American Coin-Op - January 2018

Benchmarks: By the Numbers

I N S I D E :I NJ SUI LDYE : 2 0J A0 N5 U A R Y 2 0 1 8 LIABILITY CLAIMS: MANAGING THE AREAS OF GREATEST RISK

LONE STAR STATE PROVING GROUND: ROYAL COIN LAUNDRY

LAUNDRY SUCCESS STARTS WITH DEMOGRAPHICS ANALYSIS

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CONTENTS JANUARY 2018 VOLUME 59 ISSUE 1

COVER STORY

BENCHMARKS: BY THE NUMBERS A look at the numbers, metrics and key performance indicators that store owners could (should?) be using to gauge store performance, with input from laundry equipment manufacturers and payment systems makers.

(Cover image licensed by Ingram Publishing)

INSIDE

6 COLUMNS

12 COMMON LIABILITY CLAIMS

34 WEIGHING RISK WHEN CHOOSING INSURANCE COVERAGE

22 GOIN’ WITH COHEN: LONE STAR

DEPARTMENTS

Claims such as slip-and-fall accidents can be easily prevented by applying common sense and a “safety first” mindset. Three insurance experts offer tips for managing the greatest areas of risk in and around your laundry.

STATE PROVING GROUND

Phu Tran realized the best way to keep things humming at Royal Coin Laundry was to standardize processes for each and every task — no matter how mundane.

The point of insurance is to protect against catastrophe, columnist Howard Scott says, but not to assess against every catastrophe so that we will never be out of pocket.

Scott discusses how his family chose to live with a higher level of risk in order to keep its healthcare costs down.

4 VIEWPOINT 18 INDUSTRY NEWS 32 CALENDAR

33 WEB UPDATE 38 CLASSIFIEDS 39 AD INDEX

30 COIN-OP 101: VENDED LAUNDRY

SUCCESS STARTS WITH DEMOGRAPHICS

Store site selection is all about location, location, location, writes Speed Queen’s Jim Rosenthal, and the necessary demographics analysis can’t be mailed in. Investors need to rely on someone who understands the area in question and is knowledgeable about neighborhoods, future development, local shifts in housing, etc.

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26 A CLOSER LOOK A step-by-step video guide for cleaning the washroom is a handy reference tool for workers at Royal Coin Laundry.

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VIEWPOINT Charles Thompson, Publisher E-mail: cthompson@ATMags.com Phone: 312-361-1680

Donald Feinstein, Associate Publisher/ National Sales Director E-mail: dfeinstein@ATMags.com Phone: 312-361-1682

BE SURE YOU MEASURE UP

Bruce Beggs, Editorial Director E-mail: bbeggs@ATMags.com Phone: 312-361-1683 Roger Napiwocki, Production Manager Nathan Frerichs, Digital Media Director E-mail: nfrerichs@ATMags.com Phone: 312-361-1681

ADVISORY BOARD

Bruce Beggs

BENCHMARKING: BY THE NUMBERS When you purchased or opened your first store, I presume one of your goals was to make money. But how could you tell if you did? I imagine you tracked revenue for the first month and, upon comparing to expenses for the same time, made that determination. You set a benchmark, one to which you could compare performance the next month, and so on.

Variables can and do influence results: the season you’re in, equipment was out of order or new models were placed into service, a nearby competitor lowered vend prices, etc.

It’s this moving target that demonstrates the value of tracking performance against benchmarks. And today’s advanced vended laundry equipment and electronic payment systems have never made it easier to collect customer data and manage results.

Beginning on page 6, our cover feature takes a look at the numbers, metrics and key performance indicators that you could (should?) be using to gauge your store’s performance.

I’m certain many of you actively benchmark and seek to compare your store to industry standards (like those in our annual State of the Industry Survey report, coming up in April). But if this kind of effort doesn’t appeal to you for whatever reason, a certain idiom comes to mind: You can’t manage what you don’t measure.

COMMON LIABILITY CLAIMS A customer slips on the damp floor and falls. Another carrying a basket heaping with clothes trips coming up the steps at the front entrance. Having just finished several loads late one night, a patron returning to her vehicle is assaulted in the dimly lit parking lot.

General insurance liability claims are the most common for small businesses like yours, but they are also the most preventable.

Beginning on page 12, representatives from some of our industry’s major insurance providers discuss managing the greatest areas of risk in and around the average laundry. Keep yourself safe, and your customers safer.

Kurt Archer Wayne Lewis

Ann Hawkins Kathryn Q. Rowen

OFFICE INFORMATION Main: 312-361-1700

SUBSCRIPTIONS 630-739-0900 x100 www.AmericanCoinOp.com

American Coin-Op (ISSN 0092-2811) is published monthly. Subscription prices, payment in advance: U.S., 1 year $46.00; 2 years $92.00.

Foreign, 1 year $109.00; 2 years $218.00.

Single copies $9.00 for U.S., $18.00 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 59, number 1. 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. The publisher reserves the right to reject any advertising for any reason. © Copyright AMERICAN TRADE MAGAZINES LLC, 2018. Printed in U.S.A. No part of this publication may be transmitted or reproduced in any form, electronic or mechanical, without written permission from the publisher or his representative. American Coin-Op does not endorse, recommend or guarantee any article, product, service or information found within. Opinions expressed are those of the writers and do not necessarily reflect the views of American Coin-Op or its staff. While precautions have been taken to ensure the accuracy of the magazine’s contents at time of publication, neither the editors, publishers nor its agents can accept responsibility for damages or injury which may arise therefrom.

Bruce Beggs Editorial Director

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Benchmarks: Numbers

By the

A look at the numbers, metrics and key performance indicators one could (should?) be using to gauge store performance

by Bruce Beggs, Editorial Director

H

uniforms, training); marketing costs; and other fixed and variable expenses.”

“Owners today absolutely need to collect data on overall revenue, turns per day and usage by capacity and location within their facility,” says Kathryn Rowen, North American sales manager for laundry equipment maker Huebsch. “While fast availability of this information is important for owners, it is also paramount that they receive immediate notification of error codes and vault openings.”

For Michael Schantz, president of payment systems provider Setomatic Systems, it’s “Turns/revenue per day. I also like the idea of studying revenue by hour of the day to be used to decide on hours of operation (open/ close times)

▼

ow do you know your store is performing up to expectations? Are you missing opportunities for service expansion? What about the potential for expanding your business to include a second store?

In order to make these types of determinations, you need two things: performance goals and performance data. Benchmarks can help a store owner decide if his/her operation is running well or if it might be time to make some changes.

This month, American Coin-Op polled representatives from several laundry equipment manufacturers and payment systems makers, all of which offer data collection and/or management tools, to review how store owners can crunch the numbers, then act on what they find.

by category size; revenue breakdown (selfservice, wash/dry/fold, vending, drop-off dry cleaning); turns per day (individual machines and store average); machine usage per day (track busy and slow times); utility costs (water, sewer, gas, electric); labor costs (payroll,

BASICS FOR GAUGING PERFORMANCE What basic information might a vended laundry owner want to gather on a weekly, monthly, or otherwise regular basis to track business performance?

“Today’s vended laundry owner would want to track the number of turns per day, per machine,” says Wayne Lewis, sales manager for electronic payment systems provider ESD. “This provides them with a benchmark of first whether they are hitting their objectives with regards to break-even points for any financing provided. It also gives them objective levels for specific profitability goals.”

“Identify and track the key performance metrics,” advises Joel Jorgensen, vice president of sales and customer services for laundry equipment manufacturer Continental Girbau, “which include revenue by machine and cycle type; machine 6

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“To better understand business performance, owners should understand how business variables (utilities, machine usage, machine maintenance, building costs, payroll, customer demographics, etc.) effect revenue,” says Dave Richards, vice president of payment systems provider CryptoPay. He cites an example of two washing machines, a 30-pounder purchased in 2000 and a 60-pounder purchased in 2012.

“If I’m not tracking number of turns and revenue generated per machine, I might choose to replace (because of age) the 30-pound machine when it is having the least use and impact on revenue,” he says.

“Certainly, they would want revenue reports,” says Tom Weisheipl, a regional sales manager for laundry equipment maker Speed Queen. “They would also benefit from time-of-day pricing reports, cycle modifiers, and reports showing turns per day. Owners should capture this data per machine or capacity to make informed business decisions. Many also want to see if there were any error reports indicating maintenance items that need to be addressed. Store owners also will want reports to show when, and if the coin vaults and service doors were opened.”

