43. A Walking, Talking Laundromat Encyclopedia with Andrew Cunningham

Today’s episode of the Laundromat Resource Podcast with Andrew Cunningham is jam packed full of useful information for laundromat owners and newbies, alike!

Andrew has been in the laundromat industry in various roles and capacities for 35+ years and knows this business inside and out. He freely shares tips, insights, and procedures that only come with an intimate knowledge of the business. And we get to benefit from his many years of experience!

Andrew is a co-founder of the famous Lucy’s LaundryMart in Southern California and co-founder of Cunningham Investments. As a sales rep, multi-store owner, consultant, broker, and more in the laundromat industry, Andrew is well versed in this business from multiple angles.

From quick tips and tweaks to improve business to his in-depth store analysis procedure, Andrew is one of the good ones dedicated to helping you find financial freedom through laundromat ownership.

In today’s episode, Andrew and I talk about:

His history in the laundromat business
How to survey a laundromat
The inception and rapid growth of Lucy’s Laundrymart
What makes a good broker
The glass ceiling of a laundromat
How to reach a laundromat’s potential
His simple tip to save money on a key utility
What to do if your laundromat is struggling
The 2 lives of our machines
Should you buy that laundromat?
Breaking down employee responsibilities
Your two most important business relationships
Coin vs. Card systems
Renting equipment
How to instantly lose $25,000
From most to least busiest days of the week
Laundry pick-up & delivery
Biggest mistakes owners make- laundry carts?
Make-up air for dryers
How to analyze a laundromat for sale

And so much more! Seriously, take good notes on this one. There is so much gold to be had for anyone interested in the laundromat business!

Watch The Podcast Here

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Episode Transcript

Read the Transcript Here

hey what’s up guys it’s jordan with the

laundromat resource podcast

show number 43 i’m pumped you here today

because today

we have a human laundromat encyclopedia

on with us

it is an incredible show i cannot wait

for you

to hear this so whether you own

laundromats yourself

or you’re looking to buy your first one

you’re gonna learn a ton

of stuff i know i did i took a lot of

notes make sure you’re taking notes too

because at the end i’m going to ask you

what’s the one thing

if you can narrow it down to one thing

that you’re gonna pull out of this

episode to put into practice because

that’s where it’s at

success follows action so learn

something learn a lot of things today

but make sure you put something into

action we’ll talk about that at the very

end um i want to give you a very quick

update

uh diligent capital investment i

mentioned it

in my in in my interview on the podcast

a couple of episodes ago

i just wanted to give you a quick update

on it um basically what that is is that

a group of us have put together uh an

opportunity for people who want to

invest passively in laundromats

to pool our money and and buy some water

mats together and just wanted to let you

know that that’s this thing is already

trucking and if you’re interested in

checking that out a little bit more

check out diligence

capitalinvestments.com

the link will be in the show notes at

london resource dot com

show four three forty three um or

if you’re on youtube it’s down below um

so check that out if that’s something

that’s interesting

to you and without further ado let’s

jump into our quick

one one-minute marketing tip before we

jump into it with

andrew cunningham the human laundromat

encyclopedia hey what’s up guys john

here with your one minute marketing tip

of the week

and your tip today is simply this your

brand is your opportunity

to shape the way your community thinks

about you

um and i want you to ask yourself two

questions

number one what do you want your

community to think of you

and two how do you want your community

to feel about you

if you run everything you do through

those questions

you’re going to help yourself build a

very strong brand

for instance when you’re going to train

your employees ask these questions

before you train them if you’re going to

pick color schemes

of your stores and paint ask yourself

these questions

if you’re building a new logo or a

website ask yourself these questions and

you will build a brand

that is strong and trustworthy and

people will keep coming back too

if you need any help building a strong

brand let jordan and i know at

laundromat resource dot com

slash get online andrew i am super

excited to have you here thanks for

coming on the show man how you doing

i’m doing great thanks for having me oh

oh man it’s my pleasure

my honor uh i we’ve talked a little bit

on the phone here and there it’s good to

see you face to face here well on zoom

at least

and uh and get to chat laundry mats with

you and i know that we’re gonna have a

lot of ground to cover

and i can’t wait to hear all this

experience you have in this industry and

the wisdom you’ve compiled and your

perspectives on things i’m very

intrigued by them

but before we get into all of that which

we will get into all that

and i just got to say hey you know what

buckle in because i know we’re going to

we’re going to be on a ride so if you’re

listening to this you know get the

notepad out because you don’t want to

take notes

but before we get there why don’t you

tell us a little bit about you

and who you are and then we’ll talk

about how you got into this business

well um i’m one of 13 number six

wow and uh born and raised california

primarily fullerton in here local high

school whole nine yards

spent five years in aspen right out of

high school that was my college degree

and uh moved in with my brother in san

francisco and went into business and

then moved back down here

my younger brother was working for a

company called mpe

and that turned out to be morton pollock

enterprises

and he sold washers and dryers there was

a division

but there was a pws which was pollock

wickham and steinberg

and uh he was working for them when he

was driving a corvette now he’s

21 and i’m 26 and i’m looking at my

younger brother going

i don’t get it i i think i could be

driving that corvette not him so

i uh uh i interviewed with mort and

uh he hired me and uh i didn’t have a

drive

a broker’s license or even a salesman’s

license at the time so

uh i went to work surveying laundromats

for six months for pws

you can learn a lot by surveying a

laundromat even before you get in the

business

uh what do you mean what do you mean by

surveying the laundromat can you tell us

what you mean

what were you doing well uh you would

drive up to a laundromat and you’d count

the parking spaces

and you’d look at where it was located

in line or was it on a corner

did it have a signal was there a

crosswalk

which are important aspects of what we

where the competition was where uh the

people were coming from crossing the

street same side of the street

um and then you’d go into the laundromat

you’d rate

how it looked what it looked like copy

the equipment down

ages make an estimate of the age of the

equipment

um at the time a lot of them left the

serial numbers available and you could

look at them

now they take them off so no one knows

which is you know

and then uh you’d break the van price

down and

and uh and then you’d turn that i turn

report in and that was pretty much

what you did yeah you got to know it and

you left a business card for the laundry

owner to see if they wanted to sell or

they need your new equipment and

that was pretty much your job so awesome

after i yeah after i did that um i

finally got my

real estate license and i went to work

selling laundromats from

84 85 to 90.

