American Coin-Op - June 2018

PRICING STRATEGIES

REVENUE SOUGHT, STORE QUALITY, COMPETITION AMONG VARIABLES IN PLAY

I N S I D E : J U LI N Y S 2I D0 E0 :5 J U N E 2 0 1 8 COIN-OP 101: POWER PROFITS WITH DATADRIVEN PRICING

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CONTENTS JUNE 2018 VOLUME 59 ISSUE 6

COVER STORY

PRICING STRATEGIES: BALANCING VEND PRICE WITH VALUE When it comes to pricing your washers and dryers, there are many variables at play, plus the pressure you might feel from lower-priced competitors. But build and maintain a top-quality store and you can command the high price in your market.

(Cover image: ©iStockphoto/gustavofrazao)

INSIDE 16 COIN-OP 101: POWER PROFITS WITH DATA-DRIVEN PRICING Ohio store owner Rockwell Bonecutter believes that the more quickly he can read and digest information, the faster he can develop a pricing strategy that levels out peaks and valleys during the week and spreads turns among his equipment. He relies on his networked machines to supply the data that he needs.

22 NEW LEASE ON LIFE

Negotiating and signing a lease without really understanding its ramifications can be disastrous. In this story, a trio of experts weigh in on commercial leases and offer their insights—and even some warnings—about the leasing process.

28 WASH DRY & WIFI: WHERE STACK MEETS APP Bi-level equipment design and dual pay defines Michael Kline’s stack multi-load washer-dryer store concept.

10 DEPARTMENTS 4 VIEWPOINT 6 YOUR VIEWS SURVEY 36 NEWSMAKERS

38 CLASSIFIEDS 39 AD INDEX

33 A CLOSER LOOK With MBA in hand, Cathy Neilley left a thriving corporate career to start a high-end Laundromat designed to enhance customers’ lives.

32 PROFILING WOMEN IN LAUNDRY

Get to know Cathy Neilley, owner of Spin Doctor Laundromat, Hamilton, N.J., and Kristen Packard, co-owner of distributor Automated Laundry Systems and four Floridabased Laundromats.

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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

PRICE/VALUE BALANCING ACT

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

PRICING STRATEGIES Why did you enter the Laundromat business? How much did you invest? What was your expected rate of return on your initial investment (ROI)? Are you still making the same rate of ROI? Should you expect to? What has changed since you acquired your store?

It was Karl Hinrichs, HK Laundry Equipment, who posed those questions in a 2011 American Coin-Op post-recession article.

Here we are several years later and I think store owners still ask themselves the same questions when they ponder setting or raising their vend prices.

I asked Hinrichs and several other representatives from equipment distributors throughout the country about criteria upon which to base vend prices, informing customers of price hikes, and even if there is a simple formula for calculating prices. From my conversations with them, it became clear that no matter what data or experiences you may use to set prices, it’s important to balance vend prices with service value.

Paraphrasing one of the distributors, you’ll always be able to demand higher vend prices if you keep your store and equipment in the best shape they can be. Read the story beginning on page 10.

LET THE DATA DO THE DRIVING In another article about vend pricing, Ohio store owner Rockwell Bonecutter relies on his laundry’s networked machines to supply him with the data and information he needs to develop a pricing strategy that lessens a week’s peaks and valleys plus spreads turns among all of his equipment. Read his Coin-Op 101 account on page 16.

This month’s issue also includes articles on leasing, a profile of a stack multi-load washer-dryer store in Michigan, and personal profiles of two women making names for themselves in the laundry industry.

To receive the value packed in this issue, the price is simply your time and attention. And that’s a strategy that sells itself.

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 6. 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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INDUSTRY SURVEY

UTILITY COSTS, NEW EQUIPMENT AMONG TOP REASONS FOR RAISING VEND PRICES

To read other Your Views survey stories, visit www.americancoinop.com 6

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Helping to offset utility costs is the primary reason why the majority of coin laundry operators polled (34.8%) make the decision to raise their store’s vend prices, according to results of American CoinOp’s latest Your Views survey.

Other operators boost prices to “afford new equipment” (21.7%), “generate more revenue” (19.6%), or when they “spruce up (the) store” (4.4%). Equal shares of 2.2% say they “raise prices every so often,” or that their “store has the lowest price” in their area.

Roughly 15% of operators polled raise prices for “other” reasons, including an increasing minimum wage, inflation, and addressing a just-purchased store’s outdated pricing structure.

Nearly two-thirds of respondents (63.8%) feel no guilt or apprehension about raising prices. And nearly 55% of operators polled don’t publicize price hikes. About 33% “let customers know what is happening and why,” and the remaining 13% “make minimal effort to announce a price hike.”

Approximately three out of five respondents (59.6%) have raised washer prices this year, or intend to do so before 2019. Roughly one-quarter (25.5%) have not raised their prices, and the remaining 14.9% are unsure. Regarding dryer prices, only 31.9% of respondents have raised them this year or intend to do so before 2019.

Roughly 62% have not raised prices or intend to do so, and the remaining 6.4% are unsure.

Roughly 55% of respondents say they expect to lose 1-5% of their customers when they raise prices, while 29.8% say they do not expect to lose any. Close to 11% expect to lose 6-10% of their clientele when they raise prices, while equal shares of 2.1% expect to lose 11-15% or 16-20%.

Finally, the survey asked store owners about their general philosophy about raising vend prices, and whether they found it easy or hard to take action. Here are some of the responses: • “I do find it difficult, because I know people are cost-conscious.

On the other hand, we are the lowest (priced) in the area and need to keep up with utility costs.”

• “It has to be done. Costs go up, rent, taxes, wages. We as an industry only hurt ourselves when we don’t keep pace.”

• “If your Laundromat is clean and well-run, customers will see the value. Those customers you may lose on price, you probably didn’t want/need anyway.”

• “If you’re not ahead, you’re behind.”

• “My philosophy is that if I don’t raise prices, I am going out of business.”

While American Coin-Op’s Your Views survey presents a snapshot of the trade audience’s viewpoints, its findings should not be considered scientific. Qualified subscribers to American Coin-Op e-mails are invited to participate anonymously in the survey.

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Pricing Strategies:

Balancing

(Photo: ©iStockphoto/gustavofrazao)

Vend Price withValue

by Bruce Beggs, Editorial Director

P

ricing of wash and dry cycles is quite literally the foundation of any self-service laundry business. The decisions you make now can make or break your operation down the road.

There are a lot of variables at play in your store or stores, plus there’s the pressure you might feel from a nearby competitor willing to price their equipment lower than yours.

But upon interviewing representatives from some of our industry’s distributors, it became clear that no matter what data or experiences you may use to set prices, it’s important to balance vend price with service value. The greater the value you provide your customers, the higher the price they’ll be willing to pay.

Let’s hear what those distributor company executives have to say about pricing strategies and their recommendations for investors as well as current store owners.

CRITERIA FOR PRICING? What criteria should a laundry owner use in deciding what to charge for a wash or dry in his or her store?

When Karl Hinrichs, president of HK Laundry Equipment, Armonk, N.Y., wrote a 2011 American Coin-Op column about pricing, he said the four largest expenses were labor, lease, equipment note and utili10

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ties. Nothing has changed, he says today.

“When you take a look at the expenses in a Laundromat, you’re going to find that there are four major expenses, usually in the thousands of dollars, while the rest are in the hundreds of dollars,” says Hinrichs, who also owns four stores and operates a fifth for a relative.

Further, he believes that utilities is the only variable cost in operating a store and should be the determining factor when increasing vend prices.

Hinrichs “As long as all the other expenses are roughly within the same parameters of normal, a 20% utility expense or better will give a nice little profit for the owner,” Hinrichs says. “The converse is if you let your utility expenses get too high, it’s at the direct expense of your profit.”

“I think you need to look at your business primarily,” says Dan Baker, vice president of The Minnesota Chemical Co., St. Paul, Minn. “You’ve got certain numbers you’ve got to hit, regardless of your competitors. You either have to be a price leader, a price follower, or middle of the road. If you’re building a laundry, you have to decide that before making any other decisions. And then based on that, you

start a pricing strategy.”

“First of all, it’s (their) market,” Robert Gonzalez, vice president of Steiner-Atlantic Corp.’s coin laundry division in Miami, says of pricing criteria. “Second of all, it’s the way the laundry is set up. Your laundry is not going to price the same way as the guy who has 20-year-old equipment. If you’ve got new equipment in there, you can get a little more for your money.”

“Equipment capacity (size) is the most common (criteria),” says John Antene, president of coin laundry sales and marketing for CoinO-Matic, Alsip, Ill., “although with the more sophisticated controls now offered with advanced cycle features (temperaAntene ture, length of cycle, time-of-day pricing, bonuses, etc.), the laundry owner has an opportunity to add additional revenue to the basic pricing structure.”

