Vended Laundry Industry Overview
Industry growth is based on the demographics of population density, population mix, and population income. The more concentrated the population, the greater the need for quality vended laundry facilities. National and regional demographics indicate renters, the primary users of vended laundries, are the fastest-growing segment in the nation. As of the 1990 U.S. Census, 35.8% of the nation's 94.6 million households were renter occupied, up from 34% in 1980. The number of vended laundry stores built over the past 40 years has grown steadily as the population has increased and shifted to more concentrated areas. The end result has been a mature, stabilized industry with predictable rates of turnover and values of existing vended laundries; development of new "turn-key" facilities; and, equipment expansion and replacement. Today's vended laundry industry is a strong and vibrant one. Even more appealing is the fact that this dependable public service industry continues to grow and thrive. The demographic trends toward an even greater "apartment dwelling" segment of the population predict continued prosperity.
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The term vended laundry is defined as commercial grade, self-service laundry equipment placed into service in a retail space. Vended laundries are also referred to as “coin laundries,” "coin-op laundries," "coin-operated laundries," or "Laundromats." Laundromats generally occupy retail space on long-term leases (17-30 years) and generate steady cash flow over the life of the lease. Laundromats are unique small businesses in that they have no inventory or receivables.
Laundromats range in market value from $75,000.00 to $1,000,000 and may generate gross revenues between $100,000 and $750,000 per year. Revenue is comprised of self-service use of washers and tumblers, dry-cleaning drop-off service, wash and fold drop–off service, and vended sales, which include soap, video games, pay phone, sodas and snacks. Business hours typically run from 7:00 a.m. to 11:00 p.m. seven days a week and some are open 24 hours a day. New vended laundries are valued based on actual construction and equipment costs; while existing vended laundries are valued based primarily on revenues. Vended laundries are perfect examples of passive-income generators.
Vended laundries are one part of the self-service laundry business; the industry is actually comprised of two distinct segments. The first is vended laundries, and the second is represented by coin-operated machines located in apartment housing. This "apartment" segment of the business is referred to as the "multi-housing laundry business" or the "coin route business." These two segments frequently overlap; in more mature markets, the self service laundry business is estimated to be evenly split between the two. The self service laundry market consists of an estimated primary customer base of 89 million people living in rental housing, as of the 1990 U.S. Census. The secondary customer base consists of the non-rental population, which uses vended laundries only occasionally. The vended laundry industry is approximately 50 years old, and is primarily composed of individual owner/operators. No significant franchises are in operation at this time.