and then in 1990 my brother bill was

working for pws at the time and he was

the number one salesman selling new

stores

and i became eventually became number

one salesman for

existing stores brokerage then we both

left in 90 and created cunningham

investments and uh we had a uh

he bought a condominium right on the

beach in redondo beach and we overlooked

the ocean while we did our business

daily business

and uh rough start man that lasted

that lasted for about three years when

uh we got frustrated with the fact that

we weren’t making as much as we could or

should i mean i left pws making great

money and then for two years

you know it was starting to do business

it was really difficult

um we came up with an idea to launch

a uh a chain called lucy’s

lucy’s laundry mart and we did our first

store in inglewood and i believe in

late 94 early 95. freestanding

laundromat

and um about um

5 000 square feet and

big big big at the time uh

12 14 parking spaces and that turned out

really well

and we did uh private investors and you

know probably eight to ten people that

invested

and um we were

operating the store and we were filling

up the drink in the snack machine

almost daily it was getting depleted

that much

so we came up with a concept that we

actually had four thousand square foot

of laundromat we had a bowling alley

next to us

which was just a long and narrow strip

that we we

needed to separate

the building in two parcels because the

county said if you have

one single purpose building your sewer

fees would be 200 000

if you have two tenants it would only be

100 grand

so we said okay we’ll make two tenancies

a and b which

b was just nothing more than a store a

large storage locker

so after filling up the drink and snack

machines for as much as we did we

decided to open up a convenience store

inside the market inside the laundromat

and

um you’re talking about 10 12 14 hours a

day

on an excel spreadsheet how many candy

bars am i going to sell how many chips

are we going to sell how much sodas we

can sell

so it was bath by fire on the

laundromat side as well as the the

convenience store side

yeah and we got that market up and going

and uh within six months it was doing

about thirty thousand

um we were out selling the local markets

in milk that’s how much

we were doing and then we uh did uh

third in normandy

and then we did uh figaro and coldin

and both very good successful stories

and then we went out and raised venture

capital

uh to the tune of about 30 million first

time ever

um to do co-branding which was the

laundromat convenience store but

starbucks liked the idea so starbucks

came on board

and wells fargo liked the idea so wells

fargo came on board

and now we had a long dramatic

convenience store a wells fargo bag and

a starbucks under one roof

so co-branding started to get born in

southern california i’m not sure about

the east coast because i’m sure there

were some people doing some things but i

wasn’t aware of it because

i was buried in what we were doing right

yeah and then um

we raised like i said 30 million in

venture capital and they launched the

chain and they got it up to 27 stores

and then i left the company and bill

stayed on

and then eventually

pws bought the chain and sold the

complete chain off

and uh the rest is history i mean it was

a nice

venture and we got to do some things and

it kind of showed that you could have a

market or a convenience store inside of

a laundromat

and they could complement each other

yeah i i can tell you that

at both third in normandy which did 60

000 a month in washing dry

and uh inglewood which did about 30

we did about uh 25

in soap so in inglewood we did seven

thousand dollars a month in soap sales

and then

in uh um third in normandy we did close

to uh

fifteen thousand a month in soap sales

so it was

it was a it was a fit it made it it made

sense

yeah huge and yeah huge sense and then

bill went on to work do um a a

broker a developer a real estate

developer and i stayed in the business

i left for about seven years and then i

came back

and i’m back in the saddle again now and

working uh my magic doing brokerage and

consulting and

operational aspects which is really

where my strength is i like to

to help people out and show them how to

make more money once they get a

laundromat

well hey that’s why you’re on the show

right now man

i love it i love it well i mean that’s a

crazy story though man a wild wild ride

and i know that

you know you probably got into pws right

at the right time because i know they

were booming we had

um don and david stark on this yeah

early on and they they came on and they

talked about how they were

cranking out laundromats like crazy oh

yeah

and they were just donna donna was the

uh secretary executive secretary for

all three of them um mort it was

mart’s office uh uh john wickham’s

office bernie steinberg’s office and

mark pollack’s office

and donna sat in the front so if you

wanted to speak to either three of them

you had to go through

the gatekeeper yeah you’re not going

through her easily oh it was not easy

i loved it i love those guys and david

was doing the construction

yeah he he said he thinks he probably

built around 800

laundromats and it wouldn’t surprise me

and speaking of which i if you’re

listening to this right now i’m going to

link to

uh their podcast episodes because they

did two they

did a two-parter with them and they i

mean it’s an incredible it’s incredible

story so

make sure to check those out if you

haven’t yet yeah so i’ll link them down

in the show notes or if you’re on

youtube well i’ll link them in the uh in

the description down below check those

out for sure

awesome stuff they know their stuff too

anyways small

small laundromat world but you got in

right you know right at a boom

and i got i got trained by some really

really good people

i mean there was a certain method to the

madness and how they did it

we had a salesman there named john marks

and john was probably

15 years older than i was so i’m in my

uh it’s at 85 that’s 10 years i’m 28

john’s probably 38 40. and and uh

he probably at any given time had two or

three longer events in escrow

always brokerage always and we had a

nice staff we had probably a staff of

15 sales and they were they were

cranking them out they were cranking out

new stores left and right under the

laundry land

and bernie did the leases john did the

financing and more did

the rest so it was a it was a nice

marriage and it was a good job

uh good people and you learned a lot and

um i think some some of that’s missing

today i think that

uh um as you and i spoke about the other

day

um i i think that there’s a handful of

brokers out there that

um take a keen interest in their clients

well-being going forward

but a lot of people uh a lot of brokers

and sales people

they’ll sell a laundromat and they’ll

basically

be gone the next day and that new owner

will end up talking to people at parts

departments and talking to

other owners as they meet at the parks

departments to figure out all their

problems when

um a broker the person who sold the deal

should be stepping in and showing them

how to run it how to operate it

from that perspective and then you get

people doing the same thing over and

over again

and it and it it grows

yeah you know you know what i what i

call that

is uh when when somebody is

yeah because we have these brokers right

who will sell

these laundromats especially here in

southern california i think it happens

everywhere they’ll sell the laundromats

to you know first-time buyer don’t

really give them any help

kind of oversell it the buyer gets in

they realize it’s not really what they

thought it was going to be it’s actually

going to take a little bit of work and

it’s not just collecting quarters and

that’s it and

and so after a year or so they decide

they want out because it’s not what they

thought it was so they take it back to

the broker and the broker

sells it over again and they keep doing

that cycle

and i call that the laundromail like

that there’s brokers making their living

doing that it’s a big part of the reason

i mean i got sucked into that when i

first got into business and it was a

rough go for me

um but it’s a big part of the reason why

i do what i’m doing now is because

that’s a that’s not a good sustainable

business model

you know where you’re going to be

helping people out it makes a lot of

sense to help people

succeed in their business because you

know just

strictly business sense if you can grow

if you can help somebody else grow their

business they’re going to help you grow

your business so as a broker

you should be you know helping

your clients succeed because they’re

going to help you succeed they’re going

to bring you with them

right right right yeah it’s important

that you know one of the first

you know there’s a lot of things that i

tell these folks when they get into the

business and there’s

it’s from operational aspects too i say

the first day you own a laundromat is

the first day you’re preparing to sell

and i say that because it’s important

that you keep

good books and records as you go forward

so that

truthfully when a seller talks to an

agent and says i’m ready to sell my

laundromat

or i’m thinking about selling it what

value is there

that owner should just hand him the

books

and it basically is here’s what i

grossed for the last year two years

here’s my profit and loss statement and

then you go through all the expenses and

you make sure that the expenses are

properly represented

as you look at it and and i find today

that

it’s it they don’t do it and so most

owners

scramble when you talk with them and you

say well what’s your profit and loss

statement

and i mean right now they say well can

we exclude 20 20 20 for covet and i go

no you can’t exclude that that’s

part of the the value that’s part of

what what you did i mean it

good or bad that’s what it is um but you

find out that that

that their the profit and loss

statements are not properly represented

and it causes problems because they

bought it under a certain premise

and now they’re trying to sell it for

the same premise and it doesn’t work

that way

and so you find out that you know

um the profit of law statements aren’t

what they should be and had they been

trained in the beginning

the proper way to collect this data they

would be handing you a book saying here

what’s my value right so that’s missing

today

yeah and it also makes a lot of sense in

terms of value i mean

your business is a lot more valuable if

if the

if a buyer is able to finance it right

you i mean that’s why

housing prices have continued to go up

right because there’s

access to easy financing for housing

prices so instead of having to come up

with

a hundred thousand dollars to buy a

house you know you can come up with

you know like three three thousand five

hundred dollars

you know with a with a a loan

a down payment for a hundred thousand

dollar house or whatever or twenty

thousand dollars whatever the leverage

is right

right so when you can get your

laundromat financed from

uh with having a loan which you can do

which a buyer can do if you have good

records good

solid records it’s going to make your

laundromat more

valuable just by having those records

yeah

yeah yeah so it’s important that that

you actually start to compile your

records

and you you actually get to teach the

owner

um what people will be looking for like

they were looking for

again that goes back to to you working

with the broker that you’re working with

and the other thing is

you know when you look at someone’s

profit and loss statement for the first

time

and you go over it and then you as an

owner have questions and and i always

have questions

there isn’t there isn’t a question i

can’t you know don’t have

but when you try to get the information

or you can’t get the information or it’s

not

prevalent you sow seeds of distrust

so if it’s not um uh

the insurance isn’t the correct stated

amount

then you look at the labor and it’s not

the correct stated amount you start to

sow

seeds of doubt with this buyer that what

else are they not showing you

and what haven’t you been able to

determine is correct or incorrect

and now you have a breakdown of that

fabric

of having a good sale and having the

buyer be comfortable with what they’re

getting

and so you you as a broker have got to

build that

portion up and and then it goes into the

operational aspects of the laundromat

and

you have three correct two yeah two

right now yeah

and you’ve been at it for ten years

seven

so a lot of yours has been oh oh my god

look what happened today

i mean oh my gosh yeah especially early

on but yeah

there’s some there’s some horror stories

i’m sure that you just go i can’t

believe this

oh yeah yeah i mean things things don’t

surprise

me so much anymore but that’s only

because i’ve been desensitized to the

surprising things

yeah it’s um it it’s it’s uh when you

get to the inner workings of a

laundromat

um and you start to look at um and let

me give you an example

um i think that one of the biggest

failures of most laundromat owners today

is they don’t have enough logic cards

and they’ll tell you

well they steal them and i say okay so

you

are a small uh five and dime

or you’re a small hardware store in

rural america

and you know most of your customers they

come in and they all write checks to you

and guess what a couple of checks bounce

every month or

every year that’s the cost of doing

business

that’s what it is and i i cite an

example that basically says

i talked to an old-timer named vic rose

in la and this is in the

80s and fit probably had i don’t know 10

or 15 laundromats in the valley

and um i remember having a conversation

with them and i said

what’s a good number for laudery cards

and uh he went on to tell me a story

