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Scaling Mega Laundromats in Manhattan with Stephen Gramaglia — Transcript

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0:00We have four uh rather large locations.
0:02We have three locations in Manhattan. In
0:04our busiest store, we do almost 6,000
0:08pounds uh a a week. And that is fully
0:12residential, no commercial business.
0:15It's drop off only.
0:17>> Not really that many owners doing that
0:19at such scale in the US to be honest.
0:21>> We have quotas for our employees how
0:24many pounds per shift they need to do.
0:26We don't have employees pointing their
0:28fingers at each other. We we just
0:30established our system in a way that
0:33there's accountability and having the
0:36system like wash dry fold where there's
0:38timestamps for everything. That allows
0:40us to go in and say, "Okay, Mary Smith's
0:43order, there's a problem with it. She's
0:45missing this, this, this, and that." Uh,
0:48let's go to the system. They will
0:50immediately go into the system. They
0:52will check which washers they used,
0:54which dryers they used. They will check
0:56those machines and nine times out of 10
0:59they left something in one of those
1:01washers or dryers. But the only way you
1:03would know that is if you had a system.
1:11Hello and welcome to the laundromat
1:13ownership podcast. I'm your host Ian
1:15Galahan and today I have laundromat
1:17owner Steven Grammaglia Grammalia. Did I
1:20get it right the second time?
1:22>> Yeah, second time. Yep. Stephen
1:24Grimmalia on with us today.
1:26>> Stephen, thanks so much for joining us.
1:29And um I I'd love to just hear just a
1:31little bit about your laundromat and the
1:34scale of your laundromat before we or
1:36laundromats before we get uh going too
1:38much further.
1:39>> Sure. Yep. So we currently own four
1:42laundromats. Uh we started our laundry
1:45ownership journey in 2020 right when
1:47COVID was uh raging. Uh we have four uh
1:52rather large locations. Uh our smallest
1:55location is uh 3500 square feet. Our
1:58largest is 6,000. So we've got two very
2:03large stores. We've got a couple of big
2:05stores.
2:06>> Wow. That's incredible. Do you feel like
2:09the larger laundromats are hitting the
2:11revenue numbers that you expect them to
2:13with the larger footprints or do you
2:16feel like it's a little bit of
2:17diminished returns after a certain
2:18square footage or what what are your
2:19thoughts on that? I'm just curious.
2:22>> We we like a larger location. Uh we're
2:24we're in very very densely populated
2:26areas. So we have three locations in
2:28Manhattan. Uh we have one location in
2:31Yoners, New York, which is just north of
2:33New York City. There is competition but
2:35lack of large, clean,
2:38fully attended, well-run. We've
2:40positioned ourselves to be, you know, a
2:43higherend fullervice. We call it bougie.
2:47We call our mat the laundromats. In
2:48fact, our customers call it that as
2:50well. Um, so we we've created a niche
2:53where we just want to provide the the
2:56best service that we can provide. And we
2:59we did a lot of research and my
3:01background which I I think we'll talk
3:02about a little bit more but we were just
3:05used to seeing a lot of small unattended
3:08dark you know all the bad stuff that
3:11that our industry has has been known for
3:14for so many years. We pivoted and went
3:17the opposite way. We we wanted to build
3:19big large modern locations all the
3:22amenities
3:23and you know we've been pretty
3:25successful in doing that. But to answer
3:26your question, no, we we we feel that
3:28larger location, more equipment, more
3:31turns, more revenue.
3:33>> Yeah.
3:33>> More space. People like to spread out.
3:35>> We've experienced the same thing. Even
3:37though I think our markets are just so
3:39different than yours. Uh the larger
3:41laundromat just does better. It feels
3:43like there's more room to grow and you
3:46feel like you can breathe in it and it's
3:48nice and it's open. And uh you know, you
3:51talk about the industry being known for
3:53these kind of hole-in-the-wall
3:54laundromats, these little kind of dark
3:57places, and um I think that's especially
3:59true for uh the New York City area. And
4:03so to have uh laundromats of that scale
4:06in that particular location really is a
4:09little bit against the grain. And um
4:11you've been a customer of ours for a
4:13while and we've just seen you really
4:15succeed and continue to um expand and
4:19grow. It's been really exciting. But
4:21your history before uh actually buying
4:24the laundromats, you worked at Eastern
4:25Funding for a while, right?
4:27>> I did. I worked at Eastern Funding from
4:301999. Uh I believe I was the fifth
4:33employee that was high the company and
4:36uh I stayed there for 21 years. Uh which
4:40coincides with entering the the
4:43ownership side of the Launchmat, but I
4:44worked there for 21 years and we grew
4:46the company. Like I said, I was the
4:48fifth employee and when I left in 2020,
4:51I think we had 70
4:54something employees. I'm still very
4:56close with the people that that still
4:58work there. And in fact, they're my
4:59funding source. I I do get financing
5:01from Eastern Funding. So, it's it's
5:03really come full circle. Uh but it gave
5:05me the opportunity to in all those years
5:07in 21 years, you know, I saw a lot of
5:10laundromats in those years, a lot all
5:13over the country. And I met and and and
5:16spoke with distributors, manufacturers,
5:19endusers, all the ancillary vendors,
5:22every sort of product. We financed all
5:25of it.
5:26>> And you know, that gave me a lot of
5:29contacts, which in this business is
5:31invaluable. And it gave me, you know,
5:34just the ability to see and make a
5:37determination what what would I how
5:39would I build a laundromat? and and I
5:42put a lot of time into that leading up
5:43to my first location. Uh what what did I
5:47see in all those years and what would I
5:49do differently? And a lot of what I saw
5:51I copied and a lot of things I didn't it
5:54did not completely prepare me for the
5:56ownership of a laundromat that and and
5:59well I say ownership operation uh of a
6:02laundromat because even though I knew
6:04the equipment I knew financials I knew
6:07leasing I knew you know the leases what
6:09leases should look like and I knew an
6:11insurance and all that stuff until you
6:14actually have the keys and are
6:16responsible for the employees the
6:19maintenance the ordering you're not
6:22really prepared and and you know that
6:25was there was a little bit of a learning
6:26curve and then of course we opened in
6:28May of 2020 which if you recall like the
6:32whole country was shut down
6:33>> going to say that was a pretty rough
6:34time though
6:35>> it was it was a rough time we wanted to
6:37open prior to that but we ran into all
6:39sorts of problems in February March when
6:42COVID shut everything down we you know
6:44we kind of just said we got to wait we
6:46were fortunate that we did open and we
6:47opened a brand new 55 500 square foot,
6:51beautiful facility, spotless, and we got
6:55the word out and we were very, very
6:57successful from
6:59pretty much when we opened. Um, you
7:02know, we we just fit a a need of the
7:04community for a large, spacious,
7:08clean store and it just really didn't
7:10exist.
