American Coin-Op - November 2013

BRING OPPORTUNITIES

Each different time of the year brings new opportunities for a Laundromat’s success, says Huebsch’s Jay McDonald, but the trick to maintaining a constant flow of customers is to change with the seasons.

PRODUCT SHOWCASE: WATER HEATERS

LAUNDRY LEASES: ASSETS WORTH PROTECTING

Self-service laundry operators have many responsibilities, ranging from daily operational tasks to how they can grow and market their business. Tending to your laundry’s lease is a key responsibility, and the Coin Laundry Association recently gathered an expert panel to offer advice on the best ways to go about protecting that asset.

KNOW YOUR OPERATING NUMBERS

Your Laundromat’s operating numbers should be as easy for you to recite as your Social Security number. If you don’t know your average daily revenue, machine turns per day, or the percentage of your payroll to gross, you are operating blind, warns columnist Howard Scott, and that is not a good way to go.

Service and the SeaSonS

equipment service tips

editorial

Charles Thompson, Publisher

E-mail: cthompson@ americantrademagazines.com Phone: 312-361-1680

Bruce Beggs, Editorial Director

E-mail: bbeggs@ americantrademagazines.com Phone: 312-361-1683

Roger Napiwocki, Production Manager Jean Teller, Contributing Editor

Carlo Calma, Editorial Assistant

Nathan Frerichs, Digital Media Director

E-mail: nfrerichs@ americantrademagazines.com Phone: 312-361-1681

advertising

Donald Feinstein, Natl. Sales Director E-mail: dfeinstein@ americantrademagazines.com Phone: 312-361-1682

office information

Beggs

Do you consider yourself pretty handy around your store? I would think that you, or your manager/attendant, would have to have some maintenance know-how to keep things running smoothly. The more you can do yourself, the less you stand to spend on service calls. With that in mind, I polled some manufacturers this month about the general maintenance that store owners like you should be expected to handle, the tasks that you shouldn’t, and the value of keeping your machines in working order. Check out my story beginning on page 8.

change of seasons

With the last leaves falling from the trees and Old Man Winter not far behind, should you be doing anything to adapt your store for the upcoming season? Huebsch’s Jay McDonald says each different time of year brings you new opportunities for success by changing with the seasons. Learn how beginning on page 12.

laundry leases

Meanwhile, on page 22, Editorial Assistant Carlo Calma draws on the expertise of a Coin Laundry Association panel to analyze laundry leases and describe how to negotiate and protect those important assets. Landlords and laundries alike stand to benefit from reasonable negotiations, particularly with the amount of vacant property available today.

And if those articles aren’t enough for you, our Product Showcase highlights water heaters, columnist Howard Scott spells out the importance of knowing your numbers, and the Your Views survey covers drop-off service and its profitability.

Read on!

Bruce Beggs Editorial Director

Main: 312-361-1700 Fax: 312-361-1685 subscriptions 630-739-0600 www.AmericanCoinOp.com

American Coin-Op (ISSN 0092-2811) is published monthly. Subscription prices, payment in advance: U.S. and Possessions, 1 year $39.00; 2 years $73.00. Foreign, 1 year $89.00; 2 years $166.00. Single copies $7.00 for U.S. and Possessions, $14.00 for all other countries. Published by American Trade Magazines LLC, 566 West Lake Street, Suite 420, Chicago, IL 60661. Periodicals postage paid at Chicago, IL and at additional mailing offices.

POSTMASTER, Send changes of address and form 3579 to American Coin-Op, Subscription Dept., 440 Quadrangle Drive, Suite E, Bolingbrook, IL 60440. Volume 54, number 11. Editorial, executive and advertising offices are at 566 West Lake Street, Suite 420, Chicago, IL 60661. Charles Thompson, President and Publisher. American Coin-Op is distributed selectively to owners, operators and managers of chain and individually owned coin-operated laundry establishments in the United States. No material appearing in American Coin-Op may be reprinted without written permission. The publisher reserves the right to reject any advertising for any reason.

© Copyright AMERICAN TRADE MAGAZINES LLC, 2013. Printed in U.S.A.

www.americancoinop.com

Bruce

64% OF STORE OWNERS REPORT ‘GOOD’ OR BETTER DROP-OFF PROFITABILITY

An even 40% of coin laundry store owners rate the profitability of their drop-off laundry service as “good,” according to results from October’s American Coin-Op Your Views survey.

Almost a quarter of respondents rate the profitability as “excellent” (24.4%), while 22.2% rate it as “average,” 11.1% as “below average,” and 2.2% as “poor.”

Roughly three-quarters of store owners surveyed (74.5%) provide some type of drop-off laundry service (excluding dry cleaning), while 25.5% do not.

In terms of managing the service, the majority of respondents report a mixed bag of “other” drop-off service headaches (37.8%), ranging from consistencies with the finished product to attendants losing garments to having no “market for this type of service.”

While 22.2% say that “dealing with problem garments” is the biggest headache, others say “trusting an attendant with the job” (17.8%), “customer complaints” (11.1%), “allocating the machines for the work” (8.9%), and “getting the work done on time” (2.2%) are the biggest stressors.

A little more than half of respondents (51.1%) say they do “very little” in terms of marketing their drop-off service, while 15.6% say they are a “better marketer than most.” Only a small percentage believe they are the best in the area in marketing their drop-off service (6.7%), while equal shares of 13.3% say they “market as much as the next operator” or “do no marketing at all.”

The majority of store owners (43.2%) charge between 96 cents to $1.05 per pound for the service. A small percentage charge as little as 75 cents or less for the service (6.8%), while roughly 10% charge as much as $1.26 or more. About 20% charge $1.16 to $1.25. Equal shares of 9.1% charge $1.06 to $1.15 or 86 cents to 95 cents. Just 4.5% charge 76 cents to 85 cents.

Looking ahead, 47.8% of those that offer drop-off laundry service say that “profits will stay the same,” while 41.3% predict that “profits will increase.” Only a small percentage say that “profits will decrease” (6.5%), while 4.3% are unsure of what drop-off business will be like in the next year.