about

having a barbecue on a saturday

afternoon with all your family and

friends and you go to the grocery store

and you’re with you know your kids and

you’re gonna go grocery shopping for the

barbecue and you

go up to the front door of the

supermarket and there’s no shopping

carts

his question is are you going to go back

to that grocery store to do your

groceries and the answer is no i

can’t put my groceries in a basket why

would i want to shop there

and the same thing goes for a laundromat

um most laundry

most most customers come in and they

grab that laundry cart

and they don’t let go of that laundry

cart until they are finished

yep the kids playing it the kids sleep

in it the baby’s sleeping it

i mean it’s they own it and then people

say well what’s the right number

and uh i remember telling the story in

florida after giving a

seminar for the cla and um

i told them that it was uh

10. logic cards per thousand square feet

and then i went and i went on to the

floor of the seminar

and rick rollins r b wire pulls me aside

and says what did you do

and i go what do you mean what’d you do

and he goes people are lining up here

asking if

your statement’s true and i go well i

heard it from vic rosen a long time ago

so i’m going to assume it’s true

it’s just there’s never enough and so he

he he brought it down to seven to ten

cards per thousand but it’s still a true

statement if you have a 3 000 square

foot laundry

you should have 25 logic cards and

people say where are you going to put

them i said put them down the aisle

they’ll pick them up and they’ll take

them wherever they’re going to go

but no one will be without a logic card

and that’s really an important part of

the operational aspects of laundry um if

you

um if you take a look at a laundromat

like a casino

and you have slots and you have poker

and you’ve got blackjack and you’ve got

roulette you’ve got top loaders

20s 30s 40s 50s 60s 80s

1200s they’re all different

they’re all different vending areas and

the question is once you have them how

do you move them in and out of your

laundry

to get the most productivity out of your

laundromat

and that includes keeping them a repair

and that you know jumps into another

whole area of

when to buy and why to buy and um but

but but if you look at it that way you

just want to move that client

in your laundry and so if you’ve got

more of others and less

less of some or whatever the case may be

and you have a traffic jam

then you’re going to want to look at how

do you address that traffic jam so you

walk into your laundromat you say

you’re 40 pounders you got seven of them

as an example

and they’re constantly busy people are

waiting for them

well are your 30s not in repair

or are they priced right are your 60s

the machine above

priced right maybe it’s time for you to

jack up the price in the 40s and force

them back in the 30s and

force them into the 60s so you alleviate

the traffic jam so people can get in and

out of the laundromat

which is the key as quickly as possible

so you can do higher volumes

and that goes to the next statement that

goes to

what’s what’s the max

and people toy with it and uh

every laundromat has a glass ceiling

every laundromat will hit a

numerical number that is the maximum

that they could do in that store

and that’s based on where you are who

you’re who you’re

how much parking you have who do you

share the parking with

nail salons restaurants liquor stores i

mean

it all depends on what it is and then

it’s the equipment mix of what you have

inside but every laundromat has a glass

ceiling

you can only fit so many people in a

laundromat at any given time and that’s

the match you can do

so when you start to talk about you know

i’m doing

four and a half turns per day i i kind

of shrug my shoulders and say that’s

nice

i mean that’s an okay number and people

will tell you well you know if the

injuries

four five or six i’m i’m doing great and

i go okay well

divide six into how many hours you

you are in business you know eight fifty

percent so i only have fifty percent

usage of

doing eight turns a day if your average

cycle’s an hour

and i’ve had conversations with

equipment

guys and you know they want to argue you

know

all the different features that you have

on the machines today and i say but the

bottom line is this for easy math

it’s an hour per cycle seven and a half

to load

seven and i have to unload and put it in

the dryers fifth

45-minute cycle plus or minus it’s

we’re talking about numbers that you can

look at that you can say

here’s the goal that i want to get to in

my store

so now you say can i do seven turns a

day can i do

six turns a day and the question is you

might be able to

depends on all the variables that we

just i just spoke about

on do i have enough to get them in the

store and how do i keep them there

and you keep them there by giving them a

clean safe

well-lit place to do their laundry and

it’s a female driven business

and so you have to cater to them now

when i talk to the people in

la in the hispanic neighborhoods i

always tell them to put combat mirrors

in the corners of their laundromat and

they go why because the hispanic women

are short enough they won’t see over the

80 pounder

and they don’t know one where their kids

are and two who’s around here and they

want to feel safe

but if they can look up and see a mirror

now they get to see the whole store and

what’s going on and there’s a little bit

less anxiety and more comfort that it’s

okay in the store

that’s a good tip i like that so

go ahead no probably i’ve got you know

yeah no i’m

i’m curious i mean okay so you’ve

intrigued me right so you’ve you said

hey four four and a half turns yeah fine

whatever right

but you know really you could be doing a

lot more than that

right potentially it provided the other

factors you know your equipment makes

your parking all that stuff kind of

lines up right so

so let’s say a laundromat is

under performing their potential turns

per day

what can someone do to help them reach

that potential of their laundromat

well one of the first things that i’d

sit down with them and say who are your

competition and where are they and what

are they doing

and so i’ll do a grid that that i’ll

take

um depending now depending upon where

you are you uh

if you’re in rural america you’re gonna

go probably three to five miles out

if you’re in downtown l.a you’re going

to go a half a mile out

i mean it’s just the density of

population and i drive

in four different directions and i

survey all the competition and then i do

a spreadsheet that shows

how many top loaders how many and what

at what price

and and then how many uh

front loaders there are and the

different sizes there are so i can see

one if there’s a hole

in other words is the area of vacant

40 pounders or 60 pounders or is that

the least amount that they have

so that i can probably assess what’s

going on in the neighborhood what they

need

and then i’ll also look at your vend

prices and for me i like to maintain a

dollar

per size in between each machine

so if you’ve got a top loader and you’re

at two dollars and you have a 20 pounder

i’m sorry i’d be at three

right be at least 275 and then the next

machine would be 375 the next machine

before 70 but and i would go all the way

to try to maintain that dollar because

what will happen is when they come into

your laundromat

you’re going to see where they believe

is the best value for them

they’re they’re not dumb they’re just a

little bit poor

but they know where value is and so

they’re going to go where they think is

the best value for them

in that laundromat and that’s where you

get your logjam when you look at that

and you go oh my god those are

doing seven turns a day on those

machines but the machines below them are

only at five or four and the machines

above them are only at three and two

i want to force them in the other

machine so i can actually get people

in and out of my laundry mat quicker if

they’re all waiting for those

so you raise it a quarter well sometimes

people go i’ll still pay the extra

quarter because i still see the value

well you just made more money if they go

to this

machine above you made more money if you

go to the machine below you alleviated

traffic so you don’t really lose

you just are moving them in your laundry

to create more flow

so you talked about um maximums you know

if you took a

2 000 square foot laundromat or a 3 000

square foot laundromat

and you figure that the average family

comes in

um to your laundromat and um it’s

probably one and

it’s probably at least two people for

the most good

if you’re in a college town or what have

not it’s usually

one or two guys or gals because they’re

doing a buddy system to do the laundry

but if you have a family it’s probably

two to three people well you take a 3

000 square foot store

and you start to put in these different

families and quads

and you probably can only get 20

25 people in that 3 000 square feet

and that’s your that’s your limit that’s

your cap and they’re going to be there

for hour and a half two hours

depending upon their size so you’ve

already have now there’s your ceiling

so now now the question is how are they

affected

inside your laundry do i have enough

folding do i have enough dryers

so each one of those areas once you get

out of the top loaders or front loaders

is that where do they go do you have on

a folding is it two-tiered folding are

they using benches for folding are they

using

the the washing machines for folding in

which they’ve seen they do

um and then once and then the dryers

you’ll have enough capacity to do the

drying for what they’re

for what they need in my store and

there’s the threshold i think you could

probably be

maybe 10 more poundage in your washers

than you do your dryers and after that

you’re in trouble

and i’m against putting machines in

walls

now i remember i’m only i’m only

southern california i’m not east coast

because i know that they have bowling

alleys and they’ve got dryers on one

side washers on the other side

i got that but for the most part when

you’re building a square laundry box

dryers can only go against walls and so

i do my best to avoid putting machines

against the walls

because i want that saved for dryers and

i don’t have them now i will have them

eventually

so i kind of i’m planning ahead

and then from an operational span

standpoint what can i what can i do for

these folks well

i don’t think dryers ever can have

enough makeup air

i dryers are tested in a gymnasium

and they get all the free oxygen they

want

and then we force them behind a wall

that’s three feet wide you can barely

get your shoulders down for a repairman

to get in there

to do the repairs and they’re starving

starving for air

and so you look at you know some people

are lucky they get to put holes in the

walls and they get to draw

fresh air from the outside right behind

the dryers and everybody’s happy

but the reality of it is that’s really

not how it works in fact

it actually it it goes against

the grain a lot of times when you talk

about engineering a laundry

with dryers and the tip for the day

is that i think that you if you improve

the makeup air to the back your dryers

you probably can save five to ten

percent of your gas bill

now i know that’s a lot people go oh my

god i’m spending 1500

a month in gas um but the truth is

they’re just starving for air

and currently if you don’t have

an access to the outside from the walls

behind your dryers

you’re drawing your makeup combustion

air from

above the t-bar ceiling and then

sometimes

from the laundry itself where your

tenants are where all your customers are

and my recommendation is that you

buy three or four

bathroom exhaust fans and you put them

above

all the doors that go into behind the

dryers that you have access for for

repairs

and you put them on a timer and they

just come on and what they’re basically

doing is just sucking air from the

inside of the laundry

into the back of the dryer so they don’t

work so hard

to breathe and and and that starts to

feed them with the air that they need

because

you have combustion air and up outside

and you have makeup air

directly i mean sorry the other way

around you have makeup air above it and

you have combustion air behind it and

they just

circulate so you’re taking the makeup

area now becomes

combustion air and the combustion air

now is burned

and it burns and it throws up i mean

ready for this one this is a this is a

killer

it throws up lint and stepped on oxygen

so the oxygen is 98 98.5 percent

and when it comes out of that nice

beautiful candy cane that gets dumped on

your roof

it’s around 92. but the killer

is they have the relief vents

on your roof right next to those candy

canes

and that stepped on oxygen and that lint

gets sucked

right back into the laundromat yeah

and now you have poor circulation

stepped on oxygen and lint covering your

laundromat

not only is it covering the large amount

on the co2 bar ceiling and in behind the

dryers

it’s also now dusting your entire

laundromat on the inside

and what has to happen is you

you have to be able to

prevent that from happening yeah if you

can

yeah well i mean it’s it’s a huge uh

yeah i mean lint

is just a big problem i think it’s a big

problem why you know i get asked all the

time why

we don’t use water recyclers so much of

water

you know purification systems right to

recycle the water like car washes

you know and lint is just a huge prob i

think lint is probably the biggest

reason that we don’t

do that it makes it not cost effective

to do that for most laundromats

and maybe they’ll solve that problem

maybe they’re working on it but

i’m working on solving that problem

right now i i have something that’s

gonna

that we’ll do another podcast but i have

got something else here that will

