to haves go 1st and
(07:59):
rent and laundry, they get paid first.
So, and, and it's also interesting because for
instance, a long term RV park, most people, middle and upper
middle class Americans don't even know that those exist.
They think that you go to Akoa and say in a nice campground,
people don't know that other people live in RV's for months
and years at a time, not becausethey're living the van life and
(08:22):
on Instagram, but because they only have $500 a month for rent,
right? They just, they can't afford
more. And so they, they will live in a
portable RV for years and decades of their life, right?
So it's like there's not a lot of people investing in that
asset class because they don't know it exists, you know?
Exactly. Yeah, very similar.
So how did you go from this is interesting 250 per location to
(08:45):
you open up your first laundromat?
Yeah, so my brother-in-law, he is really good at the creative
side of things, like what I'm not good at software developer,
graphic designer. So we created this awesome
brand. I give him most of the props,
the laundry spot, the logo. It's an absolutely great brand
in my opinion. I'm biased, but we came up with
that and then we're like, OK, where do we put our first store?
(09:08):
We're learning a lot. Obviously my father-in-law had
been in the business for a while, so he had his opinions
and what he knew about the industry.
But the main thing and how we open up new stores is we go to
where there are already laundromats and we look for
those rundown stores who still have customers coming in and
out. And the story for our first one
(09:30):
that we opened up together, we went and looked at this
laundromat. We were looking at a spot right
across the street and shopping center directly across a highly
trafficked Rd. We walk into this laundromat.
It's packed, and it was probablythe dirtiest thing I've ever
seen. Visible cockroaches crawling on
the ground. Children, you were.
Drooling. Yeah.
(09:50):
Like Oh yes. I mean, part of me was sad as
well. There's kids running around,
people are washing their clothesin a place like this.
I'm like, this is horrible. How are there not better options
than this? But yeah, then we're like, man,
this thing is probably doing crazy numbers and it's horrible.
It's horribly run. It's disgusting.
And so we went right across the street from that one and put
(10:13):
them out of business within six months.
That's kind of what we look for,right?
Pockets of 3/4 laundromats in anarea.
We call them zombie mats. Basically, they haven't been
updated in 20 years. They're eating their own
business, essentially just running until they die.
We look for the best location near 3 or 4, and that's where we
go into. We match up the demographics on
(10:33):
what we know works, things like that.
Is there ever a world where it would make sense to buy one of
those zombie mats, close it for three months, just completely
renovate it? Like literally turn it into what
you're starting from scratch andthen not even have to worry
about the location. People can just keep coming to
where they were always coming? Or is that just not of interest?
Yeah. So there are people that do that
(10:54):
in our industry. That's not how we do things for
a few reasons. We actually, we looked at the
beginning, we looked at buying 4laundromats that were already up
and running. They were for sale or go in
there, redo them all. When we started diving into
things, we're like, we're going to spend all this money redoing
this location. Usually old laundromats, the
infrastructure's poor, right? Utilities are not great.
(11:16):
They're not big enough to handlemodern washers.
And then also the volume we wantto do layouts of the stores
aren't great. So we want to switch where the
washers are, where the dryers are.
It's just. Too much, you might as well
start from scratch. Yeah.
So we're like, why would we pay to do this?
Let's just go across the street again, you know, that's
formulated our opinion of how wedo things.
(11:38):
And so through that due diligence, yeah, that's just
kind of how we were like, yeah, let's not buy old ones.
Let's go into a white box or build our own building and do it
exactly how we went from the beginning, knowing that we're
going to be here for 2025, thirty years.
Now what if you find the perfectlocation?
All the demographics match up, there's 3 or 4 zombie mats and
there's a shopping center acrossthe street.
(11:59):
But it it is just a garbage shopping center.
Just vape shops, tattoo parlors.Do you open or do you not?
Because you don't really want tobe this nice, clean, bright
building in a terrible shopping center, do you?
So you would you would think so.But actually one of our best
performing self-service stores is kind of in a shopping center
like that. There was nobody in there except
(12:21):
for one or two people out of eight, I think, spaces.
We approached the landlord and we're like, hey, we want to put
a laundromat. And he was like, I don't know.
Oh, I don't want a laundromat. Well, then we showed him our
other stores and he's like, oh, wow.
OK, yeah, I would love to have you guys.
So we go in there and then a year later the whole place is
now nice. Right.
(12:42):
Every spot is leased out. The landlord loves us.
He's like, you guys need to openmore of these in my other
buildings across Cincinnati. Yeah.
How long the lease do you have there?
Because you'll be in the driver's seat when you go to
renew that. We own three of the buildings,
but this one is a lease and you know you want to work for those
long term leases. So we had a 30 year lease, all
(13:03):
five year options on it. I look at this lease and I'm
like I don't know how we got it.25 years down the road are per
square foot is still under $14.00.
Holy cow. I don't know why this landlord
agreed to that, but he did. And so it's almost like an
asset, right? By the time 25 years from now,
rent's going to be double that at least, you know, I mean,
(13:26):
probably triple that. And we're sitting here with a
cheap, cheap lease. So it's all about what you can
work the lease out you want longterm, right?
You don't spend all this money on the infrastructure and things
and they get kicked out five years down the road.
It reminds me of like an Apple or a Tesla store in a mall.
Like malls love to have them in because it brings in a higher
quality of client to the mall that go shop at the other
(13:46):
stores, right? You elevated the profile of that
entire shopping center. Yeah, it's kind of funny because
you're like, oh, a laundromat elevating a shopping.
Yeah, right. It's such a good framework to
take something that's ignored, ugly and forgotten and make it
into like an Apple Store experience.
And I don't think it would work for just any industry, but
you've clearly proven it to workin that industry.
(14:07):
OK, so six months to start. How much money to open your
doors? Yeah.
So it's probably right now with where prices are to open up a
4000 to 5000 square foot store right now it's probably going to
cost you about 1.5. That's all in equipment.
Build out everything. Can you get loans for that?
There's a few options in our industry.
(14:29):
All the equipment manufacturers,they'll offer equipment
financing. There are some lending companies
out there who just focus on laundromats and car washes, some
good ones. We went with just local bank
relationship that we had. So for us they rolled up the
business loan and the equipment all in one and we just pay on
that one loan. So look into your options,
(14:50):
verify who's easiest to work with, best terms, etcetera.
How much did you have to put down of the 1.5?
We put 20% down. OK.
OK. So yeah, 300 down to to create
an asset that's netting. I mean, would you mind saying
what your stores net each? Yeah.
So our average store net's about300, a little over 300.
(15:13):
Wow. Yeah.
Last year we did about 3 milliontop line, 1.1 net.
This year, we're on pace to do probably 3.2 and 1.4 net.
Wow. And then talk about your grand
opening process. I assume you don't.
I mean, you don't want to sit around and wait two or three
(15:33):
years to really ramp up. What do you do to get foot
traffic in the door on day one? And how is it unique for the
industry? Yeah, we do a lot of build up.
So just a couple things. It's nothing super
revolutionary, but there's a couple things that I'm I'm proud
of that we've done. So we do in our industry
physical mail works well. So postcards, we do a lot of
(15:53):
postcards. So we'll send out two rounds of
coming soon postcards. Then we have grand opening
weekends, we do back-to-back free laundry weekends.
So we'll send out a postcard postcard for that.
And then we'll also do as many interviews, talk with as many
papers as we can, local papers, build the hype up for that grand
(16:14):
opening free weekend, you know, post on socials, run Google ads,
really build that hype up because that that can make or
break the stores getting that initial just getting people in
the door. One cool thing we did this past
grand opening with our newest store, we had AVIP party at our
store. We invited city officials, we
(16:35):
invited business owners in the area.
We had a catered, we had a bartender, we had a band.
It was a red carpet event for a laundromat and you know, that
kind of generated ton of buzz. Some news, local news companies
came by, did some segments on it.
So that that was really cool. That was something new that we
did for this most recent openingand that was a hit.
(16:56):
We got a lot of commercial business off of that, made a lot
of connections. And then you get the city on
your side, you know, that's hugewhen they still think of
laundromats as the same thing weall do, right?
So getting them on your side helps a ton.
So that was very cool. And then our grand opening
weekends, I mean that is all hands on deck.
(17:18):
You know, we have all of our employees, all the owners are
working. How many employees?
Per store, we probably have about 12:15 on rotation, usually
2 to 4 working at a time depending on how much commercial
laundry we have. There's probably I'd say 12 of
us in there that 12 hours we're open on those free laundry
weekends. And you know, we're just trying
(17:39):
to blow the customer service outof the park.
We'll do hundreds of five star reviews just on those weekends.
Wow. So right off the bat, boom, new
laundromat in town. OK, we have 255 star reviews.
People obviously are like, what is going on here?
I need to check this place out. So that's the most important
thing for us. If you look at the month after
(18:01):
we do those grand opening weekends, we're already at like
a 500K revenue run rate that first month.
Wow, just right off the bat we're ramped up.
So that's why we put so much time and effort and work into
those I'd like. 30% margins ish.Yeah, 3040, we shoot for 40%.
Wow. Yeah.
(18:21):
So many good principles at play here.
It's interesting because you do the free weekend and in my head,
one of the reasons I want to do I would would want to do that is
because it provides like the illusion of popularity, right?
It's like, wow, this place something's and now everyone
knows that it's free that weekend, right?
But still it's like just that there's like a safety in numbers
(18:42):
like this is popular, like thesepeople must know about this
place, like this must be a brand.
I want to come here. This is the next big thing.
It just kind of implicitly showsthat.
But if you have crappy customer service, even if it's free, you
shoot yourself in the foot. So you have to do both at the
same time. You have to fill the doors and
you have to provide an amazing experience.
(19:03):
Otherwise you're you might be doing yourself even more of a
disservice than not having this grand opening weekend, right?
I'm curious, what did you see inthe numbers or in the data when
you opened your first store? Maybe you started with one
weekend of free laundry and thenyou expanded to two.
Was that the case? And if So, what made you do
that? Yeah, that's exactly what
happened. We did just one free weekend the
(19:24):
first time we opened, and it wasso popular.
We're like, why don't we do 2? Our cost is just in the
utilities and the employees, right?
It's not killing us to give awayfree laundry for a weekend.
And we knew, we figured out oncewe get people into our store,
they're not going back to the other laundromat.
It's just not happening. So all we need to do is get
(19:45):
people into our store, get to see our modern equipment, how
fast they can do laundry, how clean it gets our customer
service, all those things. And so we're like, let's do the
second weekend. And what we realized was the
people that come on the first weekend go tell everybody else
they know. Yeah, there it is.
OK. Second weekend perfect.
So you know we can get one person in that first weekend
(20:09):
they're going to go tell for their family members and now
they're all coming that second week.