7:11>> When you think about starting a
7:14business, what do you have that your
7:15competitors don't? And I think uh 21
7:19years of uh background in the laundromat
7:21industry is a pretty strong competitive
7:23advantage there, especially if you've
7:25you've seen what what stores succeed and
7:28what stores don't. And um clearly you've
7:31been able to leverage that into creating
7:33a real I mean uh just for those
7:36listening at home that might be
7:37thinking, "Oh, I I also can start five
7:41laundromats in the most expensive place
7:42in the world and uh be extremely
7:45successful in 5 years." That is really
7:47an exceptional uh business that you've
7:50built in in a very small amount of time.
7:53I mean that is really impressive. Um,
7:57before we move on back to the the
8:00current day, when you were serving at
8:02Eastern Funding, I'm sure we've got
8:04listeners that, you know, apply for a
8:06loan and they're told no.
8:10Is there something that they got
8:12declined for the loan and you know
8:14exactly why, but you just can't say it
8:16to them as far as I'm not talking about
8:18anything legal. I'm just saying like as
8:20far as being polite and like like is it
8:23the credit score? or is that what keeps
8:25most people from getting the loan they
8:27want? Is there anything that people
8:28should kind of look out for and really
8:30think about if they're going to go apply
8:32for a loan today?
8:34>> Basically, what we were concerned with
8:35was the ability to repay the loan. And
8:39that's that's kind of like lending 101.
8:42>> Yeah.
8:43>> The ability to repay. Are we going to
8:44get paid back? Forget about the
8:46collateral and the location and all that
8:49stuff. Our first thing was what what
8:53chance of success does this operator
8:55have? And then we would dig in from
8:57there.
8:58>> And typically, you know, the deals that
9:00well, let's start with the deals that
9:02went bad because I think that's a good
9:04place to start. The biggest problems
9:07that we saw amongst borrowers were them
9:10being under capitalized.
9:12And the issue that a lot of laundromat
9:15operators have and people coming into
9:17the business that don't fully understand
9:19what they're getting themselves into is
9:21that it's a capital intensive business
9:22and there are going to be things that go
9:24wrong and that break and require money
9:27that you'll never think about leading up
9:30to it.
9:31So, for example, your boiler breaks
9:34down, you have no hot water. you get a
9:37repair person to come and look at it and
9:39they're going to say you need a new
9:41boiler. That's a 10,000 to 15,000 or
9:44more,
9:46>> you know, investment that you have no
9:49choice. You have to make it. The same
9:50thing goes with your HVAC. The air
9:52conditioning breaks in the summer, the
9:54heat breaks in the winter, you have to
9:56get an emergency, you have roof issues.
9:59You know, there's there's a lot of
10:00things that you have to be prepared for.
10:04And a lot of people think that getting
10:05into this business, all right, I'm going
10:07to buy a store. It's in existence. The
10:09equipment is pretty good. I'm going to
10:11put down my 30% 35%
10:14and off we go. And unfortunately, if you
10:17that's not the only investment that you
10:19need. So, one of the biggest problems
10:21that we saw amongst people that were
10:22struggling to make their loan payments
10:24was they were just under capitalized.
10:27That and the fact that they didn't know
10:29what they were doing. They didn't do the
10:30proper due diligence and they got talked
10:32into doing something that really didn't
10:34make sense. And unfortunately now I see
10:37that more than ever because of how
10:40popular laundromats have become. Social
10:42media and other things have promoted
10:44this business as a passive income, as a
10:47side hustle, as a this, as a that. the
10:50the common denominator of people that
10:52struggled was their personal financial
10:56capital was just not enough to support a
10:59downturn and that downturn can be for
11:01any reason. Uh what happens if I get
11:04shut down whether it's a regulatory
11:06issue or a utility issue or whatever
11:08when you shut down all of your expenses
11:11continue to acrue you still have to pay
11:13rent. Can you survive that downturn with
11:17your savings and your working capital?
11:19And that's that's kind of one of the
11:21biggest things. Well, you're not doing
11:24them a favor if you approve a deal
11:25that's going to go bad for them or that
11:27has a high risk of going bad, right? And
11:30to your point, uh Brian and I, you know,
11:33we bought these laundromats from his
11:35parents. We've only owned them about,
11:38well, I guess it's a little more than
11:39three years now that that they've been
11:40in our ownership. And as you started
11:43listing the things that go wrong, the
11:44boilers breaking, the AC going down,
11:48leaks in the plumbing, you have to shut
11:50down the store to, you know, dig up the
11:52S cement and fix the leak and then it's
11:55still not fixed and you have to dig it
11:56up again. You have to shut down the
11:58store the next week. All of that has
12:00happened on top of like three fires,
12:03right? Fires that that, you know, we had
12:05to shut down the store to clean. Uh
12:07luckily that none of them burned down
12:08the buildings or anything, but all of
12:10that has happened to us in the first
12:12like honestly it happens every year. We
12:14we were just shut down a few weeks ago
12:16to fix some big leak and they thought
12:18they had fixed it and they had to shut
12:20it down again and and so that store was
12:23down for like two weeks, you know, and
12:25and uh the boilers in in our Delaware
12:28store we had to replace. This time we
12:30went with two of them and that was I
12:31think a $20,000 investment. And yeah,
12:35it's not like I mean this was a family
12:38transaction. It's not like they were
12:40sabotaging us or anything like that, but
12:42you would almost you would almost think
12:43so. Like, oh my god, everything broke
12:45right away and and and there was a fire.