that might be able to mitigate that that

lint situation

but you mentioned water recycling and so

when i

was in charge of operations for lucy’s

um we had there was a there’s a store

at 8th and bonnie brae and it was a

combination of lucy’s

and it turned into a wells fargo

kiosk and a burger king

and burger king liked our format because

in our format it only cost them about

300 000 to put a burger king in

in that application versus a million if

it was a freestanding one i mean

they really liked it there was an

apartment building just

to the east of us and i’m talking about

15 feet off the property line

and the laundromat was up against the

property line so basically you had 15

feet and now you have

all the apartment windows of all the

tenants okay

and um

we had a lint problem and it was dumping

all that lint on the roof and then

getting sucked into these so we had to

put a lint collection system on the

laundromat

to the tune of about 150 000 and

literally

big huge bags of lint got collected i

think it’s still there

but you you you mentioned the the the

water

the water purifier well they wanted us

to put a clarifier which is the big box

at the bottom

and the front of your laundry went that

collects all the lint

well we tried to do recycling and it was

a quarter of a million dollars and it’s

like it doesn’t justify

the cost of what you’re talking about to

get water purification and then the

county

of the health department says that you

have to have

so many parts per billion uh

out nine logs so it goes point zero

zero zero out nine and

eight is what they dump in the ocean and

nine is what you get to drink

okay laundromats are probably somewhere

zero zero zero unk and it’s a it’s a

three or four and

you can’t touch it that’s why they would

like you to have

some longer mats are now required to

have clarifiers not a lot of them but

probably i don’t know 25 percent of the

laundromats in la now have clarifiers

it’s to collect all that stuff that gets

dumped into the sewer system and they

have a hard time cleaning out the sludge

so it’s not cost effective for for water

purification

uh for two reasons one is to to do it

the correct way

the cost of the installation of it and

plus it’s hard to

get that water purified to that level

that the health department would allow

you to

recycle it or use it the other thing is

whether or not it would be an open

system or a closed system a closed

system meaning

that if it broke down you would be

without water whereas an open system

you’d be able to funnel in

fresh water to compensate for it while

the other part

was broken down and you got it fixed and

so the cost to put those two together

was becoming cost and effective so it’s

always been that way you look at it you

go man too much money to spend for it

doesn’t make any sense

right so yeah now if you’re the only

laundromat in town

and you were doing a couple hundred

thousand well you know

you would probably want to spend the

money right

yeah so well hey i would love to change

gears

slightly here uh i i get so i do a lot

of consulting and stuff but i get a lot

of calls from

struggling laundromat owners and you

know who’s

you know business just isn’t doing well

maybe they’re even losing money

um and i’m just i’m curious i mean you

have so much experience so much

knowledge

what would you say to somebody whose

laundromat is losing

money every single month and they don’t

know

what to do they don’t know where to turn

i would probably start back at the

basics i’d go back and survey my

competition

and i’d look at how how i fared

to my competition with regards to

cleanliness

newness i mean there’s a lot of things

you can do in a logger map that’s not

going to cost you a lot of money

you can paint you can keep it cleaner

and so i would probably look at um where

have i failed

um some things you have um

you have some barriers number one is if

you’re paying too much rent

um there really is no fix for that and

i think the golden rule or the or i

should say

the the litmus test is

um four times your rent

is what you should be doing in volumes

and nothing lasts

your rent should be 25 basically yeah

and if you’re if you’re at

30 or 35 your landlord’s your silent

partner and it’s just going up rapidly

and the way to combat that is

and this goes this is a comment to all

laundry owners this isn’t just the ones

that are struggling

if mcdonald’s or any of the major

corporations needed to raise prices they

don’t check with anybody they just raise

the prices i mean i can’t

tell you that um you know i go to a

starbucks i get a

i got a short and it’s 2 15. but down

the street it’s 2 35 and over here it’s

250

and everybody has different pricing

structures based on what their rent is

i mean it’s what their expenses are and

what’s the ratio to there

so as an owner operator you want to try

to stay ahead of the curve and the only

way to stay ahead of the curve

is how can i raise my event prices and

what are you offering your clients

when you do raise your event prices you

don’t need new equipment to do that

you need to offer a clean safe place

that they can do their wash

in a relatively quick amount of time

and you should have a game plan that

every year you’re raising one of your

machines

just it’s it’s a you need to keep that

hedge off of that rent because if that

rent gets up in the 30s and 40s

you’re going to have a hard time staying

open and you’re going gonna have a hard

time selling it

and you may end up with that laundromat

for a long time because

you rent is too high and so the next

question is

what do i need to do to make it back

down to the percentages and you have to

go survey your competition

and see what your competition is doing

and then you need to cut your costs like

i mentioned on the makeup air and you

need to look at

do i have any gas hogs do i have

is it time to replace my equipment and

we should jump on that and talk about it

um equipment has two lives

economic life and physical life

and the physical life will always

outstrip the economic life

what do you mean by that can you explain

that a little bit yeah um

with enough baling wire and spit you can

pretty much keep a wire

washer or dryer going forever but the

problem is

in doing that is that you have a couple

of factors that work against you one is

your repair man’s getting wealthy okay

you have customer dissatisfaction

because they don’t trust your

equipment’s going to work when they go

in there so they may be leaving you for

another laundromat

because they don’t trust reliability of

your equipment

okay you may not be giving refunds on a

regular basis

or getting it back to them quick enough

and that now you’ve

you further damaged your relationship or

your relationship with your client took

a hit and so

um the physical life will be there

the economic life is is that when it

gets to a point

where the cost of new equipment

is equal to the cost of repair replace

the equipment

and now comes the big test

the big test is what are you going to

replace it with

now i’m not particularly talking about

the brand i’m talking about

if you surveyed your competition and you

know what your turns per day are

you’re going to change the mix of your

laundromat based on what your clients

needs are

and you may not no longer have 15 or 20

top loaders you may have five

and you may have go from 12 30 pounders

20 30 pounders based on

competition based on what your client’s

needs are

based on your turns per day but the goal

here is to make sure that

at what point in time do i change my

equipment out it’s where

the costs along with the lost revenue

costs you can replace it for the cost of

new equipment and that’s when you’re

replacing your equipment

that’s not talking about any of the

depreciation or any other benefits you

get from replacing equipment

so replacing equipment isn’t just oh my

gosh i got to replace the equipment

it’s a thoughtful process that says

what’s going on how much am i spending

every month for repairs

how much are spending a month for labor

and then

what would be the cost of new equipment

if i replaced it and then

what do i replace it with based on the

statistics and based on this data

i love that because i i think a lot i

mean people ask me all the time right

like how do i know when to replace

equipment and i like this kind of

systematic approach because we’re

we’re told all the time like you know

replace equipment after a certain number

of years or

your equipment’s just looking aging so

replace it but

i love what you’re saying because this

gives us numbers right it gives us

a hard like definite

here’s when you need to replace them and

it you only need to replace them

when it makes sense economically to

replace them

right numbers don’t lie people do

numbers are solid you can look at them

and you can go oh my gosh i didn’t know

it it always um uh

gives me great pleasure when you talk to

somebody who really hasn’t studied turns

per day and

you know i have a form that i give them

in excel that’s really easy and

you know people well we’re getting

we’ll talk about a card and coin but i’m

going to talk about coin because that’s

really what what i do

they basically weigh it and then they

just give you the amount and i have a

form that actually takes the amount

converts it to dollars and divide by the

machines divided by the number of days

divided by the event price and there’s

returns per day

and so they get kind of giddy when they

get to finally get to see that they go i

never knew that

you go oh and how long have you had the

laundromat oh about two years they go oh

and who’d you buy it from i mean

yeah it’s like here’s your package this

is what

this is what you should have been handed

or should have been discussed

when you originally bought it um i want

the call um

do you think i should be doing 40s or

50s

or 40s or 60s and you go okay well

what do you need let me see what your

your action is what’s your competition

let’s other is there a hole

i remember doing a store in um

uh out in the uh riverside area

and um we did a survey of the

area and i found i found

that when we did the survey um the area

was

void of 60 pounders i mean basically um

out of four laundromats there was eight

60 pounders

and i looked at i looked at the client

and i said you know

i’d put five or six eight sixty pounders

in this store because the neighborhood

doesn’t have them

and it turned out to be a a big benefit

for them because

they’re doing more volume than they did

before and it’s because of those 60

pounders

but we wouldn’t have known that had we

not surveyed the area and looked at

whether or not there’s a hole in the

neighborhood

plus it gives you the chance to go and

see what your competitors are doing

and why they’re doing what they’re doing

any and

the other thing is and i’m just jumping

around here um

it just came into my head someone says

um should i buy that laundry

and i i’m hesitant to tell them to buy

the laundry

and i’m hesitant because it’s not my

decision it’s your decision i’ve given

you everything that i possibly can

however i’ll take another one for you if

you can’t go to that laundromat

friday night at 10 o’clock get out of

the car

walk into the laundromat and feel

comfortable don’t buy it

just don’t buy it that advice would have

saved me

a ton of heartache

because

i i’ve had some interesting and

interesting situations

uh in the laundry that like figure one

colder which is

uh figaro and a century approximately

and this is

back in the 80s but um i

there there have been some scary moments

that you just look at it and you go is

this worth it

and um it was part of the chain and you

know it was okay but but

you still so when i talk with people

they oh yeah i want to buy a laundry i’m

going to do this and this and that

and then they’re all excited and they go

look at it well we like what’s the next

step and i says the next step is i want

you to go friday and saturday night

and i want you to get out of the car and

walk around that parking lot and if you

can do that you feel comfortable then we

can go to the next stage

if you can’t we’ll find you another

locker man yeah and i

i was interviewed on my own podcast by a

former guest and we were talking about

that

and you know uh peter mayberry was the

guy who was interviewing me and he said

hey

you know it’s just important for people

to know not every laundromat

is for everyone not any not not everyone

can do

any laundromat right there are areas so

unless you’re a you know a vigilante

laundromat owner who wants to come clean

up the neighborhood you know

which i ended up being an un

an unwilling and unwitting uh you know

guy who had to come in and clean up this

laundromat because i got sold into a

frankly a dangerous situation right and

and there are those

laundromats out there so you do need to

be careful you know

and i i think that’s amazing advice

especially

uh for you know someone who

is not used to that like a rougher

neighborhood

or you know it’s easy you know for

somebody who lives here in orange county

to want to go buy a laundromat in south

l.a

but if you’re not used to you know

making

making that transition from those two

different cultures because they’re very

different cultures

that can be a rude awakening it can be

very difficult for someone to do

it is in fact um interesting you should

say that

um i tell people that you should you

want your long-term route within a half

an hour where you work or play

because what’s going to invariably

happen

is it’s going to be a saturday afternoon

and you have a whole house full of

guests

post coping and um

you’re having a grand old time and you

get that phone call saying

there’s a problem with the laundromat

there’s a flood now

we’re going to go back to dg we’ll go

we’ll talk about employees

so you go honey i got to go well your

laundromat’s an hour away