Steve Marcionetti, president of payment systems provider Card Concepts Inc. (CCI), points to sales by equipment type (size), turns per equipment type, and average spend per customer.

“For card-only stores, income and sales are different,” Marcionetti remarks.

“Income is how much money was added to cards, sales is what was used at the machines, and the difference is the ‘float.’”

—Amanda Konczal, Dexter Laundry and having the appropriate help on duty if an attended Laundromat.”

“It is important to note usage trends based on day of week and time to help set your pricing structure,” says Amanda Konczal, director of marketing and customer support for laundry equipment manufacturer Dexter Laundry. “Monthly, you should analyze utilities, repair costs (including labor), attendant labor as well as any other ancillary revenue such as washdry-fold or vending.

“You should also monitor competitive activity on a regular basis. This could be monthly or semi-annually, depending on how competitive your market is. You should know your competitor’s equipment mix, pricing, machine capacity, age, water usage, and washer-to-dryer ratio.”

Oleg Stepanov, representing payment systems provider Mitech Integrated Systems (Laundroworks), believes it’s important to look at three metrics: profit, utilization, and customer retention.

“At the highest level, tracking the store’s profit (crudely defined as revenue minus utilities minus depreciation minus lease minus labor), especially if making changes, is critical. If benchmarking against the industry, you want to look at profit per square foot,” Stepanov says.

“Utilization, a measure of what percentage of time a machine or group of same-size machines are being used during a particular time of day, is a good metric to track.

“Finally, the customer retention metric should be obvious: are customers coming back to the store?”

“Understanding turns will help a laundry owner understand demand on each size machine as well as demand during peak times,” says Chris Brick, NE regional business development manager for Laundrylux, North American supplier of Electrolux and Wascomat laundry equipment. “This knowledge can help a store owner create pricing specials during slow times or raise prices on higher-demand machines.”

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HOW LONG TO COLLECT MEANINGFUL DATA? When it comes to how long a store owner should collect data in order to generate that first meaningful benchmarking report, followed by subsequent analyses, there is some difference in opinion.

“In opening up a new Laundromat, you want to monitor growth closely for the first 12-18 months,” Setomatic’s Schantz says.

“One week. This would provide a store owner with an understanding of the peak times (Saturday and Sunday) and the slower

times (usually a Tuesday or Wednesday),” offers Laundrylux’s Brick. “As you continue to gather benchmarking data, a store owner should continue to focus on the peak times but more on a monthly basis to incorporate more of an understanding of how seasonal weather and holidays affect business on a larger scale.”

“That depends on what aspect of the business they are benchmarking,” believes Speed Queen’s Weisheipl. “It is important to have daily, weekly and monthly reports.

The comparison should be made year over year, but there are little things that can be compared when you tweak pricing or something else in a monthly comparison report.”

“If the store is brand-new, it could take up to a year to get valuable benchmarking data,” says CCI’s Marcionetti. “If the store is an established location, a few months of tracked data should provide good benchmarking info.”

“It really depends on your market and how seasonal or competitive it is, but I would say a minimum of 12 months is required before you have enough information to adequately start benchmarking,” Dexter’s Konczal says. “During this time, you definitely don’t want to ignore obvious changes in your business. Listen to your customers, watch your competition, and trust your instincts.”

“The length of time to collect data to set the first benchmarks would depend on whether this is a new or existing, operating store,” advises ESD’s Lewis. “In either case, initial data should be collected and documented immediately. Weekly and monthly information should be obtained to continually provide new data and baselines to document continued growth or decline.”

“The typical customer does laundry once per week,” says Laundroworks’ Stepanov.

“At a minimum, I would look at a time window of four weeks. If you’re making changes in the store and want to track their effects, you certainly need more than four weeks so that you can see the data before and after the change.”

“In general, longer is better,” says CryptoPay’s Richards. “Statistical significance is increased by controlling/eliminating variables that could affect the data.

Example: Collecting number of turns in a day and forgetting there was a power outage from 9 a.m. until noon would provide a fairly distorted picture. On the other hand, if I’m looking at the number of turns per

▼

“It is important to note usage trends based on day of week and time to help set your pricing structure.”

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“Store owners should use all data to provide information as to whether specific marketing campaigns are advantageous...”

“They should continually review data and look for any changes in trends. That is the only way to determine what marketing tactics have been successful. We recently had a store owner who figured out an entire bank of machines weren’t being used, based on the fact that there were or, in this case, were not folding tables nearby. He rearranged the tables and immediately increased his utilization.”

CryptoPay’s Richards says the trick to putting the data to us is to understand what it’s telling you.

“The data are simply pointing to something that may require attention and/or improvement,” he says. “Without data and investigation, the issue may go unanswered or the fix is, at best, a ‘shot in the dark.’

The owner’s challenge is to understand what should be done.”

Speed Queen’s Weisheipl believes store owners should set realistic goals as to what they envision the business doing in a certain time frame.

“Once the goals are set, they should employ a strategy to reach the goals by a certain time,” he says. “This includes methods such as adjusting time-of-day pricing or implementing cycle modifiers. It’s important to review those changes soon after they are implemented to ensure they are successful.”

“The best use of benchmarking data is as a ‘control,’” CCI’s Marcionetti says. “As the owner tries different marketing techniques, they can run comparable reports and see how they line up with the control data. This is effective in determining what works and what does not.”

“If you find that (store) utilization is low, particularly on weekend afternoons, then actions you might consider taking are advertising and enabling loyalty features, such as providing a bonus for repeat use,” says Laundroworks’ Stepanov. “But if the utilization is very high or even at full capacity, then your actions might to be update the equipment mix in order to provide more in-demand machines or to experiment with price increases.”

“For an owner that has new equipment, pricing specials,” suggests Laundrylux’s Brick. “For an owner that may be looking at retooling a store, this is critical informa-

—Wayne Lewis, ESD day over the last 12 months, the power outage has little effect.”

“At a minimum, a week’s worth of data can help an owner identify high- and lowusage days,” says Huebsch’s Rowen. “A month of data will give a snapshot of if there are differences in usage between the beginning, middle and end of the month.

A year of data will paint the picture of any seasonality trends.”

PUTTING THE DATA TO USE Once the data has been collected, how should a laundry owner put it to use?

“Analyze the data and identify opportunities for improvement,” advises Continental’s Jorgensen. “Compare yearly data to the Coin Laundry Association’s Coin Laundry Industry Survey to see how your store performs against the national or regional average. … Then analyze internal sales and operations data and clearly identify methods for improving performance.”

“You need to drive your marketing program based upon the data collect,” says Setomatic’s Schantz. “Between social media and different loyalty programs … you can focus your efforts to help drive future growth.”

“Anytime you add equipment, change pricing, or make another major change to your business, you should reference track performance versus your benchmark,” suggests Dexter’s Konczal. “It is also a good habit to do a regular business check-up to make sure you aren’t missing anything that could make your business even better.”

“Store owners should use all data to provide information as to whether specific marketing campaigns are advantageous or not supplying sufficient new growth to justify their continued implementation,” says ESD’s Lewis. “Decisions on marketing platforms must be continually reviewed and evaluated.”

Owners should seek to balance out traffic flow and eliminate bottlenecks through marketing efforts, says Huebsch’s Rowen.

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tion to help properly size new equipment based on demand.”

COMMON MISTAKES TO AVOID And unfortunately, when store owners start to benchmark, sometimes they make mistakes, such as...

“Discounting data and analysis when it leads in a direction where the owner is in disagreement or simply doesn’t like the potential outcome,” says CryptoPay’s Richards. “For example, data and analysis support the direction of replacing over-thecounter sundry availability with vended items. The owner doesn’t like the technology and prefers to have a counter person making the sale of these smaller items.

While this decision is certainly the owner’s choice, the opportunity to improve the customer’s experience and/or effect revenue in a positive direction may have been missed.”

“Only looking at revenue, rather than all the factors that influence profit,” says Continental’s Jorgensen. “Not comparing data to external benchmarks.”

“Like any ‘control,’ it’s not valuable if the data being collected is affected by nonnormal variables,” says CCI’s Marcionetti.

“If there is going to be a circus in town and all the employees are going to be using the store, that week will be skewed and not provide good benchmarking data.”

“Not continuing to collect the information to understand if seasonal weather effects demand,” adds Laundrylux’s Brick.

“To think data collected in February can be used in July would be a mistake.”

Owners often see the data in absolute terms, says Huebsch’s Rowen, meaning they don’t take into account how demographics impact operations.

“Talk to anyone who has multiple stores, and they can tell you how each is different and why,” she says. “Not all stores operate equally. Differences in clientele, ethnicities, etc. will drive different engagement within the various locations.”