So we saw that play out and it'sjust, I mean, it's madness,
right? Like we're having people wait
for washing machines because it's so crowded.
And we're we got one over here. We got one over here.
I mean, it's a fun it's. Like the Wall Street floor?
Yeah, Yeah, it is. It is.
(20:29):
You know, we're playing music. We'll have pizza, you know,
drink. I mean, it's an experience.
And people are just like, this is crazy.
We hear stories and like I've shed tears on those free
weekends because people will come up to us and be like, I
haven't done my laundry in threemonths because I couldn't afford
it. 10 bags of laundry. It's like, you know what?
(20:49):
You can come free for life. Yeah, I love the business.
It makes a lot of money, but there's also the aspect of that
part of it, like we do a lot of charity, we do a lot of giving
away free laundry. We go into these communities
that have that may not have something like this, right?
They have the cockroach infestedlaundromat and we come in and
(21:09):
give them a way better experience.
And it's not like we gouge them on prices, like we're barely
more expensive than what we were, what they were paying
beforehand. And they're thankful.
Like it's crazy that they'll come up and say thank you for
bringing this to our community. So that's a part I I love about
it as well. And I imagine you're more
expensive than the neighbors, right?
(21:31):
Yeah, people ask that question alot, but it's not like we're not
much more expensive. I'm talking like right, maybe
$0.50 more expensive per lobe. Yeah.
Like, but on a percentage basis,how much more is that?
So on on a small load, you're talking 350 to $4.
OK. So 15%.
Yeah, 15% here and there depending on the size of washer.
It's funny because it there's somany crossovers with the mobile
(21:52):
home and RV park industry because we'll do that.
We will raise rent when we buy the park, but we'll also clean
it up and we'll put in cameras and they feel safer and we feel
safer. And we trim the trees, we fill
the potholes, and we will go andmake testimonial videos.
And they're like, they're in tears.
They're like, this is the first park I've had where I'm not
worried about someone breaking in.
(22:12):
Like, my kids are safe to go play in the yard.
And it's like people read a tweet and they're like, oh, this
guy's just sucking the life fromthe poor, right?
It's like, well, no, not at all.But it does.
It does feel good. Do you have any hard data on
what your attendance is like on weekend one versus weekend 2?
And why not weekdays? Is it just because it's easier
(22:34):
for people to get out there whenthey're not working on the
weekend? Laundry day.
Saturday and Sunday are the biggest days of the week.
Sunday by far. So we do as much laundry,
actually more laundry on Saturday and Sunday than we do
Monday through Friday combined. So that's just that's when
people are free. That's when they get out when
they're not working. So it just makes sense to do it
on those days. Plus we all have jobs, so we're
(22:55):
working on the weekdays. So to get all the owners there
and participating, weekends workgreat, but it's almost double
what comes the second weekend versus the first weekend.
Wow. Yeah.
So that's just a huge unlock there.
It is we even talked about doinglike a full free week or like.
How can we do this more right? Like, exactly, Exactly.
Yeah, there's obviously an end point of how many customers we
(23:18):
have in an area. You know, your normal laundromat
customer's not gonna travel outside like 3 miles to get to
your store. Yeah, there is terminal velocity
on how many people we can actually get that use a
laundromat. Yeah, it's so interesting, the
concept of that. Like I wrestle with that.
So I, I call it like the Mcrib effect, right?
Like it's, it's pretty bold of McDonald's to say you only get
(23:41):
the Mcrib and I've never eaten one in my life.
So every October or whatever it or the Shamrock shake, right,
Because they sell really, reallywell.
But like I, I know what they're going for.
It needs to be scarce. It needs to be special and
unique or like the Monopoly game.
I don't know what all my examples are McDonald's, but
it's kind of like what you're doing, right?
It's like we can't make this like the first Saturday of every
(24:04):
month necessarily, maybe once a year, maybe only at open.
It's just so hard to balance keeping it special and unique
versus really just driving a lotof traffic, right?
Yeah, no, totally agree. Yeah, we do.
We do another big thing that's called Free Dry July, where
drying is free all of July and people they know like that's the
(24:24):
month they get ready for it, things like that.
So, yeah, creating certain things, marketing ideas like
that, Yeah, spot on. This might be a terrible
question, but do people ever during free dried July, do they
bring their washed clothes from somewhere else and then you dry
it there? Yeah, it happens.
Yeah, that's interesting for sure.
Do you have any data on how manypeople from week 1 come back to
(24:48):
week two verse all new people? That's basically impossible to
track. Just we don't collect customer
information on those. We, I mean, we really don't at
all. The only way we can collect
customer information is if they use our loyalty card, they can
add their name, address and things like that.
So our industry is tough with stuff like that, right.
(25:08):
Tracking customer acquisition cost is hard to track in our
industry. We still allow coins, 35% of our
customers still use quarters. Interesting.
The other percentage using loyalty card or credit card or
you know, other forms of payment.
This might be another dumb question, but do you prefer
cash? And like I assume you're
reporting it like an old school laundromat might not right?
(25:30):
But like you're a financial planner, you got to keep the
books clean. And a lot of people don't prefer
cash because it's a liability and it's a cost to have to move
it and deposit it. Or do you prefer cash or not?
I don't think we prefer it. Like if everybody paid by
loyalty card or credit card, that would be great.
We just don't want to discriminate on how you want to
pay, right? Sure, sure.
(25:51):
We deal with the headache of, OK, we got to remove the coins,
we reuse them. Essentially.
We just put them back in the build a coin machine.
It's not that much of a headache.
We let our managers do that. Some laundromatos like, oh, you
let your managers touch the coins like hunch money.
But we, our tracking system is, is we see every quarter that
goes into a machine. We can run reports, our security
(26:13):
systems and camera systems at our stores are better than your
local bank. You can put a $20 bill into our
bill changer and we can zoom in and basically read the serial
number. People learn like probably
shouldn't try to steal from these people, from these guys or
a lot of the times and in order to laundromats people be like,
oh, I didn't get my change. I put in a 5 and then get this
and people try that at the beginning when we open and
(26:34):
they're like, no, I just zoomed in.
I saw you put in a, you know, a $5.00 bill, not a $20 bill.
And I saw you collect this at this time and they're like, OK,
and then they hang up and. You're like, dude, I've seen
enough TV shows to know this is,like, the oldest con in the
book. Yeah.
Come on. And so we don't have a lot of
that at our stores. We don't have a lot of crime.
We don't have a lot of drug usage.
Just because of that reason, thecommunity starts to figure it
(26:56):
out like this is not the place to do those things.
Well, it's such an interesting psychological phenomenon where
people walk in the door and, andit's the same people that were
walking in the zombie mats that might walk in and want to scam
or walk in and want to break therules or whatever.
But when they walk into your place, the whole experience is
elevated and they just act better, you know, and it just
(27:19):
makes it easier for everyone, especially yourself.
And I do think it's interesting that you don't prefer cash
because I would think a zombie mat owner would say the exact
opposite. Like he would love for it all to
be cash. You might just report 5 grand at
the end of the year. That that's The funny thing.
That's what they all do. Like I talked to a lot of people
who are looking at buying laundromats and I'm like, OK, do
(27:40):
they have AP and L and they're like, no, they have an Excel
spreadsheet. Like I'm like, I mean, almost
every single time. And so it's so hard to verify
revenue and, you know, net income off of what these old
owners are doing. They they don't have a
bookkeeper. It's crazy.
So yeah, we do things totally different.
(28:01):
If you can't really collect muchcustomer data, do you know what
like your lifetime value is of acustomer or like ballpark?
It's tough. So we do one marketing campaign
with postcards, and what we do is we send out a postcard and we
say this postcard is worth a $30loyalty card for free.
Oh wow, bring it in. It's like a gift card.
(28:22):
Essentially a gift card. Yeah, on a postcard.
So that's how we start to track where we're pulling or new
customers because when they bring that card in, we have our
attendance, get their name, we have their addresses and then
they ask if they're a new customer or not.
So we with that campaign, we cankind of track what our
(28:43):
acquisition cost is and the the lifetime value if they're using
a loyalty card. So we're able to track that card
across its whole lifetime. And you know, I don't have exact
numbers on that, but it's high. I mean, if we spend $30 on a
loyalty card to get a customer in thousands and thousands and
thousands of dollars over the lifetime because they're coming
(29:05):
once a week. As long as they live in that
area, right? I mean, why would they stop?
Exactly like I mentioned, if we get them in our doors, they're a
customer for life likely. And what's the average spend per
visit for a customer? It's around $20.
Probably surprisingly, it's fairly high.
I mean, our big machines are 80 pounders there, 11:25 to start.
(29:27):
Wow. So you do one big load, then you
dry a few dollars to dry. So you're already at $15 on on
one big load. If you're running three small
machines, you know, it could be $1215 there, same thing.
So it's interesting watching thepreferences of customers, right?
Like some people prefer 330 LB machines versus the one big 80
(29:48):
LB machine. They could throw that all in
there and save money, but they just prefer it that way.
So, yeah, it's interesting looking at stuff like that in
our business. And do most come weekly or like
bi weekly? It's split, yeah.
I mean, it's in that range once every week to two weeks. 10 days
or so. Yeah, yeah.
(30:09):
OK, it's just crazy to me how much you could spend on laundry,
right? Like you could buy a used washer
dryer every month or two with what they're spending on
laundry. Yeah.
Yeah, but I know that plays on alot more societal, cultural
factors that are systemic and just hard to turn that around.
Like you, yeah, like you said, rent gets paid first.
(30:31):
Laundry actually gets paid first.
When it's the first of the month, we, we, our business goes
up, yeah, like that first week of the month is usually the best
week. So yeah, a lot of factors, like
you said, go in, go into that. Well, in Friday's payday, too,
right? So you go into the weekend,
you've got time to do your laundry, you have money to do
your laundry. You said four locations.
(30:51):
Yeah. Of your four locations, are you,
how often are you at capacity onthe weekend where people are
waiting for machines? And do you measure that?
And and if so, how? Probably two of our stores have
probably hit weekend capacity. The other two still have room to
grow. So we're still trying to grow
that self-service. The problem is we have tried to
move those weekend customers to the week.
(31:13):
That's where I'm going with this.
Yeah, we offer discounts and free DRY and we've tried and
tried and it just doesn't work. Discounts don't do it.
Yeah, they don't do it. How aggressive do you get with
your discounts? It would go 20% free dry.
We're talking on a $20 load, youknow, they're saving $5 probably
across the spectrum. It did not move the needle and
(31:35):
so it's. Like can't do anything.
Yeah, it's like we're not going to go down to 50% discount,
right, Just to move some people.So yeah, it's it was super
interesting as we were messing with that and and trying to make
it work. But yeah, we just.