so now you already lost two hours from

this dinner party and depending on how

long it takes you to resolve the problem

that you have

you’re gone for at least three hours

from four o’clock now you’re back at

seven o’clock half your guests are gone

so i tell people if you can get a

laundromat that’s within

30 minutes of where you work or play the

other thing is

and i’m gonna jump back when i jump back

to employees

um when when a

laundromat owner takes over a store for

the first time

um they don’t have a clue and i can’t

tell you how many people have taught how

to use a broom

correctly didn’t you

i believe it yeah and how to teach me so

so what i what i do

and there’s a couple things that i do as

a broker that one is i get everybody

involved in what they’re doing and i

hand them a kind of a booklet that

basically says

here’s an overview of what you should

know and here’s an overview of what you

should provide

and one of them is a um an hourly

a daily a weekly a by

a bi-monthly a monthly quarterly and

semi-annually and an annual list of

responsibilities for the employee for

the attendant what they need to do

and then you also have to teach them and

nobody takes the time to teach their

employees they

have a thought process that says they

know how to use a broom or

they know how to clean up but what

constitutes an emergency and what do you

during this and how do i shut off this

or another good tip for laundry owners

um if you have a situation where you’re

you get um brownouts or you get power

outs

power outages um i instruct the

employees to turn off every breaker in

the panel

except for the lights and the reason is

is because

when that power comes back on it could

be a huge surge

more than you normally take and it’ll

fry computer boards

and unless you have a device on your

panel

called an eemon demon which is the real

name it’ll

stop the surge and only deliver the

correct amount of power

you’re going to fry computer boards when

the lights come back on the employee can

go back in and turn all the breakers

back on and all the machines are back on

but if you don’t i mean and this

happened a lot in la

the dryers just got fried the computer

boards got fried well it’s 110 bucks at

the time

to replace 20 computer boards and it was

why didn’t somebody tell me this well we

didn’t know it until now but

so it it go it points to

your employees or your first line of

defense and it’s very important that you

give them the right tools and that

includes

training them on what constitutes an

emergency what to do in an emergency

to what their responsibilities are i

mean if there’s a fire

employee get everybody out do the all

these steps and everybody has a step to

and i think that if most owners would

begin to start to take that approach

i think you’d start to see volumes go up

and i think people will be sticking

around a lot longer because

they have well-informed educated

employees that are doing exactly what

they should do given the situation

that’s awesome awesome advice because

you know i i think you know a lot of

laundromat owners

i i mean i think it’s starting to change

a little a little bit less

mom and poppy there’s still i mean i

still say it’s probably majority mom and

pop laundromat owners

right but there’s more and more that are

multi-store owners that are starting to

put

together these systems and these

trainings for employees but i think a

lot of

mom and pop owners aren’t really

thinking about that they’re just

thinking hey i’m going to hire somebody

to come clean

and you know resolve minor issues

that customers have which is fine but

when you start to think

about it more like a business which is

what you’re saying basically like think

about it

as if it’s a business because it is a

business right

instead of a cash machine which is how i

think a lot of owners

especially first-time owners who get

into the business who are sold that by

brokers or distributors or whoever

right you know to see it as a cash

machine but you need to shift that

mindset a little bit and i love what

you’re saying about training these

employees

but i think it’s something that

stereotypically we’re not good at as

laundromat owners

and you know training employees even

knowing what to train

employees and i don’t think there’s a

ton of resources out there

for that uh right now there’s some i

think but not a ton

right it’s it’s it’s a part of the

industry that needs to be

um uh analyzed and what’s the best way

to approach it just like

yeah the uh the lint situation so we we

all this industry has a couple little

interesting quirks that need to to be

looked at a little bit deeper i

personally have a a guy that uh

worked for me uh at lucy’s

and uh um i’ve been known to hire

have him take my clients on a saturday

and grab all the employees

and spend two hours with them and show

them how to

to do the basics so that the employees

understand it

the other thing another reason why you

do this

is that you know you need some kind of

manual if you have employees and in the

old days

people were paid under the table and

nobody really cared about the employee

they were dispensable until

until government got involved and said

there’s no more

independent contractors you’re either an

employee you’re not and

you know i like i when i talk with

people i kind of chuckle sometimes and i

i have a rule for you if they if you

supply them with a broom

they’re an employee period so they show

with all their own stuff and they come

in when they want a different issue

they’re an employee and and you have to

treat them like that

well you can’t just get rid of your

employees then

there has to be cause so if you

start out with a um a booklet that

basically says here’s

the rules and regulations that you as an

employee show up on time and you go

through the whole list

and it’ll take you a little to put it

together but it won’t take you long

to realize what your mistakes are where

your holes are

within six months you should have a

pretty nice kind of

contract for your employees that you

modify

all the time and you just put that in

there that you reserved right to modify

this contract anytime or this

manual anytime and and you get them to

acknowledge it and you put it in

whatever their native language in so

they can sign it

and then you you can build a case on

that and

and the building the cases is just you

know late late late

late didn’t do this didn’t do this

didn’t do this this sheet wasn’t

done and now you at least have some

cause to be able to say

i can’t use you anymore i’m gonna hire

somebody else

and uh it’s it’s um it’s

it’s an insurance policy

the more you hold on to this and you you

you

make it like that business that you and

i are talking about it’s not

it’s interesting they think oh

laundromats no big deal it’s a fun thing

it’s cash flow you know

like you say it’s a business and

the tighter you run it the more

profitable you are going to be

in the long run and it goes with

training and it goes through

you know um the repair guy

great story and i tell this to everyone

here’s another pearl for you ready

the number two most important person

besides your employees

is your repair guy

now everyone in this industry

can tell you oh my gosh

do we have a repair problem they don’t

show up on time

they don’t have the parts with them i

mean ad nauseam well i have news for you

it didn’t start out that way what

happened

is some people wouldn’t pay the repair

people on time

or would argue what their rates were or

would argue whether or not he actually

spent the time on the machine

et cetera et cetera et cetera my

attitude is this

that’s your most important person in the

operational aspect besides your

employees

and take care of them

when they show up give them half their

money if you want in the beginning

when they show up and they give you a

bid that’s going to be three bearing

jobs and it’s fifteen hundred dollars

give them the seven hundred dollars for

the parts

on a friday afternoon when you’re really

busy

and a machine breaks down if you take

care of your repair guy and you call

them on the phone

they’re going to drop what they’re doing

they’re going to come and see you

because you pay them on time

and there isn’t a hassle and that’s how

you build that rapport with your repair

guy

and your business succeeds you succeed

you don’t have broken down equipment you

don’t have pissed off customers because

i’ve taken care of my repair guy and

that’s the most the second most

important person i have

in this industry and so i see it happen

all the time

where’s charlie well he’s not here why

not well you know he had other things to

that doesn’t make any sense in my book

something’s inherently wrong with

a repair person who says they’re going

to be there doesn’t show up so

one of the first things i tell my

clients is make sure you take care of

your repair guy and make sure that

they’re

they’re paid when they they hand out the

invoices

and it’s legit um i think that in our

industry here in southern california

we could use a uh a boost in the number

of repair people that are

currently repairing equipment holy cow

we can i don’t

i struggle i’m always looking for repair

people i take care of my guys i pay him

i’ll pay him cash i’ll pay them what

front like whatever it takes and i

cannot hang on to repair

people i’ve asked for recommendations

and

it’s tough man even even with the

distributors

that have repair people that cost more

money

i can’t even get them to be consistent

it’s crazy so so we have a hole there

somebody come be a top-notch repair all

you gotta do i wanna tell you

all you gotta do is be on time and do

what you say and you will have more

business and then you will know what to

do with

you could create a whole business

hire people make sure they’re on time

and have clear communication if you

can’t be somewhere

just let you know let that model that’s

all you need to do

you don’t even have to be that good at

repairing to be honest

like no you just have to be okay

adequate and be all the time yeah and

show up

you know that that is a that is one of

the things that that this industry

has um suffered with it it is a uh it’s

a problem

and and now more than ever and for all

the folks out there wanting to start

want to get in the business to start

a different company there’s there’s also

the new all the new systems

now i’m i’ll be honest with you uh it

has been um a blind spot for me

on all the technology because and the

reason is

is that it has

developed and propelled itself

exponentially in this industry

that you have the the debit card and the

and the in the uh

the the easy card system or whatever the

system is

um uh that that it’s taking this

industry over

and it’s a flash now who repairs

those so now you’re

channeled into whatever company that is

whatever software program they have

whether it’s that company alone or is a

repair person out here

are they too busy do they have too many

clients so there’s another area

for someone that’s savvy in computers

that understands

software’s to come in and have their own

little

slice of life here because that’s part

of the industry and that stuff’s

breaking down and whenever you have

electronics now wireless is different

but a lot of it’s hardwire

to begin with in the back room you still

have lint and you still have

moisture and that always causes a

problem it’s it’s a

it’s it’s it’s something we can’t get

away in a locker man

until we resolve the lint issue which

we’ll get to it at a different time

but that’s the problem you have so you

have not only do you have repair of the

hard equipment

of bearings and coin drops and and

mechanisms and and

hoses and belts and all the other things

you actually have the electronics of it

and the software of it and who can stop

a machine and go through

and do a software repair or hardware

repair uh right there on notice or do

you have to wait for

uh uh the next day because it’s past

five o’clock new york time

that you can’t get a rep to do it so

there’s another area

that this industry in at least in

southern california right now

uh could use a boost in to to get some

money or get a company that basically

says we can work on all those things

well i tell you i’m this close to

quitting everything else i’m doing and

starting my own repair

company because i think i could probably

make a lot more money doing that

i’ll sell my laundromats and make a lot

more money fixing machines

holy cow man absolutely yeah absolutely

crazy well uh real quick i mean i have a

couple of we have a couple little

segments i want to get to in a second

but real quick

you mentioned earlier uh you want to

talk coin versus card

and i’m just kind of curious on your

take on that i mean you just touched on

it briefly right there but

i’m not part i’m old school

but um i think that um

i think there’s a time and a place in

the evolution of the card systems and

what have not that it’s beneficial for

particularly multi-store owners because

it uh

it improves one is it takes away

it takes away the possibility of theft

from people handling money

two um there’s a accurate accounting of

and you don’t have to worry about it i

mean i’ve seen some systems where

basically they just show me here’s my

bank statement

here’s what the bank deducted here’s

what i made yesterday and then it goes

further and this is what my

turns per day on each machine was uh and

not just the

the the the size of the machine as a as

a general but each machine doing the

turns and and then you get in the

conversations of

um why are those machines doing more

trends well they’re in the front or

they’re in the back or they’re next to

this so they’re next

whole different again that’s that matrix

that you get to play with once they’re

in the store like a casino you’re just

moving them within the parts

um but for coin and card um and then

