From ZombieMat to Wow: Turning Neglected Laundromats into Community Destinations

Alex (00:21): Hello, hello, awesome. All right, good morning, everybody. Day two! I hope you all have voices. Oleg and I are not doing great, but we're really excited to see everybody, and for everybody who came out last night for our happy hour that ended at 10 p.m.—thank you so much for joining us, and thank you to Eastern for sponsoring with us.

I'm really excited to have Brian Grell talk to you about transforming the industry. I would say when I first got into the industry, there wasn't somebody who's been to more laundromat bathrooms or who's been more active with the best-in-class operators in guiding me in this industry than the entire Eastern funding team. So we're huge supporters of not only Eastern, but Laundry Cares and all the amazing things that Brian and the rest of the team are doing. So, Brian, you've got more than 30 minutes to get through your 1,600 slides. Thank you so much.

Brian Grell (01:17): All right, first of all—how many of you is this the first time you've been here? I've been coming to clean shows since 1997, and this is the most energy and excitement that I've seen since coming to these events.

You're going to tell as I go through this that I'm super excited about the future of our industry. Real quick: 37 years in the laundromat business. Prior to that, I was a boring accountant—got out of that. I got sucked into becoming a laundry hacker by just meeting store owners like yourselves. There's nothing more exciting than when you meet entrepreneurs who have game, who are doing it right and moving the industry forward. So thank you, Alex, for letting me speak today.

We're going to talk about transforming laundromats—taking the stodgy, old, run-down laundromats and bringing them into the modern era. Why? Because laundry sucks! Thank you to my friends at Press over here.

Why does laundry suck? We all know that the number two most hated chore in the United States, according to Pew Research, is doing laundry. This is a fact. That's why I'm excited about the potential of building modern laundromats. Number one, by the way, is washing dishes.

Why is there so much interest in laundromats today? Why are you here today? Because the image and reputation of laundromats is transforming. You've all seen some of the big, beautiful laundromats that are opening up around the country. You're all seeing how they're treating their customers. It's all a mindset change. Innovation and technology—these are the driving forces.

For me personally, if anybody was at the Laundry Cares luncheon or participated in Free Laundry Day—absolute game changer. I'm going to say this over and over again: Laundry is not just about clean clothes anymore. It is going to be about connecting with your community.

What are you doing differently for your customers that makes them want to go to your store over a zombie mat?

A couple of things came out of the pandemic that I found super exciting. I actually wrote about it in Planet Laundry. Number one: remember the six-foot separation? Nobody wants to go into a tiny little laundromat where you back up into someone folding their clothes. The mindset is you want separate, big, modern space stores.

What are the silver linings that we have in our industry today? People don't like doing laundry, so modern machines today allow in-and-out under an hour with high-speed machinery—I'm going to talk about that later.

Does anyone know what zombie mats are? Dirty, disgusting, filthy laundromats. These are real pictures that I've taken over the years. Brett Nolan is a salesman—he goes into hundreds of laundromats. I've been in over 4,000 myself.

I learned from my wife what a dirty laundromat is because she'll walk into a store—ladies, you can relate to this—you go into the store and say, "You're not going in there." How do you provide clean clothes if your laundromat smells or there's dirt all over the place?

This is my hometown, Farmingdale, Long Island. My customer that I've loaned to for 30 years—this is how he had his laundromat at the train station I used to go to. It was like that for over a month.

Another thing about the pandemic: I figured out where viruses come from by going to this laundromat. When you walked in the store, there was a slop sink with wet towels that he'd never changed in a month. There's odor coming out of there. That's the first thing you see when you walk into this laundromat. You know what's sad? It's still there, and people still go to it.

[Describes various photos of dirty laundromats, including paint cans, dirty walls, lint buildup, and dirty fans]

[Shows examples of modern, clean laundromats]

This is what modern looks like. This is one of our customers in Newark, New Jersey. Some of you are probably saying, "Why would anyone want to spend so much money? It doesn't work. It's not worth the investment." Then why did he build another one just like it? Why did he build another one six miles away, 13,000 square feet? Since we financed it, I have the numbers on stores one and two. So doing the next two stores was kind of easy because it's proof that it works.

If you have an existing store and you're making money now, and your machines are 12 or 15 years old, and you do not throw those machines in the garbage, you are committing financial suicide. You are wasting money every single day that you don't retool that store. Flat out.

I say that with so much confidence because after 28 years at Eastern Funding doing loans and retools, we are so confident that retools work. If it doesn't work, we won't recommend you for financing because we do the analysis along with you and your distributor.

If you retool your store, what's going to happen?