12:47It's just like, yep, that's owning a
12:49laundromat and you better make sure you
12:51got the cash to deal with it. And that
12:53happens on new locations as well, not
12:55even on, you know, older acquisition
12:57stores, on brand new locations. You have
12:59you can have all those issues as well.
13:00I'm I'm on the I'm on social media. I'm
13:02on the Facebook, you know, there's a
13:03couple of Facebook groups. I see a lot
13:05of people,
13:06>> you know, how do I get into the
13:08business? I've I've got no money. I see
13:09that all the time. I I want to buy or
13:11build a laundromat, but I have no money.
13:13I need creative financing.
13:15>> Yeah.
13:15>> And I just I just shake my head. That's
13:17just
13:19>> I've I've often said and you know this
13:22is one of those things that I I guess
13:23the point of this podcast one of the
13:25points of it is to go over inconvenient
13:27truths in the industry but I've often
13:30you know made the point and $200,000 is
13:33is my number for Oklahoma or whatever.
13:35I'm sure it's a totally different number
13:37in other states and depends on the size
13:39of the laundromat that you want to buy.
13:41But I've always thought there's a
13:42flowchart of like do you want to start a
13:44laundromat? Yes. Okay. Do you have
13:46200,000? If yes, then continue to the
13:49next. If no, then don't start a
13:51laundromat. Like, if you don't have
13:53hundreds of thousands of dollars, don't
13:55do it because you're going to need a
13:56significant amount down. And then you're
13:59going to need a significant cushion for
14:00all the things that are going to break
14:02right away.
14:02>> Yeah. I mean, it's just not for
14:03everybody. Unfortunately, everybody
14:05thinks it's for everybody because they
14:07believe, you know, what they see on
14:09social media, but it's just the business
14:11is not for everybody. So remind me and
14:14and for those maybe that aren't familiar
14:17with your stores, are you offering wash,
14:20dry, fold at at every store, tell us a
14:22little bit about your kind of your
14:24revenue mix and just kind of I mean
14:27they're clean, which would lead me to
14:29think they're fully attended, which
14:31would lead me to think you're doing
14:32wash, dry, full to pay for the
14:33attendance, but tell us your thought
14:35process there.
14:36>> Yeah, we we we're fully attended all
14:38four we have four stores. All four
14:39stores fully attended. Three of those
14:41stores we do the wash dry fold out of
14:44those stores. Uh one store we we now
14:48have started doing pickup and delivery
14:50using washd dry fold point of sale using
14:53the third party driver system which in
14:55New York is only in your in our New York
14:57City stores. Uh works great. Uh we've
15:00had very little uh you know I know a lot
15:03of people third party delivery Uber
15:05driver Ubers and and Door Dash. It can
15:07be a little dicey. Uh, knock on wood,
15:10we've we've had some good success for
15:12it, uh, with it. Um, we have three
15:14stores, uh, fully attended,
15:17uh, wash, dry, fold, no dry cleaning.
15:20Um, but in our locations where we do run
15:22the the wash, dry, fold, uh, it's a
15:25pretty significant piece of our
15:26business. It's uh in our busiest store,
15:30we do almost 6,000 lbs uh a a week and
15:35that is fully residential, no commercial
15:38business. It's drop off only, which we
15:41charge $185 per pound, which in our
15:43markets is high, but we provide a very,
15:47very high quality product. the way it
15:50looks, the way it smells, the way it's
15:51presented, very professional. And again,
15:55it's a bougie, you know, high quality
16:00experience that we want to give. So, in
16:02our busiest location, we do about 6,000
16:04lbs a week. In our second busiest, we do
16:07about 5,000 lbs a week. And then we have
16:10a newer location that we built in in New
16:12York City, uh, that is is is a newer
16:15location. It's less than two years old.
16:17It's still ramping. We do wash, dry,
16:19fold there, but we recently put in uh
16:21drop um delivery and pickup there and
16:24that has added some nice revenue because
16:26again we have the staff. We're just
16:28trying to build that location up and it
16:30takes a while. You know, it's it's again
16:32ramping these these stores is is a time
16:35it takes time.
16:36>> Yeah, it and and it every store is
16:39different. And that goes back to our
16:41prior discussion about being
16:43capitalized. If if you're building a
16:46location from scratch, you're starting
16:49at zero revenue and a lot of expenses.
16:53>> Mhm.
16:54>> And if this is where that capitalization
16:56comes in, if you're not prepared to to
16:58support that store from revenue zero to
17:01revenue X that breaks you even and pays
17:04your debt, pays your expenses,
17:06you're going to be in a lot of trouble.
17:08So again, back to capitalization. It's
17:10it's a big thing in this business. Well,
17:12and that's probably a good segue when
17:14you're talking about going from because
17:17a lot of our listeners maybe have a
17:19laundromat that's a coin laundromat or
17:21maybe they got a card system in and they
17:23want to go into
17:26where you're at where you're doing, you
17:28know, 6,000 lbs a week. Like they're
17:30they're thinking, "Holy cow, how do I
17:32get there?" What are some of the issues
17:35that you see along the way? And has
17:38wash, dry, fold posos kind of helped you
17:41address some of those cuz I know with us
17:43it was like oh the the little sticky
17:45notes are always falling off the bags or
17:47you know whatever it is that before you
17:49get the systems in place and can you
17:52talk a little bit about operating at
17:54scale? There's not really that many
17:56laundromat owners doing that at such
17:58scale in the US to be honest.
18:00>> It it's it gets easier. It's it starts
18:03tough and and it does get easier. I mean
18:06the first thing you have to have is you
18:08have to have systems and operations
18:13in place and have it be uniform. Now
18:16again multiple locations but even if you
18:19have one location you really need to
18:21have a system in place to help you track
18:25what's going on. Track your employees,
18:29track the bags, you know, make sure that
18:32you're not missing or skipping an order,
18:36and have a really good sense of what
18:39we've got to do, what's in process,
18:43what's done. It allows us to communicate
18:45with our customers very well. Uh, in
18:48fact, you know, that's one of the
18:50biggest things is is the communication
18:52with the customers, whether it's can
18:54you, you know, please come pick up your
18:55bags, we can't store them forever, or if
18:57there's any issues, you know, things
18:59like that. But the biggest thing is
19:00having a system. And again, when you
19:03start in business, you want you you want
19:06to save money. You want to not spend a
19:08fortune on certain things. And
19:12a lot of operators just go with paper.