there’s a hybrid and i like the hybrid

and um i just like coin i’ve always

heard that

cash is king and and um i i kind of um

again i’m old school on that i don’t

mind taking a little bit of time to

count quarters um it may be

unsanitary now it may require you to

bleach your money

uh may require you to wear gloves where

you handle it

i mean um i’ve been known to uh actually

wash

wash uh uh money out of the changers

and try optimism for launder or

and put a rubber band on the pillowcase

and wash the money and dry it in the

dryer

and and you actually have clean money i

mean and it’s it’s you know

it’s like i can touch it and use it

right um but but but

we’re talking about actually washing

right we’re not talking about laundering

money and having cleaning yeah i

i’ve actually i’ve actually i just want

to be clear on that that we’re

talking about physically putting it in a

washing machine

with some tide or ariel or something

yeah bleach bleach actually soaking it

in bleach and just

rinsing it and putting it in a pillow

case when drying it and having it come

out crispy

and then you can get you know but you

know i’ve done it

um not anymore but i have um

but it i mean because money is dirty i

mean it touches so many different hands

and you have no idea where it’s coming

from and and

i think a lot of people like the fact

that you can wave your ae

or your debit or your credit card in

front of the

thing in your machine set which i think

as we evolve

i think that’s where it’s going to end

up in the long run although i still do

like coin because i think cash is king

and

for all the for all the variable reasons

of that um

i’m kind of more of a hybrid guy but

it to talk about that you have to make

sure that it works for you and you have

to make sure you have equipment that

works for you

and that gets back to the repair part

which is vitally important

i want to do an uh a little separation

there um one of the interesting things

that we talked about in the beginning

which was

when you buy a laundromat your first

step is getting ready to sell it

um one of the things that that i’ve

noticed in the industry today

is that um i’ll look at the the listing

for sale the laundry for sale

and i’ll see um the equipment is

anywhere between 12 and 18 years old

and um if you’ve maintained it and it

looks good

you know again you’re trading dollars

with a bank

versus with your repair guy where’s your

money well spent in order for that

equipment to work

but i find on the profit of law

statements you’ll see something like 350

and you’ll go i’m sorry 350

for what 350 for repair and i’m like no

no that might be and 350 dollars

for a week might be 350 for

the parts but it’s not 350

for the repair and they go well the

seller says he fixes his own equipment

and i kind of chuckle and i say well all

right so let’s

change businesses

you own a car rental now remember

the laundromat and a car rental aren’t

that much different people are going to

go up crazy

no you’re renting equipment to the

public it doesn’t matter what it is

it could be um hammers and jackhammers

and chainsaws but you’re renting

equipment to the public

just happens to be cars and so

the thought process for the person who

fixes their own equipment

and doesn’t put it on the profit and

loss statement

is so you own a car rental and

at the end of the day your eight cars or

12 or 20 cars or rented out you got five

in the shop

and those five cars two needs a

transmission and one needs a couple of

oil changes and you need a brake job

so when you close the doors at six

o’clock you’re gonna put on your green

jeans and you’re gonna go out there work

till one or two in the morning repairing

your own equipment

and then wake up tomorrow and do the

same thing again he goes that’s not how

businesses are run

there’s a line item for that and the

reason there’s a line item for it

because there’s a cost associated with

that now i think that it’s fantastic

that you have the time of your life to

be able to go and repair the equipment i

think that’s wonderful

and i recommend that all laundry owners

repair their own equipment

to a certain point

and if you do that you should pay

yourself for that

so when you pay yourself for that

whatever the going rate is that’s what

it should be

reflected on that profit and loss

statement and i find that

10 out of 10 times when i look at a

listing

and there’s three things that i look for

on a listing and

and and almost every time i look at them

it’s blank or it doesn’t have anything

or the numbers are

woefully um uh uh misrepresented

um and and and so i

i i take the time to either talk to the

other broker or i take the time to talk

to the seller and say

you know uh it’s difficult to sell you

you’re breaking down

trust because most people expect to see

this expense on the

report and it’s not there and um and and

then

then you have an uphill battle um with

the seller

with the broker and then you actually

have a

um a hand uh confidence-building

conversation with your buyer

to explain to them what’s happening and

what the real numbers should be

and how it builds on top of it um what

people

i think fail to understand both sellers

and

brokers and buyers um for every 500

that isn’t stated on the profit and loss

statement

that the buyer incurs once escrow closes

on an expense that you didn’t catch that

is a constant

deduct every month um if you’re buying

out of four or five buying out of five

four multiple

um that’s six thousand a year that’s

twenty you just overpaid by twenty five

thousand 000

for that laundromat that you shouldn’t

have because you missed something or

somebody understated something so it’s

vitally important

that when you slow down i know you’re

all excited

i know you all want to buy a laundromat

i mean i have a half a dozen buyers

right now that are

you know you got anything in orange

county you got anything in the valley

you got to be in la and

the question is well here’s one and

here’s one here’s one and the first

thing i do is i go nope

nope rent-a-gross ratio is off no

they’re understating this nope they’re

understating that and i go

so they want 350 000 in the laundry and

my estimation is only worth 275

because there’s a hole

i treat it like it’s my money if i’m not

going to invest in it why would i

recommend

that somebody who wants to get in the

business who has some hard-earned cash

to invest in a lot of right why would i

want to sell them something that i know

that it’s not going to produce that kind

of revenue

on a monthly basis and they’re not going

to go after the seller they’re going to

go after me

and go after me meaning we’re going to

have that come to jesus conversation of

why didn’t you tell me

why did you miss this how did you miss

this i mean i have 35 years in this

business

i can’t miss anything

it doesn’t bode well yeah you know

and and i want i want them to stay with

me i want them to call me up and say hey

i got a problem

what’s the problem i don’t know what

machines to add oh great what are your

turns per day great let’s sit down and

have a conversation about your store

and then it goes through did you survey

do you have this do you have this let me

see the reports let’s talk about it

so i think that’s a huge yeah i think

it’s a huge point

i mean i love that you said for every

500 bucks you know that’s 25 grand of

equity that you’re overpaying

uh because i think people don’t think

about it

like that right and and it’s really easy

in this business

to miss 500 bucks either in overstated

income or

understated expenses which you know

it’s just easy to do because it’s really

difficult sometimes to pinpoint exactly

what a laundromat is doing unless

you’re working with somebody who has

this experience in the industry and can

tell

the gotchas like the repair costs right

unless first of all it’s that trust the

trust that you built up in the beginning

i i find that um probably a majority

uh 75 70

80 80 20 rule the old 80 20 rule

um that it’s not the it’s not the income

it’s the expenses yeah it’s the expenses

that are understated more than the

uh income is overstated because if the

income is overstated they’re paying tax

on it nobody wants to pay taxes

so they’re going to keep that as tight

as they possibly can

or even less which is a benefit to the

owner the guy who’s buying it

who he takes over the store and it’s

doing a thousand dollars more per month

it’s like

hey wow this is pretty good so but i

find that that

that the the the challenge for us

as brokers and as buyers is to make sure

that

um the line items are properly filled

out and you’re close to being what it

truly is

what the expenses are and there’s

expenses that you can’t get away with

industry and you know what they are

i mean you know um everything is

verifiable but

gas water and electric everything else

is a

fixed payment uh repairs for the most

part but

but if you’re on a contract with

somebody you’re paying him 550 a month

just to show up once a week to fix

whatever’s there and then it’s plus

parts

so even part of the part of that is a

fixed expense you can call fixed

rent’s fixed insurance is fixed labor’s

usually fixed because you don’t want to

fluctuate hours

by giving employees more hours and

that’s the other thing

what’s your coverage and um

are you paying them the going rate at

14.50 or 15

an hour in l.a now or orange county i

think it’s 14 or 15 an hour

um and how many hours do you have your

coverage and

then the conversation becomes between us

is when do you need coverage

and what is important coverage so old

rule of thumb

um and i don’t know if you’re familiar

with this but

uh saturday sunday friday monday tuesday

thursday wednesday

those are your busy days of the week

and you could go into a laundromat on

any wednesday and shoot a shotgun and

not hit anybody

like i get clients coming out well we

went to the laundromat on wednesday at

one o’clock in the afternoon

and there was nobody there they’re not

doing the volume wait stop

time out it doesn’t work that way

they’re all creatures of habit

yep go there saturday afternoon to four

o’clock

and then let’s talk so

you know they don’t know that so so you

talk about cyclicals and then you talk

about um cyclicals for the year

so i used to have a graph i don’t have

it now but

it used to show a a mean line

with the calendar january february march

april all the way across

and then on the left hand side it would

show 115

and 85 and you’d start in january

and you’d loop it down and it would go

right through the summer months so it

would be

just after school got out when we were

in school which should be

mid-june through july and august which

will be down to the 85

and then out of august it would start to

creep back up come september school

would start again

right back and then it would go up and

then you’d have this you’d have this

cycle you’d say okay

so they’re doing a collection in july

well the laundry’s off 50

it’s not doing the volume relax it is

it’s people wear less clothing during

the summer

therefore the volumes are down if you

were doing a collection in january you’d

be all giddy saying oh my god it’s doing

more than it should i’m buying i’m

stealing it okay but that’s

not how it goes because you’re doing an

average right

for what the volumes are so those are

some of the things that i talk to

uh clients with uh when i sit down with

them and say here’s

kind of a a benchmark for you to look at

when you look at laundromats and again

it goes back to

and then it goes daily i mean each

laundromat’s different daily

um but usually the afternoons are busier

than the lunchtime and the mornings are

sometimes busier

but remember they’re all creatures of

habit and

everybody has their time that they like

to go uh

to a laundromat and um nobody likes to

do laundry it’s not something that we

all like to do

it’s probably one of the least likely

chores i mean i can tell you i hate

doing laundry

well which is one of the reasons pickup

and delivery is starting to take off

right now which which is huge yeah um

and and um which didn’t exist

when i started it was

it wasn’t even a thought not even an

afterthought it wasn’t even a thought

um i don’t well somebody could probably

fill me in on this i don’t know when the

evolution

or the yeah the the the evolution of it

came in blew up i don’t know if it was

um 2005

2010 um but

um it’s a it’s arrived

um you know there’s a there’s a lot of

conversations on that

um and um i find that one of the

interesting conversations i’ve had with

people that have laundromats that do

wash and fold wash dry and fold

and then they’re like i need another

location and you go why do you need

another location

and they go well because i can’t do the

volume i don’t have a big enough store

and one of the first things to say is go

rent a laundromat from somebody else

make a deal with the guy down the street

that you you’ll take over his laundromat

from 12

until six in the morning you’ll he he

gets all your quarters whatever it costs

you to do your laundry doesn’t matter

i mean there’s more than one ways to

skin a cat instead of spending 250 000

for a new location and be liable for the

lease and all those other things that go

associated with it and what have not

so there’s more than one way to skin a

cat when you want to grow that wash dry

fold and

this is now becoming more of a wash dry

fold

clientele particularly in the college

towns and where

you have uh upwardly mobile people that

are pushing out

and they don’t want to do one i mean

it’s it’s

quite apparent based on the numbers that

i’ve seen on some of these stores you’re

you’re doing what and how much oh my

gosh it’s it’s

it’s amazing um and

learning that is another thing it’s a

whole different school of thought

and it takes a whole different mindset

yeah it really is like having two