And Dexter’s Konczal says that ignoring the competition is a key error that many store owners commit.

“When I talk about competition, I’m not just referring to other Laundromats. You should evaluate drop-off services, vended offerings in apartment buildings, dry cleaners, and even the laundry pickup services,” she says. “Don’t be afraid to act on competitive changes, (because) it is easier to keep a customer than try to win him or her back.”

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Common

Liability Claims

(Images licensed by Ingram Publishing)

Insurers point out risky areas, give tips to prevent Laundromat incidents

W

hen a customer slips and falls on a Laundromat’s damp floor, or a person is assaulted in the store’s dimly lit parking lot after dark, the business could be liable for any injury or damage caused.

But many liability claims can be easily prevented by applying common sense and having a “safety first” mindset. To help you limit your exposure to such claims, American Coin-Op polled representatives from some of the industry’s major insurance providers about managing the greatest areas of risk in and around the average vended laundry.

Q: What are the greatest insurance

risks in a vended laundry setting, and why?

Ann Hawkins, vice president, Underwriting & Sales, NIE, St. Louis: Besides dryer fires, liability is the greatest risk in a Laundromat. People come and go all day carrying baskets and bundles of laundry, which cause impaired visibility.

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They are not looking down but straight ahead. If there is anything in their path that shouldn’t be there, you can bet someone will fall on it, in it or over it.

Larry Larsen, agent for Crusader Insurance Co., Woodland Hills, Calif.: The greatest insurance risk related to liability claims is water-related “slip and fall” accidents. The greatest insurance risk related to property damage is fire. Look for damaged ceiling tiles, broken or missing floor tiles, and sharp edges on folding tables.

In liability claims, the biggest headache to Laundromat owners is the time spent defending lawsuits and the related stress. It makes sense to engage in business behavior and premises inspection that reduces the risk of liability claims.

Adam Weber, president, Irving Weber Associates (IWA), Smithtown, N.Y.: In no particular order: Fire is a concern with Laundromats. It is vitally important that lint traps in dryers be maintained and cleaned daily to avoid any mishaps.

Water damage, as well as slip-and-falls from water on floors, is always a concern, so hoses and connections should be inspected and maintained regularly, and

spills cleaned up quickly.

Crime/security is a factor as well.

Vending machines can hold large amounts of money, which, of course, can increase the risk of burglary. Having the establishment well-lit and attended is vital in maintaining security in and around the Laundromat. Limiting signage in windows will allow for visibility both from inside looking out into the parking area as well as for people (including law enforcement) to be able to see into the establishment.

Video surveillance systems help provide a deterrent.

Q:

What precautions should a store owner take in the following areas to help prevent accidents before they happen?

LIGHTING

Hawkins: Replace all burned-out bulbs immediately, and have plenty of lighting throughout the interior and in the restrooms. Also, keep the exterior well-lit throughout the parking area and walkways. If this is not your responsibility, inform your landlord that more exterior lighting is needed when necessary.

▼

by Bruce Beggs, Editorial Director

www.americancoinop.com

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WET FLOORS

Weber: Slip-and-falls on even small deposits of water, food or soap are a real issue in Laundromats. To avoid these types of instances, employees need to be on the lookout for these types of spills constantly.

Good housekeeping is key to avoid accidents. Placement of rugs and mats at the entrance and exits, along with throughout the Laundromat, is also vital in maintaining a safe environment for both customers and employees. Maintaining the rugs/mats is necessary as well to avoid excessive wear, frays, and upturned edges.

Hawkins: Wet floors are your responsibility whether you own the building or not, so keep them dry and post “Wet Floor” signs after mopping up spills or cleaning floors.

If you are unattended, there may be no one who will clean up a spill, so this may be difficult for you to handle. Posting signs usually doesn’t help in a lawsuit.

Larsen: Slipping on water pooled on the floor is preventable by attention to maintenance items. If hoses are leaking, replace them. If customers “oversoap” and allow excess suds to spread to the floor, use floor mats or install ceramic non-slip strips or tile. Purchase non-slip liquid treatments for your vinyl tile floors. Put a little effort into preventing wet floors in your Laundromat and you might save a lot of stress and time in defending a lawsuit.

OUTDOOR AREAS AND PARKING LOTS

Hawkins: Besides lighting in the parking lot, potholes, cracks, pitting, no parking lines, etc. can also be common liability hazards. Again, if these are not your responsibility, inform the landlord because you can be sued regardless of ownership. And it is always best to notify the landlord in writing so you have something to fall back on 14

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if the landlord doesn’t take care of it and something happens.

Larsen: An often overlooked area of liability claims is outdoor areas and parking lots. You might think that the landlord has the responsibility to maintain the outside of your store; consider it your responsibility to inform the landlord of any unusual or dangerous condition in or near your Laundromat. Send a certified letter, return receipt requested, to your landlord if you have uneven sidewalks, potholes in the parking lots, improperly operating doors or inadequately lighted exteriors.

Weber: The outside of the location should be well-lit at all times, even when the operation is closed. It is a good idea to keep shrubbery at a minimum, to allow customers to be visible as they enter the Laundromat or return to their vehicles.

Having limited signs in the windows will also allow for good visibility of the parking areas, which can deter certain crimes and allow employees to witness any accidents that may occur as customers move back and forth to their vehicles.

Additionally, sidewalks and asphalt should be crack- and pothole-free as well as have the proper markings to show level transitions. Bumper stops should be used to help avoid the out-of-control or accidental entry of a vehicle into the store.

Parking spaces should be large enough to allow customers to move clothing bins or bags in and out of their vehicles safely.

Signs should be posted to remind customers to lock their vehicles when unattended.

In inclement weather, such as snow, parking areas and walkways must be kept clear with salt being laid down as needed to avoid icing.

STAIRS Larsen: Proper markings, safety handrails and signage can all be used in protecting against accidents on stairs. Serious injuries, especially to the elderly, can happen on or around stairs. When planning a location for a Laundromat, stores that include stairs should be avoided. If you already have a location that has stairs, mark and illuminate them.

Weber: Any stairway needs to be welllit, have proper railings and riser heights,

be properly painted to indicate caution, or chained or blocked off if no customer access is permitted.

Hawkins: Make sure stairs are kept in excellent condition with no chips, cracks, broken treads, etc. Keep plenty of lighting on the stairs, and install handrails. If the stairs are leading to a basement, do not allow your customers to access this area.

Keep the door leading to the basement locked at all times. You still need to keep things in order because repairmen and others may need access to your basement and they, too, could be injured.

FLOORS AND CARPETING

Weber: Floors and carpeting should be well-maintained and checked often for buckling, rips, worn or frayed areas as well as upturned edges, which can cause a trip or fall.

Hawkins: Try to keep floors dry at all times. Floor tiles should be replaced when they become cracked, missing, lifting or damaged in any way. Sometimes the floor in a Laundromat will slant toward a drain, which is a slip hazard. And the drain itself should have a painted marking around it so customers notice it. Most Laundromats are not carpeted but when they are, the carpet sometimes becomes wrinkled and presents a trip hazard. It may also start to fray in places and strings will become apparent, which are also hazardous.

Larsen: Non-slip floors are almost a necessity due to the potential of water on the floor. Carpet is not considered a great option for flooring in a Laundromat.

Replace with a more appropriate floor covering when your carpet wears out.

Q:

There are times when it may not be in the best interest of a small business to file a claim. What factors should a store owner take into account before making the decision to file?

Hawkins: Always file an incident report.

It is better for your insurance company to know about something and plan for it than to be surprised with a lawsuit in two years.

Most insurance companies would frown upon the insured who knows about an

▼

Larsen: You have a legal and moral responsibility to provide a safe environment for your Laundromat customers.

Lack of lighting, both inside and out, is a potential liability risk that can be avoided by ensuring adequate lighting in both the interior space and exterior common areas.

The extra dollars spent on your electrical bill is money well spent in helping you avoid a liability claim.

www.americancoinop.com

12/13/17 5:47 PM

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incident and doesn’t report it promptly.

Larsen: First, your insurance policy may contain a provision that obligates you to report any claim. You risk a denial of coverage if you try to cover up a claim. Second, your insurance agent is required to report to the insurer any notice of a claim. Third, although it might mean higher premiums, the safest way to handle a claim is to properly report it. Learn to distinguish between a claim and a customer service consideration, as the latter does not need to be reported.