19:15They write tickets by paper. They they
19:18take cash. They don't take credit cards.
19:21And that's fine if you're doing, you
19:23know, a 100 pounds a day or, you know,
19:27some nominal amount.
19:28>> That's right.
19:29>> But if you're if you're getting 20, 30
19:32orders a day, you can't keep track of
19:36that on paper in a spreadsheet. It's
19:38just impossible. And you're going to
19:40wind up not servicing your customers.
19:43You're going to wind up alienating them.
19:46You're going to wind up losing bags.
19:48Your employees are gonna steal from you.
19:51You're going to have all sorts of
19:52issues. And not that those things can't
19:55happen even with a great system like
19:57Wash Drive full point of sale, but it's
19:59a lot harder. And again, if you're an
20:02operator and you're actively managing
20:04the business, having a tool like wash
20:06drive full point of sale is essential. I
20:09can pull up my phone, my laptop, my
20:11desktop, and I can see right this second
20:14the orders I need to get done, how many
20:17pounds, how many pieces, what that looks
20:19like. I can see what my employees are
20:22working on, how many orders are in the
20:24wash, how many orders are in the dryer,
20:26how many orders are being folded, and
20:28how many orders are done. It also gives
20:30you metrics. We have quotas for our
20:33employees, how many pounds per shift
20:36they need to do. We do things a little
20:38bit differently than some operators. Our
20:41attendants take an order from start to
20:43finish. From sort to wash to dry to fold
20:47to bag. That's their order.
20:49>> It's not, you know, I know. And again,
20:51there's no right or wrong. That's just
20:53the way we we established a procedure
20:55where we want an attendant to have
20:57ownership over that order so that down
21:00the line if there's a problem, we don't
21:03have employees pointing their fingers at
21:05each other. Well, I didn't wash that
21:06order. I only folded it. And then, oh,
21:09well, I don't fold. I only wash. So,
21:11there's no accountability for if there's
21:14an issue. So, you know, we we just
21:17established our system in a way that has
21:21there's accountability and having the
21:23system like wash fold where there's
21:25timestamps for everything. When we do
21:28have issues, and it's not if we have
21:30issues, it's when we have issues. We
21:33have a tracking system that allows us to
21:35go in and say, "Okay, Mary Smith's
21:37order. There's a problem with it. She's
21:39missing this, this, this, and that." Uh,
21:42let's go to the system. The system will
21:45say, "Okay, um, Rosa is the attendant.
21:49She did the sorting, the wash, dry,
21:51fold. I know exactly when she sorted it.
21:53I can go to the camera and put in that
21:56time. I can see her sorting it. I can
21:59see the time she washed it. I can see
22:01all that stuff. And with those
22:02timestamps, it makes it very, very easy.
22:04I can also see which washers and dryers
22:07she used so that I can take a look at
22:11those washers, those dryers, and and
22:14usually what happens is with our system,
22:16the orders get weighed when they come
22:18in, obviously, because that's how you
22:20price it.
22:21>> We weigh the orders when they're done.
22:23And that's the first line of defense for
22:26our attendants. They weigh it in the
22:28beginning, they weigh it at the end. If
22:30there's more than a pound or two
22:32different, they already know there's a
22:34problem. They will immediately go into
22:37the system. They will check which
22:39washers they used, which dryers they
22:41used. They will check those machines.
22:43And nine times out of 10, they left
22:46something in one of those washers or
22:47dryers. But the only way you would know
22:49that is if you had a system.
22:52>> Yeah.
22:52>> So, you know, that typically stops most
22:55of the issues right there. Sometimes
22:57there's issues afterwards. I have to go
22:58to the camera, you know, and and deal
23:01with things. But it's so much easier
23:02having a system. If you're on pen and
23:04paper, there's no way you can do any of
23:06that stuff. It's just impossible. So,
23:09it's just tracking. It's it's making
23:11sure that the orders are getting done in
23:13the in the order in which they come in
23:15because that was another issue that that
23:16we saw in the industry. Certain
23:19attendants will take certain bags
23:20because they know certain customers tip
23:22or they don't like certain customers
23:24because they have a lot of baby clothes.
23:26Like, there's a million things. and and
23:28we put an end to that. You go in the
23:30order that it says, the order that they
23:32come in, no skipping orders, and we pull
23:36all our tips. So, we we eliminated the
23:39tip issue. When we first started, we
23:41were tipping out who did what order, and
23:43it became a nightmare. So, we we we did
23:46away with that whole situation. We pull
23:48all our tips and depending on the number
23:51of hours that you worked, you get x% of
23:53those tips. So, you know, again, the SIS
23:56and again the system tells you the tips.
23:58So, it's it's really easy, you know,
24:00unless it's cash tips, but anyway,
24:01that's it's a different story, but the
24:03system without the system, there's no
24:06possible way that we could do, you know,
24:09we do between the three stores that do
24:12wash, dry, fold, we do, you know, about
24:1613,000
24:1812 to 13,000
24:20uh pounds a week.
24:23So there's no way we could do that kind
24:25of volume in in a positive way uh with
24:30me having any sort of life outside of
24:34laundry without having that system in
24:36place.
24:39You know, uh listening to you talk about
24:42this, it's it's really clear to me why
24:46when you tell us something, Brian really
24:49takes it to heart and really takes it
24:51seriously. I mean, you're one of those
24:54top operators. Uh, but I think one of
24:56the things he mentioned that you really
24:59helped us decide on was the hardware and
25:05hearing you talk about it, it's much
25:07more clear to me. I have this
25:09conversation or someone on our sales
25:11team probably has this conversation once
25:13a day where they say, "Well, I've got a
25:16laptop. I'm just gonna throw the
25:18software on that or I've got um I'll
25:20just go down to Office Depot and you
25:22know there's I can get a HP laptop for
25:25$300. I'm going to bring that to the
25:26laundromat and that's going to work just
25:28fine. And we kind of have this
25:30conversation with them around you really
25:33do need the right system. It's not just,
25:36hey, we'll sell cloud-based software,
25:39but you really do need the whole point
25:42of sale system. And, you know, we only
25:44sell the 16 gig units now. And I think
25:46you were a big part of helping us
25:48decide, you know, we're not going to,
25:52could we sell more of the cheaper stuff?
