Chris Schultz on Fast-Track Laundromat Development

Erik Nemes [00:20]: Thanks everyone for joining another session with us. My name is Erik Nemes from SINCE and LaundryWorks, and I'm joined today by Chris Schultz, who's the Director of Operations at Midwest Laundries. We're going to talk about the systematic approach that enables rapid laundromat development. So Chris, before we get into that, give us a quick introduction of yourself and Midwest, and then we can jump into the questions.

Chris Schultz [00:46]: Sure. I'm from Midwest Laundries in Chicago, and I have a background in construction. I was an electrician for about 15 years. Midwest Laundries is a licensed general and electrical contractor in the city of Chicago, so we specialize in building facilities for people on top of distributing the laundry equipment, installing it, and all that sort of stuff. My family's been in laundry, give or take, for about 40 years. My grandpa started in laundry a long time ago. We didn't pass the business along through the generations—it's more that my grandfather was in it, then my dad was in it, and now my siblings and I are in it.

Erik Nemes [01:24]: Awesome. So Chris, why is speed so critical in laundromat development today, and what competitive advantages does it create for you and your operators?

Chris Schultz [01:36]: Speed's really critical for a couple of reasons. The first one that comes to mind is that nowadays, laundry is incredibly popular. You see the TikToks and the Instagrams and the Facebooks and the YouTubes—everybody wants the passive income. Everybody wants to have their own business. Everybody wants to start their own thing. We're all competing for the same customers and the same locations. So when we do find that location, when we find that secret gold nugget we've all been looking for, you don't really want to let people know that you found it. You want to be able to move quickly before the market has a chance to respond. It's just a matter of time before your competition—whether they're a block away, a mile away, or two miles away—hears about it. And maybe that triggers a response on their end to retool their store. You don't want to compete with a retooled store; you want to compete with their old store. So you want to keep that as a secret, move quickly, and get open before the market has a chance to respond to your development. The second reason is financial. When you're doing a laundromat, the costs are pretty high, right? The equipment's expensive, leases are expensive, real estate's expensive. Whether you're buying it or leasing it, getting all new equipment, getting used equipment, retooling some equipment—you want to be able to move and get your revenue going before those loans start to come to fruition. You don't want to be paying a lease or a mortgage or your equipment loan and not have any revenue coming in.

Erik Nemes [03:10]: Awesome. And what would you say is the biggest difference between traditional development approaches and your fast-track methodology at Midwest?

Chris Schultz [03:20]: Yeah, so I want to throw a wrench in that question. I don't want to say "fast track"—I want to say "efficient development." When you think of fast-track development, you think of push, push, push. And when you push, what happens? Mistakes happen, things get more expensive with mistakes, and we don't want that. What we want to do is make things extremely efficient from beginning to end. If we make things efficient, the speed will come naturally. You know, when you race cars, they say "slow is fast," because when you think slow and you move your hands slow, your car is just naturally faster. It's the same thing with construction and development. You move efficiently, you think efficiently, and the speed just comes along with that. At Midwest Laundries, we really always try to push to be as efficient as possible. When you go into a project, we want you to be 110% prepared for that project. We don't want to be thinking of what we need to do after we've already begun.

Erik Nemes [04:17]: Yeah, and speaking of efficiency, how does having a strong supplier relationship and inventory management accelerate the development process?

Chris Schultz [04:27]: Well, I mean, you know firsthand about supplier relationships. If I have a problem and it's urgent enough, I'll call your cell phone 24 hours a day, and that's really the key. When you're working with somebody, you want to make sure that they have that relationship with their suppliers who are supplying you with equipment. Because when there's a problem—and there are going to be problems; there's always problems. There's no project that doesn't have problems. If someone tells you that, they're just fibbing. So when you do have that problem, you want to make sure that the people you're working with have a direct line to their suppliers to get those problems worked out as quickly as possible so that your project's not delayed, and you stay on that efficient fast track into development.

Erik Nemes [05:11]: Yeah, and can you talk to an example or tell a story about a project that exceeded expectations with your efficient deployment approach?