“A laundry owner should most definitely be aware of competitive pricing in their immediate market,” says Greg Reese, sales manager for Commercial & Coin Laundry Equipment Co., Gulf Breeze, Fla. “In order to best set up their own pricing structure, it is best to have a sense of what the market currently will bear. This baseline will www.americancoinop.com

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help to determine where to work from. The coin laundry owner should not aspire to be the low-cost leader. If their store is a better product to the consumer, then it commands a higher price.”

“Vend prices should be based on the condition of their store and when the last time they raised the prices,” adds David Hoffman, sales manager for Gold Coin Laundry Equipment, Jamaica, N.Y. “If you keep your store wellHoffman maintained, modern, and have modern equipment, then you can demand higher vend prices.”

And should a store owner be tracking the competition’s prices?

“Key differentiators are always important in any business,” says Ryan Smith, president of AAdvantage Laundry Systems, Garland, Texas. “If an operator is very involved in a store and has other offerings that drive business, then competition becomes less important, at least keying on their pricing. Operators who don’t have a draw other than price, gosh, they need to pay attention to their competitors’ pricing.”

“I’ll tell you what I do when I’m getting ready to develop a new Laundromat in an area,” says Bill Kelson, director of vended laundry sales for TLC Tri-State Laundry Companies, Atlanta.

“I typically go to all the competitors within a mile or two and see what their pricing is like, how they manage their store, how Kelson old the equipment is, what they’re charging for washers and dryers.

“I take the point that we’re going to be the leader of the pack, if you will. If I’m building a new store, we’re going to be better at everything. Everything’s going to be clean, brand-new and ready to go. I try not to give my competitors any reason to discount or cut their pricing.”

“You gotta keep track of whatever is happening in your neighborhood,” Gonzalez says. “Doesn’t mean you have to do what they are doing, but you can counteract using different strategies.”

“Always knowing your competitors’ actions, pricing or otherwise, is one of the 12

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many tools to determine where your business is in the market,” says Antene.

“I would always recommend to know your competitors’ pricing as a reference point to gauge your vend prices as well as your wash and fold prices,” Hoffman says.

“You also need to consider the condition of their store and factor that into the price structure.”

IS THERE A FORMULA...?

Are formulas available to easily calculate what a laundry should be charging based on number of machines, load capacity, utilities cost, etc., or are there just too many individual variables per operation?

“There isn’t a cookie-cutter,” Smith says.

“I can’t tell you that we’ve built two stores the same way—and we’ve built a lot of stores. … Yeah, you can create formulas and spreadsheets that identify where you should be. There are Smith a whole host of variables that come into play. Ultimately, I go back to differentiating your business. What is your core draw for your customer base?

Form there, I would calculate where I want to be in the market.”

“With today’s advanced controls, operators have the available information at their fingertips to determine marketing formulas or patterns,” Antene says. “With the benefit of reporting totals in networking systems, laundry owners will be able to determine factors that will establish trends such as usage peak periods and slower times. With these reports, an owner will be able to raise or lower vend prices to maximize revenue.”

“Ultimately, there are too many variables to have a steadfast formula,” Reese laments. “A store owner should command a vend that represents the quality of overall product that they offer their customer base.

Should the store be attended full-time, kept clean, have plenty of parking, and offer reliable equipment of various capacities, then the store owner should expect a toptier price.”

“I’m not aware of a formula that people use,” Baker says. “Good operators know what their costs are.”

“It’s pretty simple: (charge) 10 to 15 cents a pound,” Kelson says, explaining that he developed the general guideline

based on 30 years of industry experience.

“So if you have a 20-pound washer, you might charge 14 cents a pound. That’s roughly $2.75. If you’ve got an 80-pound machine, give a little bit of a discount, charge about 11 cents a pound. That’s about $8.75 for a cold-water wash.”

“I don’t think you can easily calculate all your expenses nor should you base your pricing on that,” says Hoffman, “but rather maximize your prices based on the neighborhood you are in, the competitors, and the condition of your store and the value you offer your customers.”

“There are a lot of variables,” Gonzalez says. “If you have a new store, obviously you have the equipment payment, and your location. Obviously, you at least want an ROI on your money. After the first year, you want to start making at least 20%, so you have to calculate your prices based on that.”

SHOULD YOU TELL? Do you alert your customer base in advance before changing prices? Should you publicize price increases at all? There’s a difference of opinion among the experts we interviewed.

“I think you should (raise prices) regularly, and that means more than every two years,” suggests Baker. “Or at least every two years. I’m not a proponent of signs saying, ‘Sorry we had to raise our prices’ or ‘Prices will be going up next month.’ …

If you maintain a decent store, you’re not going to get much feedback. Target doesn’t advertise price increases.”

“I’m not a person to alert anybody,” Gonzalez says. “I had a customer that would post a note in his laundry that said, ‘If you have any complaints about me raising prices, here are the phone numbers for the water Gonzalez company, the electric company and the gas company. You can call them.’”

“Price ‘change’ will always be a difficult decision (and) process since prices typically only increase,” says Antene. “Store owners have many factors to consider in this situation; (there is) customer acceptance while keeping patrons loyal but very importantly staying abreast of continually rising utility and operating costs. The ‘bite the bullet’ www.americancoinop.com

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approach always seems to be the best. A store owner must determine the increases needed and implement them. Any gradual announcements only prolong the change.”

“If a store owner is going to increase their vend prices, I feel that advertising in advance could only encourage a customer to start looking elsewhere to take their business,” says Reese. “Should the customer come to the store, and actually recognize that the prices have been increased, then they most likely will stay on site to do their laundry anyway. The negative emotion felt immediately after recognizing price increase will quickly fade away.

“Although, if a store owner is going to run a promotion and temporarily lower the pricing structure, then they should absolutely advertise in advance to generate new business,” he adds.

“I think it’s a good idea to post a sign or two in the laundry as to why you are raising prices,” Hoffman says. “If you are raising prices due to an increase in utility cost or labor rates, then most customers can relate to this increased cost. … I do not think it is important to notify customers in advance of a price increase.”

WHEN IS THE BEST TIME TO RAISE PRICES? Is there a time of month or season of year when it’s best for a store owner to implement a price change?

“The best time to raise prices is when you’ve done something in your store,” Baker says. “And it could be anything, from equipment to a coat of paint. Any Baker kind of improvement, in my opinion, is a reason to raise pricing.”

“Price increase may be implemented anytime. Change may occur before the beginning or mid-month, based on payday or government-issued checks,” according to Antene. “Annual increases may be considered prior to busy seasons: spring and autumn. The advantage of the multi-pricing equipment and network systems is that any change increase or decrease can be easily made and continually updated and programmed automatically throughout the year.”

“I would imagine that the summer months would make the most sense,” Reese says. “Customers frequent the laundry less due to the decrease of clothing to be laun14

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dered and therefore would not feel the effect as much.”

“I always lean toward raising it right before school starts in the fall, so, generally, the end of August or maybe the beginning of September,” says Kelson.

“I wouldn’t say there is a particular month or time to raise prices, but rather after an improvement or modification in the laundry,” Hoffman says, “such as equipment replacement or interior improvements like painting or new lighting.”

“Lot of places here in Florida are seasonal, so they do it off-season,” says Gonzalez.

“When the snowbirds return, prices are higher.”

WHAT PROMOTIONS DO CUSTOMERS LIKE? “We find any type of additional owner offering is welcomed: time-of-day pricing, customer loyalty bonuses, co-marketing agreements between neighboring businesses and raffles such as wash/dryer awards totaling, in some cases, for a year,” Antene says. “Any and all ideas have been tried with success. It all amounts to individual effort and the owner’s comfort zone.”

“I think using a day-of-the-week special with discounts helps to bring in the customer on a budget or looking for a deal,” Hoffman says. “With some card payments, you can also offer loyalty discounts to your repeat customers. Whatever type of promotion you decide to do, just keep in simple.”

“I’ve got stores that are open 24 hours (a day) and they go down a dollar (on each machine) from midnight to 7 o’clock,” Gonzalez says. “I’ve seen Tuesday, Wednesday, and Thursday promos, timeof-day pricing for people who don’t have to use the laundry on the weekend, people who don’t work, retirees.”

WHEN YOUR COMPETITOR UNDERCUTS YOU ...

If a competitor is undercutting your store on price, how can you respond?

“In some instances, with all the laundry location choices available to customers, it all reverts back to what you do best, what makes you special, and why customers come to your laundry in the first place,” Antene advises. “Statistics show that price is not the No. 1 reason customers choose where to wash. Know that by continuing to provide the top-notch service you pride yourself on now will always be paramount!”

“The store owner should consider if there are any additional incentives/services that they can add to their business that

would demonstrate to the customers the appreciation of their continued loyalty,” Reese advises. “If the store is attended, maybe offer free coffee. Offer free detergent from low-cost bulk containers.

Establish a drawing for a significant prize (bicycle?) based Reese on continued attendance. A store owner should never lower their prices to compete. It will only result in a ‘race to the bottom.’”

