Tips for Multi-Store Success
Expansion and financial success did not initially come easy to Ryan and Bernadette Hansen, owners of Dirty Bird Laundry laundromats based in northern California. During their first two years in the vended laundry business, the Hansens faced a time of trial and error in terms of selecting a manufacturer and distributor, financing the projects, leasing laundromats and implementing marketing campaigns. However, now that the Hansens own and operate nine successful laundromats – as well as six dry cleaning facilities – they understand the importance of each of those aspects of the laundry business.
Choose a Trustworthy Distributor
After tragedy struck his family in 2004, Ryan Hansen was determined to build a lasting legacy that would define and support his family long into the future. Driven by the idea of personal freedom and profit, he and his wife, Bernadette, eventually left their corporate jobs and put a $30,000 offer on a laundromat in California in 2009.
When their offer was declined, Hansen knew it was time to consult an industry expert. He got in touch with one of his region’s major distributors, PWS-The Laundry Company, who showed him a 3,000 square foot store located in an area with a high renter population, one demographic of profitable laundromats. Unsure that he could afford the space, his distributor walked them through the financing process and recommended an equipment mix that would yield a profitable business.
Hansen says, “If you find a distributor that supports you, it’s a really valuable relationship.” He adds, “There’s no reason to go at it alone. It’s like having a partner with 50 years of experience in our corner.”
Hansen continued to rely on the help of his distributor as he began to grow his business because they offered the full package: quality equipment, helpful staff, and industry knowledge. This long-standing relationship with their distributor has helped the Hansens attain their goals of multi-store ownership, while allowing them to build the family legacy they wished for.
“PWS showed me that laundromats are a professional environment,” Hansen explains. “They not only help me choose viable locations and analyze competitors in my area, but provide invaluable technical support and management tips once my stores are up and running.”
Investigate your Leasing Options
Although he has now mastered the art of leasing, Hansen admittedly faced challenges at the beginning of his career. When searching for his first location in California, he first overlooked the municipal, sewer, and utility fees in the area. Fortunately, Hansen more thoroughly read the lease and successfully negotiated the pricing with the landlord according to the area’s municipal fees. Hansen says, “Without considering these extra expenses, laundry owners can rack up thousands of dollars in additional bills which can be detrimental to their business.”
After achieving success in his first laundromat, Hansen decided he would continue to lease the rest of his businesses. Currently, he leases all nine Dirty Bird locations. When pursuing a new lease, Hansen determines an area’s market rate for rent, allocates a percent of gross sales to rent, and inquires about rental incentives like tenant improvement allowances.
Hansen encourages laundromat owners to read leases thoroughly and be open with landlords about their expectations. He says, “It’s critical to negotiate the terms of a lease as much as possible because an owner can always reduce utility costs but the lease payments cannot be changed.”
Investigating leasing options and negotiating terms of leases with his landlords has been a critical component in the Hansens’ multistore success.
Explore Industry-Leading Financing Options
Unlike some of the other obstacles he faced, Hansen experienced a smooth fi nancial transition from one to nine stores thanks to both his equipment manufacturer’s and distributor’s financing team. While researching financing options, Hansen realized that a traditional bank did not understand the profit margin in a laundry. He says, “In a bank evaluation, the laundromat is valued solely on the machines, not considering age of equipment, terms of lease, potential growth, or profitability.”
A manufacturer’s in-house fi nancial services team, on the other hand, already understands the value of a laundry and executes a thorough examination upon receiving an application. They perform a business valuation by inspecting laundry equipment, reviewing lease agreements and analyzing locations, all backed by a thorough understanding of the industry.
Jeff Harvey, Speed Queen Financial Services brand manager, says, “A complete evaluation performed by a lender with laundry industry knowledge is the best way to ensure you are provided with the most comprehensive financial solution on the purchase of your laundry.” Hansen was able to ensure his stability and success while continuing to grow his business because of his manufacturer’s and distributor’s financial support. Three of nine Dirty Bird locations were built from the ground up, while six were existing stores. Hansen says it’s crucial to replace equipment in order to be profitable, and tailored fi nance packages have allowed him to do so.
“We have taken on a variety of projects including repurposing old buildings, remodeling existing laundries and new construction,” he says. “Such rapid growth wouldn’t be possible without lenders who know the industry.”
Implement Marketing Campaigns
Although his stores are strategically located and equipped with reliable equipment, Hansen began to notice that business was slowing down fairly drastically in certain stores. After four years struggling to understand the problem, Hansen realized that he could not retain customers because they were unaware his multiple stores – each with different names – all belonged to him. Most customers moved quite often, and selected laundromats located closer to their new homes, even if one of Hansen’s stores was also located nearby. He said, “I saw an opportunity to brand my stores so that my customers were aware of my other locations as they relocated throughout northern California.”
After brainstorming with his wife, Hansen decided to rename each of his stores “Dirty Bird Laundry.” With little previous marketing experience, the Hansens hired a graphic designer to bring their ideas to life. Hansen said, “I sat down with my graphic designer and discussed my vision for a family-friendly brand. She drew up four options and Bernadette and I selected one from there.”
The result was a whimsical cartoon bird named “Dirty Bird.” Dirty Bird was incorporated into the laundromat’s store signage and advertisements, lounging in laundry baskets and soaking in hot tubs, advertising the store’s hot water temperature. Dirty Bird, a recognizable store mascot, acts as a family-friendly icon, attracting children and their parents to a clean and safe environment, featuring snack bars and kids’ corners as well as a free dry service.
Hansen has seen much success since branding his stores and implementing unique marketing campaigns. He instructs laundry owners to first build a website and then maximize their search engine optimization (SEO), the process of increasing a website’s visibility when potential customers search for generic keywords. He also advises store owners to follow through with promises they make in their marketing. He says, “Store owners can build trust with customers by proving that claims made in their marketing tactics are true.” Through his growth and expansion, Hansen has proven the power of memorable, dynamic marketing campaigns.
Laundry Industry Leaders
Ryan and Bernadette currently manage more than 600 pieces of equipment within 25,000 square feet throughout four cities employing 20 full-time staff members. Their businesses continue to thrive with no sign of slowing down. Hansen shares that Dirty Bird Laundry will soon be implementing a pick-up and delivery service through their website, which involves drivers picking up a customer’s laundry, taking it to a laundromat to be cleaned and dried, then delivered back to the customer. With innovative ideas like these, Ryan and Bernadette Hansen will continue to be leaders in the laundry industry.
“On a personal level, owning laundromats has given us the freedom and financial resources to live a great life,” he says. “I wouldn’t trade it for anything.”
Entering into the laundry industry requires much consideration and detailed research. With the guidance of his trusted distributor, PWS-The Laundry Company, and help from his manufacturer, Ryan Hansen has achieved much success. He has learned the importance of evaluating financing options with a lender that has industry knowledge, negotiating leases with building owners, and implementing dynamic marketing plans. By following these tips and selecting a supportive team, laundry owners can achieve great success and maximize their profits.
About the Author: Dan Bowe was named Director of Marketing - North America in 2015, wherein he oversees planning, development and implementation of marketing communications activities for Alliance Laundry Systems and its divisions. He simultaneously serves as North American Sales Manager of Speed Queen’s commercial division, a position he has held since 2011. In that role, he oversees regional sales managers, develops policies and procedures, cultivates distributor partnerships and participates in the development of new Speed Queen products and services. Bowe joined Alliance Laundry Systems in 1996 and has held various senior sales and marketing positions throughout his tenure. His expertise lies in developing retail laundromats.
Reprinted from Coin Laundry News, September 2015.