While American Coin-Op’s Your Views survey presents a snapshot of the audience’s viewpoints, it should not be considered scientific. Subscribers to American Coin-Op e-mails are invited to participate anonymously in an industry survey each month.

The entire American Coin-Op audience is encouraged to participate, as a greater number of responses will help to better define owner/operator opinions and industry trends.

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Equipment Service Tips Improve

By Bruce Beggs, Editorial Director

Not every equipment matter in a coin laundry requires a service call. There are some things that the average store owner can do—and should do—to keep their machines in good working condition.

American Coin-Op polled some manufacturers about the level of equipment maintenance a store owner should expect to perform, what tasks should be left to trained personnel, and how much money a store could save by maintaining a consistent preventive maintenance schedule.

Q: What types of equipment maintenance should a store owner or attendant be able to do without contacting a distributor or equipment repair service for assistance?

Russ Cooper, manager of technical service, Dexter Laundry: By nature, Laundromat ownership tends to be a “hands-on” business that is undertaken by entrepreneurs that have some degree of mechanical aptitude or that have employees that do. By taking advantage of equipment service schools, owners and their employees can learn to service most aspects of the machine. Many of the equipment issues that we at the factory help out with begin with neglected maintenance or a

needs

simple lack of cleaning that most anyone would be qualified to handle.

Robert Small, senior manager, global commercial laundry service, Maytag Commercial Laundry®: Regardless of equipment type, it is always a good idea to keep the exterior of the product and all surroundings clean and tidy. This will eliminate the possibility of lint and debris getting into any part of the machine that would require additional maintenance or cleaning.

Leroy Trevigne, key account representative for vended laundries, Pellerin Milnor: For new installations, if not installed by the dealer, be sure the installer consults the installation manual or dealer for proper installation procedures. For water fill problems, be sure there is at least 40-50 psi coming into the building, 60-70 psi is best. Be sure hose sizes are correct to each machine. Check in-line filter screens, (and for) trash caught inside the valve body and small control glass control circuit fuses. Some machines, top loaders in particular, have in-line fuses for the water valves.

Keep all machines clean, both outside and inside the control. Chemicals such as detergent and bleach are highly corrosive. ... Dust should be vacuumed from the controls, with power off, at least once or twice a year.

Robert Barile, regional sales manager, Speed Queen: Most manufacturers provide preventative maintenance lists detailing which tasks should be performed on a regular basis. For issues such as water being unable to move in or out of the machine, an attendant should look to clear debris from a drain or fill valve. Owners/attendants should be able to follow lubrication per manufacturer instructions and execute the removal of lint buildup on dryers, coin drops, control compartments, computer or output relay boards and motor-cooling vents.

Q. What types of equipment maintenance or repair is generally too advanced for the average store owner and thus should be handled by factory-trained or qualified personnel?

Small: Any part or component failure, or any error codes displayed by a machine that warrants it “out of order.”

Trevigne: Anytime there seems to be an electrical problem, a problem with the sequence of the wash cycle, motor problems, main bearing problems, or problems that the owner cannot seem to determine just what the problem is, the service company should be contacted.

Barile: In general, maintenance surrounding electrical components should be

Photo: © iStockphoto/gerenme

handled by a factory-trained technician. For example, most large replacement components, such as main bearings, cylinders, motor, and suspension systems, require specialized tools and training. Solid state computer controls or inverter drives also require specialized tuning equipment and knowledge.

Cooper: Depending on the equipment and the comfort level of the owner, some electrical testing is too advanced for many store operators. In almost every case, if the machine must be dismantled for bearing or shaft replacement, these procedures should be left up to a qualified technician.

Q: Where does equipment maintenance factor in terms of warranty coverage?

Trevigne: It can factor in very prominently. Generally, things such as low water or gas pressure, which does not affect the mechanical ability of the machine, won’t affect the warranty. But if it is something like the wrong voltage, or corrosion due to chemical spill, or anything that will affect the machine mechanically, it will definitely

affect the warranty.

Cooper: Most manufacturers have a clause in their warranty that indemnifies them in the case of abuse or neglect. In some cases, poor maintenance of the machine could nullify the warranty for specific components.

Q: Is it possible to quantify the amount of money the average owner could save per year if he/she maintains a consistent preventive maintenance schedule for his/her store’s equipment?

Cooper: I’m not sure you could come up with an exact figure or percentage for neglected maintenance. There is always a cost if a machine breaks down and revenue is lost when customers are unable to use it, but what does it cost in goodwill and perception of your store if multiple machines are out or order or perform poorly for the customers?

Trevigne: That would be very difficult to do, but it could be significant. Regarding the equipment itself, I have seen 5-year-old machines that look and function like they

n Basic Equipment Service Tips

Following are some basic equipment service tips offered by the experts quoted in this month’s article (with the understanding that not all machines are alike). Keep each machine’s instruction manual close at hand and always check for recommended maintenance.

Washer, Top-Load

• Clean machine tops regularly, because they become “tables” for laundry baskets, detergent bottles, etc.

• Keep coin slides and drops clean

• Keep soap dispenser free of extra detergent or fabric softener

• Check magnet-controlled door interlock switches, water pressure switch tubes, and in-line fuses to ensure they’re working properly

• Use compressed air to clean internal parts of coin drops

• Check fill hose screens and remove any gravel, sand, etc.

• Replace water inlet hoses every five years

• Make sure machine is properly mounted/balanced

Washer, Front-Load

• Clean machine tops regularly, because they become “tables” for laundry baskets, detergent bottles, etc.

• Wipe down the bellows with cloth soaked in solution of 1 cup liquid chlorine bleach and 1 cup warm tap water; let stand for five minutes

• Change oil in bearing housings as needed

• Vacuum inverter louvers

• Keep drain valves clear of debris such as coins, paper clips, bra wires, etc.

• Ensure that power-supply voltage matches that required by machine

• Replace water inlet hoses every five years

• Make sure machine is properly mounted/balanced

Dryer

• Check that exhaust vent piping is properly sized and clog-free

are 25 years old, and 25-year-old machines have look and function like they are 5 years old. Then there are all the variables. If lint filters on dryers are not cleaned, gas consumption goes up. If water pressure is not maintained, or the hoses used on washers are too small, turnaround time goes up.

