by Speed Queen
last updated 24/03/2021
Home And Dry
by Speed Queen
last updated 24/03/2021
Speed Queen offers a robust passive investment with remote operation and high returns
Laundromats might seem like a slightly old-fashioned idea, but in fact they are more in demand than ever. Apartments are growing smaller and the cost of buying and maintaining a washing machine and dryer rules out buying your own – especially in lower socio-economic areas. ‘We’re following a trend that started in America 20 years ago where self-service laundromats have just become more and more popular,’ says Royce Little, Laundromat Sales Manager for Speed Queen.
‘And that makes laundromats almost the perfect business opportunity. They operate with cheap rent, no staff, are potentially cashless for added security, and are even capable of being run remotely. 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.
‘We’re proud to say that Speed Queen has never built a laundromat that has failed, and a lot of that comes down to site selection, something we have done a lot of research around. 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 intention of spoiling our record.’
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 over 25 years. ‘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. This means we can offer clients and investors a completely cashless operation.
‘Of the hundreds of sites we have built around New Zealand, we now have over 50 that are already running completely cash-free. It’s revolutionised the industry by enabling many owners to operate entirely remotely. You can live and work in Auckland while running a business in Tauranga, and vice versa.’
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 20s realised they could have a money-earning sideline without interrupting their careers and set up a store – they are about to set up their second, too. 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!’
Easy to operate
‘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.
‘If you’re looking for a passive investment, then, it’s worth investigating Speed Queen,’ says Royce. ‘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.’
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