Business Profiles

by Speed Queen

last updated 26/06/2020

Money Maker

by Speed Queen

last updated 26/06/2020

Speed Queen offers a near-perfect model for passive investment with cheap rent, no staff, cashless operation and remote management

Manoj Patel loves the fact that he can choose his own hours – in fact, he doesn’t even need to be on-site to be making money. Unlike his dairy businesses, he doesn’t have the risks of handling cash or stealable goods, either. Konnie Roeun loved the fact that her business was so easy-to-run that when she moved 300 kilometres to a new town, she set up the same thing again. So what is this unusual opportunity that offers so much? Laundromats!

‘Laundromats are almost the perfect business opportunity – cheap rent, no staff, potentially cashless and capable of being run remotely,’ says Royce Little, Speed Queen’s head of laundromat sales. ‘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.’

Laundromats might seem old-fashioned, but in fact they are more in demand than ever as apartments grow smaller and the expense of maintaining a domestic washing machine and dryer rules out owning your own – especially in lower socio-economic areas.

‘We’re proud to say that Speed Queen has never built an outlet that has failed,’ Royce continues. ‘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.’

Cashless operation

Speed Queen was founded in 1908. The company is the oldest and largest manufacturer of commercial laundry equipment in the world, and it also leads the market with technology – something that has made Speed Queen an even more attractive proposition for an owner/investor.

The company 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.

‘Of the hundreds of sites we have built around New Zealand, we now have about 40 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.’

Speed Queen is a solid investment from another aspect, too, says Royce. ‘Some people have found the weak link in this industry to be the machines themselves; however, being American, Speed Queen machines are pretty indestructible. They will work reliably day after day for a massive 15-20 years on average!’

Broad range of owners

Reflecting the appeal of the business model, Speed Queen laundromats attract a broad range of investors. ‘We have a retired CFO who wanted an interest and some passive income – he now owns two,’ says Royce. ‘Some dairy owners put together a deposit and opened one next door to their shop, increasing traffic to both. A group of executives in their twenties realised they could have a money-earning sideline without interrupting their careers and also 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 percent deposit.’

How much is that? ‘A medium-sized investment will be between $250,000 and $300,000, with a deposit of $75-100,000,’ Royce suggests. ‘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!

‘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 Auckland, and run your business in Invercargill without ever visiting the place.

‘If you’re looking for a passive investment, then, 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 me a call and let’s discuss how Speed Queen can help you.’   

See this advertorial on page 19 of Franchise New Zealand magazine Year 29 Issue 1

Contact details for Speed Queen

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