The Current and Future of Fluff & Fold and WDF Services in Laundromats
The local demographics best suited for pickup and delivery is nearly the opposite of what is ideal for a self-service facility. Let's say you charge $1.50 a pound for pickup and delivery services. That means a 60-LB order would cost your customer $90.00. The same customer could do their washing in the self-service portion of your business for approximately $10.00 with one hour or so of their time.
This great cost variation will therefore have limited demand in lower income neighborhoods. Review your own demographics for residential population, income level, renters, rent rates and you'll have some basis for estimating the demand you'll have for WDF and pickup and delivery in your immediate area.
If you are going to be searching for commercial industrial washing services it is important to not only consider potential demand but the legality of operating your business. Does the city you're located in allow a pickup and delivery service in a zone allowing self-service Laundromats. Demand on delivery services in commercial areas with limited parking is frequently cited as reason commercial and industrial laundries are excluded. A city might also require the installation of a sampling well to determine the content of your waste water, which is frequently required for commercial and industrial laundries. Each part of the country might enforce or have different regulations but keep in mind that a right to conduct business as a Laundromat business does not mean you can always operate a WDF, dry cleaner or a commercial or industrial laundry without further approval. Most cities define Laundromats to be self-service businesses that use household chemicals in their cleaning process.
Another concern would be with your landlord. If you are leasing, you need to read your lease carefully and see if the lease defines the businesses that can be operated in your facility. A space rented for a "Laundromat" does not include a commercial industrial laundry processing service or approval of a pickup and delivery service. A Laundromat is defined as a self-service laundry facility. Ask your landlord for a written approval to offer pickup and delivery services (which is considered a commercial laundry facility.) As your business grows, you will have more of a demand on parking (including overnight parking) for delivery vehicles. If you're in a small shopping center, the demand on parking for your business might become a concern to the other tenants.
A fifth concern would be your insurance coverage. Does your insurance carrier know you are converting your business to include pickup and delivery? It is important to put this issue to rest before you encounter an incident that might require insurance coverage. The most common issue might include automobile accidents, laundry theft and behavior of your workers when they are outside your premises. Ask your insurance agent to provide you with approval for your business expansion.
Only a small percentage of operators can operate fluff and fold operations and still keep another job as well. It requires a full-time management plan with an onsite presence. Too much can go wrong, such as the expanded role of minimum wage workers, damage to fabrics and increased potential of injury for those who provide delivery services.
Finally, there is now a group of well financed investors who are seeing the possibility of creating large-scale pickup and delivery services. They are moving to industrial, with lower cost rent, locations and installing shirt folding machines and large presses where the quality of their finished product exceeds the level that can be attained by current fluff and fold labor used in Laundromat related fabric processing. Economy of scale will be available with product being purchased in 55 gallon drums. Huge investment capital, will allow these enterprises to offer better quality results and much lower prices than in current Laundromat locations. Have you see the 70 cents per pound offer?
Wash-Dry-Fold is marketed to new owners by salespersons as a potential source of additional income but seldom have I seen the potential negatives adequately explained. I tell potential new owners that it is another business (beyond a Laundromat) and requires increased time and management skills well beyond a self-service Laundromat.
Many folks try, and then stop, WDF service and this is likely the rule and not the exception. I suggest the income off WDF should never be considered as equal to self-service income when determining purchase price and potentially limited for in future years, I suggest that within ten years this source of additional income will dry up for Laundromats and move almost entirely to professional processing centers devoted and geared for pickup and delivery.