PUBLISHED IN JUNE 2024
Laundromats are currently in vogue, especially among those who have significant capital to invest. The waive of the financially significant buyer has permitted factories to maintain the higher equipment and parts prices that developed after the dearth of demand and lack of profits of manufacturers expressed during the pandemic. It’s now harder to negotiate a significant equipment discount, especially by distribution companies who are now owned by the factories or even from some factory direct sales units.
It is likely that many of these new jumbo-sized Laundromats, maybe all Laundromats, will face choppy waters in a few years when costs of operation increase. New equipment warranties will expire, insurance rates increase, labor rates will expand and the cost of utilities will continue to spiral upward. The shine of newness will become evident in a few years and few if any protections are being demanded by current buyers of equipment.
The first thing that will protect new store buyer and major rebuilds of so called “zombie mats.” Why do all these financially secure buyers of these million-dollar plus jumbo Laundromats, or major money remodels, not include a provision in their purchase contracts address the brand of the equipment being sold to them will not be sold to any entity or competitor in a reasonable period time and distance? An equipment sales agreement similar to a non-compete agreement would be useful. Since manufacturers promote the durability and lengthy life cycle of their equipment and urban demographic studies reach out to a three-mile radius, perhaps a good starting point would be three miles for fifteen years. In dense populations centers a lower distance could be considered.
I think very few new store buyers realize their “new” store will become a store filled with used equipment in a few years. The “zombie mat” a mile down the street can be remodeled with the same, but newer, models of the same brand you’re marketing to your customer base. Most ethical distributors and manufacturers would certainly understand the need for some protection.
A second point to consider is the honesty and competence of the sales staff of companies selling services to our business. A “board certified” doctor has more credibility than a nurse practitioner. If you have a Ph.D. attached to your name, it carries more confidence than someone with only high school diploma. How do you distinguish the quality of the information you are receiving from Laundromat brokers, sales staff and factory sales people? The industry association, the CLA, could develop a certification program for sales people in our industry. A board that reviewed lawsuits and complaints against sales persons would be helpful in securing confidence in those investing their money in our business.
A third point to consider the vocabulary of the Laundromat industry. The use of the word and title of expert is widely exploited. It is often a self-appointed designation. An expert in what? Who declares you as an expert? An expert in designing stores, understanding appropriate demographics, operating a store, selling equipment, owning a Laundromat, knowing how to repair equipment, operating Wash & Dry services, Laundromat insurance, lease negotiations and so many more aspects of our industry cannot be captured in a single word and what makes you a Laundromat expert. Perhaps the only true “experts” are those who have been recognized by our legal system courts where their expert designations allow their opinions can be relied upon and entered as evidence in a trial. Otherwise, the term is overstated in my opinion and can lead to unfortunate reliance by newbies.