different businesses i mean you’re using

the same assets but you’re running two

different businesses you have two

different

client avatars clientele types um

and so you know and you know one is a

logistics company which is pick up and

delivery

it’s a logistics business right right

and laundromat is not that

at all right so you’re renting equipment

out like you said

and um so it is it’s definitely a

different mindset

but you’re utilizing the same assets and

it’s a way to

it’s another way that you can get those

turns per day

up on your machines uh you know without

necessarily even drawing more

customers from your immediate age right

yeah right the question is is that which

machines do you dedicate

how do you dedicate it yeah do you

monitor all the logistics that’s it yeah

and you’re right you have a delivery

company and you have a labor company

okay and then you have the management

and and one of the

challenges that laundry owners face

today is

um when i when we started lucy’s um i

had the privilege

and the honor to work with john gorman

one of the original founders of taco

bell

and one of the things that stuck with me

was um

we asked john at what point in time do

you need a manager

and he says the average owner can run

five taco bells before he needs help

just to give you an idea i think that

in today’s marketplace since you do have

three organizations within one

organization

you as an owner have to choose which

part of the organization you want to run

in order to do it effectively

um so i and i’ve seen it and i’ve talked

to these owners

you’ve got an owner that has three

stores

two of them do uh one of them does just

laundry

wash a regular uh self-service and the

other one does self-service and wash

drying fold

and so you have in my book you actually

have

four companies within your company

the challenges is being effective and

being

um good at all of them and then

the the smartest one is taking a step

back and saying what am i really good at

and what do i need help at and then you

solicit the help

to get the other areas covered because

it’s hard to

to to run your three your three

laundromats as it is it’s hard to run

three laundromats

filling up soap and bleach and the candy

and the snack and all that stuff and

running that happens

now you’ve got a delivery company for

for four vehicles two vehicles four

vehicles

that you’re watching all the time are

they getting maintained who smashed it

how’s the insurance in places

i mean i see posts all the time which is

i didn’t know we had this scratch on

this van and there’s a big hole in the

side of it

could you at least tell me when you did

it i didn’t know what happened okay all

right

so so you have you have these segments

and in order to get better in order to

proficient at what you do you as the

owner have to step back and say

i’m at my breaking point

and now i need someone to handle what

you said which was logistics which is a

big portion of this business

where are you going how long does it

take you to get there but you know

and and and the routes and what have not

and then you have the people actually

doing the work

which is another segment um and then you

have the overall

financial books that you’re running for

the profitability of the business

so there’s four or five hats that as an

owner is wearing

and as the more stores you open up

the more you have to take a step back

and say where am i failing or

where do i need help at in order to

maintain and grow this company in the

right direction

and i think at some point in time you’ll

have owners that

are frozen they want to grow

but they’re frozen because it’s like

i’m 16 hours a day at this and i’m still

not

getting to that level of proficiency

that i need or i want

to see from it and you got buddies

elbowing you saying hey man have you

done this if you’ve done that or

or hey you know and you’ve talked to

guys like you own two stores or four

stores

and they’re giving you tidbits and you

sit back and you go home and you go oh

my god i’m not doing this right

or i need help and then it’s what does

it help cost me

and how much beneficial is it going to

be to me and what area do i want to take

over

and what area am i weak at that i want

somebody else to run for me

and that’s the challenges faced with

people that are doing the wash drying

fold along with self-service laundry

it’s uh something needs to be looked at

yeah yeah definitely a whole a whole big

beast

uh a lot of opportunity there especially

right now

um i think it’s just getting started

i mean it’s going but i think there’s

plenty of room for it to grow

but it’s definitely a whole different

beast i think it’s

the other one of the other segments that

you and i would like to probably talk in

another cast

about um what the industry needs

um from our perspective here and and

remember we’re

kind of myopic here west coast is a lot

different than the east coast in the

midwest i guarantee

in fact a funny cut funny note um i see

more people buying used equipment in the

midwest

than anywhere else i’m like i would

never buy used equipment unless

it was just starting a store and i

needed to see if that worked so that i

could build it up and buy new equipment

but they trade you know i mean i’ve seen

pictures of 40 year old sissels and

they’re like hey

well these work and i’m going what do

you have that dryer for

so anyways so there are some areas that

you and i

could talk about in in in improving this

industry

we talked about lent we talked about uh

a repair

we talked about uh two areas of repair

physical repair of the equipment

and and then actual repair of the um

electronics for lack of a better

description yeah and that includes dvrs

that includes security systems

um most of the security companies out

there you’re on a three-year lease

and uh if you uh bail after a year and a

half they want the 18 months of money

that they would have gotten had you

stayed on the

track you sold the business whatever

they want the 1800 to get out of the

contract it’s like

how does that work yes so so there’s

some areas here that we could look at

and discuss um on on

how to improve this leg of the business

to give

the owners that we know and the people

that we know in this business

a leg up on uh running their

laundry i love that i love that maybe we

could even do like a little running

series at some point or something let’s

talk about that

uh yeah that’d be i think that’d be a

lot of fun i think they’d be

really helpful for people yeah i think

so too well we have a little segment

that i want to get to

called the secret sauce listen up it’s

the secret sauce

secret sauce is this question is hey

what what tips can you give

to current owners what’s your maybe like

your number one or one or two tips that

you can give to current owners

to help them improve their their

business right now like i think i gave

you two right

two in the beginning two already you’ve

given a ton

you need more laundry carts and you need

to assess

which ones you need and i know you can

get extenders so they can’t take them

out the door

but i think laundry carts are a big plus

to keep your customers in place

um the other one was the makeup air

which i think is a huge uh

area um one of the things that i still

do to this day which you’re going to

think is funny

is when i meet with an owner at a

laundromat and we’re going to talk about

um i just stopped by charlie and say hey

charlie what’s going on i go hey i’ll be

at the laundromat okay i’ll go by and

see them

just to keep the relationship going and

you know maybe they’ve had a lot of room

for three or four years and maybe i

assisted them in buying it maybe i did

and i just know who they are and i go

and talk with them

and um i always can find something

operationally that i can point out and

say

if i were you i would you know here’s

okay and

and the makeup air is one and basically

i would take a

a piece of paper or a wad of lint

or something i could find in the trash

can like a bounce

and i’d go to the door that has access

to the back of the dryers and i get them

i bend down and put this piece of paper

or whatever i have right at the bottom

of the door and it would just get sucked

right in

so i said your dryers are they’re just

starving for air you can’t give them

enough air

so i tried to say look there’s

three things you can do dryers like to

do this

this is how they talk about the

circulation you get the combustion

make a pair to combustion air to exhaust

right

so at the top i would put in the

ceilings you put the egg crates

which allows the air to go up and in

front of the dryers and get sucked into

the top above the t-bar ceiling

and those are the the egg crate uh uh uh

ceiling tiles that they make and then i

put

if you don’t do that i put exhaust fans

above the

curtain wall above the dryers to suck

and force the air behind the dryers

and then at below i sometimes tell

people to cut a hole in that door

to allow the air to get to and fro

in the bottom of it to create a venteri

effect that will feed those dryers

and give them more air which

if they get more air and they’re burning

properly your gas bill is going to drop

so just a natural phenomena and then you

can always have

and you can always call your local gas

company in southern california so the

california gas

and you can have them come out and

they’ll tell you

whether or not your pilot lights are

burning at the right

color they’ll just look at it and go

too rich starved or whatever then you

can get a game plan together with your

mechanic on how to make sure that those

dryers

get what they need in order to burn

efficiently

and that those two points right there i

think are

the the laundry carts and the make-up

air will allow you to one save money but

actually um your customers will be a lot

happier

um and you’ll have a more satisfaction

in your laundromat

if you can do those two things i love

the secret sauce because

those are we’ve never heard anything

like those

two tips so i mean i think those are

great tips and they’re super actionable

right like you can go out

you know jump online right now and order

laundry carts and have them delivered

you know in the next week to your

laundromat so get out there and do it

i’ll probably go

order a couple more i’m not i’m not

quite at that 10 per thousand square

feet so i know i need to add a few

i’m going to give you uh an andy tour

okay

and i’m going to talk about logic cards

so um jordan calls me on the phone and

says hey i’m thinking about um

buying a laundromat and i’ll go okay

send me the setup sheet and i’ll get the

setup sheet and

then i’ll mark up the setup sheet and

i’ll send it back to you and we’ll talk

about the cash flow

and you go you know i still like the

laundry let’s take a look at it so

i when i drive up to a location now this

is it doesn’t matter if it’s

a new location that you want to build a

new store

or it’s an existing laundromat so i’m

driving down the street

and i look at the location and i pass it

and i drive

depending upon where i’m at half a mile

east a half a mile north a half a mile

west and a half miles up

and i will survey what’s there

now when i come back to this location

the first thing i’m looking for

is it on the corner does it have a

signal or a stop sign

is there a crosswalk is it in line

meaning is it down the street and it’s

not on a corner

and is there a competitor across the

street

are all the all the apartments or the

the rental houses across the street

people have to walk across well most

women and their little

chickens are not going to walk across

the street if there’s a lager mat on

their side

okay and the only way they’ll do that is

if they’re a crosswalk

and if it’s a big boulevard forget it

i’m also looking at

what are the natural boundaries is there

a river

is there a freeway is there a railroad

track

these are going to prevent people from

coming they’re natural barriers

okay particularly in the cities that and

the neighborhoods that you and i were

you used to looking at and seeing you

know you’re like oh okay

natural barriers and then i look at um

parking

exposure ingress and egress in the

shopping center

where is the laundry in the shopping

center is it in the crotch where the two

points meet

does it have a lot of glass are there

drink and snack and vending machines and

candy machines all blocking

the glass so that people can’t see out

and people can’t see

in another safety factor i don’t like

machines

i don’t like anything in my windows if i

can avoid it i get everything out of my

windows

i want the people in there to be able to

see out and i want somebody

to be able to see and to see what’s

going on because at night that’s what

you need

okay i’m going to go at night to see if

the parking lot’s well lit and if it’s

not i’m gonna mark down the lights that

are out and tell the guy and get the

landlord to fix those lights because you

don’t have any safety or security here

then i’m gonna look at who my tenants

are liquor store

barber shop nail salon dental store

these all eat up parking so

during my out normal hours they’re going

to compete with me for parking

after hours most of these aren’t open i

get the parking

but how much is that is my business 30

35 40

at night so i then get out of my car and

is it safe to get out

is there parking in front of the

laundromat

or is the parking in the parking lot and

i’m walking

20 or 30 feet to get into the laundry

and then i look at you and say

where are my laundry carts and i walk in

there and you’d be surprised you

and and you’ll laugh the next time you

go into a laundromat your competitors

you’re just going to start to laugh

you’re going to go this guy’s only got

11 laundry cards and he has 3 000 square

feet

how are you surviving i mean you want to

you want to spend what are they about 50

now buck 30 buck 50.