Small: In general, commercial laundry equipment manufacturers’ warranties do not provide labor warranty, or if they do, it is for a limited time. Some distributors will offer a labor warranty as part of the sales negotiations.

Service calls per year for the following activities average:

• Two calls per year — Lint cleaning, payment-system cleaning

• One call per year — Dispenser cleaning

Based on these numbers, owners can reduce their number of service calls by approximately five per year. And, if, for example, service calls cost approximately $80 per hour, these simple maintenance tasks could save a store owner more than $400 per year—per machine. n

• Check that dryer has plenty of make-up air coming from specified openings; check color of burner flame: bright blue is good, light yellow means machine is starved for gas or air

• Clean lint filters (after each cycle, if possible); prevent lint from building up on coin drops, control compartments, and computer or relay boards

• Vacuum lint that accumulates on base

• Keep motors clean and free of lint; use vacuum, not compressed air, when cleaning motors

• Make sure machine is properly mounted/balanced

• Dismantle and clean exhaust/internal ducting once a year

Money-Handling Equipment

• Vacuum photo-eye components periodically to remove dust

• Wipe down and vacuum coin and bill acceptors monthly or at least semi-annually

• Remove and clean coin slides following manufacturer guidelines

Card Reader

• Vacuum photo-eye components periodically to remove dust

• Use card cleaning strip available from suppliers to clean lint from reader

• Remove readers completely every 12-18 months for more thorough cleaning of optical sensors and reader heads

• Provide any specific maintenance described by manufacturer

Soap Vender

• Clean any electronics using contact cleaner

• Lubricate mechanical pivot points as needed

Water Heater

• Wrap in water heater jacket for better heat retention

• Drain tank at least annually to remove any sediment

• Follow manufacturer instructions for any maintenance

How Many Coin Laundries Has Your Insurance Agent Handled?

One or Two? Three?

I’ve personally handled insurance for hundreds of coin laundries! I’ve already dealt with most any issue your business is likely to face. If you have any questions about insuring coin laundries, I can and will give you a prompt, clear answer. Skeptical? Call me with a question and find out for yourself.

There’s more: I’m just one member of a team of experts. NIE has been insuring fabricare business since 1915!

Anne

SeaSonal changeS Bring new opportunitieS

As the final leaves drop from the trees and the first frost appears, how should Laundromat owners adapt operations for the upcoming season? Each different time of year brings new opportunities for a Laundromat’s success, but the trick to maintaining a constant flow of customers is to change with the seasons.

SCALING DOWN AFTER SUMMER

During the summer, some owners adapt their hours to accommodate an influx of tourists. Because of the increase in customers, many Laundromats require additional staff during this time. Start adapting to seasonal changes by scaling back on increased staff during what might be considered an “off-season.”

Clark Sowers owns three Laundromats in South Dakota, including East Main Laundry and Dry Cleaning in Sturgis. That location must accommodate a large influx of tourists from May through August for events such as the Sturgis Motorcycle Rally, which typically doubles the population of South Dakota during its run.

“During the off-season, we return to normal operation, in that our staffing hours are reduced,” Sowers explains. “This staff reduction may mean that an individual’s workload increases, as they may be the only person on staff at one Laundromat.”

FALL INFLUXES

It is important to be mindful of the possible influx that may accompany the fall.

“I tend to evaluate my coin laundry business in thirds,

rather than the yearly quarters,” says Sowers. “January through April includes the final semester of college and the end of winter; May through August are the summer tourist months; and September through December covers the start of school, hunting season, and the holidays.”

In the fall, store owners can consider transitioning marketing efforts to target new groups of potential customers. For example, hunting season starts as early as August for bow hunters, with additional seasons extending through January. Due to the soil level and bulkiness of the clothes they wear for this sport, hunters may be reluctant to wash camping gear and hunting clothes in their home machines.

To increase their traffic, store owners can promote the fact that the larger washer-extractors available in their Laundromats can help hunters complete their loads more efficiently than they could at home.

The winter holiday season also brings Sowers an increase in tourists. “We have several customers who manage rental properties that do business with us; some drop off their bedding and some use the Laundromat themselves.”

ADAPT TO LOCAL INDUSTRIES

Store owners can also look to local industries to increase off-season customer traffic.

“In our region, there are elements of our business that remain constant, one of which is the local coal miners in Wyoming and now the oil field workers in North Dakota,” says Sowers. “We provide year-round drop-

Jay mcDonald

Photo: Black Hills Laundry & Dry Cleaning LLC and Alliance Laundry Systems

A panorama of the Belle Laundromat, Belle Fourche, S.D., one of Clark Sowers’ three South Dakota stores.

off service for each of these entities and have even contracted with a few coal mines.”

Maintaining a clean store, with efficient, commercial-quality equipment and with employees who care about the services they are providing is essential. Staff experience, parking availability and quality equipment all help satisfy customer needs.

“The marketing I do among regulars is very simple,” Sowers notes. “I will occasionally buy a customer a wash or two or a bottle of soda or water to let them know we appreciate their business.”

PrOVIDe INCeNTIVeS

Store owners should recognize that some equipment control systems allow additional incentives for bringing in customers.

For example, Laundromats located near college campuses should provide students with budget-friendly options to drive traffic. Time-of-day pricing enables price variations throughout the day, which helps to incentivize customers to patronize the Laundromat during slower traffic time slots, and helps a store compete for new customers. Store owners can also change prices based on water temperature and cycle selections. One control sys-

tem offers 24 customizable cycle selections, which gives customers the ability to optimize wash results for various loads.

These new options provide both money-saving incentives and flexible cycles for consumers, while still offering owners increased revenue. Additionally, some control systems let owners monitor their machines off-site using a computer, and provide reports that analyze equipment performance data and maintenance alerts for ultimate control and convenience.

By recognizing peak seasons and targeting operations and marketing to different year-round customer segments, Laundromat owners can significantly increase their traffic.

Furthermore, by using an intuitive control system, owners can optimize operations and turn off-seasons into opportunities. n

Jay McDonald has more than 32 years of experience in the laundry industry and is currently serving as interim national sales manager for Huebsch® (www.huebsch.com, 800-553-5120). His primary job is to develop and enhance the distribution of the equipment brand’s products in North America. He holds a bachelor’s degree in economics from Ripon (Wis.) College.