“For most customers who are looking for a Laundromat to clean their clothes, pricing is way down on the list,” Hoffman believes. “I think the first thing people look for is convenience and cleanliness. If you maintain your laundry and keep things up-to-date and fresh-looking, and have friendly attendants working in the store, then price is not the most important thing.”

“It all depends on who’s giving the free dry,” Gonzalez says. “If it’s ‘Little Joe’ with a 1,500-square-foot store, he’s going to be limited because people will flock there. If big stores with nice equipment are giving free dry, then you gotta go with it.”

“I think the first thing to do is make sure your store is in good shape,” Baker advises.

“Typically, your better customers will stay with you for a 10% price increase. You’re going to lose a few customers, but they’re the customers you don’t want anyway. …

They’re the first to go across the street to save some money.

“After that, maybe you have to respond with some promotions, or maybe some amenities. Maybe free coffee is enough to keep their business. I think the last resort is to lower prices.”

When all is said and done, building and maintaining a high-quality store may be your best support for a vend pricing strategy.

“Don’t pay much attention to your competitors’ pricing but rather be a price leader,” Hoffman advises. “If you keep your store and equipment in the best shape it can be, you will always demand and get higher vend prices.”

“A store that has the most reliable equipment, provides superior security for the customers’ benefit, is always kept clean, and has enough equipment to keep up with demand should command the highest price in the market,” Reese believes.

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COIN-OP 101

POWER PROFITS WITH DATA-DRIVEN PRICING

Rockwell Bonecutter

Laundromat owners are in business to make a profit on their investment. On that point, we can all agree. Obviously, a solid pricing strategy is a key component to that goal. Just what that strategy is and how it’s deployed can vary greatly and may be dependent upon geography, competition, etc.

It is also likely driven by how we develop and maintain our stores. For instance, if you provide a far better customer experience than the store down the street, you really don’t need to meet/compete or be lower. I may not have seen it that way as a relative newcomer to this business a couple years ago, but I do today. Making data-driven decisions on pricing isn’t just a “nice to have.” From my side, it’s the only approach to effectively managing your business.

QUALITY EXPERIENCE DATA Assessing the quality of your store versus others in the market is the first step in letting data drive pricing decisions. True, it’s not a computer that’s spitting out this information, but it is still data — first-hand observational data — and it is just as important.

When I first opened, I toured other Laundromats around the area and determined the pricing the market would bear. However, it soon dawned on me that if I was providing a high-quality experience, a cleaner store and bathrooms, and newer equipment (no out-of-order signs), I should get more for the experience I created.

In deploying this strategy, owners have to know up front and be comfortable with the fact that there is a small group of “price shoppers” who will always go with the lowest price in the market. While they may visit if you host promotions, they won’t be regulars. And it’s OK to not have them as regulars.

So the first step in using data to guide pricing is building a strategy around the information gleaned from visits to the competition. How does your store stack up? How do your equipment capacities, speed, efficiency and cycle flexibility measure up? All are worthy of consideration in developing your pricing plan.

The second part of setting up to make good datadriven pricing decisions is investing in the controls/management systems that provide easy access to operations information.

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FINDING BALANCE BETWEEN TOPS AND FRONTS As an IT professional in my day job, I’m definitely one to connect directly to data in driving decisions; it’s the main reason I networked my machines. Using Quantum® controls on my store’s machines, I’m able to spot trends in data and identify areas I want to act on.

The more user-friendly and intuitive the management system, the more helpful it is for the owner.

About six months after opening, the first data points I unearthed and acted upon concerned the difference in top-load usage versus my front loaders. Priced at $2 per cycle, data showed me that my top loads were far too attractive to customers. I needed a mechanism to get a better balance between the top-load washers and my 40-pound front loaders. By increasing the vend price on my top-load washers to $3, I narrowed the gap to the $5 vend on the 40s. Obviously, the hope is that customers see the smaller price difference and perceive the noticeably larger 40-pound washers as a much better deal (which it really is to everyone involved). The customer definitely benefits from higher g-force and shorter dry times to get in and out faster.

My 40-pound washers are seeing a significant upturn since the change.

CYCLE MODIFIERS Another significant “aha” data moment came in reviewing my washer-extractor cycle information. Until doing this deep dive in the data, I had been charging a flat vend for cycles: $5 for 40s and $6 for 60-pound washers.

Digging into my data, I found that a high percentage of cycles were utilizing hot water washes and extra rinses. I’m paying to heat that water and not recouping the expense; same for the extra water included in the additional rinses. So the data helped me see the need for cycle modifiers and how they can at least recapture that expense. And the result of the data-driven pricing change? My reports show a 10-12% lift in revenue, with no real drop in cycle modifier use.

DAILY BALANCE While not significantly different from what other owners experience, my usage reports show heavier www.americancoinop.com

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turns on the weekends. Being a smaller store in a rural market, it’s more important for me to balance out turns compared to much larger super stores in metro areas capable of handling much larger volumes during busy times.

I have used this data to drive a bit higher vend price on weekends to try and push some customers to weekdays and create a flatter balance across the full week. Being in a more rural area, time-ofday pricing doesn’t really fit into my pricing model as perhaps it would in a metro area.

THE VALUE OF DATA Today’s laundry business depends not only on creating an excellent experience for customers, but understanding how they interact with your store. As I begin developing my second store, I’ll use the data gathered from my original store to drive a pricing baseline.

That’s when the real work of data review begins. Once you have the information that shows customer interactions, you can begin to identify trends. They will drive pricing, promotions, and basically arm you with the detail to make informed decisions on operations.

Our time is at a premium. We can’t be in the store 24/7 watching which machines are being used or what our busy days are.

Manufacturers’ networked solutions are more powerful than ever before. Information is not only available when and where we want it, we are now able to slice it up and tailor at-a-glance reports that give us the detail we want and need to make pricing decisions virtually instantaneously.

FINAL THOUGHTS Technology is no longer a luxury item for vended laundries, it is the single most important tool to managing your business, as well as being able to scale it.

I believe the key is selecting a system that streamlines all operations data into a single report. The quicker we can read and digest information, the faster we can develop a pricing strategy that levels out the peaks and valleys during the week and spreads out turns throughout all capacities.

There’s a reason it’s called a pricing strategy; it doesn’t happen by accident.

ACO Rockwell Bonecutter owns and operates Bonecutter Laundromat, a Speed Queen vended laundry in Mt. Gilead, Ohio. He can be contacted at rock@bonecutter.net or 419-751-2220.

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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

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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.

TM

S THAT YOU FACED SD’S SYSTEM HELPED

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

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New

Lease on Life

by Bruce Beggs, Editorial Director

(Photo: ©iStockphoto/Zentangle)

Understanding key terms and negotiation tactics

N

egotiating and signing a lease is often a key component of starting or maintaining a self-service laundry business, but a store owner may pay a heavy price—literally and figuratively—if he/she doesn’t fully understand the ramifications of an agreement.

This month, American Coin-Op asked three experts to weigh in on commercial leases and offer their insights—and even some warnings—about the leasing process.

Larry Larsen, of Laundromat123.com, is a licensed real estate broker and has more than 30 years of experience in the ownership, management and construction of Laundromats.

Brad Steinberg is co-president of PWS, a 50-year-old California-based company that says it is the largest broker of existing and new Laundromats in the United States.

John Vassiliades, CEO of Chicago-based J. Vassiliades & Co., is a licensed business and real estate broker with more than 40 years of industry experience, having brokered the sales of over 1,000 coin laundries.

Q: In what ways might a commercial lease for a self-service laundry differ? Are there various types of leases in general?

Larsen: Leases can be gross or net. In a gross lease, all the expenses (except utilities) are included, just like you have in a typical apartment lease. In a net lease, you have a base rent and then the lease tells you what additional expenses the landlord expects you to pay. Building 22

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insurance, property taxes, common area upkeep, repairs, parking lot cleaning, security guards and cleanup are common costs paid by net lessees.

“CAM” and “Net/Net/Net” are terms used to describe some of these lease addons. Read the lease carefully and if you have any doubt, contact your consultant or attorney to explains things you do not understand.

Steinberg: There are two basic forms of leases: NNN (“triple net”) and gross. In an NNN lease, a tenant pays the base rent plus pass-throughs from the landlord, which include property tax, insurance and common area maintenance expenses (CAM). In a gross lease, the tenant simply pays one, all-in rent amount.

Vassiliades: There is a gross lease, which includes in the monthly rental the landlord’s taxes, some common area maintenance, so they give up only one monthly payment.

Then there is the net lease, also known as the net-net-net lease, which is a base rent calculated by the landlord, then a portion of the real estate taxes … and then also a portion of the insurance and a portion of the common area maintenance is added on.

There are many different types. There are leases called percentage leases, which are based off the percentage of the income that the store develops. You want to stay away from those as much as possible.