25:54Yes.
25:55But then if you ever scale,
25:58is a cheaper piece of hardware going to
26:01be worth all of the problems and
26:03interruptions that you have with your
26:05staff on a daily basis? Of course not.
26:08You need you need a commercial piece of
26:10equipment. And can you kind of uh remind
26:13me kind of how that happened? I mean, I
26:16think we were one of the first people on
26:18that. And I remember having
26:19conversations with Brian and you know I
26:21I don't love being a guinea pig. Uh but
26:24it it was important to us to to get it
26:26right. And I and I remember back in
26:28those early days making a lot of
26:30suggestions and and things like that.
26:32But I I'm I'm of the mindset where you
26:36get what you pay for in life.
26:38>> Yeah.
26:39>> And typically when you cheap out, it
26:43costs you way more money over time. And
26:48I think part of that is your time.
26:50>> Yep.
26:51>> My time, your time, our time is
26:53valuable.
26:55And you know, some of the hardware
26:57problems that we had is as we grew and
27:00as we were doing more transactions, we
27:02were we really were kind of at a
27:05bottleneck
27:06because that older hardware was just not
27:10capable of keeping up with all right,
27:13I'm making a credit card payment. So the
27:15hardware has to talk the the the CPU has
27:18to talk to the credit card reader. And
27:20then, you know, once that's done, you
27:22got to print out a ticket. So, that's
27:24another process. And a lot of these
27:26things just just get slowed down, you
27:29know, if you don't have the proper
27:31hardware. And again, I I like to have
27:35the best hardware, software, whatever it
27:38is. I like to have it be robust enough
27:41to handle not just what I'm doing, but
27:44as we grow over time, and I think a lot
27:46of people make that mistake where they
27:48they they look at two different things.
27:52Okay. So, okay, let's say your system
27:55costs X,
27:57>> but they can, like you just said, they
27:59can go down to uh Best Buy and buy
28:02cheaper hardware and save what, a few
28:05hundred, even $1,000. A lot of money.
28:08That's a lot of money. But if you look
28:11at that over time, that's pennies per
28:14day. You're going to have that hardware
28:16for three or four years, let's say,
28:18>> before
28:20obsolete. you have to upgrade. Whatever
28:21it is, even if it's three years, it's
28:24pennies per day.
28:26The time and energy that you're going to
28:28spend trying to fix it or trying to deal
28:31with it or it doesn't work right and now
28:34you guys can't fix it because it's not
28:35your hardware. So, you're going to run
28:38into that roadblock. So, you're yeah,
28:40you're going to save a little bit of
28:41money, but it's going to cost you more
28:43money over time. So, I've never been a
28:45proponent of of going the cheapest
28:48route. I just have always found that
28:50when you take the cheapest route, you
28:52will pay
28:55way more over time.
28:57>> Yep.
28:57>> You know, so
28:59it's just one of these things. You have
29:01to have the right hardware to have the
29:03right experience. It's just you just got
29:05to do it,
29:06>> you know. That's exactly our experience.
29:09And what's interesting is when you see
29:12that at scale if if you sell like for
29:14example if we sold um you know some of
29:16our competitors sell like kind of
29:18cheaper lower gig Android units and we
29:21could sell those and we have sold
29:24cheaper hardware in the past and then
29:26what happens is if that hardware starts
29:29having issues
29:31then we spend lots of time with that
29:34customer to fix those issues. And when
29:37you see that around, you know, we've
29:38sold uh about 1300 of these. So imagine
29:42you've sold 300 people hardware that's
29:45going to break all the time. Well, then
29:46your tech support, you know,
29:48requirements are just through the roof.
29:50But not only that, but that's 300
29:52laundromat owners that are wasting their
29:53time with tech support and trying to fix
29:56that hardware instead of growing and
29:59scaling their business. And the, you
30:02know, that's what we love to do is help
30:04people grow and scale and succeed. and
30:07you're a perfect example of if you help
30:09them succeed in one store, you'll help
30:11them succeed in five stores. You you've
30:14played a a big part in helping us make a
30:16lot of decisions, but that was one of
30:17those decisions where, you know, we
30:20really decided to stop selling the
30:22slower stuff. Maybe we make a few less
30:24sales because of it, but at the end of
30:27the day, at least we feel confident
30:29about the product that we are selling
30:32that we know it's capable of scaling and
30:34lasting a long time. with that
30:36laundromat owner. But um one of the
30:39questions I had, you know, talking about
30:42like how you've helped us kind of focus
30:43on different things over the years. Was
30:46there any specific I know when we when
30:48we switched to 2020, that was the big
30:51update, right? Because it all became
30:52cloud-based and it all became Laundry
30:55Works integrated. Was there any other
30:57little specific thing that we've done
30:58over the year that you thought that one
31:00little thing made a huge difference on a
31:03day-to-day? And it's okay if there's not
31:04one, but just curious.
31:06>> Yeah. I mean, one of the biggest things
31:08that that I had discussions with Brian
31:10about in the early days um was the
31:13dashboard, and I there were certain
31:15things on that dashboard that I really
31:17really wanted to see and they just were
31:20not there. And that's because you guys
31:22were focused on just trying to get the
31:25product to work and getting Launcher
31:27Works card reader integrated, which is
31:29an amazing thing. And it's not just
31:31Laundry Works. I know you guys are
31:32integrated with other products. I just
31:34happen to use Laundry Works, but having
31:36the, you know, the the card reader
31:37integrated, having the scale integrated,
31:39so you don't have that uh, you know, you
31:43know, human error of, oh, the the bag
31:46weighed 16.9 lb, but no, the bag weighed
31:4919.6 lb. So, you know, working on all
31:52those integrations and I I I knew all
31:54that stuff was was essential. Once you
31:56guys got all that, the big ticket stuff,
31:59then I started to give some sh like,
32:01"All right, Brian, I want the dashboard
32:03to say, I've got 462 pounds of laundry
32:08pending. I have 20 orders. I have eight
32:11comforters. I've got this many pending,
32:14you know, in the wash. My attendant did
32:17this many pounds today, so I can hold
32:19them accountable." So, a lot of the
32:21reporting and the dashboard stuff was
32:24vital in helping me run the business in
32:26terms of staffing. How many All right,
32:28I've got I've got 500 pound that has to
32:30get done today. I got to deal with
32:32staffing and I got 500 for tomorrow or
32:34600 whatever it is, you know, in terms
32:37of staffing, in terms of supplies. I
32:39mean, it's it's vital to have that
32:41dashboard with the data that that we as
32:44operators need to make those everyday
32:47decisions. So, a lot of the early day
32:49suggestions were just what as a as an
32:52operator I want to see to help me run
32:54the business.
