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    After several decades, laundromats remain
    popular franchise opportunities across Australia.
    In fact, in 2018, there were approximately 4000
    laundromats and dry-cleaners in operation
    across the country.

    Still, despite all of the potential in the field, a lack of knowledge and
    understanding of the laundromat industry can become a steadfast barrier to
    success.

    Have you ever thought about starting a laundromat? Would you like to
    learn more about the process so that you can launch into the laundry industry
    feeling well-prepared?

    women texting

    Are laundromats still popular?

    The short answer is yes – laundromats are still popular thanks to
    modern social trends. Many laundromat holder are taking an
    innovative approach to customer service, adding laundry services such as
    laundry pick-up and delivery for users’ convenience. Many laundromats
    are also seeking to create a more complete experience for loyal customers by
    using the space in new, innovative ways. Mailbox rentals, video games
    and coffee machines are amongst the popular innovations seen in
    modern laundromats.

    laundry shop

    Why do laundromats fail?

    In the hands of an effective manager, a laundromat franchise is a
    fairly safe business opportunity; however, a culture of neglect and
    mismanagement can lead to business failure. Such a culture is
    problematic because it increases the likelihood of basic problems
    such as outdated or ineffective machinery and, at a higher level, a
    lack of innovation and customer service initiative. Above all else, it’s
    important that would-be laundromat franchisees build their
    businesses on a foundation of entrepreneurial spirit and an
    understanding of the economic landscape.

    Women Dog

    Can you franchise a laundromat?

    Provided franchisees meet financial and personal conditions,
    laundromats can be lucrative franchise opportunities. This operational
    model has several advantages; for example, franchisees gain access to
    the market research and business planning expertise of the franchisor,
    as well as the training they need to succeed in the business. In most
    cases, franchisees are also able to capitalise on the reputation of an
    already successful brand.

    Women smiling laundry

    What are the requirements for laundromat franchisees?

    There are many rules and regulations which laundromat business owners and franchisees must follow. In order to keep a
    laundromat business operational, franchisees must fulfil requirements pertaining to facilities, management systems,
    operations, customer relations and general compliance. Major requirements are as follows:

    • Buildings and equipment must be effectively maintained.
    • Regular staff training must be completed and documented,
      covering best practice laundry operations, infection control, and
      the storage and transportation of supplies
    • There must be procedures for ensuring that all machinery can be
      correctly and safely operated and produce effective results.
    • Risk management practices must be upheld, including organised
      training for staff members who are responsible for chemical
      handling and storage.

    How much does it cost to franchise a laundromat?

    The initial franchise fees typically range from $15,000 to $50,000. However,
    as the costs associated with connecting utility infrastructure – including
    electricity, gas and plumbing – are often significant, the long-term
    success of a laundromat franchise depends largely on the owner’s
    ability to negotiate a shop lease with favourable terms.

    Laundry Machines

    How much does it cost to start a laundry business?

    With costs ranging up to $1.5 million, setting up a laundry business
    from scratch can be significantly more expensive than franchising
    within an established brand. Most businesses require an investment of
    between $100,000 and $400,000 to get started, depending on factors
    such as building size and rent costs, equipment capacity, the number
    and type of machines like washing machines, the fit out and the business, whether
    staffed or self service laundry business. This money covers expenses such as the
    purchase and installation of machinery, floor coverings, and plumbing,
    gas and electrical requirements. You’ll need to hire qualified
    tradespeople to help establish your laundromat infrastructure, including
    the gas supply, cooling pit, lint trip, dryer ducting and make-up air.

    Generally, day-to-day expenses are relatively small once
    the set-up is complete; however, there are several
    additional costs that must factor into this process. These
    include council applications, utility charges, trade waste
    application, security and insurance, signage and
    advertising, furnishings, equipment maintenance and
    electrical requirements. Laundromat Franchisees often secure loans to
    some or all of these expenses.

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      How do you set up a laundromat?

      Before you submit an application for finance, you’ll need to decide on
      the design and layout you want and be clear on the costs associated
      with achieving this. At this stage, it may be beneficial to work with a
      laundry professional who can provide advice and assistance in
      relation to design and aesthetic, moving towards a final result that
      suits your tastes and your customers’ preferences. Design
      considerations will include furniture, lighting, carpentry, floor
      coverings, and other fixtures and finishes, as well as signage and
      furniture once your fit-out is complete.

      It’s important to note that your business model – whether staffed or
      self-service – will also impact the space and design requirements.
      For example, staff may require a lockable space in which to serve
      customers and provide folding, dry cleaning and ironing services.