1. Increased revenue - What's the first thing you do when you put new machines in your store? Raise your prices!
2. Reduction of utilities - Everybody wins when you reduce utilities. Less water. All the older machines will work for another 20 years, but old design, old technology—they're water hogs. You've got to get rid of them even though they work.
3. Peace of mind - How many times do you get a call late at night about machines breaking down or people complaining? Store owners don't want to know about problems. But when you have peace of mind, when everything's working, everything's running, you're getting compliments.
4. Increased bottom line - Scientifically, mathematically—I'm an accountant by background. Nothing matters to me except the bottom line. You don't do anything unless you're going to get a return on your investment.

This is the part that's hard to measure: If you put new machines in, your attendants are happy, you're happy, less aggravation you have to deal with, your revenues are going to go up, your expenses are going to go down.

What about maintenance? Pretty expensive these days, right? What is it, $150 in the first half hour for a guy to show up? How about this: anybody ever have a machine break down on a Friday night? Can you get a repairman on Friday night? No. So you just lost 12-15 turns of revenue on that machine.

Our business is about revenue per square foot, and how do you maximize that?

Think about this: There are so many people in this audience right now who are looking to buy or build a laundromat. What are they doing? The same thing everybody else is doing. How many of the laundromats around here are zombie mats?

I came across Durham laundromats—beautiful building, but I went inside. He's doing great business, but he's got 20-year-old machines, old technology. So what happens when a new person comes and says, "I'm going to build right next to you"? If you upgrade your store and make the investment, what are the odds that one of these people are going to build a store in your footprint?

Is anybody here considering putting low G-force (100 G-force) machines in their store? Does everyone know that you have to go to high-speed washers these days? 200 G-force or higher?

Throughput - How long does it take a high-speed washing machine to extract water? Remember old biology with the centrifuge? You'd spin that thing around and the blood would separate from the water. When you have high-speed washers, it takes the water out. What does that do to your dry time? Instead of 30-35 minutes, you're at 15-20 minutes.

Don't you want, on a busy day, to get your customers out the door in and out under an hour? What they forget to tell you is when you go to high-speed machines, you're going to extend the life of your dryers because they're not running as much. High-speed costs more money, but you're going to get longer life on your dryers.

When you do your retool, what's your largest machine in your store right now? If you do not put 60s, 80s, 100s, and even a 135-pound machine, you're not doing yourself justice. The demand for high-capacity washers is off the charts today.

Talk to anybody in this audience about what machines you're putting in—go to high capacity. Because zombie mats have 18, 20-pound machines, that's it. People want to come in, do eight or nine loads at once, in and out fast.

How many people here want to own more than one laundromat? In 37 years, I never met anyone who wanted to get into the business and only have one. Everybody wants three, five, seven—they want to go to scale, hire a manager, then go home and bake cookies all day long. That's the goal.

But you've got to do the first one right. If you don't have technology in your store, how can you possibly manage multiple locations?

The Quarter Problem: If you have an 80-pound machine and you're charging $12, that's 48 quarters. Think about this: customer comes in on a busy day, puts clothes in the washer, walks over to the change machine, gets all the quarters, strolls back, puts in one quarter, two quarters—oops, it didn't take. Presses the button, the quarter drops out. Another quarter, another quarter. Do you think you can drop 48 quarters in a coin drop machine? No way—it'll take 50-55 drops. How much time did you spend? Eight to 10 minutes to start a machine on a busy Saturday. How do you get people out of your store when they're spending eight to 10 minutes just to start your machine?

For Selling Your Store: When you go to sell your store or buy a store, stores with technology sell with confidence. They have numbers. Yes, you're going to look at the water, gas, and electric bills. Yes, you're going to do your own due diligence for a couple of weeks, but when they can give you a report of machine usage and all the revenue breakdowns—home run. It makes it so much easier to sell your store or buy one.

How many people in this audience have high-speed washers in your store right now? Do you have a sign in your store that says "In and out in an hour—fastest wash in town"? Why not?

Do you think customers know what high-speed is? Half of you don't know what high-speed is, so they don't care. But you know what they care about? Time. Time is money.

Come to my laundromat—you can see it says "Fastest wash in town, in and out under an hour."

[Shows example of Long Island store] Right across the street from a Home Depot. His store went up and I said, "Abraham, where's your 'in and out under an hour' sign?" He took down his sign and put up one that says "Fastest machines on the planet." By the way, under a year, he flipped that store for a seven-figure profit with the real estate. Under a year. Signage matters.

This doesn't cost any money. There's a picture of five people in a laundromat, and I ask the audience, "Who's the attendant?" You couldn't tell because they all look the same—they all look like customers.

