building a store .let a didtributor do it?

[chris33]

I AM NEW TO THE BUSINESS, AND SPENT SOME TIME NOW RESEARCHING IT.ONE THING I AM NOT SURE OF ,IS WHEATHER OR NOT TO HAVE A DISTRIBUTOR DESIGN AND BUILD THE STORE , OR DO IT MYSELF.THE COSTS OF LETTING THEM DO IT SEEM A LITTLE HIGH, TO SAY THE LEAST. SO I AM SKEPTICAL.ALSO SHOULD THEY OFFER PAYMENT DEFERRAL ON THE MACHINES UNTIL YOURE ESTABLISHED,UP AND RUNNING? THIS DIST. WILL NOT OFFER PAYMENT DEFERRAL ANYMORE. SHOULD I WALK AWAY? ANY INFO WOULD BE HIGHLY APPRECIATED.

[larryg]

since nobody else wants to answer you, chris, i'll give you my opinion.distributors are out to make money just like everyone else.shop around, get different prices , and compare. im working with one now, and theyre offering construction services, but they seem alittle off the wall, so be careful.they prey on newbies like us , and count on us being naive ,and overambitious . try to confide in someone who knows the business. unfortunately for me, i dont have that luxury, which is why my situation is posted here. hopefully ,someone will step up and offer help........for both of us

[RWSmith]

I agree with larryq. You need to talk to two or three distributors and visit some stores that they have built. a good distributor should be able to help you find a location, help negotiate your lease, hire an architect, find an engineer, and hire a contractor. You could do this yourself but as a newbie I would't recomend it.
CLA has a book written buy a store owner/ distributor called "Today's Coin Laundry" it has a lot of info on building or buying a coin laundry.
You should also try to go to an affiliate meeting and or the Clean Show.
I think the most important aspect of building a laundry is to take your time and do your homework.
If I can be of any help please feel free to e mail at washman3@earthlink.net or call me at 772.567.4545
PS You generally do not pay for the equipment until it is delivered or installed.
Good luck

[chris33]

thank you guys, for your input.i'm pretty lost to the whole scenario, but im learning alot. i appreciate the comments, and any help i can get. RWSMITH, do you think the prices of the construction are legit? i mean, some of the prices im getting from this one guy seem a little high. and ive heard some of these distributors will steal your location. is this true?

[RWSmith]

I have heard of only one case where a distributor "stole" a location from someone. If you don't trust your distributor have a lawyer draw up a confidentialy agreement for the location your interested in.
I checked with a couple of people who have built laundries recently. One laundry was in a shopping center and came to $40 per sq. ft.. The other laundry was a free standing building that needed a parking lot, 4 AC's, new electrical, etc. Both stores were about 4000 sq.ft.

[petefritz]

I know a distrib who sucked dry a rich guy from "up north" to the tune of 1 mil or so.. One of his store they built cost $450k or more, and he does a big $200 a day gross.. but the distrib called it such a great locale. then they sold him a little farther up the river a site they had been trying to pawn off for years, best guess he has 700k in that store, good luck on 125k a year gross..assuming is that luckey. Bottom line, if a NEW store needs to be built it would have already been done by somebody in the biz already.. think about it. RW's number was missing a (1) as in $140 a sq ft, not $40.
Beware. Buy a used mat and remodel if you can.

[aromaz]

The prices you are getting are high because the markup on equipment they sell is huge. If it's financed through them, the markup is even higher. The interest rate and term will probably be unmanagable. They don't care. If you fail in 6 months or less they'll buy you out for penny's on the dollar for what you have invested. Now they have a new mat to sell with the build-out paid buy you. The lease they negociate "for you" will have clauses in it to make it easy for them to assume and transfer it to the next buyer. If you decide to go ahead with this talk to other financing options now. They probably won't help you now, but after they see the mat open and operating they will talk to you. DO NOT under any circumstances sign off on the financing until the first customers coins have dropped into a machine. Distributors will deliver all the financed equipment to the site and have you sign off on the financing so they get paid. It could (and probably will) sit there for months before you get open. Any deferral you get doesn't start until you sign off. DON'T SIGN! Also if you found this site and the distributor likes it, you can be sure they've already made contact with the landlord with or without you in mind.
Good luck.
PS When you type all in caps it means you are shouting.
Do I sound cynical?

[STLBOB]

I am also cosidering opening a new mat with the help of a distributer. I have done a ton of research. I have found the location. The dist. has found some but none were quite right. The only competitor has all top load machines (5 yr. old Maytags) and 3 Dexter triples and 1 Maxi. The dryers are OLD Speed Queens that cost .50 for anything from 15 minutes to 30 minutes. I timed them. One customer said that you never know how much time you will get. The store is about 15 - 20 years old and pretty clean considering the age. It does a pretty good WDF business.

My store would be a few blocks away in a busy strip mall. There are 1,300 apartment units within 1 mi. and 200 of them attached to the strip mall. I would have 2 top load, 8 double, 8 triple, 4 giant, and 2 - 75lb. all Continental. Dryers would be 14 stack (28 units) and 1 55lb Dexter. The store is 1,500 sq. ft. with rent of $14.00 per sq. ft.
The cost would be about $180,000.

The distributer has a store that he operates that he has built. It seems to be very well built and very energy efficient. My store woudl be very similar. I would appreciate andy comments.

Thanks,
Bob

[RWSmith]

Pete the $40.00 was for leasehold improvements only. I did forget to put the $60.00 per square foot for the second store. I agree with Pete on buying a existing store and doing a rehab. You have a track record and owner financing. The only problem with an existing store is the lease might be marginal. On the other side of the coin I know of plenty of people that are doing very well building new stores.

STLBOB if I were building the store you described I would dump the doubles and replace them with top loaders. I know tops are not as efficent as fronts and are more prone to breakdowns. But our customers only use them when all the other machines are in use. Every location is different but our tops do twice as many TPD as our doubles.

I would like to make one strong recomendation to the newbies. Hire a lawyer that specializes in contracts and leases. Have him go over each paragraph and describe the pros and cons of each item. It is the best $500 you will ever spend.

[STLBOB]

Thanks for the itp. I have hired a lawyer that is familiar with contracts and leases. Although it is costly, I'm sure that it is well worth it. By the way, the lawyer's dad owned a mat for years.

Bob