I am wondering what experieinces you laundromat owners have had with apartments above laudromats. What are the pros and cons of such a building. I have a location spotted, and and thinking of such a building for a new project. Thoughts?
I've driven over 500 miles throughout the west half of Michigan's lower peninsula this week, visiting about 25 - 30 Laundromats. Here are my observations:
1. About 5 Laundromats are no longer there - presumably killed off by the Great Recession.
2. Some of the largest Laundromats have deteriorated but remain open with an on-site dry cleaning or laundry service. This dual operation seems to be working satisfactorily for these operators.
3. Some of the small town Laundromats are running unattended but seem to be getting by okay that way.
4. All the Laundromats that I visited happened to be QO except 1 which was laundry card operated. I didn't visit any DCO or DC/Q Laundromats because they did not fit my criteria for these trips.
5. Many of the larger Laundromats were thriving operations when built 20 to 30 years ago but they look terrible today mainly because that old equipment was never updated. For example, I saw dryers with the small (12" diameter) windows and old Milnors with cutesy "I'm not feeling well today" out of service signs that were firmly attached above their loading doors. It was obvious that recovery from the "illness" was not a quick one.
6. Some Laundromats had some newer, soft-mount front loaders that obviously replaced some top loaders. Apparently, many operators are willing to spend some money upgrading the lower-cost equipment with similarly low cost equipment. Few Laundromats had newer, large front loaders or newer dryers though.
So far, I had requested the rent reduction to LL 4 times, ( every other year...) but all failed, LL said always "NO".
Do I need to continue ask them again? or just waste of time?
(LL is very big national shopping center owner company. It seems like what they said was "pay rent according to the lease agreement, no adjustment!"
Well 6 months are under our belt and, unfortunately, things are not going so well. My gross income is not meeting what my projected gross income was expected to be. Before I bought the business I audited the previous owners books and calculated what the average monthly gross income would be. In the last six months I have had a low of -6% to a high -20% below that. The six month running average is -16% below calculated Gross.
I have had some thoughts as to why this might be. I came up with the following:
The previous owner lied to me (cooked his books)
We switched to unattended hours in the morning and lost sales
Whiplash from a poor previous owner (he only owned the store for 6 months or so?)
We discontinued Val Pak in favor of direct mailings.
Poor customer service (due to some poor attendants? We had some problem attendants)
Lost commercial accounts we lost one large account and that hurt.
Competition increase (none that I know of)
I think that we are doing a much better job then the previous owner running the store. We are keeping the store spotless, replaced all of the lighting, and replaced the HVAC unit. We have not had the quality issues he had when I took it over (customer complaints).
I find it hard to believe we cannot match his claimed gross doing a much better job then him.
At this point I am not really sure what to think or do. 16% is a lot to recover from. I am curious if you guys have any comments or suggestions.
Can I just be in a cyclical low period? Have I not waited long enough to reap the benefits of our efforts yet? If not how long should I wait? I am starting to become very concerned.
The Illinois Coin Laundry Association will hold its Summer Meeting on September 18th at Colletti's Restaurant. You will not want to miss this event!!
TOPIC: Managing Rising Water & Sewer Costs
Brian Wallace, President and CEO of Coin Laundry Association, is a 22-year veteran of the coin laundry industry. He meets and works with operators across the nation on issues affecting their businesses. Wallace's national exposure to coin laundry owners and their challenges with rising water and sewer costs gives him great insight into this growing menace to your business. Wallace will be able to offer solutions, based on the proven results of others, that can help you improve your business' performance and bottom line.
I know each situation is different but I'm trying to get a sense of a "typical" annual increase in rent. The previous owner signed a five year lease (which I took over as is) with an annual 4% increase each year. I have 2 (5) year options with that same built in 4% increase. Is this normal? It seems like a lot to me. I'm not sure I can just keep passing on this increase on to my customers? I haven't spoken with my landlord yet, but just trying to prepare for the worst. This was my first business purchase and dealings with a commercial lease. Many good, hard lessons learned... but costly.
One of my landlords is requesting me to sign an estoppel because the building is going to be up for sale. Does an estoppel put me at risk with the new owners? I have what looks to be a good lease with options up to 2029 but dread the thought of getting into problems with a new owner.
I have some history with the current landlord. When I sold a different business in the same center he strong armed me for $5k in "legal fees" and another $3k for maintenance which he 100% neglected to do. He agreed to allow a transfer of the lease to the new buyer for the $8k in fees.
I wonder if there is something in it for me to agree to sign the estoppel such as a strengthening of my current lease terms or recouping some of the money he shook me down for. What are the pitfalls of a tenant signing an estoppel?
I'm curious about how various operators get rid of unwanted employees so I've set up this poll. You may vote for more than 1 selection.
I often use my Employee Disciplinary Report to confront the employee with serious issues. This lets her know that I'm on to what she is doing wrong and I will not tolerate it. Often, an employee will quit right after being disciplined this way. The report also creates that all-important written record that may come in handy at an unemployment compensation hearing.
As many of you, I also have video surveillance in my mats which has come in very handy in a variety of situations.
There's nothing like a video clip to show visual proof of a situation that occurred in the mat. It usually ends any argument and often helps to nail people for prosecution.
People often bother me to "see" my systems so they can verify if something they own was lost, forgotten or stolen. It seems to happen a lot these days and sometimes I don't want to be bothered to look up every little situation, yet I do want to make my customers happy.
The last one was a guy who thought he left his expensive Nike sneakers on a washer. Turns out he took them into the parking lot and left them on the roof of his car!
So.....Is it smart to show every event to every person who asks?
What if they ask for a clip to show the Police and other customers happen to be in that clip? Is that a violation of their privacy? Could we be sued for that?
Hi everyone. I have a question for those of you that have negotiated leases before. I'm close to signing a lease that is for a 10 year term and it has a 5 year option that is defined as "to be negotiated at that time at fair market value". I'm not comfortable with waiting until year 8 or so and then trying to negotiate the option but the broker representing me says that this is typical and good to have in the lease vs continuing to pay the rate increases we have for years 1-10. If the lease terms were not already high I might be more comfortable but I'm already paying steep rates for the first ten years and the landlord hasn't given much up in the months that we've been negotiating. I just thought that I've learned from all of you to define the terms up front including the option but I'm being told differently now. I ran this by someone I trust that doesn't have any skin in this and they say I'm being raked over the coals. Can I get other opinions to confirm what I think I already know?