Water Heaters

ludell manufacTuRing

Ludell Manufacturing’s “mini” water heater, the Direct Contact Water Heater, is designed to evenly distribute incoming cold water with a spray nozzle located above the heattransfer medium. The water is heated directly by the combustion exhaust of the natural/propane gas burner.

The DCWH’s upright heatingchamber design incorporates four separate zones: the process water inlet zone, heat-transfer media zone, burner-combustion zone and hotwater storage tank. Once heated, the water is re-pressurized with a pump and delivered for process use.

The DCWH features a non-

pressurized vessel and stainless steel construction, welded to ASME specifications, Ludell says. Benefits include stainless steel construction for equipment longevity, a quick return on investment, minimal equipment maintenance, reduced thermal pollution, and a stack exhaust temperature of less than 100 F, the company says.

There are no special pressure-vessel permits, no certified boiler inspections, no tubes to replace, and no need to chemically treat or deaerate feed water with the DCWH, Ludell adds.

Rheem Tankless WaTeR heaTing

The Prestige™ Series Condensing Tankless Water Heater is Rheem’s most efficient tankless water heater, the company says. Tankless water heaters use energy to heat water only as it is needed, so no energy is wasted while there is no demand for hot water, the company explains.

Key features for coin laundry operations include:

• Space-saving design, with the unit taking up the space of a medicine cabinet.

• A minimum flow rate of 0.26 GPM and a minimum activation flow rate of 0.40 GPM, thus ensuring that operators using low-flow fixtures receive warm

www.ludellmanufacturing.com 800-558-0800

water without an increase in flow.

• An EZ-link cable that can quickly and easily connect multiple units.

• Easy venting with PVC piping, which makes installation fast, easy and cost-effective.

• Flexible installation options for indoor and outdoor models.

• A commercial conversion chip that makes the tankless unit easy to configure and allows it to operate at 185 F.

www.rheem.com 866-720-2076

ational Combustion Co. (NATCO)

recently released its NatStak series of water heaters.

NatStaks are fully enclosed and integrated combinations of a Fire Coil 85-style water heater mounted over an 80-gallon storage tank. The heater and pump are pre-piped with an internal circulating pump – installers make only coldwater inlet, hot-water outlet, and (natural or LP) gas connections.

NatStak models, available at 199, 299 or 399 MBtu, provide space savings and the convenience of tank-type

water heaters.

N NatioNal CombustioN Co. (NatCo)

They are sealed-combustion, meaning that standby losses are low. The cabinet is constructed for outdoor or indoor applications, NATCO says.

NatStaks can be vented through roofs or side walls. When inlet air is ducted to NatStaks, they are isolated from air movement in a laundry caused by dryers, cooling systems or exhaust fans. All models are low-NOx. www.nationalcombustion.com 888-656-2826

HamiltoN ENgiNEEriNg

Hamilton Engineering’s EVO

Companion water heaters are compact, with a minimal footprint, and efficient, rated by the company at 99% efficiency. The heaters have a no-flow restriction and do not limit the amount of hot water supplied, the company adds.

EVO Companion water heaters are sized using the company’s CompSize™ program for a specific mix of equipment.

If a Laundromat is located in an area of poor water quality and a water heater

suffers from scale build-up, a Hamilton Indirect Companion is one solution, the company says. Poor water quality could be hard water, high pH, or a water chemistry that is prone to scale in the water heater. The Indirect Companion heats scale-forming water without risk of developing build-up and a loss of efficiency.

www.hamiltonengineering.com 800-968-5530

riNNAi AmericA corp.

The Rinnai Ultra Series of tankless water heaters features a commercial-grade heat exchanger that ensures durability, performance and a constant supply of hot water in high-frequency applications, such as Laundromats and other laundry facilities, the company says.

The Ultra’s condensing waterheating technology combines the benefits of traditional tankless water heaters with energy savings for commercial applications.

Rinnai’s unique condensing design incorporates two heat exchangers to achieve optimum water-heating value from every cubic foot of natural gas or propane. The down-fired ceramic burner allows condensation to drain from the bottom of the heat exchanger,

Noritz AmericA

The NCC1991 condensing tankless water heater from Noritz America delivers a thermal efficiency of 94%, with an input range of 16,000 to 199,900 Btu, according to the company. This enables the unit to meet the hot water needs of larger residential applications as well as a wide variety of commercial projects.

Using a special Quick Connect cable, two NCC199-DV units can be coupled to provide an input of nearly 400,000 Btu, with a turndown ratio of more than 36 to 1.

To obtain its 94% efficiency level, the NCC1991 uses a secondary heat exchanger, made entirely of stainless steel, transferring heat from the exhaust gases to the water, the company says. This heat-recovery process lowers the temperature of the flue gases, allowing an additional, cost-savings benefit: exhaust vent

protecting the primary heat exchanger and burner, as well as maintaining top product performance over time.

Units can be banked together with the Rinnai Tankless Rack System to meet any customer needs, the company says. Up to 25 units can be combined with the multiunit control system to operate seamlessly as a single hot-water source. If a unit should encounter a problem, built-in redundancies with the multiple units ensure a Laundromat can continue operating, Rinnai adds.

Wall-mounted tankless water heaters also free up valuable floor space and, in warmer climates, can be installed on the exterior of a building for even greater space savings. Installation is easy, and exterior installation requires no vent components, saving on construction costs, the company says.

www.rinnai.us 800-621-9419

runs with less expensive, installerfriendly PVC piping rather than the stainless steel venting required by conventional tankless water heaters.

Other key features include:

• Commercial-grade heat exchanger delivers enhanced performance and longevity.

• Space savings: The wall-hung NCC1991 requires less than 3 feet of wall space and takes up no floor space. The unit can be mounted inside or outside on a wall or on a free-standing rack.

• Stainless steel casing allows the unit to be cleaned, sanitized and protected from its surroundings, whether located indoors or outside.