It just doesn't happen. Now is it you offer free dries
instead of free washes cuz it's lower cost for you?
Is that the thesis? So our equipment is very, very
(31:56):
good. By the time you take something
out of the washer, it almost feels dry, like it's barely
damp. So people can dry for 15 minutes
and their clothes are ready to go.
So it's inexpensive for us to offer that.
It's a good value. The customer is getting
something for free. They're getting their whole
drive for free, right? Like oh I'm getting half of my
experience for free. But it's like 30% of your margin
(32:18):
as opposed to 50, right? Right, exactly.
I wonder if you tried something completely off the wall and
different to get people there during the week.
More like a Planet Fitness model.
Like free pizza Tuesdays, you know, and like just like nothing
related to laundry at all. Keep the prices the same and
just like just try something different, you know?
Yeah, yeah. I don't know.
(32:39):
We could get crazy, but I mean, we, yeah, we tried all sorts of
discounts. We've tried anything to do with
pricing and that nothing works. So I just don't know if pizza is
going to get in there, you know?Right, right.
Have you ever considered going the opposite direction and
increasing the price on the weekends only?
We have thought about that, but part of that makes my skin crawl
(33:00):
too. You know, we want to be fair.
We want to create a great experience.
We want to make some money doingit, but we don't want to, you
know, gauge our customers like that, you know?
I think this is one of those critical moments where, like,
your financial brain crosses over with you, like your
empathetic brain, and it's like,which one is going to win?
All right, let's be the good guyhere.
These are profitable. They're doing great.
(33:23):
Like, we don't need to optimize everything to the help.
There's just going to be a wait for these two locations on the
weekend. Yeah, not going to raise prices.
I tried to get them there duringthe weekday because it's not
unethical to lower prices, right?
They're just not coming. Like, there's probably a single
parent working during the week or two parents both working
during the week. And it doesn't matter if you
(33:43):
have free laundry on Wednesday. They can't make it.
Right, exactly. Yeah, you're spot on.
That's what we found testing allthose things.
That's so interesting. I'm just fascinated by this
business. What about it?
If you wanted to capture more data, could you offer like a
free wash in exchange for an e-mail address or something?
If they don't have a loyalty card, have you tried to get
creative with that? We basically only tried to
(34:05):
capture data on the loyalty cards.
Here's the thing. Here's another thing.
Our demographic doesn't like to give out much information.
The average laundromat user doesn't want to give out a lot
of information. They don't like to use credit
cards or debit cards because of that reason.
So that's why we still have, youknow, the 3035% coin usage.
(34:26):
They don't even want anybody to know they're there essentially,
right? So that's one battle dealing
with the customer base that we service.
Interesting because like in the mobile Home Park world, we don't
really need a lot of their information, right?
We need what any landlord needs.We don't, we're not sending
marketing emails or anything, sowe don't deal with that.
But I have a friend that sells software to school districts and
(34:48):
he said that one of the biggest problems that low income school
districts face is just contacting parents, like getting
their number, answering a a textor a call or an e-mail.
They're not checking their emails.
It cost them like millions of dollars just not being able to
get in touch with them. Right?
So it totally jives with what you're saying.
(35:08):
Yeah. Interesting.
All right, So these are super profitable.
Why haven't you opened any for two years?
We all have successful day jobs that we, we absolutely love and
we look at each other and we're like, why don't we quit and open
up 20 or 50 of these? And it's kind of the spider man
meme where we're all like, well,you quit, you know, you, you,
we're all pointing at each otherand we're all like, I'm not
(35:30):
quitting. So we've kind of battled that.
But over the last year we've been exploring how do we grow in
the capacity that we have. And we've learned a lot.
We've investigated a lot of avenues and we have a lot of
good stuff going on in the background that I can't quite
share yet, but hopefully soon. But yeah, there's big plans.
(35:51):
My goal is to have 200 laundry spots across the US at some
point and put a lot of people inbusiness, help a lot of
communities, give them a better experience doing their laundry
and have a great brand. Let's talk about what you look
for in a location. What all kind of demographic
research are you doing to make sure that it's a good location?
(36:11):
Because from what I understand, you've never had a location
fail, right? You're batting 1000.
What are you looking for? So again, first of all, the bat
is what's in the area, What laundromats are already there.
Let's find those pockets. Then we go and we do a ton of
due diligence on those laundromats.
We go do laundry there. We write down everything,
equipment manufacturer, the pricing, our notes, anything.
(36:33):
And then we get our hands dirty a little bit.
We'll run water readings on the laundromats and we can kind of
backtrack and see what revenue they're making just by knowing
the pricing, what type of equipment they're using in the
utility usage. So we can kind of look and say,
OK, between these 3 or 4 laundromats, this is the market,
(36:53):
the Tam there. Yeah, yeah.
And we know we expand the Tam when we move into an area.
So, OK, we have another 20% on top of that number that we'll
probably bring in. And then we just go and we run
our demographic reports. We say, OK, do these just line
up with what we're seeing with the competitors already there?
(37:15):
And a lot of times they obviously do.
And then we just go look for thebest possible location in that
area, right? Ton of visibility, great
signage, lot of parking. A lot of laundromats suffer from
lack of parking. And if your parking lot's full
and they can't, they'll just drive right, right on by to the
next laundromat. So that's a huge thing that I
(37:36):
feel like a lot of owners don't really look into or
underestimate a bit. Yeah.
I mean, if your parking lot's full, but you're not at
capacity, like that's the worst situation you can have, right?
Exactly. Yeah, you'll never be at
capacity. Exactly, most of our locations
have 20-30 spots for parking because on the weekend you can
almost get to capacity, you knowon a Sunday. 2030 cars there at
(37:59):
one time. It's interesting because what
I'm hearing from the research islike, yeah, you're going to look
at apartment data and income data and all that, and like
location data, but the 8020 of it is like competitor data.
Like if there's four spots and they're busy, you're going to
make it. Have you put any other
competitors out of business so far?
Yeah, we've put 11 out of business.
(38:20):
Holy cow. Not that you're counting.
It's a bad Devon. Part of me feel bad, but you
know, it's like if you're not providing what the community
needs, like I don't feel bad foryou, right?
Like. It's like you're negatively
affecting 11 business owners who've been neglecting their
business in favor of giving thousands of residents a better
experience and a safer experience.
(38:42):
Exactly. Yes.
Think of it for the greater good, right?
Yeah, three locations per location.
Basically, you're putting 3 competitors per location.
When I say like we find 3 or 4 in the area, like I mean it like
we're going in there to eventually, yeah, take all of
the business. That's our goal.
Yeah, that's so interesting. What other opportunities or
(39:04):
ideas are you seeing in this industry that you're too focused
to chase down? Because despite the fact that
you have a full time business slash job and the laundromat
stuff, it seems like you're very, very focused and detail
oriented, which I know nothing about either one of those
things. So what are you saying no to
right now that you think is promising?
(39:25):
Yeah. So right now, so we do a lot of
commercial business and we've found that's a huge market that
your average laundromat user is not doing right.
The big dogs of the world, CentOS, UNI First, they are
doing that and that market is massive.
So we've really been focusing onthat because profit margins are
great. You go pick up 2000 lbs of
(39:46):
laundry right at one time and then process it.
There's efficiency there. What we've kind of put on the
back burner, which I think is ithas the market to to do well is
just your residential pickup anddelivery, right.
We've just recently started focusing on that because we've
been focusing so much on commercial and ramping up our
(40:07):
new store self-service residential pickup and delivery.
The problem is you need those efficiencies already built in.
So since we have these commercial routes, we can now
kind of branch off of those. And start doing some residential
pickup and delivery. So that's actually started to
really gain some steam in our business and we've started to
(40:27):
put more focus there. That's kind of probably the last
piece of the puzzle for us. We do dry cleaning, but we just
outsource it. So we're pretty much taking care
of any sort of laundry dry cleaning need as a one stop
shop. So, yeah, to again to answer
your question, I think the residential pickup and delivery,
it takes a minute to get there to get it right.
But I think that's probably our next focus along with continuing
(40:49):
to grow the commercial side. So let's say you pick a
neighborhood, you saturate it with mailers or whatever
Facebook ads, and then you just you provide them bags.
And every Friday at 10 AM, you're going to stop by, pick up
the bags, take it back to your facility, do the laundry, fold
it. Are you folding it for them or
is that an extra charge? No, it's all included in the
(41:11):
price per pound. OK.
And then you just bring it back later that same day.
Not the same. I mean we usually don't do same
day service. We'll do next day or two day
usually depending on the accountor where they're located.
Are you doing any of that right now or yeah, that's just
something you're. Yes.
So we do do weekly. We have, I think last time I
(41:32):
looked like 35 recurring pickup,residential pickup and delivery
customers and that was 0 six months ago.
What are the unit economics looklike on that?
Average pick up is like 20 lbs. It's small, so that's another
thing to get by. It's like, OK, where do you put
your minimum pick up at? What are the economics for
(41:53):
profit there? So that's what we've had to work
through, making sure the numbersare accurate and having our
driver already in the area is probably the most important
part, right? Like we pay our driver 20 to
$22.00 an hour depending on whatdriver it is.
So him having to drive 30 minutes out to get one bag or
(42:13):
two bags and drive back, like we're not making money on that.
Yeah, what do you charge for that?
For like a 20 LB bag. $2.00 a pound.
Okay, so it's by the pound and the customer has no idea how
much it weighs. They're just kind of trusting
you. Correct.
But our bags, we tell them, hey,our bag can hold 25 lbs.
One bag. Like they can request an extra
bag if they want, but they can get an idea, hey, if you stuff
(42:36):
this bag full like it's gonna beprobably 25 lbs.
Yeah. And you're like, and we're gonna
weigh it after we wash it, so it's good.
That's where you juice your margins.
We actually, yeah, no, we don't do that, but we actually weigh
it when we get it. So whatever it is, we weigh it
and then we do it for them. But it comes back beautiful,
clean, smelling good. We do stain removal, you name
(42:58):
it, folded super nice. Then we clean the bag for them.
We wipe out the bag, return it to us.
So in case they did have something spill in there, dirty
clothes, we don't want to. We plastic bag the new clothes,
put them inside of the bag, deliver it back after we've
wiped the bag on things. OK so for someone fills a 25 LB
bag, it's 50 bucks all in foldeddelivery, everything.
(43:21):
Exactly. Yeah, so.
A. Lot of the customers we see are
young single people, right? They don't have a ton of
laundry. They want to do something else
than spend time doing laundry. Elderly people actually who
we've, you know, they can't really do their laundry or it's
tough for them to do laundry. We've started to see a lot more
of those customers. What we haven't seen yet, and
(43:42):
what I think in my head is a bigpart of the market is your
family with five kids and just in sports and there's no time to
do laundry and it's just insurmountable.