Q: What commercial lease terms hold the most importance for a prospective laundry tenant? Would you say they are the amount of rent and the length of the lease?

Steinberg: When you are buying a Laundromat, you are essentially buying a cash flow. The longer you can protect that cash flow, the better. Additionally, if you ever decide to sell, the multiple you receive on your store will be affected by the length and term of the lease. With that said, the important things to look at when analyzing a lease are the rent amount today, length of lease (base term and options), increases (the lower, the better), options (make sure they are not personal), and assignment language (you need to be able to assign the lease to someone else when you want to sell the laundry).

Vassiliades: Beyond the actual amount that they would be paying in rent, I particularly don’t like to see any Laundromat paying more than 20-25% of their projected total gross for a lease. That being said, the amount of time is very crucial for a Laundromat. I don’t like to see any Laundromat go into a lease with less than 15 years. … Ideally, you want to get as much time as you can.

Larsen: The amount of the rent and the length of the lease are easy to understand; buyers get these two provisions. Other important terms are hidden away in the language of the legal professionals and are the terms that can cause problems for tenants. An example is a lease option. Is it guaranteed or only providing a “first right of refusal” to lease at market rate? Is the option personal or can it be assigned to a new buyer? What about your obligation to replace the roof or resurface the parking (continued on page 26) www.americancoinop.com

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PEOPLE MATTER. RELATIONSHIPS MATTER. — Tyrone Akins and Brian Holland Huebsch Investors Co-owners, The Laundry Café Philadelphia, Pennsylvania

Pictured from left: Tyrone Akins and Brian Holland, Co-owners, The Laundry Café

YOUR SMART LAUNDRY PARTNER

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OUR NETWORK WORKS FOR YOU. While working together at a major pharmaceutical company, friends Tyrone Akins and Brian Holland discovered they had a dream job in common: owning and operating a laundromat that would serve Philadelphia neighborhoods, like the ones they grew up in.

Based in large part on a proven history of helping investors achieve 25%–35% return on investment, Tyrone and Brian decided to partner with Huebsch® —but it wasn’t just about money. They were passionate about giving their community a quality laundromat with outstanding service.

Their Huebsch distributor worked tirelessly to help them iron out the details, find the perfect location and create a business plan. Before they knew it, The Laundry Café was open for business, giving Tyrone and Brian an exciting and profitable new venture—and their customers an amazing laundry experience.

Thanks to the support and guidance they received from their Huebsch Financial team, Tyrone and Brian now own several Laundry Cafés throughout Philadelphia. They are eager to open more locations and introduce other communities to the superior quality of Huebsch.

Visit huebsch.com/investors to hear more of Tyrone and Brian’s story and learn how you too can become a Huebsch Investor.

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(continued from page 22) lot? Being profitable in the Laundromat business requires a lease that is fair, reasonable and understood by the tenant.

Q: How much flexibility does each party—the lessor (property owner) and the lessee (laundry)—have when it comes to negotiating a lease?

Vassiliades: They don’t call the landlord “lord” for nothing. If you’re going in on a new lease and you’re going to build a new Laundromat, I think you have a lot more flexibility. I’ve negotiated where the landlord will actually help with the build-out for a good long-term lease. … The best time to negotiate for a real long term is when you’re first going in there. If you’re already there and are negotiating for a new lease, it’s very difficult …

Are you going to pick up your equipment and walk out of the store if you don’t like what he says?

Larsen: Unless the landlord has been unable to rent the space, or wants more money than the market demands, you have limited to no flexibility. Your only negotiating chip to play is you’re willing to sign a lease.

When you start negotiating a lease, you should arrange a meeting in person with the landlord. Bring your credit report, financial statement and a business plan explaining your ability to pay and how you’re going to improve the premises.

You should explain that the long-term lease you desire is reasonable because Laundromats have historically been great businesses for paying rent on time and avoiding vacancies. Landlords are concerned about tenants who do not pay the rent, go out of business, or cause damage to their property. Convince the landlord you’re not going to be a problem and you’re off to a good start.

Steinberg: Most of the heavy lease negotiation is done when the Laundromat is first built. When it comes to buying an existing Laundromat and assuming an existing lease, it can be tough to negotiate significant changes to the lease.

The best chance a new buyer has in negotiating more favorable lease terms is to show the landlord that you are intending to spend significant dollars to improve the operations of the laundry. If the landlord is going to make any concessions, they are going to want to see that you are investing to beautify the business, which will in turn lead to more stability with the Laundromat 26

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“The biggest mistake (by a newcomer) is that they don’t have somebody who really knows what they’re doing alongside them...”

—John Vassiliades tenancy and be a benefit to the entire shopping center.

Q: Given the investment tied to the average self-service laundry, how long a lease should a laundry be seeking at a minimum?

Larsen: If you’re buying an established lease, the minimum I would consider is 10 years. If you’re starting a Laundromat from scratch, you want an initial lease of 10 years with options (at the same terms and conditions) for an additional 10, 15 or 20 years. Time passes quickly, so get as much time as you can.

Steinberg: For a brand-new Laundromat, a total lease term of 20 years (base lease plus options) is needed. For any investment over $500,000, a 15-year-plus lease is recommended. For lower-priced stores, a shorter lease could make sense, but it should be reflected in the store purchase price.

Vassiliades: I usually walk away from deals where I can’t get 15 years. You want to realize a return on your investment, and if you decide to sell after you get your return on investment, you want to know that you have something to sell. … On new leases, I really strive for 25 years. On existing stores that are in the (retail) center now, it’s hard to get landlords to go beyond 15 years.

Q: How might any of the following play a role in a lease negotiation: visibility of location from street, property maintenance and/or repair, utilities, parking, signage, insurance, or the ability to renovate or expand the space later?

Vassiliades: Visibility is an important point, particularly if the center is L-shaped. … The center sections are most difficult (for the property owner) to lease. They’re not the best locations for Laundromats.

The end piece, on one end or the other, is ideal. … It’s not as important to be highly visible from the street. If you’ve got good signage, you’re OK in most cases.

Unless the landlord is completely naive,

you’re going to end up paying your own utilities. … (Regarding common area maintenance), unless you’re in a freestanding building, the landlord takes care of all the maintenance and then charges back each of the tenants their portion. He may even add a fee on for doing it. The devil is in the details, so when you’re negotiating the lease and they’re charging you for common area maintenance, be sure you know exactly what that’s for.

Larsen: Prior to the negotiation of the lease, you should determine that there is adequate parking with a minimum of one parking space for each 400 square feet. The store should be visible from the street. You may want to be able to install a particular sign, a monument sign, or have a certain placement on an existing monument sign so the community knows you’re in business.

Keep in mind that most signage issues are controlled by the building departments of the city in which the premises are located.

The other items are covered with careful reading of your lease provisions. If you’re building a new store, the landlord can be asked to contribute to the cost of utility installation, tenant improvements, and to provide free or reduced rent while your store is being built.

Q: What are some common mistakes that laundry tenants have been known to make when negotiating a lease?

Larsen: New buyers tend to spend more time on potential income concerns and not enough on the lease provisions, parking, visibility and demographics. New buyers also tend to overestimate their knowledge of the business and try to negotiate on their own. Hire a consultant or adviser to help you avoid mistakes.

Vassiliades: The biggest mistake (by a newcomer) is that they don’t have somebody who really knows what they’re doing alongside them, like a good attorney who knows how to negotiate a lease. If you’re trying to do it on your own, that’s the biggest mistake you can make.

If you’re going to do anything at all when you’re (already) in business and paying rent, you’re going to pay that rent on time … and you’re going to be very good to (the landlord) all the way through. … The other thing is make sure you have enough time, so you’re not waiting until the last minute to negotiate. If you wait till the last year to negotiate your next five-year extension, then the landlord’s got you.

ACO www.americancoinop.com

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Wash Dry and WiFi:

Stack App

Where

Meets

Bi-level design and dual pay defines Michigan store

By Laurance Cohen

M

ichael Kline has an answer to high rent: think cubic feet, not square feet. At his Wash Dry and WiFi Laundry Center in Utica, Mich., get ready to toss your clothes above instead of wheeling ’em around.

Replacing perpendicular rows with a straight-line, bottom-top formation isn’t the only thing that makes this unassuming laundry in a suburban strip center stand out. Here, the currencies of choice are physical coins and virtual credits, transacted with a flick of the wrist or a tap of the smartphone screen.

Bi-level design and dual pay defines Wash Dry and WiFi: where stack meets app.

Before its arrival in the Motor City suburb, the stack multi-load washer-dryer concept went for a test spin on the other side of the globe. What started with good ol’ American ingenuity to elevate vended laundry to a whole new level quickly took hold

overseas, chronicled in American Coin-Op with a peek at the two-tiered machinery setup inside the small footprints of Cleanpro Express operations in Malaysia and Singapore (Southeast Asia’s New Spin on an American Concept, April 2016).

