Coin Laundromats - Watch Out for These Five Things When Looking to Purchase a Store

Toronto Laundromats

I am often asked what I personally look for when buying a coin laundromat business. There are five key factors that I pay attention to. If any of these factors do not pass the initial inspection, buyer beware.

Ancillary Income 

Don't forget to count the Ancillary Income that a store generates. This could be as much as 10% of the Gross Income and makes a big difference to the bottom line. Ancillary items are vending machines, soda and snack machines, video games, pay phones, internet kiosks, tanning beds, etc. 

The average margin on ancillary items is around 50%, so $1,000 a month of ancillary income would net $500 to the bottom line. Not bad, eh? Make sure you take this into account when adding up the Gross Revenue and coming up with your valuation of the store.

Age & Condition of Equipment 

When looking at a potential store, make sure you get the exact Make, Model, and Age (if possible) of each machine. Most machines have this information displayed somewhere on the machine. For top load washers, it is generally on the inside of the lid, or on the back of the machine near the top. Front load washers will often have this information on the inside of the door. 

Dryers will often have the model numbers inside the dryer door or on the back of the dryer. This information will be needed when you do your water analysis of the store. Pay attention to the condition of the equipment too.

 Most front load washers and dryers have a useful life of 15 to 20 years and top load washers, about 7 to 10 years. However, if well maintained, it is not uncommon to see dryers and front load washers lasting 30 plus years and top load washers lasting up to 15 years. Remember, this equipment is not the same stuff you buy at Sears for your house. It is commercial grade and built to last. 

If the equipment is old and run down when you are looking at a prospective store, you can look forward to a very expensive upgrade soon and increased maintenance costs until it is upgraded. Top load washers cost between $800 and $1,500 and front load washers start at $2,500 and go up to $9,000 or more depending on the size. 

Dryers can be $4,000 each. So take the condition into account when deciding on the price. Upgrading our store in Hayward, CA cost over $170,000 just for the equipment plus installation. You get the point.

Toronto Laundromats