The problem there is it gets expensive.
Yeah, you know. I'm thinking of my family.
What would that cost? Too.
Exactly. So I think, I think it's there.
(44:04):
I think it's just, I look at it as like the lawn mowing
experience, right? 20 years ago, everyone mowed
their lawn and now everybody pays for it.
Like if you can afford it, like you're paying for it.
So we're trying to get that experience to people, hey, look
how much time you can take back and, you know, take stress off
your shoulders, things like that.
(44:24):
Now do the unit if if a young entrepreneur wanted to start
this residential laundry pickup,did the unit economics make
sense for them if they don't have a laundromat?
Or could they just do it like atat home?
I would say no. A lot of companies have tried to
do that and be the Uber of laundry, right?
And then do it at their own. The margins are so thin as they
(44:45):
are already even haven't established business like ours.
Trying to do it on your own or use a laundromat to go and do
it, you're not going to make anymoney.
Yeah, You've seen a ton of pickup and delivery businesses
fail. Everybody wants in that space.
Because you think about it, you're like, oh, there's a huge
market, right? Like huge market.
So there's VC money is poured into that space.
(45:08):
You know, a couple companies raise $20 million trying to
break in a space, and it's toughif you don't know the laundromat
industry. Making residential pickup and
delivery work on scale is tough.And it's almost like you have to
supplement that business with the retail business as well.
And I imagine a lot of these VC funded companies are like
they're just opening a laundromat in like a commercial
(45:29):
location that's not open to the public.
And it's like that doesn't really work because those
machines are just going to sit unused for 8090% of the time.
Exactly, The key is having a laundromat already that's making
money and and then utilizing it for that pickup and delivery
service. Interesting.
I really like the sound of that business for you, but I don't
like that the idea of that business for basically anyone
(45:52):
else for all those reasons, right?
Like it's really hard convincingconsumers to change their
behaviors and to pay a lot of money for it, to contrast it
with like the new trend of paying someone a few dollars to
bring in your trash cans, right?That's like, OK, it's a
convenience and I'm changing my behavior, but it only cost me a
few bucks, so it's worth it. But to pay hundreds of dollars a
(46:13):
month and to stop the habit of doing laundry while you're
listening to your true crime novel or whatever, like you
changing all these habits and having to pay a bunch for it?
Unless you happen to have a highly profitable public facing
laundromat that's doing everything right, it's just not
a good business. Right, and people are picky
about their laundry, man. We allow notes.
Because they've done it themselves their whole lives,
(46:35):
right? Exactly.
Certain detergents and no fragrance and folded a certain
way and Oh well, my socks bundled a certain way.
It's very hard to change those, those habits like you said.
So I don't know. We're continuing to try to
figure this, that part out. Again, I do think there's a huge
market for it and there's some people doing a great job of it.
(46:57):
So just trying to make that partof the business work.
I wonder if there's a there's another business opportunity
where someone could go to your house and do your laundry for
you. Like that's it.
Like no cleaner, no private chef, only someone that does
laundry but on site. Is that a thing?
Are people doing that? I have not seen that outside of
just your normal nanny type, I have not seen someone who
(47:19):
specifically goes into your house and does laundry.
Yeah, because we have a cleaner and she'll wash our our linens
right while she's there. And it it works out really well
because she'll first thing she does is she throws them in and
then she'll clean the house and then she'll pull them out before
she leaves. Here's the thing, Chris, though.
You're probably going to pay that person $1520.00 an hour,
right? And it's going to take them two
hours, maybe 3. Why not just do pick up and
(47:42):
delivery at that point? Yeah, it's going to be the same.
It's going to be the same price essentially, or close.
What are they going to do while they wait for it to finish
washing? They might as well clean the
house. Or they might as well.
Yeah, interesting. Combine that with a nanny or a
housekeeper or whatever. Is there anything else you're
saying that might have a lower barrier to entry, like a CRM or
(48:03):
on the software side, or servicing laundromats or selling
something to laundromats? Like, is there a vendor that
you're missing in your life? There is a lot of innovating
going on in the space. Like I said, it's we're we're
finally catching up. So there's a lot of cool
software companies coming into the space.
So that is fun to see. What we never had access to
something like this in the laundromats and now we do, which
(48:24):
is really cool. So a lot of that is happening.
As far as something that I wish we had that we don't, I don't
know. I don't think so.
Just improving what's available in the market.
Yeah. You know, like the equipment
manufacturers, like, OK, you're making a great piece of
equipment that can last 20 yearsif you take care of it.
(48:46):
Can we make it look a little nicer?
Like, does it have to look so industrial and ugly?
It's like, I I look at it like how the electric car companies
make their car so ugly. Like, are you doing that on?
Yeah. Are you doing that on purpose?
Like, I don't get it. Make it look your ear right?
So Toyota's like the Prius is the best selling hybrid of all
time, and it's like you probablywould have sold three times as
(49:08):
many if it didn't look so terrible.
I know. I just, it baffles me.
I'm like, I don't get it. So that's a thing.
You know, these commercial equipment manufacturers, they're
not creating the most beautiful machines.
So we spice them up with decals and things and make them look
prettier. But yeah, how about you get a
design team in there and and just make the piece of equipment
look a little nicer? Yeah, I'm over here trying to
(49:31):
think of ideas like could you, they have companies that make
wraps for refrigerators, right? Like for 30 bucks you can buy a
wrap that makes your white refrigerator look stainless
steel, for instance. I wonder if there's something
for these ugly industrial laundry machines.
But then I think it's got to be really hard to sell anything to
those zombie map business owners, right?
Like you might be a buyer, but you're already doing that and
(49:53):
there's only, you're probably like 5% of the market.
Right. Yeah.
And we? Don't like, but owners like you
are like a very small percentageof the market.
Yeah, we do that. We put decals and wraps on on
the equipment to to make it looknicer.
And yeah, a lot of the good laundromat owners are doing
that. But yeah, the market is just not
huge. Like to build a whole business
off of that probably wouldn't make much sense.
(50:15):
Yeah, interesting. Well, Tyler, I'm out of
questions, but I've learned a ton and I appreciate your time.
Where can everyone find you? You can find me on Twitter.
That's where I talk most about laundromats.
Have a decent following on Twitter, LinkedIn.
I love chatting with people about this stuff.
I probably talked to two or three people every single week
who are like, man, tell me aboutlaundromats.
I'm looking to buy one or here'sa laundromat that I'm looking to
(50:37):
buy. What do you think?
So just love helping people. I don't charge for anything.
I probably should, should probably be a mini laundromat
guru and charge 200 bucks an hour.
But you know, laundromat guy. Yeah, just I like doing it.
I like helping people. I'm not out here, like I said,
to gouge anybody. So yeah, reach out, find me and
happy to chat. Cool.
(50:59):
Well, thanks for your time, Tyler.
Thanks for having me man, it wasa blast.
OK, thanks for listening. Please like and subscribe and
share this with all your friendsand we'll see you next time.
And I'm like, well, can I see how well it does?
And he's like, yeah, here's my books, Take a look.
And I looked and I was like, wow, did not expect that.
That's so interesting. I'm just fascinated by this
business. People have to have clean
clothes. We're already at like a 500K
that first month. Wow.
It's just so resistant to anything economic wise or
pandemic wise. It's just a crazy bulletproof
(00:21):
business with great margins. Have you put any other
competitors out of business? Yeah, we've put 11 out of
business. Holy cow.
Not that you're counting. It's a badge of honor.
Welcome to the Kerner Office, your one stop shop for watching
me chase all of my shiny objectsin real time.
(00:42):
Today I interviewed Tyler Purcell and he owns 4
laundromats. In addition, he has a full time
job running a wealth management firm.
He's a busy guy and he loves both of his things so he won't
quit either one of them. But he's an open book when it
comes to the laundromat business.
He answered every question I threw at him.
Hard numbers, net profits, how he does his research when he
opens a facility, how he puts competitors out of business,
(01:05):
what ideas he's seeing in the laundry industry that anyone
could capitalize on even if theydon't have much money, where the
industry's headed, where people are failing.
I hope you like this. Please like and subscribe, share
with your friends so more peoplecan quit their jobs.
All right, enjoy. How, why and when did you make
the big jump from financial planning to laundromats?
And I know you're still doing financial planning, right?
(01:26):
Yeah, yeah. So financial planning practice
is growing like crazy. I tell everybody the two best
jobs. I have that and then I have
laundromats. We manage about 250 million.
We've grown about by about 30 million this year.
So probably our best year ever. That's always been the main
thing. That's what I love doing.
Not that I don't love laundromats, but I don't see
myself ever giving this up to fully do laundromats.
(01:46):
We can get into that later. All right, So what first planted
that seed about laundromats in your head?
Yeah, so it's actually a family business, but not on my side. 10
years ago started dating my wifefound out her dad had a
laundromat. Didn't really think anything of
it. He's like, oh, now we're
definitely getting married. Yeah, I've been watching Cody
(02:08):
Sanchez and I heard this is good.
Yeah, he's loaded, just just collects quarters all day.
No, he's a smart guy. He was in and had his own PNC
insurance practice, was into some commercial real estate.
So I'm like, hey, it must be a good business.
Never thought about wanting to get in the laundromat business
or anything like that. Fast forward four years down the
(02:29):
road, we get married. About a year into to marriage,
he approaches us and then also his son and says, hey, I think I
have a good thing going. Do you guys want to team up and
open more laundromats? And I'm like, ah, laundromats,
not sexy. Like I was 28 at the time I
think when he approached. Your ego talking, your ego was
(02:49):
responding. Yeah, I'm like, do I want to be
a laundromat owner? Like, yeah, it probably not,
right? I want to do something cool,
right? VCPE stuff.
I'm a numbers guy. So I'm like, well can I see how
well it does? He's like, yeah, here's my
books, take a look. And I looked and I was like,
wow, did not expect that. I think that location was doing
like 250 net at that time for a single laundromat location.
(03:13):
I'm like man, if we could have 5-10 of these, you know that's a
Dang good business. So that's how we started.
Came up with the name Laundry Spot.
He rebranded his store Laundry Spot and now we have 4
locations. I don't know why I'm making this
connection right now, but like to think that a laundromat would
be making 250 net when like a subway sandwich location, the
(03:36):
average one Nets like 3550 grandright?
And there's 35,000 of them. And it's like when the average
business owner or wannabe business owner goes to think of
like what should I do? What should I start?
They don't think laundromat, they think something that's
probably less profitable. Why do you think that is?