Weber: There are many factors that should be considered when deciding to file an insurance claim: • The claim may not exceed the policy deductible. Deductibles should be set based on what the policyholder can manage. Keep in mind, the lower the deductible, the larger the premium, and vice versa.

• Filing a claim can cause premiums to increase. Although not always the case, premiums can increase due to claims, even if the policyholder later determines that the claim is not worth pursuing.

• Claim history can follow a business owner for up to seven years, even if he or she switches providers.

• Some claims, particularly those that involve water damage, can cause providers to drop policyholders. Water damage can involve mold, which is expensive to repair and can recur.

Filing a business insurance claim can be an arduous process, and there can be expenses involved in documenting the damage, its cause and its effects on the company’s finances. These should all be taken into consideration when deciding if/when a claim should be filed.

Q:

How can the presence of a surveillance or security system aid a store owner when a liability issue is raised?

Larsen: Security cameras can provide excellent details on a liability claim. They help prevent fraudulent claims and are often requested by law enforcement in the event of crimes committed in your Laundromat.

The price of security cameras has declined so much that high-quality systems can be 16

AMERICAN COIN-OP JANUARY 2018

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purchased for less than a thousand dollars.

Weber: Surveillance and/or security systems can benefit the store owner when a liability issue is raised, as the films can be used to review the possibility of insurance fraud, where a claimant has inaccurately described the event in such a way as to place negligence on the store owner, where, perhaps the store owner is not negligent.

Surveillance and/or security systems can also aid in deterring criminal acts as well as aid in identifying criminals.

Hawkins: If the system is on and working, and if the insured saves that video for two years, then it is invaluable. It can prove what happened and how it happened. Many owners only keep their tapes and videos for a short period of time. The reason for the two years is that is the length of the statute of limitations to file a lawsuit in most states. Often, the claimant will seek counsel from an attorney right away and the attorney will advise them to wait to sue until just before the statute runs. By then, things are forgotten by the owner and the videos or tapes are gone — better chance for his client to recover a tidy sum.

Q:

Once it’s apparent that the store owner needs to file an insurance claim for their business, what actions should they take to do that?

Weber: Assess the situation and contact emergency services if necessary, reporting to law enforcement if a crime is suspected.

If warranted, take pictures showing the area where the incident occurred. Secure the premises, to avoid further damage and keep the public safe. Contact your insurance professional, agent and/or carrier, providing all details of the incident, including data that will support your claim; be sure to get the claim number and name of who took the claim report. Once assigned a claim number, make note of the insurance adjuster assigned to the claim so you can follow up.

Hawkins: Just call your insurance company as soon as possible regardless of the condition of the injured person. You may think it seems like nothing, but nothing can turn into something big overnight.

You should take pictures of the area where the person was injured, and don’t change

anything from the way it looked at the time of injury. After the area has been memorialized by photos, you should make it safe so that no one else has the same problem. If the injury is caused by a piece of furniture, do not get rid of that furniture but store it someplace as evidence.

Larsen: Gather your information, and collect your security tapes and witness information. If pictures can tell the story better than words, take pictures. When you have put everything together, call your agent and provide the details of the claim.

Q:

What’s the most common mistake or mistakes that you see vended laundry owners make when it comes to handling common liability claims?

Hawkins: Don’t express guilt, and do not offer the injured person money. Calling an ambulance is the best thing you can do. If the person refuses the ambulance, then let them take care of what they are going to do. Do not touch them or move them, and do not offer more than a bandage; let them put the bandage on. You may feel quite sorry for them but do not verbally express it. Call your insurance company as soon as the person leaves your premises.

Larsen: Owners sometimes fail to take a potential liability claim seriously. If you believe an incident has occurred, either inside or outside your Laundromat, take the steps to gather names, phone numbers, statements, pictures and/or videotapes.

Don’t pre-judge the validity of a claim.

Contemporaneously gathered information is often the best information. People have a year to make a claim or file a lawsuit.

Always retain any information or evidence you have gathered for at least two years.

Weber: Common mistakes can include failing to contact the insurance company immediately, or failing to properly document the incident. Store owners should get as much information as possible about the incident from both the claimant and witnesses to the incident, which may include employees as well as bystanders.

It is also important the store owner have a good understanding of their business insurance policy, which may include perils and exclusions that are unclear.

ACO www.americancoinop.com

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INDUSTRY NEWS

TURNS THE BIG 5-0 CALIFORNIA FIRM CONSIDERS ITSELF LARGEST FULL-SERVICE COMMERCIAL LAUNDRY DISTRIBUTOR PWS – The Laundry Company is celebrating its 50th anniversary in 2018.

Founded by Mort Pollack, John Wickham and Bernie Steinberg, PWS got its start distributing for Speed Queen in Los Angeles in 1968, but bought out a Northern California distributor within a few years to expand its service area to the entire state.

“Mort will be 91 on Christmas,” says Brad Steinberg, a third-generation co-owner who joined the company in 2007. “His son, Brad Pollack, is my partner; that’s two generations of Pollacks. John Wickham was originally around but he was bought out in the ’80s.

“Bernie Steinberg was my grandfather.

He passed in the ’80s. My father (Eric) ran the company along with Mort for years, and now I’m third-generation.”

The three founders each specialized in a certain aspect of the laundry business that, when combined, made PWS a formidable company, the younger Steinberg says.

“Mort was the brokerage specialist,” he explains. “He specialized in selling existing Laundromats. John Wickham was the equipment guy; he had the Speed

This archival photo includes PWS - The Laundry Company founders John Wickham (far left), Mort Pollack (second from left) and Bernie Steinberg (center). (Photo: PWS) Queen distribution prior to 1968. Then, my grandfather, Bernie, was building new Laundromats and selling turnkey Laundromats.”

PWS continues to focus on this foundation, but has evolved into a tech-focused company.

“This entails building the best eCommerce site in the industry, using technology in our service department and also to assist with customer service,” Brad Steinberg

PWS co-owners Brad Pollack (far left, arms crossed, in white collared shirt) and Brad Steinberg (near front at right, arms crossed, in blue collared shirt) pose for a photo with other PWS employees in the SpinCycle Laundry Lounge. (Photo: PWS) 18

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says. “We believe in giving a lot of free services to Laundromat owners because if they are successful, we will be successful.”

Today, PWS employs 85 people in maintaining its equipment/parts, brokerage and new store business in California and Nevada. Its headquarters is in South Gate, and there are offices in Redwood City and San Diego.

Unique about the South Gate facility is what’s next door. SpinCycle Laundry Lounge had its grand opening one year ago. The 3,400-square-foot store built by PWS pairs the latest equipment technologies with upscale furnishings and amenities.

“It’s been incredible on two main fronts,” Steinberg says. “It’s helped us better understand how to operate Laundromats, better understand the needs of the Laundromat customer. Secondly, it has been a great tool for investors wanting to get into the business, or existing store owners wanting to learn about the real functionality of equipment.”

Plans are in the works for PWS to build a similar store in San Diego and also expand into a larger office and warehouse there.

ACO

PWS – The Laundry Company built the SpinCycle Laundry Lounge in South Gate, Calif., to be a showcase store and as a tool to gather data to enhance the user experience at other current and planned Laundromats. (Photo: Alliance Laundry Systems) www.americancoinop.com

12/13/17 4:41 PM

laundroworks_flyer_2017_v2.pdf

1

7/10/17

8:06 AM

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ACO StandardPage.indd ACO StandardPage.indd 1 1

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WHY DID YOU CHOOSE AN ESD SYSTEM?

I chose ESD because of ESD’s commitment to product in cutting edge technology, customer care and technical sup provided me with the tools with MyLaundryLink softw my stores operations anywhere, and ESD provides my cu payment options: card, Credit/debit card, pin based debi EBT. They can also start their washers or dryers with a p and their phone will vibrate when their washer or dryer s system even allows the customer to view their account an from their PC when they are away from the store.

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WHAT IS YOUR EXPERIENCE IN THE LAUNDRY INDUS

I have been in the commercial laundry industry since 197 owned retail Laundromats since 1987. I have personally w ESD’s growth over the years to become the industries lea payment systems.

WHAT WERE THE UNKNOWN CHALLENGES THAT YOU WITH YOUR NEW STORE AND HOW HAS ESD’S SYST YOU OVERCOME THESE CHALLENGES?

Building a customer base, hiring and managing a manag staff of employees and security; ESD provided me with th systems to manage my employees, and provide me with a

ACO StandardSpread.indd 1 Amer Coin-Op Oct 2017 2pg ESD ad.indd 1

9/15/17 9:40 AM

Larry Vladimir - Bakers Centre Laundry

o product innovation, echnical support. ESD Link software to oversee vides my customers with n based debit cards and yers with a phone app, er or dryer stops. The r account and add value tore.

my competitors do not have…I have a totally cashless store, which gives my employees and me peace of mind and security. In addition, many other marketing and pricing options that my competitors do not have.