• Full diagnostics ensure easy maintenance and repair. Most parts of the heater can be

replaced and are plug-and-play for quick repairs, according to Noritz.

www.noritz.com 866-766-7489

new modulating, or stage fire, VERSA IC™ system from Raypak features fully integrated temperature control, ignition, safety and individual fault monitoring. The machine also is field-upgradable.

Raypak’s cold-water-protection control function is now built in; a Laundromat operator simply adds the appropriate 3-way valve or variable-speed pump. A Modbus

communications port is standard for continuous monitoring, trending and troubleshooting.

The VERSA IC™ control platform is now incorporated into Raypak’s XFyre (shown), MVB and XTherm modulating condensing Hydronic and DHW boiler product lines.

www.raypak.com 805-278-5300

Bock Water Heaters

The fuel-saving Bock optiTHERM gas commercial water heaters modulate fuel input to satisfy each demand for hot water at optimum fuel efficiency, the company says.

Tests show the potential for up to 15% fuel savings over conventional water heaters, even though the demand for hot water varies throughout a normal day at any Laundromat, Bock reports.

To reduce maintenance expense, optiTHERM uses a built-in corrosion protec-

tion system that automatically eliminates the need for periodic inspection and replacement of anode rods or other corrosion protection parts.

Periodically cleaning sediments from the tank is recommended for efficient performance and tank longevity, Bock says.

www.bockwaterheaters.com 800-794-2491

Laundry Leases:

Assets Worth Protecting

By Carlo Calma, Editorial Assistant

As business owners, self-service laundry operators have many responsibilities, ranging from daily operational tasks to how they can grow and market their business.

Tending to your laundry’s lease is a key responsibility, advises Brian Wallace, president and CEO of the Coin Laundry Association (CLA).

“The [coin laundry] business can be somewhat forgiving,” says Wallace. “You can make mistakes here or there … but leases is one of those areas where if you make a mistake, they’re a pretty hard mistake to recover from.”

To assist in navigating the logistics of leasing, the CLA hosted an Advanced Laundry Lease Analysis panel at this summer’s Clean Show, featuring Brian Grell, executive vice president at Eastern Funding; Van Merrill, vice president of vended laun-

dry development and sales at CG West; and Charlie Pasquale, founder of Pasquale Properties and BCC Payment Systems.

Leases are “an important asset” of a business for not only laundry owners who lease their laundry space, but property owners themselves, Wallace says.

“I think this has relevance for those of

you who own your buildings, because at some point you might find yourself wanting to sell that laundry but keeping the real estate and becoming a landlord.”

MARKET CONDITIONS

Despite the many ins and outs of the process, all panelists agreed that now is a good time to lease space, particularly because of available vacant property.

“The marketplace is really coming alive, so that kind of velocity of transactions that is going on out there is really good,” says Merrill. “It just speeds and greases the wheels of getting good leases done.”

“Landlords are willing to make very good deals right now,” adds Pasquale. “They’re looking for strong tenants to come into their buildings and be able to pay rent.”

Market conditions have also led landlords to get into the laundry industry. “What we have noticed is that many landlords, people who own properties, are actually themselves

Image licensed by Ingram Publishing

Charlie Pasquale (left), founder of Pasquale Properties and founder/ CEO of BCC Payment Systems, and Brian Grell, executive vice president at Eastern Funding, weigh in on best lease practices during the Coin Laundry Association’s Advanced Laundry Leases Analysis panel discussion at the recent Clean Show. The panel also featured Van Merrill, vice president of vended laundry development and sales at CG West. (Photo: Carlo Calma)

looking to get into the laundry business, because it’s just an easier way to develop a spot that’s been vacant for a number of years,” says Grell.

OPTIONS, CONDITIONS AND FINE POINTS

Merrill explains that, among the finer points of a lease, 1) conditions have to be established before a laundry owner enters into an agreement, 2) lease options should never be “personal,” and 3) one must allow for provisions.

“You have to be very careful when you set up a lease,” he says. “You have to set up what the conditions are going to be in an assignment. If you don’t do that, then the landlord is going to start making up a lot of onerous conditions.”

Regarding lease assignments, Merrill adds, “It will not be necessarily compelled, delayed or conditioned. Landlords can delay an assignment and blow a deal … to play with time and really make you squirm, so you have to be careful about that.”

“It’s about thinking ahead to the point at which you want to be able to sell that business and not being held hostage knowing that with no lease, you have nothing to sell,” Wallace says.

“Most Laundromats are sold when they’re worth the least,” he adds.

Grell spoke of the “crucial” part of the process—financing. In many cases, new laundry store owners have already signed their lease prior to signing a collateral assignment of lease document to the landlord, which many financing companies require of business owners looking for financing.

“The time to get that [document] signed

is before you sign your lease,” says Grell.

ESTABLISHING DURATION AND CLAUSES

How can a prospective store owner negotiate other aspects of the lease such as duration and other clauses?

Regarding duration, Pasquale says, “I understand that it’s going to take a long time to repay the money back to [lenders] to have your equipment be your own. In companies that have a lot of mechanical [equipment], we’ll start 10 years with a good-credit tenant.

“On options, our policy is [to] match it; if it’s a 10-year lease, we make it a 10-year option.”

Grell advises prospective store owners to add certain clauses to their lease, such as a “dark clause,” for when other businesses surrounding the laundry go out of business.

Because of this, landlords have developed a bad impression of laundry businesses, he says.

“You have to overcome that,” says Merrill. “You have to really explain to the landlord [that] things have changed. … You’re going to have people coming to your great laundry from a long way away and they’re going to patronize other tenants in that shopping center.”

Another point to negotiate—tenant improvements. The building’s infrastructure and utilities must be the responsibility of the landlord, not the tenant, Merrill explains.

THE ART OF NEGOTIATION

When it comes time to lay a deal on the table, what tactics are there to employ? All panelists agreed on the importance

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Another sub-clause he spoke about was a ‘water clause,’ which would give the owner the full responsibility of paying the water bill themselves.

“Often … a landlord pays the water authority directly for the water bill [but] if your landlord doesn’t pay the water bill, [the water authority] can shut it down,” Grell says.

PITCHING THE BUSINESS TO THE LANDLORD

Perhaps one other obstacle that prospective store owners can anticipate is the industry’s “legacy issues,” says Merrill.