Kline became intrigued with the bunkbed approach to self-service laundry while attending a 2015 gathering of Dexter Laundry distributors following his appointment as a dealer. There, he met with his overseas counterparts and came away thinking the concept had potential back in his region.

“My goal was to start a stack washer-dryer Laundromat so that I wasn’t paying an excessive amount of rent,” says Kline, who showcases his prototype in a 20-foot-wide storefront northeast of Detroit. “We almost built a 2,400-square-foot Laundromat, but we’ve got about three-quarters of that equipment into 1,200 square feet so it made a lot more sense for us.”

Tiering machines is nothing new. Tum-

Store owner and distributor Michael Kline believes a two-tiered approach to laundry layout can minimize rent and enhance the customer experience. (All photos by Laurance Cohen) 28

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bler baskets have a long history of being placed on top of each other in a bid to save space and have become ubiquitous in the industry. And now the stack washer-dryer, long familiar in domestic and apartment complex laundry rooms, has gone multiload and found floor space where “by the square foot” usually comes with a hefty price tag.

Kline’s project is an all-stacked affair with the exception of a pair of solo 90-pound washers. Unlike the ultra-compact stores of Asia, this Americanized version boasts greater capacity laid out in spacious, wellappointed surroundings.

‘COFFEE HOUSE’ FEEL Off the bustling Hall Road thoroughfare, Wash Dry and WiFi fits the description of thousands of strip center coin-ops.

But stepping inside, it quickly breaks the mold. The laundry takes full advantage of its southern exposure to soak in natural light through full-length glass, and welcoming patrons with a sliding power-door entry — a rarity for partially attended stores.

Once inside, the place has a decidedly “coffee house” feel, where one would expect a hot cup of joe, not gallons of hot water.

The rich, earth tone of the west demising wall’s thin brick delivers an upscale statement without overpowering the main event on the opposite side. Kline and wife Deborah devoted eight days to the masonry project, bringing a taste of their own home’s self-described “Pottery Barn and Restoration Hardware décor” to the business.

“She wanted to design a laundry that was as nice as our own home,” he says of his wife, noting that going upscale fosters good housekeeping. “Customers want to make sure they take care of it and make sure they help others take care as well because it becomes their laundry room.” www.americancoinop.com

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Natural sunlight floods the southern exposed storefront equipped with a customerfriendly power-door entryway.

The porcelain tile floor, four back-to-back folding tables, a comfy sofa, and soft overhead lamp lighting help carry the package and set the stage for the stainless steel and chrome-finished equipment on offer.

Closest to the front entry stands the lion’s share of the store’s big iron. First in the lineup are two 90-pound front loaders—the only non-stacked machines—vending at $11 for a default warm wash, and $12 and $10, respectively, for hot- and cold-cycle settings. The pair, which the owner reports generates one-third of total revenue, are teamed with 200 pounds of stack dry capacity spread over four pockets immediately to the left and priced at five minutes per quarter.

The 13 stack washer-dryer models are presented in a 4-5-4

Wash Dry and WiFi Laundry Center’s 13 stack washer-dryers are presented in a 4-5-4 configuration, with the five 30-pound combo units flanked on each side by four 50-pound models. www.americancoinop.com

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configuration, with the five 30-pound combo units flanked on each side by four 50-pound sets. A 6-inch steel base installed below the mid-size units facilitates loading and contributes to the equipment layout sight line.

A 50-pound warm wash vends at $6.50, adjustable up or down 50 cents for hot or cold cycles. The front loaders serve as the foundation for the equal load capacity tumbler above. The five 30-pound stack models, priced at $4-$5 per individual wash selection setting, along with a seven-minuteper-quarter dry vend, round out the mix.

Free dry is promoted Tuesdays and Thursdays to both attract new trade and incentivize mid-week patronage, Kline says.

In total, Wash Dry and WiFi boasts 730 and 750 pounds of wash and dry capacity, respectively, along a single wall of the 20-foot-by-60-foot store.

While shotgunning washers on one side and dryers down the other could accommodate similar poundage, the owner stresses that the stack configuration enhances the customer experience by eliminating congestion and allowing a generous open corridor from front to back.

Kline notes traditional small-store layouts create bottlenecks as patrons ferry loads from machine to machine, maneuvering carts around occupied folding tables

in narrow aisles. Stacking, he points out, translates into more personal work space.

“When someone occupies three machines, they’re the only one standing in front of those three. The customers absolutely love it. They can just take the laundry from the machine below and place it in the dryer above without going across the store.”

When asked if patrons intuitively transfer loads from bottom washer cylinder to top dryer basket, Kline says he observes that nearly all follow the unwritten protocol, with the exception of a few who opt to fill the same-capacity tumbler a few pockets down the aisle.

CANDIDATES FOR SPACE-SAVING SETUP Wash Dry and WiFi draws from Utica’s mix of apartment complexes, starter homes, and a scattering of duplexes and senior and low-income housing. Five hotels are also located within two miles of the store.

Kline sees suburbs and rural towns as good candidates for the space-saving setup.

“The stack washer-dryer format lends itself to putting it in a middle-class or upper-middle-class area,” he says. “You have enough customers to cover your expenses and make money — not just make payments.”

Wash Dry and WiFi took the place of a long-shuttered taqueria. The space was

Ample space is provided behind the Wash, Dry & WiFi Laundry Center’s stack washerdryer units to access equipment, mechanical feeds and the pitched drainage trough.

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brought back to four walls and the slab removed in an 8-foot-wide swath extending the length of the premises. Utility feeds were all undersized, necessitating new 2½-inch water overhead, 400-amp/3-phase power and a larger gas line.

The machinery’s straight run minimized mechanical buildout and called for only a single pitched trough for drainage discharge. A supplemental heating system, designed to keep exposed water lines flowing in the fresh air-fed back area during below-zero winter days, hasn’t had to be called into action, the owner reports.

Building a business is familiar to Kline, 53. He grew up in the family’s well-established medical supply house before forming Detergent Solutions, a Sterling Heightsbased commercial chemical and janitorial products distributorship that eventually branched into on-premise and vended laundry equipment sales and installations.

DUAL PAY FOR TWO-TIERED APPROACH It was at Clean ’15 that bi-level laundry clicked for Kline. There was a new higher-capacity 50-pound stack washer-dryer model moving into production. With the first eight coming off the line earmarked for his store, he pulled the trigger.

As the inaugural prototype began taking shape, attention turned to another critical

Kline and his wife Deborah brought a warm, upscale look to the Utica market, including decorative thin brick mounted on a demising wall, a masonry project the couple devoted eight days to complete. www.americancoinop.com

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format: payment. The operator saw firsthand the non-cash-carrying habits of his own grown children and realized his new venture had to accept more than just coin.

“I thought cell phones and millennials are a natural fit,” Kline says of his motivation to bring a dual-pay format to his twotiered machine setup.

Kline reached out to Butch Bruner of Imonex ClearToken, who had integrated a smartphone pay app into his firm’s coin drop controller. The opportunity to offer both higher-denomination coin acceptance and phone pay at machines vending as high as $12 per cycle was appealing and convinced him to move forward, he recalls.

Wash Dry and WiFi customers can opt to download the free ClearToken app, load virtual credits onto their smartphones using credit and debit cards or cash, and enable their device’s built-in Bluetooth technology to communicate with any of the store’s 32 machines and redeem the quarter-increment credits for payment.

The cash-to-credits loading option allows smartphone users who are non-credit card holders the same access as cardholders, a feature the operator promotes through

Kline demonstrates fingertip selection of a machine ready to pay on his smartphone screen. in-house signage and word-of-mouth. The over-the-counter transactions also eliminate credit card processing fees, Kline notes.

New and returning customers can receive generous bonus incentives during self-loading or assisted loading of credits.

First-time patron Vanessa Mackey was drawn to the laundry after reading favorable

BRAND NEW!

Yelp reviews online. The visit was rewarded with a $5 promotional bonus added to her account by attendant Niyah Ward.

With three washers loaded and cycle selections made, Mackey let her index finger complete each machine transaction on the phone screen with taps of the corresponding alphanumeric color-coded band and the pay button.

“I think it’s more convenient,” she remarks, making her way down the line.

“The app was pretty easy.”

For traditional coin customers, dollar coins are dispensed along with quarters at the twin hopper changer and accepted in any washer or dryer. Kline says the dollar coins significantly reduce the number of insertions required to activate the multi-load machines and are welcomed by patrons.

While he admits some do a double take when they receive the golden-colored dollar coins, there is a silver lining: “It’s good because they get to meet all the presidents.”

ACO Laurance Cohen is a freelance writer for American Coin-Op, and a laundry accounts representative for Imonex ClearToken.

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Profiling

Women in Laundry (Photo: © iStockphoto/uzenzen)

Editor’s note: During Women’s History Month in March, Laundrylux, distributor of Electrolux and Wascomat commercial laundry equipment in North America, introduced a blog series titled Women in Laundry to celebrate women’s contributions in the workplace. The following profiles are part of that series and are published here with permission.