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DRY INDUSTRY?

try since 1979 and have personally witnessed ndustries leader in

IS THERE ANYTHING THAT SURPRISED YOU ABOUT THE ESD SYSTEM? I was surprised at how many customers really love the ability to use their credit or debit cards right at the machines.

HAS THERE BEEN ANY DOWNSIDE TO THE ESD SYSTEM? Absolutely not. I do not believe my store would be as successful as it has been so far without the ESD CyberLaundry system and the company and the people that stand behind it.

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ACO StandardSpread.indd 2

www.esdcard.com Contact your local ESD distributor or ESD sales representative for more information.

9/15/17 9:40 AM 9/14/17 1:28 PM

GOIN’ WITH

COHEN

Lone Star State

Proving Ground Tran puts the tech in Texas coin-op

Y

ou’re more likely to catch Phu Tran pulling an all-nighter at his laundry than working there during the day. That’s when he and his brother Tom conduct stealth operations in a never-ending campaign to stay one step ahead of lint buildup and sluggish drains.

Just two years in, Tran has the energy of an industry novice yet the discipline of a veteran. He realized from day one that his Royal Coin Laundry in the northern Dallas suburb of Garland had a lot of moving parts and the best way to keep

things humming was to standardize processes for each and every task — no matter how mundane.

While Tran fully embraces the do-ityourself laundry model, he tweaks it to optimize the efficiency of both self-service equipment and full-service attendants.

Systemizing his business has yielded some impressive results, the owner says. This once derelict location is now a well-oiled machine where volume, Tran reports, increased 50% during the first 24 months.

Royal Coin Laundry is not a new kid on the block, nor is Tran. Much of the iron on the floor may be dated, but it’s

Natural light floods through the 100 linear feet of glass storefront of Royal Coin Laundry in the northern Dallas suburb of Garland. (Photos by Laurance Cohen unless otherwise noted) 22

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kept showroom-new. And for the 60-yearold tech-minded owner, who rose from electrical apprentice to build a six-figure wholesale business, the Texas coin-op is his proving ground for the next level of laundry management.

To Tran, the soft-spoken man behind the motto “Where Cleanliness is King,” proper upkeep is measured by what’s seen and what’s not. He doesn’t sit on a throne; duties not delegated to his conscientious staff are handled personally, with him getting down and dirty when the store is closed. The result: Customers enjoy a spotless environment where you’d be hard-

▼

by Laurance Cohen

(Flag image in headline licensed by Ingram Publishing)

www.americancoinop.com

12/13/17 4:43 PM

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Tech-minded operator Phu Tran utilizes his Garland, Texas, laundry as a proving ground for taking coin-ops to the next level. laundry environment are “not challeng- later enrolling in computer training classes.

In 1990, Tran rented a warehouse and ing” to Tran, who sums up routine equipopened the doors to his own sales and ment repairs as “very simple.”

It’s no surprise fixing the mechanisms repair facility, 311 Computer. Five years that drive coin-ops is an easy hurdle. At later, he purchased the facility housing age 12, a young Tran split his time between attending school and getting acquainted with electrical repair services in his native Vietnam. Within two years, he was the youngest student in his electrical training class and developed a passion for science and technology.

“I’m good at electronics, math and chemicals,” he smiles.

Emigrating to the States with his brother in 1985, he settled in Dallas and took a minimum wage assembly job at an electronics factory. He stayed grounded in his studies while working, obtaining Tran shares a lighthearted moment with staff member Consepcion Jarquin Sanchez a journeyman elecas she readies a front loader for the next patron during her afternoon shift on a busy trician license and weekend.

▼

pressed to find a discarded dryer sheet on the floor or a soap spill atop a washer even on a busy weekend. And inside the web of ductwork and pipes is every owner’s dream — the constant free flow of air, lint, water and discharge.

Behind the gleaming stainless steel is where this operator really shines. When he took over the operation, Tran rodded sewers, replaced all the water valves, and rebuilt or replaced each drain valve.

He and his brother go back in every six months to snake lines, and inspect those key components.

Over at the dryer bank, the panels come off twice a year to vacuum lint, while belts, motors and other parts are inspected and attended to. Vents at the back of the tumblers are disassembled annually and cleared of lint accumulation. The work is typically conducted overnight after the last patron leaves at 11 p.m., wrapping up before the first 6 a.m. wash.

His four rooftop HVAC units, all of which he and his brother have replaced since taking over, receive coil cleanings every two months, as well as weekly filter changes.

And while most owners would be hardpressed to tell you what they spent in repairs on Washer #15, Tran can. For him, the job’s not done until it’s recorded. He doesn’t scribble notes in a repair logbook or mark a decal at the back panel, but rather maintains digital spreadsheets detailing the attention given to all equipment, extending from the customer area up to the rooftop. Routine inspections, malfunctions, overhauls, and parts installations are recorded by date and accompanied by costs incurred.

From a small laptop in the laundry’s back room, and with a couple of keystrokes, he can scroll through a complete history of the store’s preventative maintenance and repairs. The routine of logging entries every time a panel is pulled or service door opened helps pinpoint recurring issues and budget parts purchases, the owner says.

Resolving the underlying cause of a machine malfunction on the first goaround is a top priority.

“I never like to swap parts. It can take triple the time going back and forth,” he says. Troubleshooting errors in the coin

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GOIN’ WITH

COHEN

Stack dryers are thoroughly cleaned of any lint accumulation and components checked as part of a preventative maintenance procedure conducted semi-annually and logged into a spreadsheet. (Photo courtesy of Phu Tran) 26

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An electronic maintenance logbook details procedures undertaken and parts utilized for each machine and ancillary equipment unit installed in Royal Coin Laundry.

Royal Coin Laundry is now fit for a employs a video monitor inside the comking. With an end cap shopping center pact staff station to run a series of instrucposition and prominent 100 linear feet of tional presentations. Attendants can sit glass storefront, the site enjoys impressive back and view or scroll back through the curb appeal and ample parking. Customers loop, which was produced by the owner, can select from an array of 58 washers in for a refresher on proper procedures.

In addition to a daily duty summary, six capacities, topping off at 75 pounds, and backed by 56 multi-load tumbler the bilingual English/Spanish slides cover pockets. Creature comforts include strate- a five-step dryer lint vacuuming guide gically placed TVs, free coffee and a well- and the seven steps to restroom cleaning — complete with accompanying photos. appointed kids play area.

Staffers in two shifts cover the coin-op’s Action plans to handle life and safety 16 daily operating hours. Attendants are issues, including medical, fire and robbery trained to prioritize their activity on the as well as gas- and water-leak incidents, floor by focusing first on customer service are also detailed in the series. and store upkeep, and then on wash-dry-fold processing.

In addition to general cleaning, crew members are assigned groups of washers and dryers so that the store’s full complement of machinery is detailed top to bottom over the course of a day. The children’s play area also receives careful attention with wipe downs, nightly disinfectant sprays, and once-aweek treatments with a portable ozone air cleaner.

Tran, having walked in his employees’ shoes, says staff is motivated by wages: “If somebody pays me well, I will do a better job.”

He builds loyalty and enhances productivity by starting hourly pay at $2 above the minimum wage, along with incremental increases, paid vacation time and holidays.

A bilingual step-by-step guide to washroom cleaning procedures is To reinforce what is expected to one of a series of video guides staff can scroll through on a monibe completed during a shift, Tran tor mounted inside the attendant station.

▲

the business, which had passed the $1 million mark in annual sales.

It wasn’t until 2015 that he turned his eye toward coin laundries after hearing of an acquaintance with one on the market.

When that deal fell through, he purchased an existing store on Royal Lane just south of the I-635 perimeter expressway.

Tran says he yearned for “something new and different” and saw opportunity in local coin-ops that “didn’t reach the next level and don’t try to get new customers.”

Operators oftentimes laid out a floor full of equipment and adopted an “if you build it they will come” attitude, he says, resulting in stagnant sales and the store eventually being put on the market.

When the first-time owner took the keys to Royal Coin Laundry, the venue was in a state of disrepair with “everything dirty and very, very bad.” He and his family rolled up their sleeves to clean things up, make it more inviting and, most importantly, place machinery in good working order.

