20 Years of Laundry Industry Wisdom: Jason Fleck's Vision for Success in the Modern Laundry Business

Erik Nemes: My name is Erik Nemes from Cents and Laundroworks, and I'm joined here today by Jason Fleck, who's the Senior VP of Strategic Partnerships at Laundrylux. Jason, I'd love for you to quickly introduce yourself, introduce Laundrylux, and then we can get into the questions we have for you.

Jason Fleck: Sure. Hi, I'm Jason Fleck, the Senior VP of Laundrylux. I have a long career in the industry with everything from working with store owners to distribution, to sales team training, to product expertise. I started off really in a factory and worked my way out to selling Huebsch for a long time for Alliance—18 years of that—and then worked my way up to lead sales development manager at Alliance for Speed Queen and Huebsch. Then, three and a half years ago, I moved to Laundrylux and took a VP position there. I've been managing their sales teams, distribution, chain accounts, all kinds of things, and I do a lot of marketing too. I wear a lot of hats, as they say.

Erik: Awesome, and thanks for joining us today. I'm going to kick it off with a softball, but you've been in the industry a long time. You're now leading strategic partnerships at Laundrylux. What are the biggest changes you've witnessed in the industry over your career?

Jason: Well, when I started off in like 2002 or something, there weren't a lot of electronics in laundry equipment back then. We were still seeing a lot of timer models, and those of you who were there know exactly what I'm talking about. Great machines, but they used a lot of water, right? They had a lot more fills and washes and things like that going on. We slowly started to see the advent of electronics, which obviously brought the efficiency in place that we see now, because you can customize the cycles and create all these neat things.

Then we had the ability to card stores. The rise of card stores really took over in the last 20 years—a lot of changes. People using more 80-pounders, 60-pounders in stores. Bigger machines became a big trend for a while there and still is, which kind of ties into probably some of the other stuff we'll talk about, so I'll come back to it.

Larger footprint stores are really a thing. I'd say the average store when I started was like 1,500 square feet, and that seemed like it would never change. You'd go in and there were two rows of top loaders across the middle of the store and maybe two front loaders on either side, all single-pocket dryers, stuff like that. And wood paneling—getting rid of that was a good thing, but there was a lot of that back then. But to see bigger stores, bigger machines, more technology—that's really the arc that we're seeing.

Erik: I'm actually still a fan of wood paneling. My wife disagrees.

Jason: It's coming back!

Erik: I still think it looks good. One thing I'd love for you to explain for us is Laundrylux's Next Level model and really how it's built on the four pillars of customer experience, performance, efficiency, and profitability.

Jason: Wow, okay. I'll do my version, which is a little more high-level. When I came from another manufacturer that really didn't ever talk about high-G, although I saw the adoption of 200G really taking off while I was there, when I jumped over to Laundrylux and they were like, "No, 450G is the big deal," it took me a while to wrap my head around it—even me with like 20 years in the business. So I went to a lot of events and I went to some stores and I met with store owners, and I started to see the utility bills before and after. I looked at them closely and I knew how to read them, and I said, "Wow, this is neat."

The operating cost of utilities typically runs around 18-20% on a store, wouldn't you say? And one of my mentors is right here—this is wild to be able to talk with literally somebody who taught me the business at a young age. But anyway, to be able to see those utilities drop to 12% to 10%—that's what Next Level is really about. What does that mean for you? That means your utility bills are going to get slashed.

Somebody asked me, "If I put in your 450G equipment, am I going to be eligible for a rebate?" And I said, "Yeah, you get a rebate every month when you get your utility bill." I mean, that's really what it's about.

And if you have crappy parking, you're also going to be able to turn that faster. Think about it: you've got six spots. You're going to turn the cars faster because you've got faster throughput. You can serve more people on busy days, so your revenue is up. A lot of different things start to happen, and it makes sense to me. If I had a long view of the industry, we're going to see a lot more high-G in the future.

Erik: Yeah, and I will say if you have never gone to a Next Level event, I would recommend going. I've seen 20-30 that Josh and Andy have done, and it's so cool having them walk you through the process and seeing the high-G. So if you have that opportunity, highly recommend it.

