by Speed Queen
last updated 18/09/2020
Passive Earner Ticks All The Boxes
by Speed Queen
last updated 18/09/2020
A Speed Queen laundromat provides a healthy, near-passive return on investment – even when everything else is shut down
Business ownership often means gruelling long hours, but Speed Queen does things differently. Speed Queen is a turn-key laundromat business that stands out for its ability to generate regular passive income for next-to-no-time spent on site.
And during the recent lockdown, self-serve laundromats were deemed an essential business, meaning they could continue trading (and making money for their owners) when many other businesses couldn’t.
Together with a business partner, Sanjay Kohi opened his laundromat in the Hamilton suburb of Dinsdale three years ago. While maintaining full-time jobs, they have built it up from scratch while rarely having to set foot on the premises – and it went on earning during Level 4.
While that was good news, Sanjay says their primary motivation was to generate good income at all times without being stuck in the business 9 to 5. ‘We don’t want to work all hours until we reach retirement age, and Speed Queen offered something that seemed to meet our goal.
‘Speed Queen researched a good location for the laundromat and supplied all the equipment and systems we needed to get up and running,’ says Sanjay. ‘They also gave us recommendations, marketing information and plenty of advice based on their experience. But we still have the freedom to make decisions ourselves; it is our own company and our own name, and there is no-one saying, “You must do it this way.” We are in charge of our own destiny.’
Sanjay admits he was also sold on the fact that there are no ongoing franchise fees to pay – it’s simply a case of investing in the equipment up-front. With the US-built machines virtually indestructible, Speed Queen owners can expect an average of 15 to 20 years of reliable service. ‘In fact, our first laundromat has gone so well that we are now looking at setting up a second business,’ he smiles.
New technology makes it simple
Royce Little, Speed Queen’s head of laundromat sales, describes laundromats as, ‘Almost the perfect business opportunity – there are low rents; zero staff; potentially cashless operation; and remote management.
‘While the washers and driers themselves are incredibly robust, it’s the way that we have matched them to new technology that has boosted the overall appeal of this business opportunity. It means that you could theoretically live in the Bay of Islands and operate a business in Invercargill!’
Sanjay loves the fact that he can manage the laundromat remotely simply using an app downloaded to his smartphone. The app allows him to access marketing and support functions, and to get operational reports, as well as resolve any issues within the laundromat – such as responding to customer queries and managing individual machines. For example, if a token gets stuck or an ‘error’ light is displayed on a machine, Sanjay can instruct the customer to load their washing into another machine which he can then start remotely.
Remote monitoring of the laundromat on his smartphone through in-store security cameras adds further peace of mind.
A long pedigree
Speed Queen has been around since 1908 and it has been operating in New Zealand for 25 years. It is the world’s oldest and largest manufacturer of commercial laundry equipment, and leading-edge technology has long been a feature of the brand.
Most recently, cashless operation has been introduced. ‘Going cashless has not just enabled complete remote operation, but also eliminated any security and health issues associated with the handling of cash,’ explains Royce.
It also made it easier for the laundromats to continue to operate through the Covid-19 lockdown as an essential business with strict cleaning guidelines. Sanjay is confident that the business is both future-proof and recession-proof. ‘People will always have to wash and dry their clothes – you can’t get away from that fact,’ he says.
Easy operation, excellent return
When it comes to opening your own laundromat with Speed Queen, Royce says, ‘We’ve done all we can to make this pretty much a turn-key business and we will hold your hand through the process.
‘We offer a solid financial package and won’t give the green light to anyone unless the fundamentals are right – site selection, demographics and parking. We’ll also assist with all the required council regulations.’
Showing the appeal of the business model, Royce says that Speed Queen laundromats attract a broad range of investors. They include a retired CFO, some dairy owners who put up a deposit and opened one next to their shop, and a group of executives in their twenties who wanted a money-earning sideline without interrupting their careers.
‘The required deposit is around 30 percent – between $75-100,000 – and the return on total investment is in the region of 20-30 percent. That’s a lot more than you’ll get from the bank, and we’ve had some owners do much better than that!
‘Right now, we’re looking to hear from anyone who has the desire to build a successful business in any part of the country. With cheap rent, no staff, cashless operation, remote management, and a high level of business security for these uncertain times, I think you’ll find the Speed Queen opportunity ticks all the boxes.’
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