Although he invested $80,000 in equipment upgrades, the lion’s share of the washers and dryers date back to the store’s debut.

www.americancoinop.com

12/13/17 4:44 PM

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ACO StandardPage.indd 1

11/30/17 1:55 PM

GOIN’ WITH

COHEN The operator also utilizes monitors above bulkheads and in high-traffic locations throughout the store to deliver self-produced, looped bilingual content designed to entertain and offer laundering tips to a captive audience. The monitors — combined with an elaborate CCTV system — help him maintain a visual presence in the store even while he’s concentrating on his computer business.

Automation is even carried to the washroom door and bill changer wall where call buttons are strategically placed to summon laundry staff via an overhead announcement.

At 4,200 square feet, Royal Coin Laundry is the smallest of four stores within a half-mile radius. The three competitors boasting larger floor areas between 4,500 and 6,000 square feet promote free drying, but being the little guy on the block with paid drying doesn’t concern Tran.

“I’m not worried,” he says, adding that retaining customers and attracting new ones is his focus.

Patrons coming through the door from a free-dry competitor who raise issue with the pricing format differential are surprised that Royal’s combined paid wash-and-dry rate actually comes in lower, he says.

“Use my service. If it costs more, I’ll pay you back,” he recalls of a recent con-

versation with a first-timer. “After finishing up, she said mine was cheaper.”

Customer service wins over basket-toting locals, Tran believes.

“We take complaints seriously,” he says, noting that calls are handled immediately and corrective action taken. “A lot of owners may skip these, but we take them seriously. If you don’t take care of a small problem, it becomes a bigger one.”

Attendants are trained to handle any equipment-related complaint Side-by-side monitors showing real-time security camera views by requesting a customer relocate alongside promotional videos are front and center in high traffic the load followed by a cycle restart areas, while an attendant call button is strategically placed to the with “no questions asked.” Even right of the changer bank to summon assistance if needed. when his machines function propHe grins when talk turns to competing erly — as was the case when a patron claimed being shorted $19 on a $20 for trade in the Dallas market. To this changer payout — Tran settles rather than savvy businessman, moving forward and reaching the next level requires planning become embroiled in a confrontation.

In this instance, he kept the video evi- and execution more than deep pockets.

“A lot of people rely on the money they dence of the $1 bill insertion to himself, and retained, rather than alienated, have,” Tran says. “I rely on new technology a weekly regular. “We don’t have a lot of to enhance the customer experience.” ACO refund issues, so why treat good people badly?” he explains.

Laurance Cohen crisscrosses the country When we walk the aisles, Tran is all seeking out the most unique vended launsmiles, greeting customers, sharing a laugh dries. He served as American Coin-Op ediwith staff, and handing out lollipops to tor in the early 1990s and currently operyoungsters congre- ates Laundry Marketing Concepts based in gating in the play Hallandale Beach, Fla. He can be reached area. at goinwithcohen@outlook.com.

Monitors above the washer bulkheads play bilingual English/Spanish looped videos produced by Tran to promote his store’s machine mix and offer up laundering tips.

28

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COIN-OP 101

VENDED LAUNDRY SUCCESS STARTS WITH DEMOGRAPHICS

Jim Rosenthal

What makes a vended laundry successful? If Laundromat success is a combination of several elements, the base is demographics. A bright, clean, well-run laundry will fail quite quickly without the proper demographics to drive business.

Sadly, as we have also seen, that old, run-down facility operating with equipment dating back to the Jimmy Carter administration can be immensely successful, despite the owner “checking out” of his business sometime during the Reagan years.

So as the old real estate cliché goes, it’s all about location, location, location.

GETTING STARTED The first step in looking at demographics is obviously finding that location to take a look at. Like

buying a home, it’s important to not fall in love with a site right out of the gate. Often, the demographics might not be exactly what they need to be to support a profitable store. It’s vital that investors work with an experienced laundry equipment distributor in finding a location. They are your local experts and many times have already identified a variety of viable sites.

I can’t stress enough how important it is to have this local resource. Demographics analysis/site selection can’t be mailed in. Investors really need to rely on someone who understands the area and is knowledgeable about neighborhoods, future development, local shifts in housing, etc.

In addition to being the local expert and partner, a distributor also is keenly aware of what finance companies will need to see in the numbers to be comfortable funding a new store. The bottom line is that if the demographics numbers paint a strong picture of success, the store/equipment financing is much more likely to be approved.

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WHAT TO LOOK FOR Many new investors may want to begin their journey into the business by finding their own location to open discussions with a qualified distributor. So what should they be looking for that might give indications they may have a viable site?

A heavy saturation of multihousing developments is the first gate to check off. Are there a lot of apartment buildings or mobile home parks close to the location?

Though most colleges and universities have on-campus laundry rooms, close proximity to these institutions can be a boost to the www.americancoinop.com

12/13/17 10:50 AM

store as well. This is because on-campus laundry rooms often are small with more residential-style equipment.

The multi-load commercial front-load washers — 20, 40, 60, even 80 pounds capacity — of a Laundromat resonate with students looking to get as many items in one load as possible. They also appreciate getting more done in less time.

Additional thoughts on a site that can help complement the demographics are dedicated parking and having high visibility along a main roadway. Quality neighbors to look for nearby that may hint at solid demographics to piggy back off of include grocery stores, dollar stores, or check cashing stores.

INSIDE THE NUMBERS I mentioned the need to find a local distributor expert, somebody who thoroughly understands the vended laundry business. Not all folks who perform demographics analyses truly understand our business. They also may not have an accurate view of the local areas you are considering. So again, rely on a local expert.

The reason for this is simple. While the numbers are a great starting point, they often do not tell the whole story. Demographics reports are one-dimensional. Vended laundry site location analysis and demographics review is anything but.

A LOOK AT THE NUMBERS There are a few cornerstone figures to look for within the demographics report. A good starting point to look for is that renters represent 35% or more of the area’s households. Second point of reference is an average household size of 2.3 residents or higher.

Finally, investors should look for 40% of all households in the area earning less than $35,000 per year.

Worth noting is that these numbers are your starting point. This is what you should be targeting in your primary customers. These are the clients who use the laundry out of necessity. They are your principal revenue base and are looking for a fast, convenient experience. Primary customers are your main focus. On average, the primary customer will spend about $500 a year in your laundry.

As you start to pull demographics, you may need to shift your location starting point to find the market area that gives your store the greatest opportunity for success. This is part of the process.

A good starting point to look for is that renters represent 35% or more of the area’s households. Second point of reference is an average household size of 2.3 residents or higher.

▲

We have plenty of examples where the demographics numbers do not tell the whole story. For instance, what about that new apartment complex that is under construction down the road?

Without any residents yet, it doesn’t show up on a report. Or perhaps it went up since the last census and isn’t reflected in it.

In one instance, we saw a location with horrible demographics and overall low population. But it was a resort town with a

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COIN-OP 101 number of rental properties that generate a large amount of washdry-fold business. Housekeeping staff for the properties also use the laundry to process linens for the rentals. Demographics hid the fact that a laundry could be successful, albeit with a different core customer base.

Mobile home parks and university populations sometimes can be missing from demographics reports. Other times, great numbers can also lie. One example is a location that showed amazing demographics within a 3-mile radius of a location. A drive through the area told a different story. The immediate mile around the proposed location was terribly unsafe, to the point that it likely would never draw the big numbers of residents living in the 2- to 3-mile range.

Again, this is where local expertise is paramount. It’s also why getting in the car and driving around the area can provide the best evidence of whether the demographics report is telling the full story.

SIZING FOR THE CUSTOMER BASE Once the location checks out through the demographics and tour of the area, it’s time to see how they drive store design. A distributor will be able to assist with right-sizing the laundry for the demographics.

They will also use the numbers to drive equipment mix. Do the numbers show a large household size? Then the store may lean toward more 60-pound and 80-pound washer-extractors. Heavy college and university crowd? It may be smaller front loaders that get installed.

Are apartments mostly one-bedroom or are they two- or threebedroom units? The more residents in those units, the more loads of laundry. Thus the store may focus on large-capacity washers and stack tumble dryers.

FINAL THOUGHTS There’s nothing cut and dried about performing demographics analysis when selecting a vended laundry location. While numbers are important, you still need those “feet on the street” to look beyond the demographics report.

This is why even industry veterans can benefit from enlisting the assistance of a qualified distributor in their area to act as an extra set of eyes. Before making a sizable investment, investors should feel comfortable that they reviewed all factors, projections, etc. A distributor rooted in the area can be your local expert.

ACO Jim Rosenthal is North American sales manager at Speed Queen®. He can be reached at jim.rosenthal@alliancels.com.