32:56>> You know, I remember that update and
32:57that conversation with Brian and I
32:59remember even just saying, "Well, why
33:01don't we just show how many orders there
33:03are to do that day?" And he's like,
33:04"Well, what if one of the orders is 500
33:06pounds?" It's like, "Oh, that's why."
33:09you know, and I think uh to especially
33:14as as these new tools that people are
33:16using can build software so much
33:20quicker, it's actually important to know
33:23what to build. Not just the technical
33:25capacity of can you build a software
33:27that does these things, but also do you
33:30have the communication lines open with
33:32the laundromat owners to where you
33:34actually know what needs to be built and
33:36what do they really need to see? Because
33:38if you've only got one person on shift
33:39and there's 1,000 lbs of laundry, uh
33:43then that is actually, you know, an
33:45actionable item that you could be like,
33:47"Wow, okay, this person needs some help
33:49and you know, we we're going to get
33:51overwhelmed if we don't uh, you know,
33:53adjust accordingly." The integration, I
33:56know we've kind of added on to it and
33:58like you've mentioned, we've done
33:58Spiderwash and we've done CCI, but are
34:01you using the wash links app now as well
34:04or do you just use the cards? How do you
34:06do it? Yeah, we we didn't switch over to
34:08the wash links. Um,
34:12various reasons. I mean, honestly, I
34:13didn't even know it was there for a
34:15while. I don't know when it came out.
34:17Uh, I know it's kind of recent, but I
34:19kind of missed the whole functionality
34:21of it. And I have so many long-term
34:24employees
34:26that you know we we just stuck with the
34:28laundry cards uh you know and I have the
34:32way I track it is I track the management
34:35usage of those laundry cards. I've been
34:37doing this now for six years. Uh the
34:40business is kind of steady except for
34:42again I have a store that's kind of
34:43ramping. So I know every month when I
34:47run my monthly numbers, one of my
34:50monthly numbers is management card
34:52usage. So gross dollars that my
34:55attendants in that store, whichever
34:58store, gross dollars that my attendants
35:00spend at the machines.
35:02>> And so that's one number. And then I
35:05take that number as a percentage of our
35:09wash, dry, fold revenue. Mhm. And that
35:13number is consistent every single month.
35:18Couple months I had an outlier like I
35:20had, you know, the percentage went from
35:23whatever it was, it went up by four or
35:255%. I know there's something that
35:29happened. I got to dig into that. Now,
35:32it it's slightly challenging to figure
35:34that out, but you know, that's part of
35:36my job and it doesn't happen often. But
35:39we manage we manage that in a way just
35:42by looking at the numbers and
35:44percentages
35:46and you know so yes the answer is we're
35:48still our our attendants use laundry
35:50management cards we track those cards
35:53those cards are registered to each
35:55attendant so if I get a card that looks
35:58like it's out of control spending I can
36:01drill down and see what that's going on
36:03there. Uh, the other thing that we do is
36:06we have two attendants for every shift.
36:08>> Okay.
36:09>> And I feel like that kind of keeps the
36:12attendants
36:14a little bit more honest. I think if an
36:16attendant is working solo, they are
36:19could be a little bit more tempted to
36:22start a machine for a customer for $5 or
36:25whatever it is. I mean, there's there's
36:27definitely
36:28um there's no perfect solution. And I I
36:31do know operators that use the wash
36:33links. They rave about it. We just
36:36haven't gotten there yet.
36:37>> Well, I think though to your credit, um
36:41I talked to a lot of laundromat owners
36:43and a lot of times people will reach out
36:45to us because
36:48uh they're having some issue and a lot
36:52of times the hardest issue to get is
36:54employee theft out of them. They don't
36:55want to talk about it, but if you dig
36:56hard enough, you know, they're really
36:59looking at a at a new point of sale
37:01system because they found out their
37:02manager was stealing. And if it's a
37:0510,000, 20,000, I mean, I've heard up to
37:0850,000 now.
37:10That amount, it's always stolen the same
37:12way. And it's they've got the money on
37:15the card. They're using the card, sure,
37:18to start the wash, dry, fold orders, but
37:20they're using it to start self-s serve
37:21orders. They're using it to start a
37:22little business they're running on the
37:24side. And so if you're not just doing
37:26that, it's just one thing you do. You
37:28could do it once a month, once a week,
37:30however long, you know, it doesn't
37:31matter. But as long as you're actually
37:32on staying on top of as a ratio, how
37:36much of those machine starts are they
37:37using as a ratio of the amount that
37:40they're processing. And like you said,
37:43if they're all of a sudden using double
37:44the amount of machine starts, but they
37:46don't have double the amount of orders
37:48they're processing, you got to look into
37:50that. And uh unfortunately I've talked
37:53to so many laundromat owners who just
37:56aren't tracking that. And so they don't
37:58even see as it steadily climbs and
38:00climbs and climbs, but the orders aren't
38:03climbing with it, right? And so, uh, you
38:06know, all of a sudden they're looking
38:08back on their records and this person,
38:10you know, they catch them on camera or
38:11another employee tells on them and they
38:13realize that this person's been using
38:15thousand dollars of card starts per week
38:17for the past two years, you know, uh, on
38:20on stuff that's not wash dryfold orders.
38:23And so, I think it's really good that
38:25you're doing that. the wash links app.
