After several decades, laundromats remain
popular franchise opportunities across Australia.
In fact, in 2018, there were approximately 4000
laundromats and dry-cleaners in operation
across the country.
Still, despite all of the potential in the field, a lack of knowledge and
understanding of the laundromat industry can become a steadfast barrier to
success.
Have you ever thought about starting up a laundromat business? Would you like to
learn more about the process so that you can launch into the laundry industry
feeling well-prepared?
Below, we’ve summarised the frequently asked questions we often receive from potential
laundromat franchisees. Click on the question below to find the answer you need.
Are laundromats still popular?
The short answer is yes – laundromats are still popular thanks to
modern social trends. Many laundromat holder are taking an
innovative approach to customer service, adding laundry services such as
laundry pick-up and delivery for users’ convenience. Many laundromats
are also seeking to create a more complete experience for loyal customers by
using the space in new, innovative ways. Mailbox rentals, video games
and coffee machines are amongst the popular innovations seen in
modern laundromats.
Why do laundromats fail?
In the hands of an effective manager, a laundromat franchise is a
fairly safe business opportunity; however, a culture of neglect and
mismanagement can lead to business failure. Such a culture is
problematic because it increases the likelihood of basic problems
such as outdated or ineffective machinery and, at a higher level, a
lack of innovation and customer service initiative. Above all else, it’s
important that would-be laundromat franchisees build their
businesses on a foundation of entrepreneurial spirit and an
understanding of the economic landscape.
Can you franchise a laundromat?
Provided franchisees meet financial and personal conditions,
laundromats can be lucrative franchise opportunities. This operational
model has several advantages; for example, franchisees gain access to
the market research and business planning expertise of the franchisor,
as well as the training they need to succeed in the business. In most
cases, franchisees are also able to capitalise on the reputation of an
already successful brand.
What are the requirements for laundromat franchisees?
There are many rules and regulations which laundromat business owners and franchisees must follow. In order to keep a
laundromat business operational, franchisees must fulfil requirements pertaining to facilities, management systems,
operations, customer relations and general compliance. Major requirements are as follows:
- Buildings and equipment must be effectively maintained.
- Regular staff training must be completed and documented,
covering best practice laundry operations, infection control, and
the storage and transportation of supplies
- There must be procedures for ensuring that all machinery can be
correctly and safely operated and produce effective results. - Risk management practices must be upheld, including organised
training for staff members who are responsible for chemical
handling and storage.
How much does it cost to franchise a laundromat?
The initial franchise fees typically range from $15,000 to $50,000. However,
as the costs associated with connecting utility infrastructure – including
electricity, gas and plumbing – are often significant, the long-term
success of a laundromat franchise depends largely on the owner’s
ability to negotiate a shop lease with favourable terms.
How much does it cost to start a laundry business?
With costs ranging up to $1.5 million, setting up a laundry business
from scratch can be significantly more expensive than franchising
within an established brand. Most businesses require an investment of
between $100,000 and $400,000 to get started, depending on factors
such as building size and rent costs, equipment capacity, the number
and type of machines like washing machines, the fit out and the business, whether
staffed or self service laundry business. This money covers expenses such as the
purchase and installation of machinery, floor coverings, and plumbing,
gas and electrical requirements. You’ll need to hire qualified
tradespeople to help establish your laundromat infrastructure, including
the gas supply, cooling pit, lint trip, dryer ducting and make-up air.
Generally, day-to-day expenses are relatively small once
the set-up is complete; however, there are several
additional costs that must factor into this process. These
include council applications, utility charges, trade waste
application, security and insurance, signage and
advertising, furnishings, equipment maintenance and
electrical requirements. Laundromat Franchisees often secure loans to
some or all of these expenses.
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How do you set up a laundromat?
Before you submit an application for finance, you’ll need to decide on
the design and layout you want and be clear on the costs associated
with achieving this. At this stage, it may be beneficial to work with a
laundry professional who can provide advice and assistance in
relation to design and aesthetic, moving towards a final result that
suits your tastes and your customers’ preferences. Design
considerations will include furniture, lighting, carpentry, floor
coverings, and other fixtures and finishes, as well as signage and
furniture once your fit-out is complete.
It’s important to note that your business model – whether staffed or
self-service – will also impact the space and design requirements.