Do you think it's because they're primarily in low income
communities? So a lot of there's like a
(03:58):
selection bias where a lot of the people that might be able to
start one of these just don't live in that world.
It's not familiar to them. Yeah, I think you're spot on
there. Also, the laundromat industry is
probably 10 years behind any other industry as far as
innovation. Most people think when they
think laundromats, they think, oh, the 25 year old laundromat
(04:18):
down the street from me, that's dirty, there's crime there,
drugs, and it never kind of evolved.
And so I think of it as now, finally the industry is coming
along. It's like where car washes were
10 years ago and now you see, you know, there's a car wash on
every block. Interesting.
That's true. So I kind of view it like, hey,
(04:38):
we're five years behind the car wash industry, but it's coming.
I mean, there's a lot of money coming to the laundromat space
right now. So let's do that for a SEC.
Compare the and contrast the carwash in the laundromat industry.
Because on the surface I get that.
I remember car washes were like no one thought of them and now
they're everywhere. And I went on an 80 mile bike
ride around DFW, like around allsome of the fastest growing
(05:00):
suburbs in the country. And there was, I forget the name
of it, but there was one car wash brand that I saw like 4
going up, 4 brand new on one bike ride.
And I wasn't even looking for them.
And I'm like, holy cow, someone is on to something.
But then I think, OK, well, rich, poor, middle class,
they're all driving cars. What percentage of the
population is actually using a laundromat on a weekly basis?
(05:24):
20% Thirty. Yeah, probably not even to be
honest. So, you know, that's a a big
thing. People are like, oh,
laundromats, No one uses laundromats anymore, right?
Everyone has washer dryer in their home.
The funny thing is they don't think about them breaking,
right. We have people every day coming
to our store who are like, hey, my washer's down.
People who live in high class neighborhoods who are upper
(05:47):
middle class and they come and do they do, they do their
laundry at our store because it's nice, clean, they feel
safe. It's attended.
We're pulling in people who aren't the normal laundromat
users, so we probably pull a bigger percentage of what your
normal laundromat would. But the demographics, they're
all across the board, right? We offer drop off laundry.
That's upper middle class peoplewho have big families who don't
(06:08):
have the time. They want to outsource that.
So we offer all sorts of services on top of just the
self-service part of it. I think there are a lot of
similarities. One is the the depreciation,
right like car washes, you can depreciate a ton of the
equipment. Same with laundromat.
One of the great things is you open up a laundromat and you
have $800,000 worth of laundry machines.
You can depreciate all that. We could bonus depreciate it if
(06:29):
you want to. So that's a huge benefit that
both of those have one major difference at.
And why it's funny because my father-in-law actually looked at
car washes at one point. And the main difference was
when, you know, SHIT hits the fan, people are still washing
their clothes, right? When the economy is down, they
still got to wash their clothes.They may come a little bit less
(06:51):
often. People are cutting your monthly
subscription at the car wash, right?
Like, yeah, it's probably one ofthe first things to go.
People have to have clean clothes.
And I've been doing this for seven years now.
And I've, I've seen a few ups and downs, right?
COVID business didn't change. It actually exploded during
COVID. And so it's just so resistant to
(07:15):
anything economic wise or pandemic wise, right?
Like it's just a crazy bulletproof business and that's
with great margins. And so that's why we prefer that
over something like a car wash. It's funny as you talk about it,
I'm maybe for the first time making the connection between
your business and my business and mobile home and RV park
business, right? Because when we went through
(07:36):
COVID, we didn't see anything because a rent is like top of
mind first. The month rolls around and they
got to pay rent first, right? And so that came to us as mobile
home and RV park owners that that's a non negotiable.
They can't get kicked out of their house.
Whereas like you said, the monthly car wash subscription,
the Netflix subscription, those other nice to haves go 1st and
(07:59):
rent and laundry, they get paid first.
So, and, and it's also interesting because for
instance, a long term RV park, most people, middle and upper
middle class Americans don't even know that those exist.
They think that you go to Akoa and say in a nice campground,
people don't know that other people live in RV's for months
and years at a time, not becausethey're living the van life and
(08:22):
on Instagram, but because they only have $500 a month for rent,
right? They just, they can't afford
more. And so they, they will live in a
portable RV for years and decades of their life, right?
So it's like there's not a lot of people investing in that
asset class because they don't know it exists, you know?
Exactly. Yeah, very similar.
So how did you go from this is interesting 250 per location to
(08:45):
you open up your first laundromat?
Yeah, so my brother-in-law, he is really good at the creative
side of things, like what I'm not good at software developer,
graphic designer. So we created this awesome
brand. I give him most of the props,
the laundry spot, the logo. It's an absolutely great brand
in my opinion. I'm biased, but we came up with
that and then we're like, OK, where do we put our first store?
(09:08):
We're learning a lot. Obviously my father-in-law had
been in the business for a while, so he had his opinions
and what he knew about the industry.
But the main thing and how we open up new stores is we go to
where there are already laundromats and we look for
those rundown stores who still have customers coming in and
out. And the story for our first one
(09:30):
that we opened up together, we went and looked at this
laundromat. We were looking at a spot right
across the street and shopping center directly across a highly
trafficked Rd. We walk into this laundromat.
It's packed, and it was probablythe dirtiest thing I've ever
seen. Visible cockroaches crawling on
the ground. Children, you were.
Drooling. Yeah.
(09:50):
Like Oh yes. I mean, part of me was sad as
well. There's kids running around,
people are washing their clothesin a place like this.
I'm like, this is horrible. How are there not better options
than this? But yeah, then we're like, man,
this thing is probably doing crazy numbers and it's horrible.
It's horribly run. It's disgusting.
And so we went right across the street from that one and put
(10:13):
them out of business within six months.
That's kind of what we look for,right?
Pockets of 3/4 laundromats in anarea.
We call them zombie mats. Basically, they haven't been
updated in 20 years. They're eating their own
business, essentially just running until they die.
We look for the best location near 3 or 4, and that's where we
go into. We match up the demographics on
(10:33):
what we know works, things like that.
Is there ever a world where it would make sense to buy one of
those zombie mats, close it for three months, just completely
renovate it? Like literally turn it into what
you're starting from scratch andthen not even have to worry
about the location. People can just keep coming to
where they were always coming? Or is that just not of interest?
Yeah. So there are people that do that
(10:54):
in our industry. That's not how we do things for
a few reasons. We actually, we looked at the
beginning, we looked at buying 4laundromats that were already up
and running. They were for sale or go in
there, redo them all. When we started diving into
things, we're like, we're going to spend all this money redoing
this location. Usually old laundromats, the
infrastructure's poor, right? Utilities are not great.
(11:16):
They're not big enough to handlemodern washers.
And then also the volume we wantto do layouts of the stores
aren't great. So we want to switch where the
washers are, where the dryers are.
It's just. Too much, you might as well
start from scratch. Yeah.
So we're like, why would we pay to do this?
Let's just go across the street again, you know, that's
formulated our opinion of how wedo things.
(11:38):
And so through that due diligence, yeah, that's just
kind of how we were like, yeah, let's not buy old ones.
Let's go into a white box or build our own building and do it
exactly how we went from the beginning, knowing that we're
going to be here for 2025, thirty years.
Now what if you find the perfectlocation?
All the demographics match up, there's 3 or 4 zombie mats and
there's a shopping center acrossthe street.
(11:59):
But it it is just a garbage shopping center.
Just vape shops, tattoo parlors.Do you open or do you not?
Because you don't really want tobe this nice, clean, bright
building in a terrible shopping center, do you?
So you would you would think so.But actually one of our best
performing self-service stores is kind of in a shopping center
like that. There was nobody in there except
(12:21):
for one or two people out of eight, I think, spaces.
We approached the landlord and we're like, hey, we want to put
a laundromat. And he was like, I don't know.
Oh, I don't want a laundromat. Well, then we showed him our
other stores and he's like, oh, wow.
OK, yeah, I would love to have you guys.
So we go in there and then a year later the whole place is
now nice. Right.
(12:42):
Every spot is leased out. The landlord loves us.
He's like, you guys need to openmore of these in my other
buildings across Cincinnati. Yeah.
How long the lease do you have there?
Because you'll be in the driver's seat when you go to
renew that. We own three of the buildings,
but this one is a lease and you know you want to work for those
long term leases. So we had a 30 year lease, all
(13:03):
five year options on it. I look at this lease and I'm
like I don't know how we got it.25 years down the road are per
square foot is still under $14.00.
Holy cow. I don't know why this landlord
agreed to that, but he did. And so it's almost like an
asset, right? By the time 25 years from now,
rent's going to be double that at least, you know, I mean,
(13:26):
probably triple that. And we're sitting here with a
cheap, cheap lease. So it's all about what you can
work the lease out you want longterm, right?
You don't spend all this money on the infrastructure and things
and they get kicked out five years down the road.
It reminds me of like an Apple or a Tesla store in a mall.
Like malls love to have them in because it brings in a higher
quality of client to the mall that go shop at the other
(13:46):
stores, right? You elevated the profile of that
entire shopping center. Yeah, it's kind of funny because
you're like, oh, a laundromat elevating a shopping.
Yeah, right. It's such a good framework to
take something that's ignored, ugly and forgotten and make it
into like an Apple Store experience.
And I don't think it would work for just any industry, but
you've clearly proven it to workin that industry.
(14:07):
OK, so six months to start. How much money to open your
doors? Yeah.
So it's probably right now with where prices are to open up a
4000 to 5000 square foot store right now it's probably going to
cost you about 1.5. That's all in equipment.
Build out everything. Can you get loans for that?
There's a few options in our industry.
(14:29):
All the equipment manufacturers,they'll offer equipment
financing. There are some lending companies
out there who just focus on laundromats and car washes, some
good ones. We went with just local bank
relationship that we had. So for us they rolled up the
business loan and the equipment all in one and we just pay on
that one loan. So look into your options,
(14:50):
verify who's easiest to work with, best terms, etcetera.
How much did you have to put down of the 1.5?
We put 20% down. OK.
OK. So yeah, 300 down to to create
an asset that's netting. I mean, would you mind saying
what your stores net each? Yeah.
So our average store net's about300, a little over 300.
(15:13):
Wow. Yeah.
Last year we did about 3 milliontop line, 1.1 net.
This year, we're on pace to do probably 3.2 and 1.4 net.
Wow. And then talk about your grand
opening process. I assume you don't.
I mean, you don't want to sit around and wait two or three
(15:33):
years to really ramp up. What do you do to get foot
traffic in the door on day one? And how is it unique for the
industry? Yeah, we do a lot of build up.
So just a couple things. It's nothing super
revolutionary, but there's a couple things that I'm I'm proud
of that we've done. So we do in our industry
physical mail works well. So postcards, we do a lot of
(15:53):
postcards. So we'll send out two rounds of
coming soon postcards. Then we have grand opening
weekends, we do back-to-back free laundry weekends.