um uh um give me five just under a grand

750 right

you could pick up the average logic

customer is between 50 and 70

a month that’s a family of three and a

half okay

um so what if you picked up two more

people

because you have carts you have no idea

it’s it’s just another thing so now i’m

looking at carts i walk in the door

and i’m looking at the floor and i’m

looking at the ceiling now

ceiling tiles another oh another pearl

for you for your for our customers okay

you have a leak in the roof everybody

does

okay well it could be

it could be condensation okay

from the pipes okay it could be an

actual leak but you don’t know

and it’s not for you to worry about when

you replace that tile

don’t replace it take the new tile and

put the new tile underneath it

and leave the the water tile above it so

it acts like a sponge

and you will save on ceiling tiles

because it’ll absorb whatever moisture

is coming through because it already has

it just looks bad now you have a clean

tile up there for the most part for

another six months it’s going to stay

clean

when it starts to leak you take the old

one off you put another one underneath

it and acts like a sponge

simple way to save your ceiling and make

it look nice that’s a good tip

okay so now you walk into the laundromat

you’re looking around and what am i

looking for

i know that trash on the floor isn’t

gonna

push people away overflowing trash cans

will

because then it’s gonna go on top of the

counter then it’s gonna go here

also the uh night walk though the

watchman

newspapers that they nope you you don’t

get to advertise on my laundromat

unless you want to pay for it there’s no

rent there’s no this there’s no none of

those bulletin boards that they have

outside or inside

all trash no phones we all have cell

phones now

but i could tell you a story of when i

was at

when i first did lucy’s in inglewood

where um we had a drug problem outside

and there were four phones and

phones like newspaper racks they can put

anywhere they want they’re not regulated

but if you touch them

it’s grand theft it’s you they can put

them where they want but you can’t touch

them

so they wouldn’t take the phones out so

i just set up out

leaving every night i would take uh

silicone caulk and i would fill in the

corner slots

with silicone and it only took me about

a month and they removed the phones

even after i asked them to remove the

bones because it was a drug problem and

people weren’t coming to my logarithm

that was me and this was 1987 or

something like that

not an issue anymore for those of you

who don’t know there used to be phones

that you put

quarters into to be able to call people

these are called pay phones

right so now i’m in the laundromat so

i’m looking for trash i’m looking for

the ceiling

and now i’m looking at the overall

layout of the store

and as i walk through it i either

chuckle or i smile

because i’m looking at those are 35

pound milners

those are 35 years old i mean

okay um now i’m you know i’m okay

all right uh 16 quarters all right four

dollars okay all right okay

all right okay you’re in the right range

okay all right um and you see eight of

them and

four working and four look like they

just got

baseball bad beaten and you’re like i

don’t understand this

and then you look in there and you go

okay so i do a quick

poundage reading on the machines and i

don’t care what your machine is

10 20s 8 30s i’m doing my math

and then i just look at all the dryers

and i every dryer is a 30 pounder unless

they’re new ones

and i do the math and i see if they have

the proper amount of ratio of poundage

to poundage

again i like to have a little more

sometimes you have a little less

but now i’m looking at mix i’m looking

at flow do i have machines

that are against the wall so that um and

they don’t do it anymore they used to

i haven’t seen too many today but i like

to see a free-flowing laundromat where

people can walk in the laundry room

without getting stopped in

in the older days they used to have some

laundromats where the machines came out

of the walls

and if you were doing your washing you

were in there you had no way to escape

well that’s just making the person who’s

doing their laundry fearful that they

can’t get out of a situation if someone

came in the door

and said how do i get out of here so i’m

looking at the layout i’m looking at the

equipment

i’m looking at the age of the equipment

i’m looking at are all the lights on

do they have lights are they all working

are they all functional

and and then i leave the store and i sit

down on my car and i and i rate

ingress and egress and that’s how i look

at a laundromat

every time i go to a new laundry

and i count the logic cards

and i give it a grade and then i sit

down with you and say here’s what

my discovery was at this particular

laundromat here’s where i think you can

improve

you can call me today and say come down

to look at my login and tell me what you

think of them because i haven’t been

into your stores

so i’d be more than happy to do that so

but it just takes another set of eyes

not yours

and it’s one of those like hey i think

i’ll do this every six months i just

have somebody come in and look at my

store

from their perspective and it could be

another owner that you know in orange

county say hey

come by and rip my store apart

and and you get you get that i mean you

know

because you realize you’re really not in

competition with each other

right you’re you’re just trying to gain

the mass of people that need their

clothing washed

and how do i provide for them so your

competition is really yourself

how can i provide this neighborhood

and you and i can talk about in the

future we can do another podcast

of demographics how they impact you what

do they really mean what do you look for

um to um what’s the average family spend

um an example i’ll just give you a

little tidbit um

somebody said you know i i look at

renters and

i get it down to a number and i multiply

that number by

i divide it by the number of people per

household and in hispanic communities i

know that it’s probably double so if

they say there’s 3.5

there’s six people living in that house

it’s just

just the way they they work and

but that household is 50 to 70

per household so you’re doing 25 000

in your laundromat not including wash

dry and fold

and not including vending because

vending

is an adjunct to your wash i take that

000 and i divide it by orange county i’m

going to divide it by 60.

you’ve got 425 permanent customers

coming to your shopping center every

week to do their wash

those are your numbers and if you wanted

to you could sit down and put a

percentage to each day of the week

saturday sunday friday monday tuesday

thursday wednesday and you can figure

out

approximately how many people are coming

to your logger mat on fridays

as a percentage and then divide that by

16 hours you’re gonna go geez i don’t

have a lot of people coming in here

now the question becomes how do i get

them in here right

and and then it goes back to if i had

more parking

i could do more volume if i had more

volume i need more dryers i had more

dryers i need more washers and now it

becomes one of those

oh my god i’m chasing my tail here but

that’s

when you’re doing that then you’re doing

it right

i love that i mean again the systematic

approach is something that i think

is missing even with most brokers that

i’ve worked with that i’ve seen

they’re not taking the systematic

approach a lot of them are just kind of

basing off their experience and so they

have like these

you know general knowledge where they

can kind of get ballpark and stuff like

that but i love the systematic approach

and again

treating your business like a business

right and that’s what you’re doing

that’s what you’re saying

when you’re going through i mean i i was

taking all kinds of notes while you were

talking about your process and stuff

like that because i i think

even just having an owner do that for

themselves and i love the advice of

having somebody come in

every six months and just tear your

laundry mat apart it terrifies me to

death

to have that happen but it’s way better

to be critiqued by somebody who knows

and to be able to make

you know adjustments to improve your

business

than to be ignorant of that stuff and

feel and not feel that uncomfortable

feeling of saying

hey here’s some things that i’m not

doing optimally

that i could do better right it feels

scary to me

but you know ultimately if you want to

grow your business it’s like that whole

like iron

sharpens iron kind of thing right you

have somebody come in and telling you

how to improve your business it’s only

going to benefit you and

as important it’s going to benefit your

customers

and your community that your laundromats

in right

you’ll be you’ll laugh and i’ll i’ll and

i’m going to use you so that everybody

can see that you’re human

um what was the last time you surveyed

your competition

oh i was just i was thinking this i

don’t even want to talk about that i was

because i was thinking i was like man i

need to go back it’s probably been two

years at least since i’ve gone out and

looked at

the competition and you’d be surprised

um i’ll give you a story um i got a guy

in la

and um we found out that

he only has one competitor that

competitor has equipment the same age as

his equipment which is 20 years

so this neighborhood has not had a

resurgence of new equipment for 20

years that’s

shocking but it’s also

a benefit to him because we went in

there and said

what do we need to change how do we need

to change it based on the competition

and based on the machines that the other

competitor has we’re going to put new

equipment in here you’ll do just fine

because in that case since they haven’t

seen new equipment once they see new

equipment

it’s not so much that it’s new it’s they

know it’ll work

right yep even if it’s a quarter more

it won’t matter they’ll be at his door

so well

we don’t know go ahead yeah no that was

awesome man i mean that

that whole that whole secret sauce thing

was

incredible there was so much good stuff

in there uh i mean you’ve given already

a ton of

tips for newbies but we have a section

called pro tips

pro tips and that’s if you have a piece

of advice to give to somebody buying

their first laundromat

what would you tell them go there late

at night so you’re comfortable that you

know that that’s the laundry you want to

own

move very slowly and methodically

in your analysis and investigations

don’t give up

when it doesn’t fly right the first time

because it’s not going to fly right the

first time

trust the process with your broker

and realize that once you get to escrow

the escrow officer rules the broker

the seller and the buyer have no say

because the escrow officer has her own

set of rules that she has to work by

and she’s only asking for information in

order to close that escrow

don’t open escrow

unless you have a deal

unless you have verified several things

escrow in my estimation is good for two

things

three things you’re legally good to

transfer the business you’re going to

get a bill of sale

you need an assignment of lease and you

got your financing

and those are the only three things that

i look at when i talk to my clients

about

what escrow means the rest of it you get

to do collections you get to

learn about the business you get to be

trained on it but that’s all

what the escrow officer does and trust

in the fact that that’s the process

there is no control after once it gets

to escrow it’s out of our hands

yeah and most people don’t understand

that they think you can manipulate

something that’s like

she’s got her own rules that’s what

they’re for they’re a neutral

neutral party yeah awesome

awesome pro tips i think those are great

things for newbies to be thinking of

again a lot of

uh unique tips there that we haven’t

heard before on the podcast so

really really good stuff and we haven’t

really talked about escrow at all i

don’t think no podcast so

i mean at least bringing that up i

appreciate that maybe we can do

something later on down the line talking

about escrow too

um okay well i have two more questions

for you the first one

is uh do you have any resources that you

would recommend

i i feel like there’s not a ton of

resource there are resources out there

but there’s not a ton

out there but do you have any that you

would recommend besides me

i mean you of course that’s gonna be my

next question

well no no no it’s um um

i don’t have anything explicit because i

haven’t really um

gotten out of my box and looked at

what’s available out there i know

there’s some videos out there that i

haven’t really watched yet

i’ve seen a couple of podcasts that are

interesting

um and i like by the way i like the way

the podcasts are going and

the topics that they’re covering because

it’s covering a broader spectrum than

than i am seeing in my world um

and then um

what else um

lost my train of thought yeah that’s

okay i mean

i think it’s a tough question and i i

find this is a tough question for a lot

of people and i think

my my kind of takeaway is that we need

more resources for people

out there if almost almost no one can

give me

specific uh laundromat related resources

material

yeah yeah almost there’s almost nobody

who’s come on the podcast who can do

that some will give like

business books or something like that

but i think there’s a distinct lack of

resource

and i would just say that as laundromat

resource one of my missions personally

is to get some more specific

laundromat resources out there into

and to give voice to people like you and

people like other

people in this industry who who know

this business

backwards and forwards who have a lot to

give and to give

you know you guys a voice to be able to

share your wisdom

moral story happy to participate and

help you need more resources so let’s

talk more about that

all right my very last question for you

man i know a ton of people are going to

get a lot out of this interview some of

them may want to

contact you either you know to consult

with you or

you know to use you as a broker whatever

the case may be what’s the best way for

people to get a hold of you

um my email address and my phone

okay you want to shoot me that email

address yeah ajc

at a cunningham

ent.com okay

and again that’ll be in the show notes

if you’re on youtube that’s in the

description so if you want to get a hold

of andrew

uh that’s the best way to do that the

email his phone number

is there and andrew this has been

awesome it’s been great just hearing

your i mean

literally decades worth of wisdom and i

know we just scratched the surface but

there was so much good stuff that i

think is going to help a lot of people

with their businesses or those trying to

get their first laundromats gonna help

them

get pointed in the right direction and

that is the whole goal of everything

we’re doing here so i really really

appreciate you coming on

and sharing your wisdom with us i uh

i’ve had a blast i didn’t uh

have any idea how it would be this was

my first podcast in doing this

yeah right um this is what i do daily

and it’s a lot of fun and i really enjoy

what i do

and uh i would like to help out whoever

needs help

to um make it a better experience for

them and

make money which is what the reason

we’re in the business world

love it well appreciate it and looking

forward to chatting again

next time thanks man i appreciate it

thank you very much have a good day

all right you too all right that was a

doozy i know that was

uh man there was so much in there

that i just holy cow man my head feels

like it’s gonna explode

after listening to that hole uh just

andrew’s just like

giving fountains of knowledge uh about

the industry

and about his history is also

fascinating to me

um he just has these deep roots this

history in the industry and also just

all this knowledge that he shared with

super super cool for me the takeaway

again i i tell you every single episode

pick one thing to take it away

um and put it into action this week so

wherever you’re at on your laundromat

journey

find something from this episode put it

into action and let’s stack those

actions on top of each other

for me it’s a simple one i need to get

some more laundry carts apparently

um so i am gonna go order some laundry

carts for my laundromats

all right pick something for you let me

know what you end up doing i’d love to

hear

what actions you guys are taking hit me

an email at jordan

at laundromat resource dot com or better

yet head over to the forums

laundromat resource.com forums and have

a conversation about the action steps

you’re taking

from these episodes all right cannot

wait to see you next week

another awesome episode next week it’s

going to be a lot of fun

hope you enjoyed this one we will see

you next time

peace

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