According to Brian Wallace, CEO of the Coin Laundry Association, buying a small laundromat costs around $300,000, while larger, more successful operations can sell for as much as $3 million.
Roughly 30,000 laundromats operate nationwide, with an average profit margin of 24%, Wallace said. But results can vary widely, and new owners may face repair bills and other unexpected expenses.
Carlos Ochoa, whose Laundromat Money TikTok account has two-million followers, helped popularize the trend by filming himself collecting $1,419 in gross revenue over a five-day period. Ironically, he’s now warning that aspiring owners are getting swept up in the hype he helped create, without properly researching the business.
“People are getting trapped into looking at all these videos that glamorize the industry and they forgo any other due diligence,” Ochoa told the Journal.
His warning highlights why social media viewers shouldn’t conflate revenue and profit, and that owners still have to pay for utilities, maintenance, rent and other operating expenses.
For Sam Cohen, who purchased a laundromat in Old Bridge, New Jersey, unexpected repair bills have kept his business from breaking even. Other owners have faced problems unrelated to washing clothes, including drug dealers occupying bathrooms and customers damaging equipment.
The hidden costs of owning a laundromat: time and experience
What often gets lost in the social media hype is that laundromats are established businesses that require time and hands-on management. According to IBISWorld, the U.S. laundromat industry generates more than $7 billion in annual revenue, and many owners operate multiple locations.
A survey by American Coin-Op, a trade publication covering the self-service laundry industry, found that nearly half of respondents operated more than one store. Twenty-seven percent owned two or three locations, while another 22% owned four or more. These are hardly the hallmarks of a hands-off, passive investment.
Furthermore, ownership is often a full-time commitment. Nearly two-thirds of respondents (63.5%) described their involvement as full-time, compared with 36.5% who said they worked part-time.
The same American Coin-Op survey also found that 65% of respondents identified high utility costs as a major challenge, while 44.4% cited the cost of new equipment and 39.6% pointed to high labor costs. Competition is another concern cited by 17.5% of respondents.
