It all comes out in the wash
As apartments grow smaller and the European style of laundry become more popular, owning a domestic washing machine and dryer isn’t as common as it used to be. Not to mention the expense and maintenance required. Laundromats may seem like an old-fashioned idea, but in fact they are more in demand than ever.
“We’re following the trend that happened in America 15 years ago where self-serve laundromats became more and more popular,” says John Cameron, director of Speed Queen Equipment Sales.
“In fact, laundromats are almost the perfect business opportunity – cheap rent, no staff, potentially cashless and capable of being run remotely. You don’t need a primary high street or mall site – provided there’s plenty of parking available, a far less glamorous and much cheaper site is ideal. The only human requirement is a cleaner, and some owners like to do that themselves.”
“The crux of the matter is site selection, and we have done a lot of research around that. Owners and investors have come to us on occasions with a site we consider bad, and we don’t hesitate to say keep looking. After all, it’s a near-perfect model for passive income and we have no desire to spoil it.”
Speed Queen was founded in 1908 and the company is the oldest and largest manufacturer of commercial laundry equipment in the world. The company also
leads the market with technology – something that has made Speed Queen an even more attractive proposition for an owner or investor.
The company has been operating in Australia for over 50 years, and recently introduced the cashless operation. “For years, the need to take coins was the Achilles heel of all vending operations, but times have changed,” John explains, “Now we have our own cashless technology which ensures all standard cards are compatible with the machines, so we can offer clients and investors a completely cashless operation.”
“Of the hundreds of Speed Queen sites, we now have many that are running completely cash free. It’s revolutionising the industry, has enabled many owners to operate entirely remotely, and there are no longer security issues from having cash on the premises.”
A solid investment
Speed Queen is a solid investment from another aspect, too, says John, “Some people have found the weak link in this industry to be the machines themselves, however, being American, Speed Queen machines are basically indestructible.” The Speed Queen machines will work reliably day after day for a huge 15-20 years on average! This kind of robustness can only be obtained by extensive testing.
Machines are regularly put through the wringer at the factory in Wisconsin where they are tested with foreign objects inside, such as hockey pucks. “I’m not sure if that’s a common loading mistake in North America, but I can tell you that you need ear-plugs if you are in the testing room with one of those going round and round and banging against the inside of the machine for weeks on end” says John.
Reflecting on the appeal of the business model, John says that Speed Queen laundromats attract a broad range of investors, “We have a retired CFO who wanted an interest and some passive income and he now owns two. Some convenience store owners put together a deposit and opened one next door to their shop, increasing traffic to both. A group of executives in their 20s realised they could have a money-earning side-line without interrupting their careers and set up a store.”
“Really, the concept will work for anyone prepared to put in a bit of effort and some initial legwork who can raise about a 30 per cent deposit,” says John.
So how much is that 30 per cent? A medium-sized investment will be between $250,000 and $300,000, with a deposit starting from $60,000, John says, “The return on the total investment is in the region of 20-30 per cent and we’ve had some owners do much better than that!”
“Operation really could not be easier. We’ve done all we can to make this a pretty turn-key business and will hold your hand right the way through the process. We can offer a great financial package and won’t let you go ahead until you have the fundamentals right – site selection, demographics and parking. We’ll help with all the essential council regulations and after that, the process should be very quick – open the doors and your business is ready-to-go with as much involvement from you as you choose. Such is the quality of our technology, you could theoretically live in Noosa, and run your business in Adelaide without ever visiting the place” says John.
If you’re looking for a passive investment, it’s worth investigating Speed Queen. We’re looking to hear from anyone who has the desire to build a successful business in any part of the country. I can guarantee we’ll support you every step of the way so, whatever your situation, give us a call on 1300 WASHER (927 437) to talk to your local representative.