Evaluating Laundromat deals beyond revenue
In the laundromat deals I’ve seen, most of the negotiation revolves around things like revenue multiples and level of owner involvement. But I think it’s equally important to ask yourself some additional questions as the buyer.
1. What will it take to get this location operating to your standards?
2. What is the estimated scope of the work required to continue operating at that level or improve the level of operations?
The seller usually provides a revenue statement or P&L but this only gives a snapshot of the store currently. A proper scope assessment will help you determine the future needs of the business. From my experience, scope looks very different depending on the location quality among other factors.
Before pulling the trigger, it’s worth being honest with yourself about the amount of work needed to move the business into it’s future state. Not just the current numbers.
Curious to hear if others look at future scope? If so, what factors do you weigh most heavily? Does it affect whether you pursue a deal—or how you structure it?