CATHY NEILLEYD

C

athy Neilley left a thriving corporate career to start a high-end Laundromat and create the Spin Doctor brand in 2012. The mission of her 3,000-squarefoot Spin Doctor Laundromat, Hamilton, N.J., is to enrich the lives of its customers. To accomplish its mission, Spin Doctor features a customer-centric staff and high-performance Electrolux professional equipment.

Neilley is truly an embodiment of the entrepreneurial mindset. With a professional path full of interesting twists and turns, she meets every new challenge with the appropriate amount of resilience and determination.

“I learned to think of ‘setbacks’ as challenges,” she shares. “Which in turn would lead me to new opportunities.”

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Her first career challenge came early on.

“I didn’t get into medical school, which was a huge disappointment,” Neilley says.

“But I had so many positive family influences involved in science that I wasn’t going to give up on a science career quite yet.”

Her mother was a hospital administrator at Kings County and Harlem Hospital. Her aunt was the second black woman to graduate from the Yale School of Medicine and was a pioneer in sickle cell anemia research.

Another aunt served as acting health commissioner for the State of New York.

From her father came a love of sciencefiction paperbacks. “My father didn’t leave for work without his paperbacks,” Neilley laughs. “In addition to being an avid reader, he was a professional photographer, and a motorman for the NY Transit Authority.”

If medical school wasn’t an option, Neilley resolved herself to find something that was. She went on active duty in

the U.S. Navy Reserve, and upon return, trained in the field of clinical pathology, where she could stay within striking distance of a career in medicine.

After being certified, she worked in several New York hospital laboratories.

However, she soon found career opportunities within the lab very limited.

Her second career challenge led to a new goal.

“At that point, I thought, ‘I’ll get my MBA and continue working in the lab,’” she explains. “An MBA degree would be my entry into hospital administration or the pharmaceutical industry and I’d be set.”

As she began her MBA studies, she purchased a book that would ultimately change the direction of her calling.

“The book was how to make a million dollars from an investment of a hundred bucks,” she says. “Definitely not on the required-reading list! But I was single and wanted to prepare in case I didn’t get a well-paying job or married, which I know probably sounds incredibly strange to young women today.

“The book suggested owning a car wash or Laundromat since they were considered ‘crown jewel’ businesses, thought to be www.americancoinop.com

5/10/18 3:19 PM

▲

small home-based sporting goods recession-proof. I mean, you still company named Catania Sports, have to clean your clothes no then took a new position as a matter what happens in life, and brand manager for Johnson & that particular point resonated Johnson. There she spearheaded with me.” the creation of a “green” marketAt that time, Neilley lacked ing campaign that took off. the funds to make such an invest“The advanced technology ment. Yet with her MBA degree and environmentally friendly now in hand, she sought to break platform became a major sellinto pharmaceutical sales. It was ing point to hospitals,” Neilley an especially difficult transition to explains. “Johnson & Johnson’s make for women without nursing equipment was better not only or solid sales experience. from a technological standpoint, “To address the gap,” she but for the environment and comshares, “I took a second job as a munity. The ‘green’ aspect was management trainee for Frito-Lay top of mind when I finally left to and drove a delivery truck.” start my first Laundromat and Neilley finally landed a covcreate the Spin Doctor brand.” eted sales rep position and began An exit package, personal her long career in pharmaceutical savings, and a consultant job marketing and sales. However, were the winning combinashe says, “Over time, I couldn’t An exit package from Johnson & Johnson, personal savings, and a consultancy job tion that launched Spin Doctor help but see the ‘-isms’ and how were the winning combination that helped Cathy Neilley launch the Spin Doctor Laundromat into existence. they played into corporate poliLaundromat brand. (Photo: Laundrylux) unwavering determination tics.

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course, had no choice but to won business gems that Neilley has relocate where they sent us, learned along the way: which was Jacksonville,” she • Use every single job in any says. “However, the move turned career to sharpen your leaderout to be an incredible career ship skills and learn to become opportunity for me. I landed with an effective team member. a local developer and learned • Don’t discount the intangible everything there was to know “softer skills,” such as listening about developing apartments and creative problem-solving to under the Low-Income Housing promote relationship-building Tax Credit program. and improve customer service.

“I feel very fortunate to have • Don’t be intimidated by the had this business experience.” idea of joining a “boy’s club,” She also felt fortunate to have since virtually all Laundromats attended Goucher College in the are independent and/or familyfirst place. It was historically an owned. all women’s college but turned • Find mentors in and out of co-ed shortly after Packard the industry; join women’s and applied. business organizations for busi“My freshman class was only ness and personal support. the first or second to have men,” • Get an accountant well-versed in she recalls. “Yet the spirit of an business that can help manage all woman’s institution remained the books.

Prior to immersing herself in the laundry industry, Kristen Packard enjoyed a exceptionally strong. It impressed Neilley also encourages givsuccessful career in the apartment industry. Today, she and her husband co-own upon me that I could be anything ing back to the community. For a laundry distributorship and four Laundromats. (Photo: Laundrylux) I wanted to be.” instance, Spin Doctor Laundromat At that time, Packard decided she wanted is an annual sponsor of the Hamilton Girls Becoming involved in the laundry indusSoftball team; has raised money for One try wasn’t something Packard and her hus- to be a lawyer. As a young girl, growing up in Albuquerque, N.M., she didn’t have any Simple Wish and Big Brothers Big Sisters; band/business partner, Don, set out to do. donated clothes to the Rescue Mission of “We knew how much capital we had definitive careers in mind; she only knew Trenton, Salvation Army, and Goodwill; to invest and that we had sound business she wanted something that was secure and and hosted a blood drive. experience, and that was about it,” Packard reliable.

“My parents had been small-business “In October 2016, we hosted our first says. “But when Don randomly found the Laundry Love event,” she shares. “Laundry listing for (Automated Laundry Systems), I owners but they didn’t succeed at it, so I Love is a non-profit, out of California, that got very excited about the business poten- was very risk-averse,” she shares.

She met her future husband the first day seeks to help organize free laundry days for tial right from the start.” struggling members of the community. St. The distribution company model she arrived in Maryland. Don Packard Mark’s Church in Hamilton approached appealed to her on multiple levels. From had recently graduated from the Naval me about hosting it and we partnered up sales to service and parts, it appeared to Academy and was living in Maryland on for a successful event.” be recession-proof. “Plus, there were vari- temporary duty before reporting to flight On the business side, Neilley offers up ous revenue streams open to us,” she says. school. They were married during spring her Laundromat to host networking events “Everywhere I looked, I saw potential laun- break of Kristen’s senior year.

“I had to ask permission of the dean at for local business groups. Additionally, dry customers.” local and national businesses can advertise In March 2012, the Packards acquired Goucher to marry and then continue to on Spin Doctor’s Laundry Card kiosks.

Automated Laundry Systems. They bought live in the dorms until graduation,” she “Every patron must interact with kiosks their first Laundromat, Clean Quarters, in remembers. “I know that marrying so soon at some point to first obtain, add money to, June 2013, and opened their second, Wash after college disappointed some of my proand check activity of their laundry cards,” & Go, which was built from the ground up, fessors, but I count it as one of my greatest blessings.” she says, “so that translates into thousands in February 2017.

After the move to Florida, the Packards of views for an individual business at “We acquired Quick Wash and extremely low rates.”

Victoria Coin Laundromats in August and settled into married life and concentrated on their careers.

November 2017, respectively,” she says.

Kristen worked in the apartment develPrior to immersing herself in the world KRISTEN PACKARDD of laundry, Packard enjoyed a successful opment business for over 15 years, turning risten Packard is co-owner of dis- career in the apartment industry. Shortly to consultant work in that industry, and tributor Automated Laundry after graduating from Goucher College in then becoming a stay-at-home mom. After Systems and four Florida-based Baltimore, she and her husband moved to serving more than a decade in the Navy, Don pursued a second career as a CPA. Laundromats: Clean Quarters, Wash & Jacksonville, Fla. Then, one day, he arrived home with a “Don was in the Navy and we, of Go, Quick Wash, and Victoria Coin.

K

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new revelation.

“He told me he wanted to be an entrepreneur,” she shares. “And my aversion to risk kicked way into high gear, let me tell you. But we had been married for over 20 years and I knew, together, we could do anything.”

Now six years, one distribution company and four Laundromats later, she hasn’t looked back.

Packard takes her responsibility as an employer seriously. “My employees’ livelihoods depend on me,” she states. “Failure is not an option.”

When the Packards purchased Automated Laundry Systems, all of the employees stayed on. Since then, they’ve experienced some turnover, but generally the original team has remained intact.

“We’ve also managed to retain all the staff at each of our Laundromats,” she says. “I’m truly thankful we create working environments where people thrive and can take pride in their work.”