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Ft. Lauderdale, Fla. Info: 954-537-1643 28 Laundry Pro of Florida Open House Lakeland, Fla. Info: 800-232-5736

MARCH 10 Coin-O-Matic Service School: Top Load Washer & Small Dryers Alsip, Ill. Info: www.coinomatic.com 14 CSC Serviceworks + Super Laundry Equipment Expo Jamaica, N.Y. Info: 516-678-4404, jclyde@ cscserviceworks.com

APRIL 14 LES Laundry Equipment Services 2018 Mid-Atlantic Trade Show Hagerstown, Md. Info: https://leslaundry.com/ event-trade-show/

MAY 16-17 Coin Laundry Association Excellence in Laundry Conference Naples, Fla. Info: https://www.coin laundry.org/events/ excellence-2018 ACO Visit www.americancoinop.com for more event listings! www.americancoinop.com

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AMERICAN COIN-OP 12/6/17 33 4:08 PM

12/13/17 10:46 AM

AN OUTSIDER’S VIEW

WEIGHING RISK WHEN CHOOSING INSURANCE COVERAGE

Howard Scott

Typically, insurance is a given. You get an annual bill and you write a check. After all, insurance is a necessary component of doing business, just like rent.

After you pay the bill, you might not think about it for a year. I am talking about both liability and property damage insurance, and sometimes loss of income insurance.

It is what it is, right? Well, maybe not.

I’d like to talk about me and my personal medical insurance. I and my family obtained “poor man’s” (my term) health insurance for 30 years. We averaged paying about $220 a month for family health coverage, with a $10,000 annual deduction. That is, we paid the first $10,000 of medical bills before insurance kicked in, so that our maximum outlay in a calendar year was contained at $10,000.

Most of our friends had full coverage, with zero or minimal deductibles, or $10 co-pay at worst. Either their premiums were paid for by their company or they personally paid anywhere from $600 to $1,000 a month.

One good friend claimed that we cheated on insurance because we didn’t fully insure. In fact, what we did was live with a higher risk.

What happened over those 30 years is that we never got sick. We ate well, exercised regularly, maintained moderate habits, and stayed healthy. Not that we couldn’t have gotten cancer or had a heart attack and spent a lot in one year. We could have. But in fact we were healthy, and hardly ever went to the doctor.

The upshot is we spent no more than $4,000 for health expenses annually over a 30-year span. Some might say we were lucky. But the bottom line is we spent less than any of our peers. Now that my wife and I have arrived at the ripe old age of Medicare coverage and are wellinsured at low sums ($109 a month for Medicare A and B), we believe that our strategy was a good one.

Let me give you another example. We winter in a condo complex in the Bahamas. There are 270 units (mostly studio apartments) and 80% of owners are Canadian.

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Our complex has a massive insurance policy that costs $62,000 a month, or $740,000 a year. Of course, we are right on the ocean and risk suffering extensive hurricane damage. Indeed, Hurricane Matthew, which hit the Bahamas hard in October, resulted in a few million dollars of damage. So we need to spend this money, right?

Maybe not.

Down the way, there is another condo complex that self-insures. It pays no insurance. Now, it is a much smaller place—only 18 units—but that fact only increases the per-family rate risk. In the last 20 years, it has built up several million dollars to pay for damages. With

The point of insurance is to protect against catastrophe, but not to assess against every catastrophe so that we will never be out of pocket.

Matthew, it suffered about $300,000 damage and the repairs were soon completed. The condo simply wrote a check out of its fund. In contrast, we are still dickering with the insurance company, and no repairs have been made.

I am not saying you should not have any insurance, but the insurance deductible is your best friend. I believe you should never insure for full value, using the deductible to lower your premiums. Insurance should be to protect against disaster, to eliminate the chance of you ceasing operations. Prevent that from happening, be prepared to take a hit when something bad does occur, and work hard to see that that something doesn’t reoccur.

Truth be told, bad things do happen, but not that often. The chance of your store having a fire and being destroyed is extremely rare. The possibility of your company being sued because a customer slipped and fell on your premises and broke her arm is extremely unusual. The chance of you needing to use loss-of-income www.americancoinop.com

12/13/17 10:44 AM

insurance is miniscule.

In my condo in the Bahamas, we incurred heavy damage from the two 2004 hurricanes—Jean and Frances—and again in 2016 from Hurricane Matthew. That’s two hits in the last 12 years. But for the decade before 2004, there weren’t any claims. So in the last 22 years, our condo has had three insurance claims.

If we had self-insured (and didn’t pay out premiums), we would have built up a fund of approximately $13 million ($600,000 average annual insurance premium multiplied by 22). We would have been able to fix up the facility after each of the three hurricanes, and have $7 million in the till. Now, the past doesn’t necessarily repeat itself, but it is a guide to what will happen in the future.

Our condo association has a $250,000 deductible. If I were head of the board of directors, I would change it to $1 million, and reduce insurance premiums by perhaps $200,000 a year. Why a million dollar deductible? If we had another hurricane that does significant damage, we could easily come up with the million dollars by assessing each owner $3,700. Even better, if we had lowered the deductible five years before the hurricane, we would have had an extra $1 million in the till, and have no assessment. The point of insurance is to protect against catastrophe, but not to assess against

every catastrophe so that we will never be out of pocket.

It’s a matter of balancing your tolerance for risk with reaching the breaking point of existence. If we doubled it to a $2 million deductible, it could be that a $7,500 assessment would push many condo owners over the edge, and feel the need to sell. Then, there could be a major run on condo values. On the other hand, if most condo owners were well-heeled, then that means they would have deep pockets to pay for catastrophes, and that would further the argument for increasing the deductible.

As for your business, weigh risk against coverage. See how much increasing the deductible lowers your premium. Go with a deductible level that saves you premium expenses but will not destroy your business if disaster strikes.

Insure your future, but take care not to over-insure.

ACO This column is not intended to provide specific advice or individual recommendations. Consult your insurance agent for advice regarding your particular situation.

Howard Scott is a former business owner, longtime business writer, and consultant. He can be reached at dancinghill@gmail. com.

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NEWSMAKERS

CLEC ACQUIRES DELTA LAUNDRY EQUIPMENT CO. Distributor Commercial and Coin Laundry Equipment Co. (CLEC) recently completed its purchase of Delta Laundry Equipment Co., the second acquisition by the Gulf Breeze, Fla.based company in the last decade. Terms were not disclosed.

“CLEC has been in a steady state of growth over the last few years as we continue to expand our footprint in the Gulf region,” says Craig Dakauskas, who owns CLEC. “Delta has a history of great service under Gary Woody’s leadership and we are proud to add them to our organization, which values the same excellence in customer service.”

Delta distributes Speed Queen coin laundry equipment throughout the state of Mississippi, and has a route business. The company maintains an office, warehouse and parts operation at its Greenwood, Miss., headquarters.

“With CLEC already having a presence in Mississippi, and recently gaining UniMac distribution in the state, Delta was a great fit for us,” Dakauskas says. “We are excited to continue to grow our business in this area and pleased that Gary will stay on and share his talents as a regional sales manager for our organization.”

Plans call for maintaining an office in Greenwood while centralizing some of Delta’s business activities to Gulf Breeze.

CLEC’s last addition came in 2008 when it acquired Ebner Equipment, Lafayette, La. CLEC boasts a staff of more than 25 employees, as well as expansive equipment and parts inventories.

AAXON HOSTS SECOND ANNUAL AUTUMN EXPO Commercial laundry equipment distributor Aaxon Laundry Systems staged its second annual Aaxon Autumn Expo here at its headquarters in early October.

Industry vendors that included Setomatic Systems, ESD, Imonex, Rowe and others were on hand to educate customers about their products and services. Informative breakout sessions featuring Huebsch factory representatives Jason Fleck, senior regional sales manager, and Jason Husman, financial brand manager, took place throughout the morning of the show.

Speaker presentations and service school-style seminars continued throughout the day as attendees were also able to mingle with onsite vendors. Lunch was catered, and prizes that included a 60-inch highdefinition TV were given away during the event.

The annual Autumn Expo is designed to benefit the South Florida laundry owner community by gathering industry vendors and educational tools in one place for a day. The event drew laundry owners from across Southeast and Southwest Florida, including several new investors looking to learn more.

“Aaxon is proud to put on these types of events for the local laundry owner community to connect, learn, and realize they have a friend in the laundry industry,” says Frank Paul D’Annunzio, Aaxon consultant. “It’s a joy to see attendees walk in, some of them who are just learning about the industry, ask questions, and be able 36

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to educate themselves on topics essential to operating a successful laundry.”