“Our legacy issue is one where we have a lot of old laundries that are small [and] unattended,” he says. “What happens is that a lot of those old laundries that are still around [don’t] necessarily have the best appearance after a few years.”

of being reasonable.

“Try to be reasonable if you’re not using a professional and you’re doing it on your own,” says Pasquale. “There is a calculation to what real estate is worth and what the landlord needs to make his business function.”

“I modify so many terms by the word ‘reasonable,’” says Merrill.

Grell advises consulting with a local distributor before making a deal.

Merrill adds that reviewing the whole lease, and having an understanding of all the terms on the lease, should be part of a prospective owner’s “battle plan.”

“You have to have a strategy of how you’re going to go after that lease, and really give and take,” he says. “Just like poker, you [have to] know when you’re going to give a little bit to get a lot.”

THE SPORTDOZER OF LAuNDRY.

an outsider’s view

Know Your operating numbers

Your Laundromat’s operating numbers should be as easy for you to recite as your Social Security number.

What is your average daily revenue? What are your machine turns per day? What percentage is payroll to gross?

How much is revenue per square foot? How much does wash/dry/fold fund payroll? What percentage is your cost of operating supplies to revenue?

Has occupancy as a percent-to-revenue been rising or falling? Have utilities as a percent-to-revenue been rising or falling? If you own multiple stores, what are the answers to these questions on a per-store basis?

If you don’t know the answers to these questions, then you are operating blind and that is not a good way to go. Knowing these ratios helps you manage your business, enables you to make better decisions, and puts you in full control.

I know some operators who don’t know this information, nor do they care to know. One said to me, “As long as I can pull out $700 a week, I’m happy. I don’t pay attention to numbers. If there were weeks I couldn’t pull out this figure, I would get more involved. But, hey, if it’s not broken, don’t fix it. That’s my philosophy.”

Is that a good philosophy? Certainly not. While he might not stress out about the numbers, he might be missing areas that should concern him. If he rearranged matters, he could perhaps draw out $1,000 a week instead of $700. Maybe an employee is stealing from him, and he is totally oblivious to the deception. Or possibly he’s doing things wrong, which will cause him trouble next year. If he would examine these ratios now, such insights would help head off trouble.

Finally, there’s that wonderful feeling an owner gets by being in complete control. It’s the sense that one has mastered the basics and will not lose the grip of command. It’s the satisfaction of knowing where every dollar is going. It’s the feeling of being the master of one’s universe. It allows one to sleep well at night.

HOW THE NUMBERS HELP

Here are examples of how it helps to know the ratios.

Example 1: You are achieving 3.4 turns per machine in Store No. 1 and 2.8 turns in Store No. 2. Obviously, the second store, the one with the lower average number of turns, is underperforming. Why is that so?

Is the location less than ideal? Are there staffing problems? Is there an issue with access? Is there a relationship between turns and operating hours?

What can be done to improve the turn? Should more machines be moved to store No. 2 to obtain the better turn? Can staffing be switched around to see how this affects turns? Does the store simply produce less?

Should you consider closing Store No. 2 and focusing on Store No. 1? Can some customers be encouraged to frequent the lower-performing store?

Such questions get the owner thinking, which will ultimately result in a solution. The bottom line: if one store achieves 3.4 turns, the second and third stores should do as well. If they don’t, then something’s wrong.

Example 2: Wash/dry/fold revenue covers 50% of the store’s payroll. Is that good?

A friendly competitor tells the owner that the competitor’s wash/dry/fold volume covers 100% of payroll. Obviously the friend’s wash/dry/fold business is much more robust than that of the owner’s. Or is it?

Both stores do the same wash/dry/fold volume, but our owner’s attendant has to devote seven hours a day to wash/dry/fold and thus must work overtime to get all the work done. So, is our owner’s staffer inefficient? Is the competitor’s staffer super-efficient? Is the wash/dry/ fold volume handled differently in each operation? Are the types of garments different?

Maybe the pricing structure used by our owner – 6 pounds at one price, additional poundage a second price

Howard Scott

Knowing these ratios helps you manage your business, enables you to make better decisions, and puts you in full control.

an outsider’s view

– compared to a straight poundage price charged by the friendly competitor is the culprit.

Knowing these different statistics begins the inquiry that should result in some sort of decision. If one operator can cover his payroll with wash/dry/fold volume, then the other operator should, too, particularly where the total volume is identical.

Example 3: What does it mean when utilities percent-to-revenue is rising?

It clearly shows that costs are increasing as a percentage, a dangerous predicament. Has the owner not been raising prices enough to cover cost increases?

Are some utility costs escaping in the forms of leaks or inefficient power use? Is the mix of equipment inefficient, and is it time to purchase new, more efficient machines?

Has the owner been fighting to get the best deals, to take advantage of every pricing allowance? Are attendants not paying enough attention to utility usage?

Such an increase in utility cost percentage is a real cause for alarm. It won’t be too long before utility costs are 30% of revenue, completely drowning out profit.

Example 4: Is revenue per square foot within industry parameters?

If it is considerably below industry standards, then perhaps reconfiguring space will make it more efficient. You could build a wall and rent out the excess space to a small tax office or even a retail store. This action could augment your revenue significantly and realign your per-square-feet ratios.

This author knows a restaurateur who runs his business in the tiniest space imaginable. He hits an incredible ratio of volume per square footage by packing tables tight, by forcing strangers to sit alongside each other, and by keeping waiting diners lined up out front and taking orders while they are in line. While this goes against the industry grain, he believes this signature crowdedness is the key to his success. So, square-footage revenue counts.

Run a loose operation, and you risk missing these clues. There are benefits to being on top of your numbers. n

Howard Scott is a long-time business writer, small-business consultant, and author of four books.

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CSC ServiCeWorkS to ACquire MAC-GrAy for $524 Million CSC ServiceWorks Inc. (CSC) and Mac-Gray Corp. have entered into a “definitive agreement” and plan of merger, with the aggregate value of the transaction worth $524 million, CSC reports.

CSC will acquire all of outstanding Mac-Gray common stock for $21.25 per share, payable in cash, representing a premium of 42% over the company’s closing stock price Oct. 14, CSC adds. The transaction’s aggregate value takes into account Mac-Gray’s outstanding stock options, restricted stock units and net debt as of June 30.