For example, staff may require a lockable space in which to serve
customers and provide folding, dry cleaning and ironing services.
How do you finance a laundromat?
Securing finance is a natural next step after planning and costing
your laundromat project. In most cases, franchisees need to secure a
business loan to finance a new laundromat business. This process
typically requires a good credit rating and access to sufficient capital
to service the lease, furnish the store and advertise the business.
Ensuring that you have these things prior to submitting a finance
application will set you up for success with lenders.
How do you run a laundromat?
The way in which you run your business will depend largely on whether you own laundry or standalone laundromat or a laundromat franchise.
Becoming a laundromat franchise owner may mean accepting
decisions about how your business should be run from upper
management. Alternatively, an owner of a laundry startup will
generally have the freedom to operate under whichever model they
prefer, whether that means being a hands-on owner, hiring a team
of staff to run things on their behalf or letting the business run
largely independently.
Before you make this decision, however, it’s important to examine
your competition in the area and the conditions that have
contributed to their success, or lack thereof. Once your business is
operational, it’s also important to ask for customer feedback on a
regular basis and consider opportunities for growth and
improvement.
What are the ongoing expenses involved
in operating a laundromat?
As is the case in all businesses, running a laundromat franchise
involves a range of ongoing expenses. The most significant costs
include rent, water and electricity, while the cost of machine repairs,
business insurance, chemicals and marketing can also be significant.
How do laundromats make money?
The main way in which laundromats make money is by charging
customers for the use of their machines. As each customer may only
spend a small amount on a weekly or fortnightly basis, an effective
pricing strategy is key to ensuring that the business remains
profitable. While a laundromat franchise may be required to follow a
predetermined pricing model, startup businesses can typically set
their own prices. In this situation, it is essential to conduct a
competitor audit and settle on a price that works for all involved.
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DOWNLOAD IT HEREHow much revenue can a coin laundry make?
Given all of the right conditions, it’s possible for successful coin
laundries to generate upwards of one million dollars per year.
However, this figure depends on factors such as the local population
and the range of revenue-generating facilities on offer in the
business. Pay-per-use video game consoles, for example, can
generate up to $300 per month in additional revenue.
How profitable is a coin laundry business?
A coin laundry can become a very profitable business venture with the
right business acumen and industry knowledge. As a general
rule, owners of established laundromats can expect to see about
20-35 percent of their initial investment returned as profit; however, this is
only a general guide. Key factors for consideration include the
business location, set-up, functional capacity and operating costs –
including water, gas, chemicals and capital requirements. If you
intend to hire staff, this will also increase your expenses
significantly, given that employing team members is the most
significant expense in the laundry business. In any case, it’s
important to work out your profitability through estimated revenue,
return on investment, and profit and loss calculations.
How much do laundromat owners make?
Are laundromats profitable? Laundromats can be highly profitable,
recession-resistant, and flexible businesses, making them highly attractive for entrepreneurs.
Just as laundromat businesses vary widely in service quality and
profitability, so do the incomes of laundromat holders. Some
laundromat keepers make up to $15,000 net profit each month,
depending on their business model and staffing arrangements.
How can I market my laundromat business?
Marketing is critical for the success of any laundromat franchise or
business, particularly in the first few months of operation. It’s also
important to consider each component of the customer experience –
particularly as competitors in the space are working harder to
attract customers with high-quality equipment and fun, modern
features.
All marketing efforts should be informed by your unique selling
proposition (USP) – the aspect of your business or offering which
sets you apart from competitors. This might be something basic, like
an easily accessible location or a great location, a pleasant atmosphere, an effective
range of machinery or a trusted brand name (particularly for
franchisees), or something unique, like the style of your marketing or
other novel features such as snack bars or video games.
Who regulates laundromats?
The Australian Healthcare Laundry and Linen Services Association
regulates commercial laundromats across the country, and the
Australian Standards for Laundry Practices have been used as a
primary reference source to identify acceptable levels of service and
compliance since 2000. These regulations were created to ensure
safe infection control and disinfection of soiled linen in laundries
across Australia.
If you’re interested in starting your own laundromat and looking for
the right advice that will set you up for success, the laundry and
sanitation experts at Richard Jay are here to help. Contact us today
for more information. Would you like to open a self service laundry business with a strong focus in your local community or preferred city? Contact us now to discuss your new business project.
