This annual list of the best laundromat (laundry) franchises was revised and updated on May 23, 2023.
Laundromats are vital services for many people, some at specific points in time, some throughout their lives. Renters, university students, and people living in multi-family properties are often reliant on them. Property management companies and the owners of apartment buildings turn to them as a way to serve their tenants. This is a large industry in which franchising plays a significant part. So is it worth the investment?
The US laundromat industry is worth $6 billion, down from a peak in 2018, when it was worth nearly $6.5 billion, since when it has declined by an annual average of -1.4%. Some of this decline was influenced by the economic impact of Covid, and it has seen some growth since a low of $5.8 billion in value in 2020, but it is still only expected to grow by 0.1% in 2023.
The industry employs nearly 53,000 people in over 19,300 businesses. Services operate all across the US, clustering in urban areas with their large customer bases. The demographics of home and machine ownership mean that the majority of laundromat users are in poorer communities, and this is where businesses often cluster. Low incomes also mean that customers have limited funds, and that laundromats can’t pass on the rising costs of utilities to their customers. Together with competition, both within the sector and from home machines sales, this is putting the financial squeeze on laundromats.
Laundromats are primarily used by people living in urban apartments, who don’t have space for their own laundry machines. Increasing urbanization is therefore expected to provide a solid customer base for this industry. As of 2019, around 36% of US households were renters, and these are essential to the business of laundromats. People are less likely to buy their own machines if they don’t own their homes, as it is an investment in the value of the property, and moving a machine on to another rental isn’t always practical. Renters are also less likely to have the wealth needed to buy and install their own machine. There’s therefore a tension for laundromat businesses between the impact of urbanization and that of poverty. The customer base might be growing, but its ability to pay isn’t rising at the same rate.
Historically, laundromat businesses have seen a 95% success rate, but whether this continues will depend upon wider demographic trends and patterns of washing machine ownership. The current economic uncertainty has some advantages for the laundromat industry, as more people may stay in rentals while they wait to see how the property market shakes out. But wider economic prospects currently look reasonable, which should mean recovery for the housing market, and as more people buy their own homes, fewer will rely on laundromats.
The growth of college education is one area where economic growth can be good news for this industry. Students living on campus are reliant on laundromats, and rising student numbers benefit laundromats serving this sector. Establishing a business close to a college campus or in a student-heavy neighborhood can be a good move when setting up one of these businesses.
Earnings mostly come through the use of coin operated machines, though other payment methods have started to be introduced. Sales of laundry detergents and dry-cleaning services can provide varied revenue streams, but the core business is always self-operated washers and dryers.
Depreciation, purchases, and rising utility bills all contribute to keeping industry profits down. Washers have to be replaced every 5-15 years, dryers after 10-15 years, and most facilities have between 40 and 100 machines. This means that costs increase once a laundromat has been established for a few years and equipment starts to wear out. The capacity of the machines has a significant impact on profits, so it’s worth paying more for equipment that will bring bigger returns, but this adds to the costs for repair and replacement, as well as affecting the size of the property you need for the business.
Laundromats are unusual as small businesses, because they occupy retail spaces but don’t have significant inventory or deliveries to deal with. This removes one complication for the owner of the business, and leaves you with one less significant issue to deal with. However, the constant use of the machines means that extra work has to be put into maintenance, repair, and cleaning, and it’s important to have access to staff with the skills to do this. Other than machine maintenance, cash collection, and bookkeeping, costs relating to staff are minimal, as customers operate the machines themselves.
There isn’t a lot that laundromats can do to stand out from one another, or to attract a larger customer base, beyond drawing attention to their existence. Most people will simply use the nearest laundromat to them, out of convenience and time saving – 87% of customers live within a mile of the laundromat they use. Location is therefore critical to a laundromat’s success or failure, and should be the biggest concern for anyone considering a laundromat franchise. The best branding in the world won’t help your laundromat business if you set up in an area where everybody has their own washing machines.
The upside of this is that you don’t have to grapple with retaining customer loyalty – 90% of customers become repeat users, because location is so important and unchanging. Checking what established competition you might face is vital to judging the potential in a laundromat.