So we'll send out a postcard postcard for that.
And then we'll also do as many interviews, talk with as many
papers as we can, local papers, build the hype up for that grand
(16:14):
opening free weekend, you know, post on socials, run Google ads,
really build that hype up because that that can make or
break the stores getting that initial just getting people in
the door. One cool thing we did this past
grand opening with our newest store, we had AVIP party at our
store. We invited city officials, we
(16:35):
invited business owners in the area.
We had a catered, we had a bartender, we had a band.
It was a red carpet event for a laundromat and you know, that
kind of generated ton of buzz. Some news, local news companies
came by, did some segments on it.
So that that was really cool. That was something new that we
did for this most recent openingand that was a hit.
(16:56):
We got a lot of commercial business off of that, made a lot
of connections. And then you get the city on
your side, you know, that's hugewhen they still think of
laundromats as the same thing weall do, right?
So getting them on your side helps a ton.
So that was very cool. And then our grand opening
weekends, I mean that is all hands on deck.
(17:18):
You know, we have all of our employees, all the owners are
working. How many employees?
Per store, we probably have about 12:15 on rotation, usually
2 to 4 working at a time depending on how much commercial
laundry we have. There's probably I'd say 12 of
us in there that 12 hours we're open on those free laundry
weekends. And you know, we're just trying
(17:39):
to blow the customer service outof the park.
We'll do hundreds of five star reviews just on those weekends.
Wow. So right off the bat, boom, new
laundromat in town. OK, we have 255 star reviews.
People obviously are like, what is going on here?
I need to check this place out. So that's the most important
thing for us. If you look at the month after
(18:01):
we do those grand opening weekends, we're already at like
a 500K revenue run rate that first month.
Wow, just right off the bat we're ramped up.
So that's why we put so much time and effort and work into
those I'd like. 30% margins ish.Yeah, 3040, we shoot for 40%.
Wow. Yeah.
(18:21):
So many good principles at play here.
It's interesting because you do the free weekend and in my head,
one of the reasons I want to do I would would want to do that is
because it provides like the illusion of popularity, right?
It's like, wow, this place something's and now everyone
knows that it's free that weekend, right?
But still it's like just that there's like a safety in numbers
(18:42):
like this is popular, like thesepeople must know about this
place, like this must be a brand.
I want to come here. This is the next big thing.
It just kind of implicitly showsthat.
But if you have crappy customer service, even if it's free, you
shoot yourself in the foot. So you have to do both at the
same time. You have to fill the doors and
you have to provide an amazing experience.
(19:03):
Otherwise you're you might be doing yourself even more of a
disservice than not having this grand opening weekend, right?
I'm curious, what did you see inthe numbers or in the data when
you opened your first store? Maybe you started with one
weekend of free laundry and thenyou expanded to two.
Was that the case? And if So, what made you do
that? Yeah, that's exactly what
happened. We did just one free weekend the
(19:24):
first time we opened, and it wasso popular.
We're like, why don't we do 2? Our cost is just in the
utilities and the employees, right?
It's not killing us to give awayfree laundry for a weekend.
And we knew, we figured out oncewe get people into our store,
they're not going back to the other laundromat.
It's just not happening. So all we need to do is get
(19:45):
people into our store, get to see our modern equipment, how
fast they can do laundry, how clean it gets our customer
service, all those things. And so we're like, let's do the
second weekend. And what we realized was the
people that come on the first weekend go tell everybody else
they know. Yeah, there it is.
OK. Second weekend perfect.
So you know we can get one person in that first weekend
(20:09):
they're going to go tell for their family members and now
they're all coming that second week.
So we saw that play out and it'sjust, I mean, it's madness,
right? Like we're having people wait
for washing machines because it's so crowded.
And we're we got one over here. We got one over here.
I mean, it's a fun it's. Like the Wall Street floor?
Yeah, Yeah, it is. It is.
(20:29):
You know, we're playing music. We'll have pizza, you know,
drink. I mean, it's an experience.
And people are just like, this is crazy.
We hear stories and like I've shed tears on those free
weekends because people will come up to us and be like, I
haven't done my laundry in threemonths because I couldn't afford
it. 10 bags of laundry. It's like, you know what?
(20:49):
You can come free for life. Yeah, I love the business.
It makes a lot of money, but there's also the aspect of that
part of it, like we do a lot of charity, we do a lot of giving
away free laundry. We go into these communities
that have that may not have something like this, right?
They have the cockroach infestedlaundromat and we come in and
(21:09):
give them a way better experience.
And it's not like we gouge them on prices, like we're barely
more expensive than what we were, what they were paying
beforehand. And they're thankful.
Like it's crazy that they'll come up and say thank you for
bringing this to our community. So that's a part I I love about
it as well. And I imagine you're more
expensive than the neighbors, right?
(21:31):
Yeah, people ask that question alot, but it's not like we're not
much more expensive. I'm talking like right, maybe
$0.50 more expensive per lobe. Yeah.
Like, but on a percentage basis,how much more is that?
So on on a small load, you're talking 350 to $4.
OK. So 15%.
Yeah, 15% here and there depending on the size of washer.
It's funny because it there's somany crossovers with the mobile
(21:52):
home and RV park industry because we'll do that.
We will raise rent when we buy the park, but we'll also clean
it up and we'll put in cameras and they feel safer and we feel
safer. And we trim the trees, we fill
the potholes, and we will go andmake testimonial videos.
And they're like, they're in tears.
They're like, this is the first park I've had where I'm not
worried about someone breaking in.
(22:12):
Like, my kids are safe to go play in the yard.
And it's like people read a tweet and they're like, oh, this
guy's just sucking the life fromthe poor, right?
It's like, well, no, not at all.But it does.
It does feel good. Do you have any hard data on
what your attendance is like on weekend one versus weekend 2?
And why not weekdays? Is it just because it's easier
(22:34):
for people to get out there whenthey're not working on the
weekend? Laundry day.
Saturday and Sunday are the biggest days of the week.
Sunday by far. So we do as much laundry,
actually more laundry on Saturday and Sunday than we do
Monday through Friday combined. So that's just that's when
people are free. That's when they get out when
they're not working. So it just makes sense to do it
on those days. Plus we all have jobs, so we're
(22:55):
working on the weekdays. So to get all the owners there
and participating, weekends workgreat, but it's almost double
what comes the second weekend versus the first weekend.
Wow. Yeah.
So that's just a huge unlock there.
It is we even talked about doinglike a full free week or like.
How can we do this more right? Like, exactly, Exactly.
Yeah, there's obviously an end point of how many customers we
(23:18):
have in an area. You know, your normal laundromat
customer's not gonna travel outside like 3 miles to get to
your store. Yeah, there is terminal velocity
on how many people we can actually get that use a
laundromat. Yeah, it's so interesting, the
concept of that. Like I wrestle with that.
So I, I call it like the Mcrib effect, right?
Like it's, it's pretty bold of McDonald's to say you only get
(23:41):
the Mcrib and I've never eaten one in my life.
So every October or whatever it or the Shamrock shake, right,
Because they sell really, reallywell.
But like I, I know what they're going for.
It needs to be scarce. It needs to be special and
unique or like the Monopoly game.
I don't know what all my examples are McDonald's, but
it's kind of like what you're doing, right?
It's like we can't make this like the first Saturday of every
(24:04):
month necessarily, maybe once a year, maybe only at open.
It's just so hard to balance keeping it special and unique
versus really just driving a lotof traffic, right?
Yeah, no, totally agree. Yeah, we do.
We do another big thing that's called Free Dry July, where
drying is free all of July and people they know like that's the
(24:24):
month they get ready for it, things like that.
So, yeah, creating certain things, marketing ideas like
that, Yeah, spot on. This might be a terrible
question, but do people ever during free dried July, do they
bring their washed clothes from somewhere else and then you dry
it there? Yeah, it happens.
Yeah, that's interesting for sure.
Do you have any data on how manypeople from week 1 come back to
(24:48):
week two verse all new people? That's basically impossible to
track. Just we don't collect customer
information on those. We, I mean, we really don't at
all. The only way we can collect
customer information is if they use our loyalty card, they can
add their name, address and things like that.
So our industry is tough with stuff like that, right.
(25:08):
Tracking customer acquisition cost is hard to track in our
industry. We still allow coins, 35% of our
customers still use quarters. Interesting.
The other percentage using loyalty card or credit card or
you know, other forms of payment.
This might be another dumb question, but do you prefer
cash? And like I assume you're
reporting it like an old school laundromat might not right?
(25:30):
But like you're a financial planner, you got to keep the
books clean. And a lot of people don't prefer
cash because it's a liability and it's a cost to have to move
it and deposit it. Or do you prefer cash or not?
I don't think we prefer it. Like if everybody paid by
loyalty card or credit card, that would be great.
We just don't want to discriminate on how you want to
pay, right? Sure, sure.
(25:51):
We deal with the headache of, OK, we got to remove the coins,
we reuse them. Essentially.
We just put them back in the build a coin machine.
It's not that much of a headache.
We let our managers do that. Some laundromatos like, oh, you
let your managers touch the coins like hunch money.
But we, our tracking system is, is we see every quarter that
goes into a machine. We can run reports, our security
(26:13):
systems and camera systems at our stores are better than your
local bank. You can put a $20 bill into our
bill changer and we can zoom in and basically read the serial
number. People learn like probably
shouldn't try to steal from these people, from these guys or
a lot of the times and in order to laundromats people be like,
oh, I didn't get my change. I put in a 5 and then get this
and people try that at the beginning when we open and
(26:34):
they're like, no, I just zoomed in.
I saw you put in a, you know, a $5.00 bill, not a $20 bill.
And I saw you collect this at this time and they're like, OK,
and then they hang up and. You're like, dude, I've seen
enough TV shows to know this is,like, the oldest con in the
book. Yeah.
Come on. And so we don't have a lot of
that at our stores. We don't have a lot of crime.
We don't have a lot of drug usage.
Just because of that reason, thecommunity starts to figure it
(26:56):
out like this is not the place to do those things.
Well, it's such an interesting psychological phenomenon where
people walk in the door and, andit's the same people that were
walking in the zombie mats that might walk in and want to scam
or walk in and want to break therules or whatever.
But when they walk into your place, the whole experience is
elevated and they just act better, you know, and it just
(27:19):
makes it easier for everyone, especially yourself.
And I do think it's interesting that you don't prefer cash
because I would think a zombie mat owner would say the exact
opposite. Like he would love for it all to
be cash. You might just report 5 grand at
the end of the year. That that's The funny thing.
