Re: Brainstorm: Building a coin-op laundry route empire (F&I X-post)
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It can be a very profitable business however, there is more to it.
I think you have not considered the issues of vandalism, theft, machines eating quarters, and liabilty for damaged clothes. Other things can breakdown that you will have to take on that will not necesarily be your responsibility. Property owner not paying the utility bills, drain getting clogged, lights going out in the laundry room. Who will you get to empty the coin hoppers? Are you going to the bank every month to deposit $3200 in quarters? Are you thinking about security?
Also, this is a very competitive, mature industry. The more profitable locations are always in fierce competition. I have seen deals where the property owners get paid huge sums of upfront money. You better have an air tight lease with good lawyers to back you. If the place is profitable, the other companies are going to come around and tempt the owner to break the lease.
If the place was abandoned by Coinmach, I think your income calculations are way off. Coinmach knows this because the are the ones who have been collecting the quarters. They would not refuse to replace old machines if the profit numbers were there.
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These are all very good points. As to CoinMach pulling out of this location, I disagree with the sentiments in this and other posts. The fact is that we really don't know CoinMach is pulling out of this location. It could be any number of reasons. Maybe they don't have any money to buy new machines and they don't have good enough credit to finance. Maybe the location is profitable but not profitable enough to focus their attention on - $350 a month isn't very much money. Maybe they've got 2000 machines to deal with and these six just aren't a priority. Maybe owner of CoinMach intends to retire in a year. Who knows? But we can't assume that just b/c the company isn't focusing on this small location that its not a profitable location.
IMO, it appears to be a very profitable location. You're offering a needed service to a semi-captive clientele. That is a very good situation to be in.
As always, however, you need to consider if you can live with the downside. What will you do if the whole thing is a bust? If you can live w/ the worst case scenario then you're in great shape.
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