Right now, the laundromat industry seems to have plateaued. Historical growth ended several years ago, while more privately owned machines and the squeeze of running costs are impacting profits. Increasing urbanization helps to maintain the customer base but isn’t creating the rise in demand that might have been expected. Laundromats aren’t going away, and if you can find a good location then you can establish an essential service with strong customer loyalty. But with profit margins falling, the industry is going through a period of consolidation and closures, not expansion.
The Top Laundromat (Laundry) Franchises of 2023
1. Speed Queen Laundry
Speed Queen Laundry stores, with their bright, open designs, are safe (live security cameras are always recording) and family friendly. Each location offers free high-speed internet, plenty of seating and tables, and a kid-friendly lounge area with complimentary iPads to keep the little ones entertained.
The Speed Queen mobile app and rewards program can be used by customers to ditch the coins and pay for each wash online, which is safer for franchisees than dealing with cash. Customers can also pay to have their laundry done for them with the wash-dry-fold option (same-day or next-day pickup) or the wash-dry-go option (same-day pickup and customers fold their laundry at home).
Founded in 1908 by Joe Barlow and John Seelig as a laundry washing machine manufacturer, the laundromat franchise concept wasn’t rolled out in the US until 2019. According to the company website, there are currently 21 locations in the US, though it doesn’t say how many of those are company-owned stores. In Europe, there are 11 company-owned locations and more than 800 licensed locations.
2. WaveMax Laundry
WaveMax Laundry markets itself as “making waves in the laundry industry” by not being your typical laundromat. Cleanliness is the name of the game at WaveMax, both in terms of maintaining every facility to the highest standards of cleaning and sanitation as well as featuring Electrolux washing machines and dryers known for their high efficiency and ability to wash and dry clothes in record time.
Customers can do their own laundry or choose the WaveMax wash-dry-fold service with 24-hour turnaround time in most cases. Free WiFi is offered at each location, and the WaveMax app allows for smartphone payment options and alerts for washer availability and cycle completion.
Founded in 2012 and headquartered in Jacksonville, Florida, WaveMax Laundry has been franchising since 2016. The number of locations has risen in recent years to the current total of 45 (up from the previously reported total of 26), of which one is company-owned and all are located in the US.
3. Zoom Express Laundry
Zoom Express Laundry features high-efficiency machines that can wash and dry clothes in only 60 minutes. Each location is equipped with modern machines with payment options including its rewards-generating app, card payments, or coins. Every Zoom Express location features full-time attendants (staffed 16 hours/day, seven days a week), vending machines, air-conditioning, comfortable lounge areas, big screen televisions, free WiFi, and charging stations for smart devices. Many locations also feature a children’s learning activity area.
Customers can also take advantage of wash-dry-fold services. When customers bring their laundry in (drop-off/pickup) it will be done within a 60-minute turnaround. They can also have their laundry picked up and delivered back home within a 24-hour turnaround. Finally, customers can start the washing machine(s) and then have store staff handle the rest with their dry-and-fold service. Dry cleaning services are also offered. Safety is ensured with a robust video surveillance system.
The company website currently lists three locations, with two in Michigan, one in Texas, and another four listed as coming soon (three in Florida and one in Pennsylvania).
4. LaundroLab
LaundroLab aims to elevate the laundromat concept to a 5-star experience. Locations feature high-efficiency Electrolux washers and dryers for maximum value, and amenities such as in-store staff, 24/7 surveillance, lounge areas, arcade games, and snack and laundry vending, and a mobile app for convenient payments and loyalty points.
They also go the extra mile with their Family Read, Play, and Learn spaces developed in partnership with the LaundryCares Foundation. This area in each store is designed to create a safe, fun, and engaging place for children and families and is equipped with literacy-rich materials to support children’s early brain and language development.
Customers can take advantage of full wash-dry-fold services (drop off by 10 a.m. and ready by 6 p.m. for pickup) or their flip service where store staff will move the laundry from washer to dryer.
Founded in 2016 and having just rolled out its franchising program in 2020, the company website currently lists 11 locations open and another eight locations are listed as coming soon.
An Important Note About Our Methodology
The franchises on this list were ranked according to the number of units in the franchise system. If you are a prospective franchisee searching for franchise opportunities that meet or exceed certain performance benchmarks for sales, profits, and return on investment, please check out this list of America’s Most Lucrative Franchises.