That's what they all do. Like I talked to a lot of people
who are looking at buying laundromats and I'm like, OK, do
(27:40):
they have AP and L and they're like, no, they have an Excel
spreadsheet. Like I'm like, I mean, almost
every single time. And so it's so hard to verify
revenue and, you know, net income off of what these old
owners are doing. They they don't have a
bookkeeper. It's crazy.
So yeah, we do things totally different.
(28:01):
If you can't really collect muchcustomer data, do you know what
like your lifetime value is of acustomer or like ballpark?
It's tough. So we do one marketing campaign
with postcards, and what we do is we send out a postcard and we
say this postcard is worth a $30loyalty card for free.
Oh wow, bring it in. It's like a gift card.
(28:22):
Essentially a gift card. Yeah, on a postcard.
So that's how we start to track where we're pulling or new
customers because when they bring that card in, we have our
attendance, get their name, we have their addresses and then
they ask if they're a new customer or not.
So we with that campaign, we cankind of track what our
(28:43):
acquisition cost is and the the lifetime value if they're using
a loyalty card. So we're able to track that card
across its whole lifetime. And you know, I don't have exact
numbers on that, but it's high. I mean, if we spend $30 on a
loyalty card to get a customer in thousands and thousands and
thousands of dollars over the lifetime because they're coming
(29:05):
once a week. As long as they live in that
area, right? I mean, why would they stop?
Exactly like I mentioned, if we get them in our doors, they're a
customer for life likely. And what's the average spend per
visit for a customer? It's around $20.
Probably surprisingly, it's fairly high.
I mean, our big machines are 80 pounders there, 11:25 to start.
(29:27):
Wow. So you do one big load, then you
dry a few dollars to dry. So you're already at $15 on on
one big load. If you're running three small
machines, you know, it could be $1215 there, same thing.
So it's interesting watching thepreferences of customers, right?
Like some people prefer 330 LB machines versus the one big 80
(29:48):
LB machine. They could throw that all in
there and save money, but they just prefer it that way.
So, yeah, it's interesting looking at stuff like that in
our business. And do most come weekly or like
bi weekly? It's split, yeah.
I mean, it's in that range once every week to two weeks. 10 days
or so. Yeah, yeah.
(30:09):
OK, it's just crazy to me how much you could spend on laundry,
right? Like you could buy a used washer
dryer every month or two with what they're spending on
laundry. Yeah.
Yeah, but I know that plays on alot more societal, cultural
factors that are systemic and just hard to turn that around.
Like you, yeah, like you said, rent gets paid first.
(30:31):
Laundry actually gets paid first.
When it's the first of the month, we, we, our business goes
up, yeah, like that first week of the month is usually the best
week. So yeah, a lot of factors, like
you said, go in, go into that. Well, in Friday's payday, too,
right? So you go into the weekend,
you've got time to do your laundry, you have money to do
your laundry. You said four locations.
(30:51):
Yeah. Of your four locations, are you,
how often are you at capacity onthe weekend where people are
waiting for machines? And do you measure that?
And and if so, how? Probably two of our stores have
probably hit weekend capacity. The other two still have room to
grow. So we're still trying to grow
that self-service. The problem is we have tried to
move those weekend customers to the week.
(31:13):
That's where I'm going with this.
Yeah, we offer discounts and free DRY and we've tried and
tried and it just doesn't work. Discounts don't do it.
Yeah, they don't do it. How aggressive do you get with
your discounts? It would go 20% free dry.
We're talking on a $20 load, youknow, they're saving $5 probably
across the spectrum. It did not move the needle and
(31:35):
so it's. Like can't do anything.
Yeah, it's like we're not going to go down to 50% discount,
right, Just to move some people.So yeah, it's it was super
interesting as we were messing with that and and trying to make
it work. But yeah, we just.
It just doesn't happen. Now is it you offer free dries
instead of free washes cuz it's lower cost for you?
Is that the thesis? So our equipment is very, very
(31:56):
good. By the time you take something
out of the washer, it almost feels dry, like it's barely
damp. So people can dry for 15 minutes
and their clothes are ready to go.
So it's inexpensive for us to offer that.
It's a good value. The customer is getting
something for free. They're getting their whole
drive for free, right? Like oh I'm getting half of my
experience for free. But it's like 30% of your margin
(32:18):
as opposed to 50, right? Right, exactly.
I wonder if you tried something completely off the wall and
different to get people there during the week.
More like a Planet Fitness model.
Like free pizza Tuesdays, you know, and like just like nothing
related to laundry at all. Keep the prices the same and
just like just try something different, you know?
Yeah, yeah. I don't know.
(32:39):
We could get crazy, but I mean, we, yeah, we tried all sorts of
discounts. We've tried anything to do with
pricing and that nothing works. So I just don't know if pizza is
going to get in there, you know?Right, right.
Have you ever considered going the opposite direction and
increasing the price on the weekends only?
We have thought about that, but part of that makes my skin crawl
(33:00):
too. You know, we want to be fair.
We want to create a great experience.
We want to make some money doingit, but we don't want to, you
know, gauge our customers like that, you know?
I think this is one of those critical moments where, like,
your financial brain crosses over with you, like your
empathetic brain, and it's like,which one is going to win?
All right, let's be the good guyhere.
These are profitable. They're doing great.
(33:23):
Like, we don't need to optimize everything to the help.
There's just going to be a wait for these two locations on the
weekend. Yeah, not going to raise prices.
I tried to get them there duringthe weekday because it's not
unethical to lower prices, right?
They're just not coming. Like, there's probably a single
parent working during the week or two parents both working
during the week. And it doesn't matter if you
(33:43):
have free laundry on Wednesday. They can't make it.
Right, exactly. Yeah, you're spot on.
That's what we found testing allthose things.
That's so interesting. I'm just fascinated by this
business. What about it?
If you wanted to capture more data, could you offer like a
free wash in exchange for an e-mail address or something?
If they don't have a loyalty card, have you tried to get
creative with that? We basically only tried to
(34:05):
capture data on the loyalty cards.
Here's the thing. Here's another thing.
Our demographic doesn't like to give out much information.
The average laundromat user doesn't want to give out a lot
of information. They don't like to use credit
cards or debit cards because of that reason.
So that's why we still have, youknow, the 3035% coin usage.
(34:26):
They don't even want anybody to know they're there essentially,
right? So that's one battle dealing
with the customer base that we service.
Interesting because like in the mobile Home Park world, we don't
really need a lot of their information, right?
We need what any landlord needs.We don't, we're not sending
marketing emails or anything, sowe don't deal with that.
But I have a friend that sells software to school districts and
(34:48):
he said that one of the biggest problems that low income school
districts face is just contacting parents, like getting
their number, answering a a textor a call or an e-mail.
They're not checking their emails.
It cost them like millions of dollars just not being able to
get in touch with them. Right?
So it totally jives with what you're saying.
(35:08):
Yeah. Interesting.
All right, So these are super profitable.
Why haven't you opened any for two years?
We all have successful day jobs that we, we absolutely love and
we look at each other and we're like, why don't we quit and open
up 20 or 50 of these? And it's kind of the spider man
meme where we're all like, well,you quit, you know, you, you,
we're all pointing at each otherand we're all like, I'm not
(35:30):
quitting. So we've kind of battled that.
But over the last year we've been exploring how do we grow in
the capacity that we have. And we've learned a lot.
We've investigated a lot of avenues and we have a lot of
good stuff going on in the background that I can't quite
share yet, but hopefully soon. But yeah, there's big plans.
(35:51):
My goal is to have 200 laundry spots across the US at some
point and put a lot of people inbusiness, help a lot of
communities, give them a better experience doing their laundry
and have a great brand. Let's talk about what you look
for in a location. What all kind of demographic
research are you doing to make sure that it's a good location?
(36:11):
Because from what I understand, you've never had a location
fail, right? You're batting 1000.
What are you looking for? So again, first of all, the bat
is what's in the area, What laundromats are already there.
Let's find those pockets. Then we go and we do a ton of
due diligence on those laundromats.
We go do laundry there. We write down everything,
equipment manufacturer, the pricing, our notes, anything.
(36:33):
And then we get our hands dirty a little bit.
We'll run water readings on the laundromats and we can kind of
backtrack and see what revenue they're making just by knowing
the pricing, what type of equipment they're using in the
utility usage. So we can kind of look and say,
OK, between these 3 or 4 laundromats, this is the market,
(36:53):
the Tam there. Yeah, yeah.
And we know we expand the Tam when we move into an area.
So, OK, we have another 20% on top of that number that we'll
probably bring in. And then we just go and we run
our demographic reports. We say, OK, do these just line
up with what we're seeing with the competitors already there?
(37:15):
And a lot of times they obviously do.
And then we just go look for thebest possible location in that
area, right? Ton of visibility, great
signage, lot of parking. A lot of laundromats suffer from
lack of parking. And if your parking lot's full
and they can't, they'll just drive right, right on by to the
next laundromat. So that's a huge thing that I
(37:36):
feel like a lot of owners don't really look into or
underestimate a bit. Yeah.
I mean, if your parking lot's full, but you're not at
capacity, like that's the worst situation you can have, right?
Exactly. Yeah, you'll never be at
capacity. Exactly, most of our locations
have 20-30 spots for parking because on the weekend you can
almost get to capacity, you knowon a Sunday. 2030 cars there at
(37:59):
one time. It's interesting because what
I'm hearing from the research islike, yeah, you're going to look
at apartment data and income data and all that, and like
location data, but the 8020 of it is like competitor data.
Like if there's four spots and they're busy, you're going to
make it. Have you put any other
competitors out of business so far?
Yeah, we've put 11 out of business.
(38:20):
Holy cow. Not that you're counting.
It's a bad Devon. Part of me feel bad, but you
know, it's like if you're not providing what the community
needs, like I don't feel bad foryou, right?
Like. It's like you're negatively
affecting 11 business owners who've been neglecting their
business in favor of giving thousands of residents a better
experience and a safer experience.
(38:42):
Exactly. Yes.
Think of it for the greater good, right?
Yeah, three locations per location.
Basically, you're putting 3 competitors per location.
When I say like we find 3 or 4 in the area, like I mean it like
we're going in there to eventually, yeah, take all of
the business. That's our goal.
Yeah, that's so interesting. What other opportunities or
(39:04):
ideas are you seeing in this industry that you're too focused
to chase down? Because despite the fact that
you have a full time business slash job and the laundromat
stuff, it seems like you're very, very focused and detail
oriented, which I know nothing about either one of those
things. So what are you saying no to
right now that you think is promising?
(39:25):
Yeah. So right now, so we do a lot of
commercial business and we've found that's a huge market that
your average laundromat user is not doing right.
