Coin-operated Laundries

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 9,500 coin-operated laundries in the US operate facilities with coin-operated or similar self-service laundry and dry cleaning equipment or supply and service equipment in other locations, such as apartments and dormitories. Some operators offer drop-off laundry services and some facilities offer a snack bar, coffee shop, or Wi-Fi access to occupy customers as they wait. Coin-operated laundries are also known as coin-op laundries, self-service laundries, and laundromats.

Dependence on the Rental Market

The coin-operated laundry business is highly dependent on the apartment rental market and occupancy rates.

Capital-Intensive Operations

The coin-operated laundry business is capital intensive and requires firms to regularly invest to maintain and replace equipment and implement new technology.

Industry size & Structure

The average coin-operated laundry operates out of a single location, employs about 4 workers, and generates about $500,000 annually.

    • The coin-operated laundry industry consists of about 9,500 firms that employ about 41,000 workers and generate about $4.8 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 41% of industry revenue.
    • Large firms, such as CSC ServiceWorks and Wash Multi-Family Laundry Systems, typically operate coin laundries in multi-unit housing settings, such as apartment complexes and dormitories.
                              Industry Forecast
                              Coin-operated Laundries Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Jan 9, 2024 - Higher Minimum Wages in 2024
                              • Laundromat operators will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                              • Challenging housing conditions caused by high home prices and elevated mortgage rates generally favor the laundromat industry by creating a growing market of renters, who drive demand for laundromats. Existing home sales are expected to decline by 19% in 2023 over 2022 and remain flat in 2024, according to the 2024 Housing Forecast from Realtor.com. First-time homeowners accounted for 32% of all home sales in 2023, up from the record-low 26% in 2022, according to the National Association of Realtors. First-time homebuyers in 2023 had household incomes that were $25,000 higher than last year and were more likely to use financial assets to enter the market. A key demographic for laundromats, renters typically have limited access to laundry equipment where they live.
                              • Labor quality and inflation were tied as the top business problems for small business owners, each called out by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell half of a point in September 2023 to 90.8, marking the 21st consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy. Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.” Small business owners are still encountering historically high job opening levels, with a seasonally adjusted 43% of owners reporting job openings they could not fill in the current period. Nearly 60% of owners reported making capital outlays in the past six months, with 41% spending on new equipment, 22% acquiring vehicles, and 17% improving or expanding facilities.
                              • Lower consumer spending, a weaker rental market, and continued high price levels are expected to limit growth in the US coin-operated laundries industry, which is projected to grow at a less than 2% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The slowdown follows several years of volatility during the pandemic in 2020 (-9%), 2021 (7.6%), and 2022 (5.5%). According to the sector forecast, “Personal consumption spending for dry cleaning and laundry services should rise as people increasingly return to traditional workplaces and seek a wider array of entertainment and recreational activities.”
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