When you're running today's modern laundromat, invest in a $15 shirt or an apron—something professional—so that when a customer comes in, they feel secure that there's someone there watching out for them, not just an unattended laundromat.

The Number One Issue: Besides maintenance in laundromats, it's attendants—HR, hiring and keeping them, and paying them a proper salary. Train them well.

How many attendants, if you walk in, don't even greet you? Common sense says, "Hi, how are you? Can I help you?" Especially senior citizens when they come in. Did you train your attendant to go to the senior citizen, maybe go out to the car and help them bring their laundry in? How about that extraordinary extra service that doesn't cost anything?

You know how many zombie mats I've walked into where the attendant was sitting with his legs up on the table reading a magazine while people are walking around, and he doesn't even care? That person needs to be fired immediately. You want an engaged attendant.

The problem everyone makes is because of labor issues, we hire anybody with a pulse. That doesn't work. You've got to interview them. They have to be engaging. You have a million-dollar store and you have a $20-an-hour attendant who doesn't smile, doesn't talk, and they're the face of your million-dollar investment. I think it's worth it to spend a little time training them, just like every other retail business.

When laundromats are treated like a real retail business, you know what's going to happen? No matter what condition your store is in, just customer service alone—that costs nothing—is going to drive people into your store.

Think about a restaurant where you have a favorite waiter or waitress. You go back because they give you great service. Sometimes the food's just okay, but because they treat you well...

Everybody in this audience right now—and that means everybody—has something invisible written on their forehead. You know what it says? "Make me feel important."

Know people's names, pat them on the shoulder, "How was your day?" You have no idea the mileage you get out of doing nothing. How much money does that cost? Nothing.

Changing Your Mindset: When I go into laundromats, I'll ask for the owner. They generally say, "Oh, I'm just the maintenance guy"—until I open up my folder and I have a copy of his driver's license because he's looking for a loan. All of a sudden: "Oh, oh, I didn't know you were from Eastern Funding!"

I said, "Well, no, I wanted to see how you were going to greet me."

Why do you think owners don't want to admit to owning a store? Because they run zombie mats. They don't care. I'm going to be honest with you: we don't want anyone in this industry anymore who doesn't care about their customers.

I don't have to tell you about it—you guys are all here. Woody Allen said 80% of success is showing up. How many zombie mat owners across the country are not here? Don't go to the Excellence in Laundry conference, don't go to local distributor shows, don't go to local CLA networking events.

The value of meeting your peers, even if it means staying up until midnight hanging out with the midnight laundry hackers, staying up until two in the morning learning something from other successful people—it's off the charts. And it doesn't cost money to hang with winners.

One of the things that got me excited after 37 years: we all know that laundromats used to be boring. When I got into the industry 37 years ago and you owned a laundromat and you were at a social event, someone would say, "I'm a doctor, I'm a lawyer..." and you'd say, "I own a laundromat."

Now it's: "I own WOW Laundromat, I own Spin Express Laundromat, I own Laundry Kingdom." Now there's pride. You know why they're proud?

1. They're making money B. Your attendants are happy because they work in a professional environment C. The customers love it

And if you have a modern, energy-efficient laundromat, guess who else wins? Everyone forgets this: If you're using less gas, you're now green. If you're using less water, you're now green. So who loves you? Environmentalists love you. Local businesses love you.

And if you're doing more like Laundry Cares—doing free laundry days, giving out backpacks for schools, having the fire department come and do free screenings, whatever it is—do more than laundry. Connect with your community. That doesn't cost anything either.

If anybody was at the Laundry Cares luncheon: when you put literacy in your laundromat, if you have the space, you are going to have parents come to your laundromat because you're giving children books. The research has proven that when you connect and give books and bring literacy to your laundromat, you're going to have customers—moms with children—that will go out of their way. They'll pass the zombie mat and go to your store because you cared enough to give children books to take home with them.

Retooling your laundromat is not a gamble. Let me say something that makes sense: If you were to come to us and you're two years in business with a good credit score, we will give you half a million dollars with a signed application, copy of a driver's license, and a signed sales agreement. That's it.

Ask me: why would any money lender give away half a million bucks with such little information? Because we know it works.

I may be short, and every once in a while people in the back say, "Brian, please stand up"—I am standing up!

When I have the numbers on my side, and you may think you're a 30-year veteran and you know more than me, I have numbers. I'll take my numbers over your stubbornness on retooling your store.

Throw out your old machines. I don't care how big and strong you are or if you're an ex-football player. When I have the numbers on my side, the numbers don't lie.

Thank you for hanging out. Sorry for the slides not loading up, but I think I got the point across. Thank you.