by Speed Queen
last updated 08/12/2019
No Cash But Loads Of Money
by Speed Queen
last updated 08/12/2019
New laundromat owner finds Speed Queen offers a near-perfect investment
Manoj Patel is a ‘hands-on’ kind of person. ‘I think I owned the last VideoEzy store in Auckland, and had a couple of dairies before that, and we were successful for so long because I kept a close eye on things. Now I am applying the same philosophy to my new venture – Pakuranga Laundromat – and it is proving even better than my expectations. It doesn’t need me to be there all the time and I might even take a holiday soon!’
Laundromats might seem like a slightly old-fashioned idea, but they are more in demand than ever as apartments grow smaller and the expense of buying and maintaining a domestic washing machine and dryer rules out ownership – especially in lower socio-economic areas.
‘We’re following the trend that happened in America 15 years ago where self-serve laundromats became more and more popular,’ says Royce Little, head of laundromat sales at Speed Queen – the oldest and largest manufacturer of commercial laundry equipment in the world. ‘Founded in 1908, we’ve always been at the cutting edge of technology and trend, and that’s why our operators continue to make big profits,’ says Royce.
‘A medium-sized investment will be between $250,000 and $300,000, with a deposit required of $75-100,000. The return on the total investment is in the region of 20-30 percent, and we’ve had some owners do much better than that.
‘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 premium high street location or mall site: provided there’s plenty of parking available, a much cheaper site is ideal. That makes them a near-perfect model for anyone seeking passive income. The only human requirement is a cleaner, and some owners like to do that themselves as Manoj is doing in Pakuranga.’
Speed Queen has been operating in New Zealand for 25 years, and recently introduced cashless operation. ‘For years, the need to take coins was the Achilles heel of all vending operations, but times have changed,’ Royce explains. ‘Now we have our own cashless technology company which ensures EFTPOS and credit cards are compatible with the machines, so we can offer clients and investors a completely cashless operation.
‘That means all the security issues have gone. There is nothing to steal on site, and there are no worries about cash handling, collecting and banking coins, either. New laws designed to prevent money laundering have made dropping coins into banks increasingly difficult, but the change has actually made owning a laundromat even more attractive.
‘And EFTPOS is universally used these days. Without an EFTPOS card you can’t easily get money out of the bank or even access a benefit, so virtually everyone has one. As a result, cashless payments have become readily-accepted and mutually convenient.’
Speed Queen is not actually a franchise (you operate under your own brand, like Manoj with his Pakuranga Laundromat) but Speed Queen provides all the help you need to get up and running. This covers everything from site selection, according to proven demographic and parking criteria, to meeting council regulations and launching your business.
‘We’re proud to say that Speed Queen has never built an outlet that has failed,’ says Royce. ‘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 occasion with a site we consider bad, and we don’t hesitate to say, “Keep looking.”’
Smooth and easy
Manoj opened the Pakuranga Laundromat in May 2018 and has not looked back since. ‘I always had the feeling that there was a need for a laundromat in the Pakuranga area so I started to research sites and equipment and it quickly became clear Speed Queen offered the most robust machines, the best service, and were well ahead of the game in terms of offering cashless operation.
‘Other than some very brief local newspaper advertising when we opened, I’ve not had to spend a cent on publicity,’ he says. ‘Word of mouth has spread the news and the service we offer has kept people flooding back regularly. The wet winter weather has caused an enormous boom in operations, too.
‘Working with Speed Queen was very smooth and easy – there were no dramas, the equipment is excellent and I’d thoroughly recommend them to anyone thinking of setting up a laundromat.
‘For me today, the biggest advantages are that I can choose my own working hours and I certainly don’t have to be on site all the time. Also, there is none of the hassle of handling cash any more, which gives me a great feeling of security. My aim is to understand every aspect of the business, then I know I will be able to relax and do what many Speed Queen operators do – work remotely! In the future I may well set up another laundromat, and I’d certainly go with Speed Queen again.’
And Royce says, ‘If you’re looking for a business with lots of advantages and few drawbacks, give me a call. There are opportunities all over New Zealand.’
See this advertorial on page 37 of Franchise New Zealand magazine Year 28 Issue 3
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