Q. WHAT ABOUT THE LEASE?
The majority of existing Laundromats for sale will have an existing lease on the premises the buyer will have to assume. Many established laundries have leases with rents currently "below market" for new shopping center space, and although the leases may be shorter, the lower rate can make some exceptionally attractive. You may also attempt to negotiate a new lease or a lease extension on any existing lease. Rent, along with utilities, constitutes the largest monthly expenses an operator faces and sometimes a note payment if a loan was made to finance the purchase. Viewed in this light, some locations for new laundries may be more affordable, however, rental costs should not be considered apart from the contributions the landlord may make toward tenant improvements. The square foot costs of rent per month will vary. Some locations may rent for as little as $1.00 per square foot or as much as $3.00. Rehabilitated locations in established areas may be less costly, while shopping centers in rapidly developing or exclusive areas are often more expensive. The lease is the most important document for the majority of owners who do not own the property housing their business. Depending on a number of factors, including the location, the lease can be a complex, lengthy document. The simplest leases run four or five pages. However, the bigger the shopping center, the larger the lease is likely to be in number of pages. In developing areas where rents can escalate rapidly, operators prefer longer-term leases, fifteen to twenty years or more. But whatever the lease duration, a clause should be requested which permits the tenant to assign if a decision is made to sell. Because the lease establishes the terms of tenancy and sets rent for a fixed period it is important that the lease be negotiated with the assistance of an experienced person in Laundromat ownership or development.
Q. WHAT IS AN ACCEPTABLE POPULATION DENSITY?
The typical Laundromat user is in the middle-to low-income bracket. Densely populated areas with apartment buildings, college campuses, resorts or mobile home parks can be considered advantageous locations. Laundromats also have successfully located in the suburbs and multiple-housing areas where they serve the needs of families with children. For up-to-date information, research services are available which provide demographic studies at reasonable rates of up to $100.00 per survey, or Laundromat123.com will provide them for free upon a request and meeting.
Q. HOW IMPORTANT ARE OTHER LAUNDROMATS IN THE AREA?
The number of Laundromats that can operate successfully in one area depends upon the size of the market. If demand is adequate, a one mile radius might support five or more stores. One owner with four stores located within one-quarter of a mile apart in a low-income, urban area reports: "Business is fine in all of them."
Q. IS PARKING IMPORTANT?
In Southern California, parking should be plentiful, close, and well advertised. Ample off-street parking is eminently desirable, Laundromats which share their parking lots with adjacent stores ("reciprocal" parking regulated by the lease) will require more parking if located near establishments (like cocktail lounges) whose patrons stay for longer periods of time and tie up parking spaces.
Q. IS VISIBILITY NECESSARY?
Laundromats should be located where potential customers can easily see them. Good exterior signs can help a poor location by attracting the attention of individuals traveling by car. The standard: an unobstructed, lighted sign, visible for three hundred feet or more.
Q. WHAT IS THE INDUSTRY OUTLOOK?
The market for Laundromats will see expansion in the next few years as housing costs soar, forcing more young adults to select apartment dwellings for longer periods of time, and as the population of California continues to grow at a substantial pace. The successful future of the independent store will depend on its owner's willingness and ability to develop good management practices, adjust to changing economic and environmental conditions, and investment back into the business. Energy-efficient equipment will play an increasing role in effective store management overall. Laundromats have weathered many of the storms brought on by shortages and increased regulations. Industry leaders are therefore optimistic that the well-equipped, well maintained, and well-managed store will continue to prosper, attracting and keeping customers by offering quality service at a competitive price.
Q. ARE VANDALISM AND THEFT MAJOR PROBLEMS FOR LAUNDROMATS?
While not a large problem, money theft and store vandalism are two common threats to Laundromat security. Many safeguards can be implemented to deter money theft and vandalism. It is always a good idea to outfit machines with the most sophisticated locks available and some operators have installed different locks on each ten machines for security reasons. Physical protection of the Laundromat is accomplished in various ways. Both silent and sound alarms are commonly used for store entrances during non-business hours. Operators who do not employ full time attendants may use automatic time locks to open and close the establishment or install cameras. Inside the store, alarms are also used on bill changers.
Q. DO YOU HAVE A SUMMARY STATEMENT?
Laundromat123.com and Larry Larsen Real Estate are ready to provide you with the help you need to develop a new or buy a used Laundromat. We employ a low-key approach that features education in an attempt to help you buy on your terms and in manner that fits your personality. We believe that repeat customers are the strength of any company. This website is designed to instruct and assist the potential Laundromat store buyer in making an informed purchase. If it stimulates additional questions, Larry Larsen is available to supply additional answers to your complete satisfaction. Larry Larsen is also available as a consultant to analyze any Laundromat prior to making an offer to purchase or build.
DUE DILIGENCE BASICS