You touched on a few of these things, but with the Next Level laundry approach, we've heard that it can increase revenue and also lower operating costs versus what competitors do. What are some of the other strategies that drive those results?

Jason: Yeah, I think for one thing, a modern laundromat—whether it's high-G or not—is going to have the latest and greatest in energy efficiency built into the electronics, into the mechanics. For our Next Level machine in particular—an Electrolux Professional or Wascomat machine—you have these... if you just start with a drain valve, right?

Most every machine in the industry uses a very similar drain valve. It's made by a company in Florida, and it has a long sump that comes out. It's a big rubber tube, about that big, and it goes to the drain valve. Whether or not you have something going on up here, it's holding water down there. Every time it drains and fills, it's called "dead water." It sits in that thing, and it's a few gallons of water. But over time, that's a lot of dead water that gets—you know, a couple of dumps per cycle over 40 machines over seven days a week... do the math. It's tens of thousands of dollars of wasted water.

So we start right there, and we created a sumpless drain valve. It hooks right into the bottom of the basket and saves an incredible amount of money for you. And then we have smart technology built into the machine today that I think is one of a kind. I think it makes so much sense to me that pretty soon everybody's going to have a version of this in the future.

How many times have you been in a laundromat and you've seen somebody put like a 20-pound load into an 80-pound machine or something along those lines? They really don't know what 80 pounds of laundry looks like, and neither do we, to be honest. If I got all of you up here and had you hold a bag of laundry and asked you how much it weighed, I doubt any of us would get it right. I very seldom see anyone get it right. We've tried this, and I use the analogy: you go to the airport and they ask you, "Yeah, your bag's five pounds overweight. You've got to take five pounds out." Do you know what five pounds of clothes looks like? I mean, you think, is that two shoes and a sweatshirt? Is that a hygiene bag? What is it?

So anyway, my point is people underload machines most of the time, and so our machines have the ability to weigh the load before it starts and say, "Wait a minute, this is not 80 pounds of clothes, it's 40 pounds of clothes. I'm not going to add 80 pounds of water. I'm going to adjust to a 40-pounder." You wouldn't believe how much money this saves you over time because, as you know, water is a very expensive resource.

Automatic weighing makes a lot of sense to me. I think everybody's going to have a version of it in the future, probably the way that when axial airflow came out in dryers—does anyone know what that is? Everybody was laughing; now everybody has it, except maybe one brand. So that's kind of the way I look at it.

Erik: Yeah, and I know really with Laundrylux, high spin technology is a major focus for a laundromat owner with that technology. How does that help them differentiate themselves from their competition?

Jason: It's a big differentiator. Here's the thing: you guys either own laundries out there surrounded by competitors, or you're looking to put a laundry in a market that already has competitors there. There are very few new markets. There's a lot of attrition going on, and you want to stand out in a sea of mediocrity, right? You want to really be different.

So what are the things that you see store owners doing to be different today? Maybe they put in an ozone system. Maybe they have different services. Maybe their idea is to have the largest machines in the area. Well, I say use high-G as a differentiator. Because unlike an ozone system—and I'm not knocking it at all, I love the business—I just think it's hard for an end user to wrap their head around what that is. But when they see their clothes coming out of the washer and they're nearly dry, they immediately know what that is. And they go into a dryer, and it dries in 15 minutes faster than any other dryer in town. They're going to leave your laundromat thinking you have the best dryers in the world. And that's the last impression they're going to have at your store, and that's a good impression, right?

So I'm going to recommend you use high-G as a differentiator in this case.

Erik: Absolutely. And we've heard that with the Next Level model, some stores are achieving 20-30% cash-on-cash annual return. What are some things that those owners are doing that really help them reach those performance levels?

Jason: Well, when you go into pro forma, as I do often, and I'm trying to get that 30% cash-on-cash return, I'm going to ask you guys: what do you think your major variables are that really move the needle? There are like three things, all right? So there's utilities, labor, and probably your equipment note and rent, right? So maybe four things, okay.