38:28All that does is if you wanted to ever
38:31tie instead of like a card that moves
38:32around the store, if you ever wanted to
38:35tie it to like, you know, their actual
38:37face or their pin on their phone and
38:39then force them to start the the washers
38:42and dryers with their phone through the
38:44wash links app, then that will now you
38:46can actually start the washers and
38:48dryers with the wash links app and then
38:50you still get that same data reporting.
38:53And you know, the the one thing that I
38:56think is kind of stronger with it is you
38:58can't just hand your laundry works card
39:00off or it doesn't get stolen or anything
39:02like that because it's actually tied to
39:04their personal phone. So, it strengthens
39:06the functionality, but honestly, you're
39:09getting 90% of the benefit, right? The
39:12the the extra wash links app would just
39:15add a little tiny extra little piece.
39:18And if you ever wanted to do that, it's,
39:19you know, it's included. So, it's no big
39:21deal. I think you do have to pay works
39:23for the wash links app though. So that's
39:25that's the other it cost.
39:27>> It is an additional monthly fee. I don't
39:28know what it is but I but I know it's an
39:30additional monthly fee. I mean look
39:31there's no perfect solution to pro to
39:35eliminate employee theft.
39:38Reducing it uh there's a lot of ways to
39:40reduce it and one of the biggest ways to
39:42reduce it is to pay attention to the
39:44business. Brian mentioned that you're
39:46kind of getting your son into the
39:48industry. Okay. Tell us a little bit
39:49about that and what are you what are you
39:50teaching them?
39:51>> We have I have two uh two sons in the
39:54business 20 22 and 24 years old recent
39:58college graduates.
40:00>> Um
40:02they wanted to be in the business. I I
40:04wanted them to go do other stuff. Uh but
40:07they they want to be in the business. So
40:10uh yeah, I've got them both working
40:12full-time. They do a lot of things, you
40:16know. They they go to the stores
40:18probably more than I do now. They do
40:21collections. They do um they fill We own
40:26all of the vending machines in all of
40:28our stores, soap and snacks. So, they
40:30they're responsible for ordering
40:33uh procuring and filling the vending
40:35machines. They do some minor repairs.
40:38You know, we're we're very fortunate. I
40:40have a full-time onstaff
40:41repair/handymanyman
40:44uh who does amazing things. So, we're
40:48fortunate that we don't have to do a lot
40:51of repairs. We do spot repairs. He
40:53doesn't work Sunday. So, you know, I I I
40:57go to all the stores on Sunday
40:59religiously. That's my day. Uh, but I
41:02will go to a store and I'll see a
41:04machine out of order and I will I will
41:07fix it or at least make every effort to
41:09fix it. Um, so they're they're doing a
41:13little bit of that, not as much because
41:14again it's just not a big need with
41:16within our organization at this time.
41:19Um, but yeah, they're doing a lot of
41:21stuff and it's it's freed me up to be
41:24more strategic, look for additional
41:27opportunities, whatever they may be. uh
41:30work on sort of as they say, work on the
41:33business rather than in the business. Um
41:37and also really just have a little bit
41:40more free time.
41:41>> Yeah. No, I I I that makes a lot of
41:44sense. And there is just things that
41:46family can do, especially if they have
41:48the the card like buy the things, you
41:51know, there's certain things that uh
41:53having family on board to kind of take
41:54some things off your plate really uh
41:57helps. But I think they're going to be
42:00have a serious leg up on everyone else
42:02once if they ever want to go and do
42:04their own laundromats or maybe they just
42:06take over yours. I don't know what the
42:08plans are there, but um I think they're
42:10learning from the best. So that's that's
42:13pretty cool that it's becoming a a
42:14family business for you. Um it is it's
42:16it's fun and it was it's their idea. I I
42:20not only did I not put pressure on them,
42:21I actually tried to persuade them to do
42:24something else just so that they had a
42:26different perspective on and they could
42:28bring something different, but they both
42:30really wanted to be in the business and
42:33um you know, I think they they enjoy
42:36doing it. I think they enjoy the the
42:38benefits of being a laundromat owner is
42:41you make your own schedule for the most
42:44part. I mean obviously there are things
42:45that happen that you got to you know
42:47happen that you got to deal with right
42:49away but as far as the schedule and when
42:51they go and collect and when they do
42:53things you know that's you know really
42:56uh one of the great benefits of being in
42:59this industry is is is something like
43:01that. It's interesting. We've seen a lot
43:04more multi-generational
43:06um people in the business just recently.
43:09If you look at Stephen Max at at CCI
43:13um and then of course Spiderwash,
43:15Michael and Greg and then um uh even
43:18Brian has took it over from his dad and
43:21then we'll probably pass it on or
43:23certainly the plan is to pass it on to
43:24one of his boys um and maybe his girl
43:27too. I don't know if she wants it. But
43:29um but yeah, it is it's kind of cool how
43:31it can be like that. Yeah, we we met um
43:34so we were down at the Laundry
43:36Excellence show down in Hilton Head uh
43:39whenever that was May, Aprilish,
43:43>> and I brought one of one of my sons um
43:47uh I brought down with me and he met
43:50quite a number of people his age in
43:54their early to mid20s that are second or
43:57third generation and it's between like
43:59you said vendors uh like you know the
44:02CCI and and um and Spiderwash, but also
44:07operators
44:08um that have entered into the business
44:12as well. And and I think it's great that
44:14there's a there's a new new blood and
44:17new generation and they come with
44:18different experience and they come with
44:21different viewpoints and uh they're
44:23better at technology. I mean, we thought
44:25our generation was good at technology.
44:27They're they're even better. And so they
44:30they've brought some things to my sons
44:34in specifically have brought some things
44:36and do things differently than I would
44:38have done them. And
44:41I I think it's great. I I just think
44:43it's it's an amazing thing. And you
44:46know, family business can be tough
44:47because, you know, it's
44:50>> it's your family and how do you hold
44:52them accountable and how do you deal
44:55with issues? And we've we've seemed to
44:57make it work. And in fact, in our house,
44:59it's my wife and my two sons and I were
45:03all in the business. My wife is our
45:04bookkeeper. She was an accountant um
45:07prior to having kids. So, when we opened
45:10up the laundromat, she jumped right in
45:11and has done our books since the
45:13beginning. Um so, we're truly like
45:16everyone, the four people in my house
45:18are laundry people. Sometimes at dinner,
45:20we we're like, "Okay, we got to talk
45:22about something else." Just laundry
45:24constantly, non-stop. So, you know,
45:27that's the joke in our house is you got
45:29to take a break at some point. Um, but
45:32no, it's great. It's it's I I love it
45:34and I love the fact that they bring
45:36different viewpoints and they'll go,
45:38"Dad, you know, we could do this in a
45:39better way and more efficient and I'm
45:41I'm all for it."