Chris Schultz [05:20]: Well, no, we can go back to fast track—this one was rapid. Yeah, so we can just talk about the project we most recently did. We opened a store about a month ago in Highland, Indiana. The landlord came to us not too long ago. The store had been closed for about six months, give or take. They asked us, "Hey, we know you have a store about two and a half miles down the road. Would you be interested in opening a store in this location?" We looked at it, looked at the demographics and the past performance of the store, and we said, "Yeah, we'd be interested." So we sat in our offices and made a budget and a timeline of what we thought it would take. We thought, "We're going to gut the whole place. It'll take about four months of permitting, construction, ordering equipment, installing it, and getting the staff trained up and running—all that stuff." So we put that initial four-month timeline on it. We went out there, looked at the location, and it turns out all the underground plumbing was no good, all the underground drains were no good, and all the electrical needed to be changed out. So there was a lot of stuff that needed to happen that we didn't necessarily fully expect. We knew that it would take some of that stuff, but not necessarily starting completely from square one. So we got with our contractors and we didn't change the timeline. We just changed the expectations. We changed the way that the trades overlapped, changed the way people had to work together, and continued with our initial expectations of four months. Long story short, that project ended up being done in about three months and one week. So we still opened three weeks early. We did that because we stayed on that efficient track. We knew we had to spend a little more money and the trades had to do a little more work, but we just built that into our schedule and worked things around so that it didn't delay anything. We ended up being three weeks ahead of timeline. We got in there before the rent started, so we started making money before we had to make our first payment to the landlord, and it all worked out great.

Erik Nemes [07:26]: Awesome. I think you touched on a couple of things here, but you mentioned earlier that mistakes happen and things can go wrong. What's your approach when something unexpected happens to get that project back on track?

Chris Schultz [07:39]: Yeah, so when something goes wrong, the biggest thing for us is communication. You know, as soon as that problem happens, everyone needs to know about it. Whether it's the distributor, the owner, and certainly all the contractors need to know about that. And so we want to make sure that everyone understands the problem, what we're doing to fix it, and then the way that it affects their work. And then from there, you know, you hire people that are good at what they do, and when they're good at what they do, they're going to help you through that problem. They're going to help you manage that issue. They're going to help you overcome that issue. But the key thing is definitely just the communication, making sure everybody's on the same page. You can't have a plumber sitting there on a Thursday trying to pipe up the hot water heaters and then come to find out that the electrician is not going to be there until the following Tuesday. Then your plumber's day is wasted, and you're delayed by a week. So, really, you just got to make sure that if you're working with contractors or if you have your own staff who's doing the job, that communication about what needs to happen and what just happened is continuous through the entirety of the project. And then the second part about that is dedication. You know, you have to be dedicated to the project. If you're doing a job and you go there every four or five days, and you take your contractors there every four or five days, things aren't going to get done. When you're doing a project, you have to be there every day. Your contractors have to be there every day. If you can't be there every day, you have to hire somebody who's going to be there every day. Hire a project manager, hire a distributor who's going to be there every day and check on things, whatever it takes. But it's just the investment in people and the investment in the project to make sure that everything stays on track.

Erik Nemes [10:14]: Absolutely. And we've talked a lot about being fast, efficient, and rapid, but what are some of the more common mistakes that you see developers make that will slow down a project?

Chris Schultz [10:24]: The number one mistake we see all the time is that people don't go to the municipality or the city to get permission to do the project before they do the project. You're doing electrical, you're doing plumbing, you're doing carpentry. These inspectors, these commissioners—they've seen all this before. This isn't new stuff. So when you go in there and you think, "I'm not going to pull a permit because I'm only doing a little electrical or I'm only doing a little plumbing," well, all it takes is for an inspector to drive by while you're doing something, see no permit in the window, and they're going to put that big red stop-work order on your door. And as soon as that happens, your project is now at the mercy of that person. They could decide they don't like it and they're going to review your paperwork as slowly as possible. Your project could be delayed for months. And then after you're delayed, they could put your project under the microscope, whereas if you went to them first and explained what you were doing, at least they know about it. They know you're upfront, they know you're honest, and yeah, they'll certainly give you an easier time. So my advice there would be to go to the city. I know it's uncomfortable. You may have never talked to a building inspector before. You may have never talked to a commissioner before, but they're just regular people. You don't have to be scared of them. Just tell them exactly what you're doing and they'll tell you the best way to proceed with that. And then I think the other way we see big delays is, like we said, using poor contracting or poor construction work, and people just sitting around waiting for contractors to come.