Before entering the laundry business, the Packards knew nothing about washing machines. “Other than the one we owned to wash our clothes, that is,” laughs

Kristen. Now they can both spout off facts about an Electrolux professional washing machine’s G-force extraction and automatic water-saving features like pros.

“I can also name parts by sight,” she reveals. “Those black plastic thingees that look like top hats. That part number is 471-819501. The little round things with the blue part sticking out? Those are 432832492.”

There was one thing about the laundry industry that took her by surprise.

“It was the first time in my professional career that being a woman was detrimental,” she shares honestly. “In the beginning, I was very offended that parts customers didn’t want to deal with me because I was a woman. Or other customers just assumed I had no idea how to handle their service issue because I was a woman.

“But I have learned to let all that go and just focus on providing superior customer service.”

Her advice to other women who may be intimidated by joining a “boy’s club”: Don’t back down, and don’t be offended.

“My favorite phrase is, ‘How may I help you?’” she says. “When folks real-

LISTEN

UP!

ize that you actually have the power to address their concerns, they will eventually respond.”

She is determined to create more value in Automated Laundry Systems’ service department.

“I would like to see Automated significantly expand its service force over the next five years. We currently have three technicians in the field. My goal is 15 over the next five years.”

She would also like to apply her multifaceted business strategy in various markets.

“When you provide great customer service in the field for routine repairs, then the opportunity to sell machines will follow.”

And, finally, to focus on new machine sale opportunities through a vast network of general contractors.

“Talk about a male-dominated field!

Nonetheless, the building industry in Florida is strong and new opportunities are presented every day. I’m especially looking forward to breaking into this ‘boys club.’”

ACO For other Women in Laundry profiles, check out the Laundrylux blog at https:// laundrylux.com/blog/.

EPISODE 1: Laundry Sales Tax: Is Your State Next?

Paul Hansen, Chicago store owner and Illinois Coin Laundry Association president, discusses efforts to keep Laundromats sales tax-exempt nationwide.

EPISODE 2: Breaking Down the Tax Cuts and Jobs Act for Vended Laundries

Veteran business writer Mark E. Battersby discusses the new tax reform and how coin-ops might benefit.

NEW! ! EPISODE 3:

When There’s History There

American Coin-Op announces yet another channel to provide a convenient way for busy store owners and operators like you to gain self-service laundry information and insight from industry peers and other experts quickly and easily. And it’s free! www.americancoinop.com 0618aco_House Podcast half horiz.indd

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1

Christy Davis, co-owner of Wash-O-Rama Laundromat, Cottonwood Falls, Kan., describes how the discovery of a downtown building’s historic makeup led her to focus on its preservation while constructing a laundry to serve her small town.

GO TO: https://americancoinop.com/podcasts JUNE 2018

AMERICAN COIN-OP 5/9/18 1:50 35 PM

5/10/18 3:19 PM

NEWSMAKERS

WHIRLPOOL CORPORATION COMMERCIAL LAUNDRY CELEBRATES MULTIMILLION-DOLLAR INVESTMENT IN OPERATIONAL EXCELLENCE Over the past few years, Whirlpool Corporation Commercial Laundry, a division of Whirlpool Corp., has made “substantial investments” in its facilities, products and services with the intent of moving the industry forward, the company says.

“We are celebrating the completion of ongoing investments in the Fall River, Mass., commercial laundry production facility and distribution center,” says Trey Northrup, general manager of Whirlpool Corp. Commercial Laundry. “Through listening to our customers, we have made great moves to continue our commitment to our portfolio of products and services.”

The Fall River manufacturing facility is intended to support strong customer demand for Whirlpool-built commercial laundry equipment. The $35 million project includes upgrades to the 300,000-square-foot facility, which will be Whirlpool’s largest plant in the world dedicated to commercial laundry.

“The advanced production here supports the growth of our premium commercial laundry business, which includes some of the most innovative multi-load washers and dryers, specialty products, and industrial dryers offered in the marketplace,” says Northrup.

Whirlpool’s acquisition of the Fall River facility means the Maytag® Commercial Laundry brand now has customized production washer capabilities.

“The Fall River facility allows for flexibility and nimble product offerings through its configure-to-order capability,” says Raul

Rincon, Fall River plant director.

The latest platform advancement is a production line solely dedicated to Maytag Commercial Laundry’s rigid- and soft-mount multi-load washers.

As part of the 59th Maytag Commercial Laundry Meeting in May, a group that included local dignitaries, trade customers and others got a first-hand look at the new washer platform that will produce models ranging in size from 20 pounds to 65 pounds.

The new machines are due to start rolling off the line this summer.

The washers can be configured in hundreds of ways, Maytag says, allowing customers to choose among different water-heating options, electrical connections, control interfaces, water inlets, drain systems and cabinet construction options.

James and Rhonda West, owners of distributor Best Wash Inc., Humble, Texas, enjoyed the behind-the-scenes tour.

“We got a lot of good information about how and where the product is being made,” says James West. “And it was really interesting to see the testing stations and environmental control lab.”

Sales and service support have also been expanded to include more resources and an enhanced call center at Fall River.

“These investments in our manufacturing facilities, products and services are examples of our ongoing commitment to manufacturing and reinforce our belief that the state of Massachusetts serves as a manufacturing center of excellence for commercial laundry equipment,” says Pam Klyn, vice president of the global product organization for Whirlpool Corp.

As part of the 59th Maytag® Commercial Laundry Meeting in Fall River, Mass., a group of 150 people that included local dignitaries, Maytag trade customers and others were on hand as a ceremonial ribbon was cut to celebrate the brand’s new dedicated multi-load washer production line. (Photo: Whirlpool Corporation Commercial Laundry) 36

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5/14/18 8:27 AM

ALLIANCE LAUNDRY SYSTEMS TO DISCONTINUE PRIMUS BRAND EQUIPMENT SALES IN NORTH AMERICA AS OF NOV. 1 Commercial laundry equipment manufacturer Alliance Laundry Systems will no longer sell Primus-branded equipment in the United States and Canada as of Nov. 1, the company reports.

The brand will continue to be sold globally outside North America.

In a press release, Rick Pyle, Alliance Laundry Systems president and chief commercial officer, says the decision to discontinue Primus sales in North America came after “significant research” as well as evaluation by Alliance’s executive team.

“While the brand offered differentiated products for this market, there was still significant overlap with our existing products and target customers,” Pyle says. “We are appreciative of those distributors who have worked with us with the Primus brand and will work through a thoughtful transition with them.”

Eliminating the Primus brand in the North American market enables Alliance to sharpen its focus on the already strong reputations and brand awareness of its Speed Queen, Huebsch and UniMac brands, he adds.

Alliance says it will continue to support installed Primus products through parts availability and its world-class service and support network.

CASHLESS PAYMENT VETERAN LEDESMA JOINS PAYRANGE STAFF PayRange Inc., maker of an in-app mobile payment service for automated retail, including self-service laundries, reports it has hired Cecil Ledesma as vice president of enterprise sales.

Ledesma has spent the last 20 years at USA Technologies, most recently leading that company’s regional accounts team for five years.

“I’m thrilled to join the PayRange team,” he says. “There is a fundamental shift happening with everyday consumers — they are looking not only for convenience, but also a richer experience. With decades spent in cashless payment, I see the opportunity to take automated retail to the next level with an appbased platform.”

PayRange has charged Ledesma with Cecil Ledesma expanding its network, which today serves more than 2,000 retail operators across 350 cities in the United States and Canada.

YANKEE EQUIPMENT ST. PATRICK’S DAY EVENT MARKS 40TH YEAR St. Patrick’s Day weekend marked the 40th year that commercial laundry equipment distributor Yankee Equipment Systems has hosted its annual St. Patrick’s Day Sales and Education Exhibition, the company reports.

The event at a Boston area hotel offered the many owner-operators in attendance the opportunity to examine the latest in technology from exhibitors. Speed Queen, ESD, NATCO, Vend-Rite, CCI, Standard Change-Makers, Caco Mfg. (Solomatic), SpyderWash (Setomatic Systems), American Changer and Triad displayed their newest equipment offerings while Alliance Laundry Systems (More Newsmakers on page 40)

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WASCO GEN 5 DOOR LOCKS & TIMERS REBUILT Door Lock $75 • Gen 5 & 6 Timer $85 WASCO Gen 4 Timer $85 • Continental Timer $95 DRYER COMPUTER BOARDS ADC Stack $60 • Single $45 Huebsch SQ Board $45 Huebsch Old Style Board $55 Stack Dexter/Continental $75 Washer Coin Boards $65 Some prices may vary!!!!