45:42>> That's That's really cool. So, what one
45:45thing I try to always ask every podcast
45:48guest is the number one craziest thing
45:51that they've seen in their stores or in
45:55the laundromats in in the industry
45:58maybe. What's that thing for you that
46:00you has just always stood out to you as
46:03just like this is not what I thought I
46:05was getting into or uh or maybe you I I
46:08guess you knew because you had 21 you
46:10know years of experience already but but
46:13is there anything that surprised you
46:14even still?
46:15>> Yeah, that there's a few things. Some I
46:18probably can't say on this.
46:21>> Okay. Uh yeah, there's a lot of there's
46:24a lot of crazy people in the world and
46:27they like to do laundry and you've got
46:29to be able to handle a lot of different
46:33situations. We we had a customer come in
46:37uh go into the store into the aisle
46:40where the washers were and they took off
46:43all their clothes
46:45>> and put them in the washing machine. And
46:46I'm sure I know for sure that's I'm not
46:50the first person that that's happened
46:51to. I I'm sure there's whoever's going
46:53to watch this video. Uh there's going to
46:55be people going, "Yep, that's happened.
46:57We've had it, too. We've seen it. You
46:58like you." Yeah.
47:00>> And and and I again, I know it happens.
47:02It's just when it happens and you're and
47:04I was there and you're watching it,
47:06>> it's it's shocking. And And I And I
47:09almost I didn't really know how to
47:12handle it. Um,
47:15so yeah, that that happened fortunately.
47:19Uh, you know, a couple of the other
47:21things that really surprised me were the
47:24amount of clothes that people leave in a
47:27laundromat every single day. It is a
47:31shocking amount.
47:33>> And and it's all of my stores. It's not
47:36one store. It's all of my stores. It's a
47:38shocking amount of clothes that people
47:40leave in a washer, leave in a dryer,
47:42leave in a laundry cart, leave on the
47:44floor, leave wherever,
47:46>> and
47:4875 to 80% of them never come back for
47:50it. And I'm talking about a lot of
47:53stuff. I mean, we have, you know, 50 lb
47:55dryers and people I mean, there's full
48:00washers and dryers full of it's not one
48:03thing. It's not a sock. like somebody's
48:05whole wardrobe and they never come back
48:07for it. It's and that shocks me
48:11especially the cost of these clothes.
48:13Another thing that really really
48:14surprised me and still surprises me to
48:16this day, the amount of lint inside
48:19these laundromats. It is a staggering
48:21amount. But yeah, I mean just crazy
48:23customers yelling, screaming or fights
48:25that break out or like I said the the
48:28guy who got naked and then was just like
48:32no, he didn't think it was a big deal,
48:34>> right?
48:35>> Going back to we we have a lot of
48:36clothes left over.
48:38>> So I I went and got him pants and shirt
48:40and you know and we got him we got him
48:43clothed while his clothes were being
48:44washed. I was gonna ask. I was curious,
48:47but I like I said, I didn't know if you
48:48were allowed to tell me what happened
48:49with this guy. But
48:51>> we we we h we hooked him up with some
48:53something to cover himself up with, and
48:55he was he was grateful for that. Um, but
48:58yeah, it's it's a it's an adventure and
48:59and and a lot of times I'll just say I
49:03think I've seen it all and then
49:05something happens that you just can't
49:08you just can't expect. It's it's it's
49:10wild. Yeah, it's uh it's definitely not
49:14a uh
49:16I mean it sounds boring and predictable.
49:19It's people come in and do their clothes
49:21every week and and in and in the good
49:23ways it is. um you know it's it's a
49:26little recession resistant and you're
49:28not having to it's not like AI or some
49:31crazy thing where the the whole game
49:33changes every week but then in other
49:35ways there's always some new problem
49:37that you've never seen before and new
49:40challenge and new thing that breaks
49:42that's got to be fixed and so um
49:45>> Yep. Yep. I've been dealing with
49:47landlords and dealing with utilities and
49:51inspections and, you know, we had a
49:54surprise inspection recently at one
49:56location. We've had other inspections in
49:59in New York City where we've had some
50:02some things we had to fix and and deal
50:04with. Um, but yeah, you just can't you
50:07don't know what dayto-day I don't know
50:08what to expect. It's a It's a fairly
50:10boring,
50:11>> fairly consistent business, but again,
50:13there's just things that happen you just
50:15can't expect. Uh you just you can't
50:19predict. Well, there's always something
50:21new to learn and I feel like uh you've
50:23really probably helped a lot of our
50:25listeners learn learn a thing or two
50:27today and I really appreciate you
50:29sharing all of your experience with us
50:31and your wisdom and um we're just always
50:34really proud to have you as our customer
50:36at Wash Drive full poss
50:41uh contributed over the years to uh to
50:44helping us build a better product for
50:46for for you and for everyone. So, thank
50:48you for that. Well, you're welcome. It's
50:50it's been a it's been a great
50:51partnership. And you know, one of the
50:53things that I really like about both you
50:55and Brian and your whole team is that
50:57you are receptive to uh if I make a
51:01suggestion or if there's some something,
51:03you know, not working or whatever it is,
51:04you guys are always open to to listening
51:06to it and and uh implementing it if if
51:10if at all possible. And it's been a a
51:13great partnership. You guys have helped
51:14me tremendously grow my business. And um
51:18you guys are always responsive, very
51:21little issues and whenever there is an
51:22issue, you guys jump right on it. So um
51:25I thank you as well.
51:26>> Thanks. Well, I really appreciate that
51:29and I don't think we're going to top
51:30that. So I'm ending it there. I really
51:32appreciate it.
51:33>> Thank you very much. This was a lot of
51:34fun. I appreciate it.

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