The big dogs of the world, CentOS, UNI First, they are
doing that and that market is massive.
So we've really been focusing onthat because profit margins are
great. You go pick up 2000 lbs of
(39:46):
laundry right at one time and then process it.
There's efficiency there. What we've kind of put on the
back burner, which I think is ithas the market to to do well is
just your residential pickup anddelivery, right.
We've just recently started focusing on that because we've
been focusing so much on commercial and ramping up our
(40:07):
new store self-service residential pickup and delivery.
The problem is you need those efficiencies already built in.
So since we have these commercial routes, we can now
kind of branch off of those. And start doing some residential
pickup and delivery. So that's actually started to
really gain some steam in our business and we've started to
(40:27):
put more focus there. That's kind of probably the last
piece of the puzzle for us. We do dry cleaning, but we just
outsource it. So we're pretty much taking care
of any sort of laundry dry cleaning need as a one stop
shop. So, yeah, to again to answer
your question, I think the residential pickup and delivery,
it takes a minute to get there to get it right.
But I think that's probably our next focus along with continuing
(40:49):
to grow the commercial side. So let's say you pick a
neighborhood, you saturate it with mailers or whatever
Facebook ads, and then you just you provide them bags.
And every Friday at 10 AM, you're going to stop by, pick up
the bags, take it back to your facility, do the laundry, fold
it. Are you folding it for them or
is that an extra charge? No, it's all included in the
(41:11):
price per pound. OK.
And then you just bring it back later that same day.
Not the same. I mean we usually don't do same
day service. We'll do next day or two day
usually depending on the accountor where they're located.
Are you doing any of that right now or yeah, that's just
something you're. Yes.
So we do do weekly. We have, I think last time I
(41:32):
looked like 35 recurring pickup,residential pickup and delivery
customers and that was 0 six months ago.
What are the unit economics looklike on that?
Average pick up is like 20 lbs. It's small, so that's another
thing to get by. It's like, OK, where do you put
your minimum pick up at? What are the economics for
(41:53):
profit there? So that's what we've had to work
through, making sure the numbersare accurate and having our
driver already in the area is probably the most important
part, right? Like we pay our driver 20 to
$22.00 an hour depending on whatdriver it is.
So him having to drive 30 minutes out to get one bag or
(42:13):
two bags and drive back, like we're not making money on that.
Yeah, what do you charge for that?
For like a 20 LB bag. $2.00 a pound.
Okay, so it's by the pound and the customer has no idea how
much it weighs. They're just kind of trusting
you. Correct.
But our bags, we tell them, hey,our bag can hold 25 lbs.
One bag. Like they can request an extra
bag if they want, but they can get an idea, hey, if you stuff
(42:36):
this bag full like it's gonna beprobably 25 lbs.
Yeah. And you're like, and we're gonna
weigh it after we wash it, so it's good.
That's where you juice your margins.
We actually, yeah, no, we don't do that, but we actually weigh
it when we get it. So whatever it is, we weigh it
and then we do it for them. But it comes back beautiful,
clean, smelling good. We do stain removal, you name
(42:58):
it, folded super nice. Then we clean the bag for them.
We wipe out the bag, return it to us.
So in case they did have something spill in there, dirty
clothes, we don't want to. We plastic bag the new clothes,
put them inside of the bag, deliver it back after we've
wiped the bag on things. OK so for someone fills a 25 LB
bag, it's 50 bucks all in foldeddelivery, everything.
(43:21):
Exactly. Yeah, so.
A. Lot of the customers we see are
young single people, right? They don't have a ton of
laundry. They want to do something else
than spend time doing laundry. Elderly people actually who
we've, you know, they can't really do their laundry or it's
tough for them to do laundry. We've started to see a lot more
of those customers. What we haven't seen yet, and
(43:42):
what I think in my head is a bigpart of the market is your
family with five kids and just in sports and there's no time to
do laundry and it's just insurmountable.
The problem there is it gets expensive.
Yeah, you know. I'm thinking of my family.
What would that cost? Too.
Exactly. So I think, I think it's there.
(44:04):
I think it's just, I look at it as like the lawn mowing
experience, right? 20 years ago, everyone mowed
their lawn and now everybody pays for it.
Like if you can afford it, like you're paying for it.
So we're trying to get that experience to people, hey, look
how much time you can take back and, you know, take stress off
your shoulders, things like that.
(44:24):
Now do the unit if if a young entrepreneur wanted to start
this residential laundry pickup,did the unit economics make
sense for them if they don't have a laundromat?
Or could they just do it like atat home?
I would say no. A lot of companies have tried to
do that and be the Uber of laundry, right?
And then do it at their own. The margins are so thin as they
(44:45):
are already even haven't established business like ours.
Trying to do it on your own or use a laundromat to go and do
it, you're not going to make anymoney.
Yeah, You've seen a ton of pickup and delivery businesses
fail. Everybody wants in that space.
Because you think about it, you're like, oh, there's a huge
market, right? Like huge market.
So there's VC money is poured into that space.
(45:08):
You know, a couple companies raise $20 million trying to
break in a space, and it's toughif you don't know the laundromat
industry. Making residential pickup and
delivery work on scale is tough.And it's almost like you have to
supplement that business with the retail business as well.
And I imagine a lot of these VC funded companies are like
they're just opening a laundromat in like a commercial
(45:29):
location that's not open to the public.
And it's like that doesn't really work because those
machines are just going to sit unused for 8090% of the time.
Exactly, The key is having a laundromat already that's making
money and and then utilizing it for that pickup and delivery
service. Interesting.
I really like the sound of that business for you, but I don't
like that the idea of that business for basically anyone
(45:52):
else for all those reasons, right?
Like it's really hard convincingconsumers to change their
behaviors and to pay a lot of money for it, to contrast it
with like the new trend of paying someone a few dollars to
bring in your trash cans, right?That's like, OK, it's a
convenience and I'm changing my behavior, but it only cost me a
few bucks, so it's worth it. But to pay hundreds of dollars a
(46:13):
month and to stop the habit of doing laundry while you're
listening to your true crime novel or whatever, like you
changing all these habits and having to pay a bunch for it?
Unless you happen to have a highly profitable public facing
laundromat that's doing everything right, it's just not
a good business. Right, and people are picky
about their laundry, man. We allow notes.
Because they've done it themselves their whole lives,
(46:35):
right? Exactly.
Certain detergents and no fragrance and folded a certain
way and Oh well, my socks bundled a certain way.
It's very hard to change those, those habits like you said.
So I don't know. We're continuing to try to
figure this, that part out. Again, I do think there's a huge
market for it and there's some people doing a great job of it.
(46:57):
So just trying to make that partof the business work.
I wonder if there's a there's another business opportunity
where someone could go to your house and do your laundry for
you. Like that's it.
Like no cleaner, no private chef, only someone that does
laundry but on site. Is that a thing?
Are people doing that? I have not seen that outside of
just your normal nanny type, I have not seen someone who
(47:19):
specifically goes into your house and does laundry.
Yeah, because we have a cleaner and she'll wash our our linens
right while she's there. And it it works out really well
because she'll first thing she does is she throws them in and
then she'll clean the house and then she'll pull them out before
she leaves. Here's the thing, Chris, though.
You're probably going to pay that person $1520.00 an hour,
right? And it's going to take them two
hours, maybe 3. Why not just do pick up and
(47:42):
delivery at that point? Yeah, it's going to be the same.
It's going to be the same price essentially, or close.
What are they going to do while they wait for it to finish
washing? They might as well clean the
house. Or they might as well.
Yeah, interesting. Combine that with a nanny or a
housekeeper or whatever. Is there anything else you're
saying that might have a lower barrier to entry, like a CRM or
(48:03):
on the software side, or servicing laundromats or selling
something to laundromats? Like, is there a vendor that
you're missing in your life? There is a lot of innovating
going on in the space. Like I said, it's we're we're
finally catching up. So there's a lot of cool
software companies coming into the space.
So that is fun to see. What we never had access to
something like this in the laundromats and now we do, which
(48:24):
is really cool. So a lot of that is happening.
As far as something that I wish we had that we don't, I don't
know. I don't think so.
Just improving what's available in the market.
Yeah. You know, like the equipment
manufacturers, like, OK, you're making a great piece of
equipment that can last 20 yearsif you take care of it.
(48:46):
Can we make it look a little nicer?
Like, does it have to look so industrial and ugly?
It's like, I I look at it like how the electric car companies
make their car so ugly. Like, are you doing that on?
Yeah. Are you doing that on purpose?
Like, I don't get it. Make it look your ear right?
So Toyota's like the Prius is the best selling hybrid of all
time, and it's like you probablywould have sold three times as
(49:08):
many if it didn't look so terrible.
I know. I just, it baffles me.
I'm like, I don't get it. So that's a thing.
You know, these commercial equipment manufacturers, they're
not creating the most beautiful machines.
So we spice them up with decals and things and make them look
prettier. But yeah, how about you get a
design team in there and and just make the piece of equipment
look a little nicer? Yeah, I'm over here trying to
(49:31):
think of ideas like could you, they have companies that make
wraps for refrigerators, right? Like for 30 bucks you can buy a
wrap that makes your white refrigerator look stainless
steel, for instance. I wonder if there's something
for these ugly industrial laundry machines.
But then I think it's got to be really hard to sell anything to
those zombie map business owners, right?
Like you might be a buyer, but you're already doing that and
(49:53):
there's only, you're probably like 5% of the market.
Right. Yeah.
And we? Don't like, but owners like you
are like a very small percentageof the market.
Yeah, we do that. We put decals and wraps on on
the equipment to to make it looknicer.
And yeah, a lot of the good laundromat owners are doing
that. But yeah, the market is just not
huge. Like to build a whole business
off of that probably wouldn't make much sense.
(50:15):
Yeah, interesting. Well, Tyler, I'm out of
questions, but I've learned a ton and I appreciate your time.
Where can everyone find you? You can find me on Twitter.
That's where I talk most about laundromats.
Have a decent following on Twitter, LinkedIn.
I love chatting with people about this stuff.
I probably talked to two or three people every single week
who are like, man, tell me aboutlaundromats.
I'm looking to buy one or here'sa laundromat that I'm looking to
(50:37):
buy. What do you think?
So just love helping people. I don't charge for anything.
I probably should, should probably be a mini laundromat
guru and charge 200 bucks an hour.
But you know, laundromat guy. Yeah, just I like doing it.
I like helping people. I'm not out here, like I said,
to gouge anybody. So yeah, reach out, find me and
happy to chat. Cool.
(50:59):
Well, thanks for your time, Tyler.
Thanks for having me man, it wasa blast.
OK, thanks for listening. Please like and subscribe and
share this with all your friendsand we'll see you next time.
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