Erik Nemes [12:00]: Yep, absolutely. And when you're moving at an accelerated pace, how do you ensure that quality doesn't suffer?

Chris Schultz [12:08]: Yeah. So when we're moving at that accelerated pace, we want to remember that what we're aiming for is an efficient pace. We want to make sure that we're sending the right people to do the right job and we're giving them enough time to do their job. If we schedule that install for two weeks and the client comes back and says, "Can you do it in a week and a half?" it's important not to go push, push, push and push your labor to work 10- to 12-hour days and tell them, "Hey, you've got to be done with this by Wednesday," when it might be a really unrealistic expectation to get it done by Wednesday. You've got to be realistic with yourself. You've got to be realistic with your guys, because at the end of the day, they're going to feel pressure as employees to try to get it done by that date, and they might make mistakes that they're not going to tell you about. So when we're moving at that fast pace, it's important for the owner of the store, the distributor—you know, visit there every day and make sure everybody's doing what they're supposed to be doing. Make sure they're putting the proper amount of labor on the job and not just really trying to slam it in, because when you do that, mistakes start to happen, quality starts to slip. And you might be on track, but then you're going to pay for it down the road.

Erik Nemes [13:21]: And, you know, there are multiple ways to go about store development, but what should someone know before deciding if a fast-track development is right for their project specifically?

Chris Schultz [13:33]: I think fast-track development is for everybody. I mean, I don't know anyone who said, "I want this project to take as long as possible," because that's just painful. No one wants to be under construction. No one wants bills coming in before they're ready for them. So I think everybody should start every project with the mindset that "this is a realistic timeline for this project, these are the people I'm going to work with, and I want to make sure I'm going to stick to that timeline." My advice to everybody who does any project is, if you don't have a general contractor that's there every single day, you have to try to be there every single day. Certainly doing general contracting in the past, you know, if I have a busy week and I can't be there for three, four, or five days, when I come back after those three, four, or five days, something is going to be wrong. It's not because they didn't have the information or they didn't know what they were doing. It's just because there are many layers between the general contractor and then you have your plumbers, and then you have your plumbers' employees, and then you have maybe an apprentice who works for the plumber. And maybe they didn't get the memo. So you have to be there. It's your responsibility to keep an eye on your projects. And yeah, I think everybody should aim for that.

Erik Nemes [14:49]: Absolutely. And really to end it with the questions, looking ahead, how do you see laundromat development evolving, and what trends are really driving the industry?

Chris Schultz [15:00]: I think laundromat development is evolving the same way construction is evolving. Everything's going to prefabrication, more DIY stuff, more UL-certified stuff that you can put in as an owner. If you can turn a wrench, maybe you can install your bulkheads yourself and have your plumber just bring the electric and the plumbing to the bulkheads. Maybe we'll start doing that with something like water heaters, where you just install the assembly and have your plumber connect to the assembly. I think it's going the way of more DIY, more "how can we get this done quicker?" How can we get it done with equivalent quality, but more efficiently? Yeah, and I think construction as a whole is going in that direction.

Erik Nemes [15:48]: Awesome. Well, Chris, you know, you've been a great partner of ours and we appreciate you spending time with us here today. We know there's a lot going on. We've got a couple minutes. I will open it up for a couple questions, but thank you so much for spending time with us. And if anyone has any questions, happy to answer them here.

Chris Schultz [16:07]: [Responding to audience question] Yeah, so that's a great question. She asks, "How do you know if the plumbing is bad?" Before you even sign the lease, before you go into this space, bring a plumber with you. Spend the $1,500, two grand, whatever it costs—have them run a camera all the way from every cleanout all the way to the sewer, the main sewer in the street. You want to make sure you have a complete view of the entire sewer that you're about to work with. If you're purchasing it, you want to know what you're purchasing. It won't be a deal breaker, but you definitely want to know if you have a cracked pipe before you go into construction. That's what we had. So not only was the underground filled with coins and dilapidated, but also the pipe was cracked where it connects to the main sewer. So it was a ticking time bomb. It was only a matter of time before we had so much buildup in there that we would have had to close the store and fix it anyway.

Erik Nemes [17:02]: All right, well, thank you everyone for attending. We'll be here at our booth. Chris is walking around. Feel free to find him if you have any other questions, but thank you guys and thank you, Chris.

Chris Schultz [17:11]: Thanks, Erik.