Of those four things, what can you really lever? You can get a good deal on your equipment, but is it really going to—it's still going to be a six-figure number, right? And then you've got your rent, which is it $10 a square foot, is it $20 a square foot? That's something you can maybe negotiate, but then you're locked into it for a very long time.

So then you have variable things like utility and labor. Okay, these are things you can actually manipulate as the day goes by. So I say we're going to help you with utilities, and labor's really up to you. The way we design stores, we design them to be unattended, but in reality today, we're seeing a lot more attended stores, and we're getting a sense that attended stores can produce a lot more revenue if they're set up the right way.

Erik: Yeah, crushed it. You're doing a great job. One thing I'd love for you to touch on a little bit is just the importance of the customer experience component in today's laundry world, and then some other practical ways that an owner can really elevate that experience in-store for their customers.

Jason: Yeah. So I had this guy in South Florida. He's a French guy. He had like nine stores, and I always try to—multi-store owner-operators are a unique animal. They can teach you a lot. I was standing in the store and he was very quiet, and he was watching customers come in and out, and so was I. I was kind of thinking, who's going to say the first word here? Because I was really trying to get him to retool a store with me.

And he said, "You know what the secret is to this industry?" And I said, "What's that, sir?" And he said, "Everybody who comes through that door—it's their worst day of the week. It's laundry day." And he's like, "It's like doing the dishes." And he's like, "But I try to make them a little more comfortable and give them a nice place and respect. And they'll come a little bit further to come to my store, and they'll pay a little bit more even to have that experience."

And he said that, and it was—you ever heard the Albert Einstein quote where like, if you can't explain something in the simplest terms, then you don't fully understand it? He got it. It just clicked in my head, and I knew that was right. And so I think about the customer experience from the parking lot to the folding tables. And I think, what is their journey through my store, and all the little pain points and the flow of the store and all those things? And if you really dial into that and you really take care of that, you're going to have an amazing store. You're an amazing operator, and you're going to be very successful.

Erik: Yeah. I think something we hear a lot is the concept of "if you build it, they will come" is no longer a reality. You need to create that experience to get your customers to walk through the door, but also to come back every single time.

Two-part question here, but just, you know, looking ahead at market trends, what are some challenges that you foresee coming up in the next 5-10 years for laundromat owners, and with those challenges, what are some opportunities you see for them as well?

Jason: Yeah. I mean, I want to—before I say anything scary—I think I would mention that all industries are really facing some challenges right now, whether you're in the restaurant business or whatever your business is. We're all seeing high interest rates. We're all seeing rents go up, and we're seeing construction costs go up, equipment costs go up, utilities go up, labor go up. Everything's a little bit inflationary going on right now. And so typically, how any industry responds to that is we raise prices. And so we know that prices need to go up, and that will help us.

The other thing we're seeing—the reason you see, by the way, one of the most popular events of the year is a thing called wash-dry-fold, other than Clean Show. And recently the CLA has been doing them in Nashville and they've been wildly popular. And if you've been to one, you're like, "Wow." The reason that's so popular, by the way, is people are looking for additional revenue streams to help offset those rising costs. That's why it's very popular to go to learn about commercial pickup, wash-dry-fold, things like that—vending, whatever it is.

Erik: And then for new investors considering entering the laundromat business, what's your advice to them for building a sustainable, profitable operation from day one?

Jason: I think I would say, 20 years ago, to kind of bring it home: when I was in my younger twenties and I was looking at laundromats in that day, I could never picture really exactly in my head where we are right now. So now imagine you are right now looking—you're on a wooden wagon on a dirt road, and I'm trying to tell you about a space shuttle that's going to come in 100 years. You probably wouldn't believe me. But I'm only looking 20 years out, and I'm thinking, okay, we see some things that could be patterns like AI, the rise of AI. You can see that high efficiency is probably going to be more important in the future, which means high-G force machines are here to stay. We're going to have soft mounts everywhere at some point, right?

If you're thinking 20 years ahead, I'd be looking to get the best technology possible that exists today. That's my advice. I would lay out the store to be prepared for more wash-dry-fold business. I think we have a generation a little bit younger than me that loves to order out food and loves to order out laundry, or will soon. And I think that's something we've got to get ready for. And so we've got to design the laundries for that, at least to be future-proof.