CONTINENTAL GIRBAU PARTNERS WITH HILLS COMMERCIAL LAUNDRY Commercial laundry equipment manufacturer Continental Girbau Inc. recently partnered with Hills Commercial Laundry to provide vended equipment throughout Alaska, the company reports. Hills now represents Continental and LG commercial laundry products, as well as the Express Laundry Center® brand.

Hills Commercial Laundry works with vended laundries and new-store investors throughout Alaska, assisting with laundry development, renovation, efficiency, equipment and marketing.

Rod Hill, who leads the Hills Commercial Laundry team, understands the unique needs of Alaskan vended laundry owners, according to Joel Jorgensen, Continental vice president of sales.

“Continental is thrilled to partner with Hills Commercial Laundry,” Jorgensen says. “The Hills Commercial Laundry team, which draws from 60 years of laundry industry experience, is focused on complete customer satisfaction.”

Needing a career change, Adam Dixon closed his chiropractic practice and built Duck River Laundry. The store opened in January 2017, and less than a year later he was named the Huebsch Store Owner of the Quarter. (Photo: Alliance Laundry Systems) HUEBSCH NAMES DIXON ITS LATEST STORE OWNER OF QUARTER Commercial laundry equipment manufacturer Huebsch® has named Adam Dixon the latest recipient of its Store Owner of the Quarter award.

Dixon, who decided he needed a career change, closed his chiropractic practice and built Duck River Laundry in Shelbyville, Tenn.

“The laundry Adam opened is an example of the higher-quality experience many of our Huebsch store owners are trying to create,” says Kathryn Rowen, North American sales manager for Huebsch. “Adam has really gone the extra mile with this store and has had great success. We are proud to be associated with an owner of his caliber. He certainly has a bright future (continued on page 40) www.americancoinop.com

12/13/17 4:47 PM

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CUSTOMER CRAZIES: ANTICS THAT WILL LEAVE YOU SMILING

THERE’S GROWTH TO BE HAD IN REACHING MILLENNIALS

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1-800-568-7768

ADVERTISERS’ INDEX Advertiser

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Advertiser

Page

AC Power ................................................ 33

Great Lakes Commercial Sales ............... 38

ACE Commercial Laundry Equipment .........31

Huebsch .....................................................3

American Bill Changers ............................39

HHC Electronic Service ........................... 39

American Switch ......................................38

Imonex Services ........................................11

BDS Laundry Systems...............................17

Laundroworks ..........................................19

Card Concepts ..........................................13

Laundry Concepts ...................................29

Cleaner’s Supply .......................................39

Metro Laundry Tech Corp. ......................38

Continental Girbau ................................IBC

Mountain Electronics ...............................38

CryptoPay ................................................15

Primus ........................................................7

CSC Serviceworks/Super Laundry ............27

Progressive Insurance .................................9

D&M Equipment Co. ..............................25

R&B Wire Products ..................................1

ESD Inc. ...................................... 20-21, BC

Setomatic Systems ................................. IFC

FrontecStore.com......................................38

Tjernlund Products ...................................38

Gold Coin Laundry Equipment ................23

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NEWSMAKERS

(continued from page 36) in our industry.”

Dixon’s goal was to provide an excellent customer experience for visitors to his 5,400-square-foot Duck River Laundry. The business, which opened in January 2017, offers drop-off laundry services in addition to self service. Open 24/7, the store is attended 10 a.m.-6 p.m. Monday through Saturday and 2-6 p.m. on Sundays.

While he has several competitors in the area, Dixon believes nobody is operating the caliber of store that he is in terms of space, cleanliness, and equipment quality and flexibility.

Once inside, customers can choose from 60 pieces of equipment to wash and dry their loads, including Huebsch washer-extractors ranging from 20 to 80 pounds in capacity. On the drying side, single-pocket 35-, 55- and 75-pound models get customers out the door fast with no bottlenecks.

While the store has taken off since he switched on the open sign, Dixon says he’s ready to tap into the technology built into the Huebsch Galaxy control in hopes of spreading out the busy time and improving the store’s overall profitability and flow.

Though he’s been in the business less than a year, Dixon already loves the industry and knows he’s found his calling, according to Huebsch.

DISTRIBUTOR LAUNDRY OWNERS WAREHOUSE CALLS ‘ACTION!’ Commercial laundry equipment distributor Laundry Owners Warehouse is producing a series of short films as a brand-building experience and to consolidate its relationship with manufacturer Dexter Laundry Equipment.

The first film is now available exclusively on the Laundry Owners Warehouse website, https://lowlaundry.com.

According to a Laundry Owners Warehouse spokesman, the films highlight Dexter’s and Laundry Owners Warehouse’s shared

A Laundry Owners Warehouse employee (center) waits to hear “Action” as a camera crew prepares to film him working on a washer in an unidentified Laundromat. (Photo: Laundry Owners Warehouse) 40

AMERICAN COIN-OP JANUARY 2018

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commitment to quality, and will feature employees and customers who will share the story from their perspective.

The distributor serving South Florida says staying at the “cutting edge of marketing techniques” helps it maintain an edge over competitors.

“We recently released the first short film of our series. Laundry Owners Warehouse has been focusing on generating brand awareness and this film is the first in our endeavor to get our message across in a unique and effective manner. We thank all the customers and employees who agreed to be part of the video,” the company says.

The second film is in production and scheduled to be released in the spring.

Dexter Laundry staff and participants in the Dexter University – Service Academy earlier this fall were (from left) Amanda Konczal, Dexter; Stephen Durham, Gold Coast Laundry Equipment; Joe Blevins, Advanced Laundry; James Scotton, Dexter; Brian Hooyer and Ryan Hooyer, Gerrit’s Appliance; Lester George, Laundry Pro of Florida; Brad Millard, Dexter; Casey Stufflebeem, Dexter; Alec Sabin, Century Laundry; Russ Cooper, Dexter; Adam Yorysh, Coinless Laundry; Mike Kline, Detergent Solutions; Hector Melendez, Laundry Pro of Florida; Jeremy Guiton, PAC Industries; Shane Palmer, Dexter; and Jaimie Johnson, Dexter. (Photo: Dexter Laundry) DEXTER LAUNDRY HOSTS FALL SERVICE ACADEMY Commercial laundry equipment manufacturer Dexter Laundry recently hosted service technicians from around the globe for its Dexter University – Service Academy.

The Service Academy graduates included technicians who are responsible for providing installation, service, parts sales, and support for Dexter Laundry’s extended network of owners.

The Service Academy is a continuation of Dexter University’s revamped curriculum and included four days of in-depth product training.

The training focused on both Dexter’s newest product offerings as well as historical models, some of which were released more than 30 years ago but still remain in operation today.

ACO www.americancoinop.com

12/13/17 4:47 PM

LOOKING FOR A NEW

PROFIT CENTER? BOOST PROFITS. ADD COMMERCIAL LAUNDRY SERVICES.

As a vended laundry owner, you outlay a lot of money in store development, permitting, construction and equipment.

So why not make that investment as fruitful as possible? Fully utilize idle equipment and attendants by launching fullservice wash/dry/fold. Then, once you’ve got your head around it, consider adding commercial laundry services to

LAUNCH WASH/DRY/FOLD

2

• Maximize usage of equipment & employees during slow hours • Cater to young professionals & families

DESIGNATE SPACE FOR COMMERCIAL WORK • Add staff to process full-service work • Designate space to process & store commercial work • Establish pickup & delivery

PHASE

1

PHASE

PHASE

your store’s tagline. Become a retail laundry services enterprise.

3

INSTALL ON-PREMISE WASHERS & DRYERS • Harness programmability of on-premise washers • Easily clean and process oils & stains • Expand commercial accounts business

4

ADD A FLATWORK IRONER • Add capability to finish linens • Pursue new customers needing ironed bed & table linens • Take on larger commercial accounts

PHASE

PHASE

• Cater to small commerical businesses

5

ESTABLISH A COMMERCIAL LAUNDRY PLANT • Outfit a separate building with specialized equipment • Include on-premise washers, dryers & ironers • Consider adding folders & finishers

GROW REVENUE. Call (800) 256-1073 to receive your FREE Vended to Commercial Laundry Guide.

Choose Continental for ALL your laundry needs.

We’ve partnered with vended laundry owners to expand commercial services since 2008.

INNOVATIVE LAUNDRY SOLUTIONS www.cgilaundry.com • (800) 256-1073

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