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Coin Operated Laundry

We have years of experience in this industry for the valuation of the business, equipment and real estate. Let us help you with our valuation consultation in all areas of the valuation of coin operated laundry businesses. Below is a brief synopsis of the industry.

Description of Business

Establishments primarily engaged in the operation of coin-operated or similar self-service laundry and dry cleaning equipment for use on the premises, or in apartments, dormitories, and similar locations.

General Industry Information

According to the recent US Census, there were 12,185 coin-operated laundries and dry cleaners. These businesses accounted for a total of $3.48 Billion in industry revenues, and employed approximately 46,000 people.

Traits that are often associated with successful coin-operated laundry business include favorable long term lease arrangements, good rental locations, and an appropriate mix of equipment. Due to the importance of water as an input for these businesses, it may be difficult to obtain a suitable location that also has ample interior space and parking. Equipment mix refers to the ratio of washers to dryers. Typically, more washers are preferred, as dryers can service more than one load of laundry.

Demographics can affect a coin-operated laundry business dramatically. There is a positive correlation between a community’s renter population and customer volume for laundry mats, as many apartment properties are not equipped with washer and dryer hookups. Similarly, many operators have found success working in areas with college dormitories and other high-density locations.

The industry is highly fragmented, although there are clear industry leaders. Coinmach Service Corp. and Mac-Gray Corp. boasted combined sales of $700 million during 2004. Both lease out laundry room space in residential complexes.

Red Flags and Risks

Buyers need to consider leased space carefully when buying a business. Acceptable term lengths often last between 10 to 20 years, with water utilities billed separately. A signed lease providing adequate surveillance and security is a strong positive for this business, which usually operates at extended hours without employees present. Equipment should be in proper working order, including water heaters, extractors, washers and dryers. The building’s plumbing should be in good condition to safeguard against leaks and water damage. Due diligence on equipment should consider the water efficiency of machines and age.

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