Erik: Yeah, I think the concept of instant gratification, whether it be for Uber, Amazon, whatever it may be—if you want something, you want it right away and you want it to be easy.

Jason: Yeah.

Erik: You talked about adding additional services and owners becoming more sophisticated and using data more. So really to wrap it up, I'm curious to get your opinion on what role you see strategic partnerships playing in your vision for the future of commercial laundry and just overall in general.

Jason: Thanks, Erik. I look at my role now kind of stoically. I look at a long arc of the industry and I try to make sure that we're ahead of where things are headed. And I look at—at a high level—I look at the sales team and make sure they have the tools they need for those challenges ahead of us and the challenges of making our store owners successful. I think that's ultimately what I think should be at the heart of everybody who's in a position that I'm in: we want to have the most successful store owners there is on Earth, and we want them for life.

I have so many customers that call me today who have done nine or 10 stores. I have a friend who does 25 stores, got a friend who does 109 stores, and I've been with him for over a decade. And I build those relationships on making sure they're successful.

So if I had some advice: if you're working with a rep and you bring them a lousy location and they don't talk you out of it, you probably need a new rep. And if they're quoting you 100G machines right now, you probably need a new rep, I would say, because of future-facing the future. It really is—100G machines are like having a corded phone right now. You know, it's like you've got to get it out of the house, I think.

Erik: Absolutely. And Jason, you've been a great partner to us at Cents and LaundroWorks. You've been a great resource as I've learned the industry. So thank you so much for spending time with us and sharing your wisdom for everyone here. And I do want to open it up for questions if we have time, because we do have a few minutes. So thank you.

Audience Member: [Question about attended stores and setting up stores for attended models]

Jason: Oh, so could you hear that? I'll say she asked about attended stores. I said, you know, getting ready for that is a trend that we're seeing. And how do you set up a store for attended models?

I had somebody the other day who wanted to build a laundromat and he wanted to put more machines in and lose the counter. And I fought him on it. I challenged him on it. And he's like, "Well, I don't think I'm going to use a counter." And I said, "Well, you might need a counter. You might want to sell laundry one day, though."

I mean, you've got to look at revenue per square foot and you've got to do the math and see if it's worth it. You've got to look at the demographics and make sure that customer is going to be around there. Sometimes it's not. I know some neighborhoods are maybe on the lower end where there's not a lot of drop-off business there, and you'll have to go get it—you'll have to do commercial pickup. And then you might still need a counter for that, I think.

So designing the store to have that—even if you have like a pull-down door that locks and it's there if you need it—and there's your accounting room, your privacy room to deal with reloading changers, where you can have some secure area to handle money and rail out in kiosks with LaundroWorks. There you go, with LaundroWorks. Exactly. These guys are great. Erik's been around the country with me doing these events this year, so we've become close. And we talk to a lot of store owners, and it's very market-dependent. Sometimes, you know, the way the stores are in Texas, everything's bigger. Lots of room for this model. I think when you get into rural markets and you're pressed for space, you've got to think about it. You've got to have a great advisor. Don't go on this journey without a great advisor that knows what they're talking about.

Don't try to do all your research on the internet. Trust me, you will make terrible mistakes—expensive mistakes.

Erik: Yeah. And I'll just add, there's a reason why we've had three conversations in a row with distributors. They know their market, they know the industry, they're the experts. So really find someone that you can work with that you trust and, most importantly, find someone that you can grow with—not just buy machines from, but truly partner and build a business with. So definitely want to add that to it as well.

Jason: Does that answer it? I mean, things like I've seen buildings where you could put the laundromat in the front and you have a processing area in the back with a pull-down ramp and stuff like that. Very nice to have if you really want to think ahead and think about how much time do you want to spend in the laundry and how much labor do you want to put in the laundry. And then for every attendant in the laundry, you've got to have something that generates revenue to offset that. So that's what I recommend.

Erik: Awesome. Well, thank you everyone. We'll be around the booth. Visit Jason at Laundrylux, but thanks for spending some time with us and we'll talk to you later.