      Women walking

      How do you finance a laundromat?

      Securing finance is a natural next step after planning and costing
      your laundromat project. In most cases, franchisees need to secure a
      business loan to finance a new laundromat business. This process
      typically requires a good credit rating and access to sufficient capital
      to service the lease, furnish the store and advertise the business.
      Ensuring that you have these things prior to submitting a finance
      application will set you up for success with lenders.

      Laundry machine open

      How do you run a laundromat?

      The way in which you run your business will depend largely on whether you own laundry or standalone laundromat or a laundromat franchise.

      Becoming a laundromat franchise owner may mean accepting
      decisions about how your business should be run from upper
      management. Alternatively, an owner of a laundry startup will
      generally have the freedom to operate under whichever model they
      prefer, whether that means being a hands-on owner, hiring a team
      of staff to run things on their behalf or letting the business run
      largely independently.

      Before you make this decision, however, it’s important to examine
      your competition in the area and the conditions that have
      contributed to their success, or lack thereof. Once your business is
      operational, it’s also important to ask for customer feedback on a
      regular basis and consider opportunities for growth and
      improvement.

      What are the ongoing expenses involved
      in operating a laundromat?

      As is the case in all businesses, running a laundromat franchise
      involves a range of ongoing expenses. The most significant costs
      include rent, water and electricity, while the cost of machine repairs,
      business insurance, chemicals and marketing can also be significant.

      laundry machines

      How do laundromats make money?

      The main way in which laundromats make money is by charging
      customers for the use of their machines. As each customer may only
      spend a small amount on a weekly or fortnightly basis, an effective
      pricing strategy is key to ensuring that the business remains
      profitable. While a laundromat franchise may be required to follow a
      predetermined pricing model, startup businesses can typically set
      their own prices. In this situation, it is essential to conduct a
      competitor audit and settle on a price that works for all involved.

      Women with laundry

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      How much revenue can a coin laundry make?

      Given all of the right conditions, it’s possible for successful coin
      laundries to generate upwards of one million dollars per year.
      However, this figure depends on factors such as the local population
      and the range of revenue-generating facilities on offer in the
      business. Pay-per-use video game consoles, for example, can
      generate up to $300 per month in additional revenue.

      How profitable is a coin laundry business?

      A coin laundry can become a very profitable business venture with the
      right business acumen and industry knowledge. As a general
      rule, owners of established laundromats can expect to see about
      20-35 percent of their initial investment returned as profit; however, this is
      only a general guide. Key factors for consideration include the
      business location, set-up, functional capacity and operating costs –
      including water, gas, chemicals and capital requirements. If you
      intend to hire staff, this will also increase your expenses
      significantly, given that employing team members is the most
      significant expense in the laundry business. In any case, it’s
      important to work out your profitability through estimated revenue,
      return on investment, and profit and loss calculations.

      Laundry machine with people

      How much do laundromat owners make?

      Just as laundromat businesses vary widely in service quality and
      profitability, so do the incomes of laundromat holders. Some
      laundromat keepers make up to $15,000 net profit each month,
      depending on their business model and staffing arrangements.

      How can I market my laundromat business?

      Marketing is critical for the success of any laundromat franchise or
      business, particularly in the first few months of operation. It’s also
      important to consider each component of the customer experience –
      particularly as competitors in the space are working harder to
      attract customers with high-quality equipment and fun, modern
      features.

      All marketing efforts should be informed by your unique selling
      proposition (USP) – the aspect of your business or offering which
      sets you apart from competitors. This might be something basic, like
      an easily accessible location or a great location, a pleasant atmosphere, an effective
      range of machinery or a trusted brand name (particularly for
      franchisees), or something unique, like the style of your marketing or
      other novel features such as snack bars or video games.

      Women putting laundry

      Who regulates laundromats?

      The Australian Healthcare Laundry and Linen Services Association
      regulates commercial laundromats across the country, and the
      Australian Standards for Laundry Practices have been used as a
      primary reference source to identify acceptable levels of service and
      compliance since 2000. These regulations were created to ensure
      safe infection control and disinfection of soiled linen in laundries
      across Australia.

      If you’re interested in starting your own laundromat and looking for
      the right advice that will set you up for success, the laundry and
      sanitation experts at Richard Jay are here to help. Contact us today
      for more information. Would you like to open a self service laundry business with a strong focus in your local community or preferred city? Contact us now to discuss your new business project.

      Large laundry machine