Mac-Gray’s board of directors unanimously approved the transaction.

“After a careful and thorough evaluation process, the MacGray board has determined that the all-cash transaction with CSC maximizes value for our shareholders,” says Mac-Gray Chairman Thomas E. Bullock. “The board strongly believes that this transaction achieves that result, providing a significant premium for our shareholders.”

“We are excited to bring these two companies together to create a world-class operation,” says Bob Doyle, CEO of CSC. “Both CSC and Mac-Gray are industry leaders in customer service and technology. Bringing our teams together to share each other’s best practices will elevate both companies and enhance our customers’ experience.”

Completion of the acquisition is subject to conditions, CSC reports, including the adoption of the acquisition agreement by Mac-Gray stockholders, regulatory approval, and other customary closing conditions. The deal is expected to be completed in the first half of 2014.

lAundrylux AppointS roth Cfo Laundrylux has appointed Joanne T. Roth its new chief financial officer, the company reports.

Roth joins the Laundrylux team as a CPA with a financial background spanning three decades, including work in financial management, budgeting, human resources and risk management, the company says.

“[Roth’s] vast private-sector financial experience and outstanding leadership skills make her a brilliant addition to our executive team,” says John Sabino, Laundrylux chief operating officer.

Roth’s CFO duties will include improving financial controls and enhancing customer-facing services, the company says.

“I am thrilled to join the Laundrylux team,” she says. “My focus right now is on enhancing our systems and platform to support and grow the business and better serve our customers. Providing world-class support to our distributors and customers is paramount.”

Prior to joining Laundrylux, Roth served as vice president of finance/controller at Darien, Conn.-based Parfums de Coeur Ltd., a consumer fragrance product manufacturer, and as regional assistant controller for Corporate Express.

Roth earned her bachelor’s degree in accounting and finance in 1984 from Manhattan College, graduating magna cum laude, and became a CPA in 1986, Laundrylux adds.

Speed queen GoeS pink in pArtnerShip With BCrf

Speed Queen is partnering with The Breast Cancer Research Foundation® (BCRF) to support the search for a breast cancer cure by donating a portion of proceeds from sales of a limitededition home-style washer and dryer pair.

“Speed Queen supports breast cancer research because the disease personally affects many of our lives,” says Reid Meisner, national sales manager for Speed Queen Home.

Speed Queen will be donating $20 from every purchase of its limited-edition home-style washer and dryer pair, available through mid-November at independent retailers around the country, according to the company.

“Just for this month, we’ve modified the exclusive washer’s and dryer’s control panels, making portions of the panels pink to show the brand’s support to breast cancer awareness,” says Meisner.

In addition to increasing awareness, BCRF’s mission is to achieve prevention and a cure for breast cancer by providing “critical funding for innovative clinical and translational research at leading medical centers worldwide,” according to Speed Queen.

“The Breast Cancer Research Foundation is inspired by Speed Queen’s efforts to make a difference in the fight against breast cancer,” says Myra Biblowit, president and CEO of BCRF. “Not only is Speed Queen making an impact by spreading breast cancer awareness on a national level, but this partnership introduces your loyal customers from across the country to our mission of prevention and a cure.”

‘SuCCeSS StorieS,’ neW Content Added in hueBSCh WeBSite redeSiGn Huebsch recently unveiled its newly redesigned website, featuring a new look and layout, as well as other new content.

“Today, many of our customers turn to our website as the first point of contact, making it necessary for our online resources to be as informative as our knowledgeable staff and distributors would be in person,” says Jay McDonald, vice president of distributor development and interim North American sales manager. “We believe the updates make www.Huebsch.com one of the industry’s most informative and easy-to-use websites.”

The site’s new home page features a sliding banner highlighting “the latest products, promotions and videos,” while an “updated footer” on every page has also been added, enabling visitors to “locate an authorized Huebsch distributor, contact Huebsch and learn about financing options through Huebsch Financial,” according to the company.

Roth

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1. Publication Title: AMERICAN COIN-OP 2. Publication

Number: 0092-2811 3. Filing Date: 9/24/12. 4. Issue

Frequency: Monthly 5. Number of Issues Published Annually: 12 6. Annual Subscription Price: $39.00. 7. Complete

Mailing Address of Known Office of Publication: American Trade Magazines LLC, 566 West Lake St., Suite 420, Chicago, IL 60661-1410 Cook County. Contact Person: Charles Thompson, 312-361-1700. 8. Complete Mailing Address of Headquarters or General Business Office of Publisher: American Trade Magazines LLC, 566 West Lake St., Suite 420, Chicago, IL 60661-1410 Cook County. 9.

Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor. Publisher: Charles Thompson, American Trade Magazines LLC, 566 West Lake St., Suite 420, Chicago, IL 60661-1410 Cook County. Editor: Bruce Beggs, American Trade Magazines LLC, 566 West Lake St., Suite 420, Chicago, IL 60661-1410 Cook County. 10.

Owner: American Trade Magazines LLC, 566 West Lake St., Suite 420, Chicago, IL 60661-1410 Cook County. Charles Thompson, American Trade Magazines LLC, 566 West Lake St., Suite 420, Chicago, IL 60661-1410 Cook County.

