Owning a laundromat can be a rewarding and easy business. We’ve talked about the different ways you can purchase one – from building your own to buying an existing one. Now let’s look at how to buy a laundromat franchise. Purchasing a franchise means you are buying a name that is already recognized along with a level of service that customers expect. It can help you avoid the challenge of having to establish a brand name because people probably already know it.
Buying a franchise means that your start-up risks are lower and your marketing is taken care of by headquarters. However there are fees involved that will give you an additional expense as well as possible monthly royalties and advertising fees. You will have to factor those in when calculating your monthly expenses versus income.
When buying a franchise, investigate the company. There aren’t many laundromats well known nationally, but there may be chains in your area that you are familiar with, so you can decide how they are perceived and if you want to be associated with their name. If you know people in the laundry industry, ask around for insight into the business and the owners. There are trade shows for people in the industry that suppliers, manufacturers and franchisors attend.
The cost to purchase a franchise can range from $200,000 up to $500,000, which does not include franchise fees. Because it is such a large purchase, it may be best to consult with a lawyer about the contract and other legalities in order to ensure you are not overlooking any loopholes or things that could become issues down the road.
If you find a franchise you want to purchase, you have to apply to show that you have the business knowledge and funds to successfully run a business. You will have to provide statements showing that you have financing along with a letter of intent. The franchisor will also have to approve the site you select. Once you are approved, you will have to design the space according to their guidelines, so keep that in mind when looking at locations. In some cases, the company may have sites already selected for you to use.
Many companies will provide training in how to run the business. A laundromat does not have inventory the way a retail store does, so purchasing certain items will not be required in most cases. They may suggest a brand of equipment to use if you are supplying the washers and dryers. You will also have to stock the laundromat with other items such as hangers, racks and folding tables. It is likely that there is a floor plan to follow that makes all of their facilities uniform.
Franchise contracts have different lengths of renewals, so keep that in mind. Some may be for as long as 20 years, however they are not automatic. You do have the option of ending a contract at the end of each term. Again, this is a discussion to have with a lawyer to ensure that if you decide the franchise laundry business is not for you, you are able to cancel your obligations.
For helpful information about buying a laundromat, be sure to check out these other topics!
- The First Steps to Owning a Laundromat
- Other Factors to Consider When Buying a Laundromat
- Hiring Laundromat Employees | Contractors vs W2
- Differences Between Contractors and W2 Employees
- Start New, Buy Existing, or Franchise?
- Start New, Buy Existing, or Franchise - continued
- Buying a Laundromat Franchise
- Here's What Laundromat Customers Expect
- Here's What It Takes to Own a New Laundromat
- We Can Help You Finance a New Laundromat
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