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Recommendation from David Fu & Associates in Arcadia, CA
The laundry featured in the video was introduced to us when working with one of our Clients in searching for a suitable laundry location. This particular Laundry was brought to our attention by a listing Broker who specializes in Laundries.
During a deep review of the laundries elements of value, we discovered unacceptable issues in regards to the Lease, Equipment Condition, Parking and several other damaging, yet potentially correctable issues. However, the Laundry was not in any condition to sell, which was unfortunate because the owners had a very busy schedule, never expected these issues and had little time or funds to deal with them. They had just recently purchased the Laundry without an understanding of the implications of owning a laundry that is so Far Off Model.
Our Buyer moved on to a new project and the owners of this laundry (one is in video and partner) employed PBI to see if we could negotiate a new lease and build a model that we could cost out and project growth satisfactory growth in a manner that would clearly demonstrate the logic for them to invest another 6 figures into the already failing business.
However, there was a path. Since it was already a new lease, from the recent transaction, it was not easy to renegotiate. Any landlord would love it. We were able to renegotiate the Lease and it is now very favorable and fair to all. It also now fits the Base model projections well and gives the potential to grow the business. There are also several assigned (and protected) parking spots directly in front of the laundry.
With the barriers down, we went on to develop a laundry that would compete favorably and maximize the income. The retool is less than a year back and now we are adding additional (8 load) washers.
At this time the laundry is well exceeding expectations.
The Owners need to be applauded on how they were able to take a real stinker of an investment, already written off as a loser with the only question being, “How do I get out of this mess?” to already looking to expand to other laundries.
This is what happens to Laundries. It is about mismanagement of the elements of value; and this is the Life of a Laundry. An operating Model, once put into place should have the flexibility built into it, in order to deal with cost increases and to be taking advantage of cost cutting methods. A model needs to be renewed periodically and so does the equipment. This laundry was not properly cared for and 100's of thousands of dollars have been wasted, lost and left on the table, until now.
To be successful in this business you must understand how the elements of time effect the laundry and also know how to restore the model in order to be successful in the Investment Laundry Business. This is one of the many things PBI Laundry Consulting brings to the table.
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