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13. Publication Title: AMERICAN COIN-OP 14. Issue Date for Circulation Data Below: September 2013

15. Extent and Nature of circulation: (average number of copies each issue during proceeding 12 months=”X”) (Number copies of single issue published nearest to filing date = Y”) (a) Total Number of Copies (Net press run): X=18,073, Y=17,849. b. Legitimate Paid and/or Requested Distribution (By Mail and Outside the Mail). (1) Outside County Paid/ Requested Mail Subscriptions stated on PS Form 3541. (Include direct written request from recipient, telemarketing and Internet requests from recipient, paid subscriptions including nominal rate subscriptions, employer requests, advertiser’s proof copies, and exchange copies.) X=9,678, Y=9,001. (2) In-County Paid/Requested Mail Subscriptions stated on PS Form 3541. (Include direct written request from recipient, telemarketing and Internet requests from recipient, paid subscriptions including nominal rate subscriptions, employer requests, advertiser’s proof copies, and exchange copies.) X=0, Y=0. (3) Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid or Requested Distribution Outside USPS®: X=0, Y=0. (4) Requested Copies Distributed by Other Mail Classes Through the USPS (e.g. First-Class Mail®): X=0, Y=0. (c) Total Paid and/or Requested Circulation (Sum of 15b (1), (2), (3), and (4)): X=9,678, Y=9,001. (d) Nonrequested Distribution (By Mail and Outside the Mail). (1) Outside County Nonrequested Copies Stated on PS Form 3541 (include Sample copies, Requests Over 3 years old, Requests induced by a Premium, Bulk Sales and Requests including Association Requests, Names obtained from Business Directories, Lists, and other sources): X=8,054, Y=8,734. (2) In-County Nonrequested Copies Stated on PS Form 3541 (include Sample copies, Requests Over 3 years old, Requests induced by a Premium, Bulk Sales and Requests including Association Requests, Names obtained from Business Directories, Lists, and other sources): X=0, Y=0. (3) Nonrequested Copies Distributed Through the USPS by Other Classes of Mail (e.g. First-Class Mail, Nonrequestor Copies mailed in excess of 10% Limit mailed at Standard Mail® or Package Services Rates): X=0, Y=0. (4) Nonrequested Copies Distributed Outside the Mail (Include Pickup Stands, Trade Shows, Showrooms and Other Sources): X=40, Y=5. (e) Total Nonrequested Distribution (Sum of 15d (1), (2), (3) and (4)): X=8,094, Y=8,739. (f) Total Distribution (Sum of 15c and e): X=17,772, Y=17,740. (g) Copies not Distributed (See Instructions to Publishers #4, (page #3)): X=301, Y=109. (h) Total (Sum of 15f and g): X=18,073, Y=17,849. (i) Percent Paid and/ or Requested Circulation (15c divided by f times 100): X=54.56%, Y=50.74%. 16. Publication of Statement of Ownership for a Requester Publication is required and will be printed in the November 2013 issue of this publication. 17. Signature and Title of Editor, Publisher, Business Manager, or Owner: I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties): Charles Thompson, Date 9/24/2013.

Also new to the site is a page dedicated to Galaxy controls, the company’s control system for commercial laundry equipment.

“The pinnacle of this new page is an interactive module highlighting the ways vended store owners can optimize their efficiency and maximize revenue with Huebsch washer-extractors and tumble dryers equipped with Galaxy 600 controls,” the company says.

An updated “Success Stories” page has also been added, Huebsch says, allowing potential and current customers to learn about other store owners’ achievements.

The company says that the website redesign is just one part of its overall marketing campaign, which includes “a new brand platform and creative campaign.”

BDS LauNDRy SyStEMS WELcOMES LOuWagiE tO ExEcutiVE tEaM

Distributor BDS Laundry Systems has appointed Jim Louwagie its chief operating officer.

In his newly created position, Louwagie will be responsible for overall sales and logistics functions across all BDS business units, and will report to BDS President David DeMarsh, the company says.

Prior to joining BDS Laundry Systems, Louwagie served as president of the Burnsville, Minn., branch of Anchor Bank, a family-owned bank holding company with 15 locations in the Minneapolis-St. Paul area, according to BDS.

“We’re delighted to welcome Jim to the BDS team and to the commercial laundry industry,” says DeMarsh. “He is a proven leader and knows our company well. He brings a fresh perspective to our operations.”

“I am excited to start a new chapter in my career,” says Louwagie. “I’m looking forward to working closely with David and contributing to the company’s ongoing success.”

BRaiN WaSh café aND LauNDROMat SERVES up NEW EquipMENt

Brain Wash Café and Laundromat is no stranger to the San Francisco scene, or to the global community.

Opened in 1989, the Laundromat was once touted as “the most unusual Internet café in the world” by Yahoo!, says distributor Western State Design.

It has made appearances on film and TV, and has garnered a “big international following,” according to owner Jeffrey Zalles. Anyone can check out the store’s happenings on its website through various webcams set up around the café and Laundromat.

With a global eye on the well-known Laundromat and café, Zalles recently updated the store by upgrading its machines to new Dexter laundry equipment.

In addition to conducting his own research, Zalles consulted with his mechanic in deciding which equipment to purchase, says Western State Design.

“It had a major bearing on my decision, because I don’t want machines that are going to break down in a few years,” he says.

Zalles worked closely with Western State Design’s Bryan Maxwell on the project. Since the equipment has been installed, Zalles has noticed “several positive changes,” and that “usage and revenue have increased” at the store.

“There are people who like to hang out here, but there are also people who just come to do their laundry and want to leave,” says Zalles. “So for those people, they love the faster machines, because not only is the wash cycle faster, now the dry times are shorter.

“The customers are out of here 20 to 25 minutes sooner than they used to be, so they like that.”

caLifORNia MiNiMuM WagE gOiNg up tO $10 pER hOuR By 2016 California Gov. Edmund G. Brown Jr. recently signed a bill raising the state’s minimum wage from $8 per hour to $10 per hour over the next three years, the governor’s office reports.

Assembly Bill 10 (AB 10) will raise California’s minimum wage in two one-dollar increments, from $8 per hour to $9 per hour, effective July 1, 2014, and then to $10 per hour effective January 1, 2016.

“It’s a special day to stand with workers who are laboring for all of us and laboring at a low wage. Turning that wage into a $10 an hour wage is a wonderful thing,” says Brown, prior to signing the bill.

The California Chamber of Commerce included the bill in its “2013 ‘Job Killer’” list, recently saying that “a minimum wage increase affects more than just the hourly rates of employees, [it] also drives up exempt employee salaries, workers’ compensation costs, uniform/tool reimbursements, overtime and consumer prices.”

The organization also states that even at a 3.5% rate of inflation, minimum wage would only reach $8.87 by 2016.

The California Restaurant Association (CRA) also opposes the minimum wage increase. n

Louwagie

Owner Jeffrey Zalles recently upgraded the Brain Wash Café and Laundromat’s equipment with new Dexter laundry machines. (Photo: Western State Design)