JECON INC. THE UPS STORE 204-17 HILLSIDE AVE. # 394 HOLLIS NEW YORK 11423 One-Year Warranty on All Parts Send Core Unit with S&H Fees Call Toll Free: 1-888-532-6677 (888-JECON77) Local: 718-525-3733 • Fax: 212-656-1913 718-525-2266 Visit: JECONINC.COM We Now Accept All Major Credit Cards

Wascomat / Electrolux Inverters (MotorControl) All. . . . . . $245.00 471977101,105,115 . . . . . . . . . . . . . . . . . call Emerald Selecta Gen. 6 Washer Main Computer PCB . . . . . . . . . . . . . . . . . . $125.00 Emerald Selecta Washer Door Lock Control PCB. . . . . . . . . . . . . . . . . . . . . . $75.00 Compass Control Assembly Gen. 6. $125.00 Selecta II Dryer PCB Assembly . . . . $125.00 Maytag Computers . . . . . . . . . . . . . . . . . . . . . $65.00 23004118 . . . . . . . . . . . . . . . . . . . . . . . . . call W10343020 . . . . . . . . . . . . . . . . . . . . . . . call ADC 137213, 137234, 137240 . . . . . . . . . . $65.00 137253,137260,137274,137275. . . . . . . . call Igniters (Fenwal only) . . . . . . . . . . . . . . $35.00 Speed Queen / Huebsch Computers . . . . . . . . . . . . . . . . . . . . . $65.00 Motor Control . . . . . . . . . . . . . . . . . . . . . . call

SERVICES AND SUPPLIES

CHANGE MACHINES Specializing in

Standard/Rowe Call Jeff Rhee

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IPSO 209/00440/70 (Micro 20). . . . . . . . . . $125.00 Volume Discounts • One-Year Warranty Free Return Shipping El - Tech, Inc. 26 West St. Colonia, NJ 07067 For Complete Price List Please Call: 908-510-6520 or visit us at www.eltechlab.com

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1-800-568-7768

www.cleanersupply.com

CARD READERS FIXED

ADVERTISERS’ INDEX Advertiser

Page

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

Laundroworks ..........................................23

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

Laundry Concepts ...................................27

Card Concepts ..........................................19

HHC

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

1338 Electra Ave., Rowland Hts., CA 91748

626-961-8678 • 844-846-0371 E-mail: hhc168@hotmail.com

Continental Girbau ................................IBC CryptoPay ................................................15 ESD Inc. ...................................... 20-21, BC FrontecStore.com......................................38

TIMERS REBUILT — IPSO main & reverse, Dexter, Primus, Speed Queen, Maytag & Continental Girbau, Wascomat Generation 4, 5 and 6.

Reeco Timer Co., 2860 Kirby Circle, N.E., Suite 14, Palm Bay, FL 32905, 888-952-1889. www.reecotimers.com

www.americancoinop.com

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LG Electronics ............................................7

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

ELECTRONIC SERVICE

Advertiser

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

Gold Coin Laundry Equipment ................17

Maytag Commercial Laundry.....................3 Metro Laundry Tech Corp. ......................38 Mountain Electronics ...............................38 NIE Insurance ..........................................13 Progressive Insurance ...............................18 R&B Wire Products ..................................1 Setomatic Systems ................................. IFC

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

Speed Queen ............................................8-9

Huebsch ..............................................24-25

TheLaundryPass.com................................29

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

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

Imonex .....................................................11

Vend-Rite ...................................................5 JUNE 2018 AMERICAN COIN-OP 39

5/11/18 11:31 AM

NEWSMAKERS

(continued from page 37) Financing and Eastern Funding explained financing options.

Aristocraft sold supplies, and Springboard and Laundromat 24/7 presented the most recent technology in support of wash-dry-fold pickup.

Educational seminars included New Technology in the SelfService Laundry Industry by John Smith, Replace Your Old Equipment Now (also known as the “Zombie Laundromat” presentation) by Brian Grell, and 10 Steps to a More Profitable 2018 by the Coin Laundry Association’s Brian Wallace.

The highlight of the weekend, Yankee Equipment reports, was the presentation of a $1,000 check for the LaundryCares Foundation to Wallace and Grell, who is vice-chairman of the CLA board.

Store owners and investors attending the Conference of Champions Profit Symposium listen to a presenter during the April 7 event in California. (Photo: Continental Girbau West) ANNUAL PROFIT SYMPOSIUM DRAWS ‘RECORD NUMBERS’: DISTRIBUTOR Commercial laundry equipment distributor Continental Girbau West and Elite Business Investments recently hosted the Conference of Champions Profit Symposium in Santa Fe Springs, Calif., focusing on ways to improve vended laundry profits and attract new customers.

Tod Sorensen, CG West vice president, reports that the April 7 event drew “record numbers” of attendees who took in presentations by the “Laundry Doctor” Jeff Gardner, multi-store owners Rob Maes and Art Jaeger, and Joel Jorgensen, Continental Girbau Inc. vice president of sales.

“Attendees enjoyed the entire scope of the show,” Sorensen says.

“Everything related to ‘vended laundry’ was offered in one place for attendees to access.”

“With the educational format of the Profit Symposium as a ‘profit tool,’ this gave our clients more confidence to make informed decisions about their own laundries,” adds Carol Dang, Elite’s vice president of sales and marketing, “and ultimately, that will translate into more ‘profit’ for them.”

Vendor booths provided information on ancillary items, financing, electronic payment systems and marketing; Continental and 40

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LG laundry equipment displays allowed for live demonstrations; presentations by industry experts spurred discussion and excitement; and specials on parts and equipment pricing were offered.

Additionally, a California couple won a trip for two to Spain.

Symposium sponsors included Continental Girbau, Elite, LG Commercial Laundry Equipment, Eastern Funding, Coin Laundry Association, Continental Creative Services, High Mark Manufacturing Inc., Hamilton Engineering, Card Concepts Inc., R&B Wire Products Inc., Vend-Rite Manufacturing, Standard Change-Makers Inc., ESD and Laundry Boss.

HAMILTON ENGINEERING STRENGTHENS SALES TEAM Hamilton Engineering, a manufacturer of custom-engineered, pre-packaged hot water solutions for commercial and industrial applications that include laundries, has introduced a new sales team lineup and added Tyler Segur as a regional sales manager to better serve customers in expanding markets in the East.

“We have the most knowledgeable and responsive sales professionals in the business,” says Director of Sales Jeff Deal. “With the addition of Tyler Segur, we have added extensive knowledge and hands-on hot water experience to our team and implemented a new organizational structure that provides better access to our customers within and outside the United States.”

As director of sales, Deal covers all sales in Mexico, the Caribbean, and Central/South America. Hamilton’s regional managers—Andrew Hyde, Central; Josh Reasoner, West; and Segur, East—serve the company’s commercial distributors. Ken Novak is sales manager, covering all laundry distributors nationally.

WASH UPGRADES COMMON-AREA LAUNDRY ROOMS WITH MOBILE PAY WASH Multifamily Laundry Systems, which has more than 7 million people doing their laundry in a WASH laundry room every week, reports it has selected PayRange Inc. to be the technology provider of its mobile payment solution.

“Partnering with PayRange not only enables us for mobile payment, but it also serves as a platform to reimagine the customer journey,” says Gautam Roy, chief information officer of WASH. “WASH is committed to building one-of-a-kind experiences that benefit residents and property owners. We are leveraging best-inclass technology to power a fully mobile experience.”

Many consumers do not carry cash in their wallets but expect to make purchases just about anywhere, including the laundry room.

With PayRange, WASH now offers a mobile payment solution that allows residents to pay for laundry through an app, making quarter counting a thing of the past. Coupons and rewards integrated into the app give additional reasons to reach for the phone to pay.

“Adding the convenience of mobile payment to our laundry rooms is a great way to improve resident satisfaction and foster loyalty,” says Roy. “We are happy to report that we are already seeing an increase in laundry room usage from high-adoption properties. Plus, recent surveys of residents indicate their appreciation of the app’s features.”

ACO www.americancoinop.com

5/14/18 8:27 AM

“THE IRONER PAID FOR ITSELF IN THE FIRST YEAR. NOW IT PAYS FOR ITSELF EVERY MONTH.” – Jeff Gardner, the “Laundry Doctor”, Sel-Dale Laundromat, St. Paul, Minn.

You outlay a lot of money in store development, permitting, construction and equipment. Make that investment as fruitful

PHASE

PHASE

PHASE

PHASE

as possible by adding commercial laundry services to your store’s tagline. Become a retail laundry services enterprise …

1 2 3

4

Launch Wash/Dry/Fold • Maximize usage of current 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 services • Cater to small commerical businesses

+

+

+

+

Install On-Premise Washers & Dryers • Harness programmability of on-premise washers • Easily clean and process hard-to-clean oils & stains • Increase commercial accounts business

+

Add a Flatwork Ironer • Add capability to finish sheets and table linens • Pursue new customers needing ironed bed & table linens • Take on larger accounts

+

+

+

BOOST PROFITS. ADD COMMERCIAL LAUNDRY SERVICES. Call (800) 256-1073 to receive your FREE Vended to Commercial Laundry Guide.

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

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GIRBAU 1/11/18 AM 1/11/18 10:24 2:19 PM

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