In this FDD Talk post, you’ll learn the following:
- Section I – Estimated initial investment (franchise costs) for a WaveMAX Laundry franchise, based on Item 7 of the company’s 2022 FDD
- Section II – Initial franchise fee, royalty fee, and marketing fee for a WaveMAX Laundry franchise, based on Items 5 and 6 of the company’s 2022 FDD
- Section III – Number of franchised and company-owned WaveMAX Laundry outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD
- Section IV – Background information on the WaveMAX Laundry franchise opportunity, including relevant news updates
- Section V – Presentation and analysis of WaveMAX Laundry’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:
- 2019, 2020, and 2021 actual and average gross revenue for the franchised outlets that were open by January 1 of the applicable year
- 2015, 2016, 2017, 2018, 2019, 2020, and 2021 gross revenue; net profit; less royalties, grand opening and local marketing, and POS system to adjust net profit as if a franchise unit; and adjusted net profit as if a franchise unit for the Jacksonville, FL company outlet
- Section VI – Key ratios, comparables, computations, and analyses for the WaveMAX Laundry franchise opportunity (exclusive content for Platinum subscribers)
Section I – WaveMAX Laundry Franchise Costs
- WaveMAX Laundry (standard without mobile) franchise costs, based on Item 7 of the company’s 2022 FDD:
- Initial Franchise Fee: $49,950
- Training-Related Expenses: $1,500 to $2,000
- Grand Opening Marketing: $20,000
- Computer Equipment and Software: $1,000 to $1,500
- Laundry Machines and Equipment: $69,000 to $659,000
- Tenant Improvements: $50,000 to $375,000
- Location Lease: $2,000 to $6,700
- Safes: $550 to $1,200
- Containers: $175 to $200
- Miscellaneous Supplies: $75 to $200
- Camera and Security System: $900 to $3,500
- Office Equipment: $150 to $300
- Signage: $12,000 to $15,000
- Vending Machines and ATM: $0 to $2,500
- Televisions: $175 to $450
- Furniture: $400 to $600
- UV Sanitation: $0 to $18,500
- Insurance: $400 to $600
- Uniforms: $80 to $150
- Business License(s): $100 to $400
- Additional Funds for 3 Months: $25,000 to $35,000
- Total WaveMAX Laundry Franchise Costs: $234,455 to $1,194,750
Section II – WaveMAX Laundry’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- WaveMAX Laundry’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:
- Initial Franchise Fee: $19,950 to $49,950
- Royalty: 6% of Gross Revenue
- National Advertising and Marketing: up to 1% of Gross Revenue (not currently implemented)
- Local Marketing: $300 to $1,000 per month depending on the advertising package selected
Section III – Number of Franchised and Company-Owned WaveMAX Laundry Outlets
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 10
- Net Change: +7
- Outlets at the Start of the Year: 10
- Outlets at the End of the Year: 18
- Net Change: +8
- Outlets at the Start of the Year: 18
- Outlets at the End of the Year: 28
- Net Change: +10
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
Section IV – Background Information on the WaveMAX Laundry Franchise
20 Things You Need to Know About the WaveMAX Laundry Franchise
Surpasses 100 Signed Development Agreements
1. In mid-October 2020, WaveMAX Laundry announced that it had reached a major milestone in the brand’s aggressive growth strategy. Since launching its franchise opportunity in 2017, the brand had just inked its 100th development agreement – which added to the already explosive growth plans the brand had laid out to have over 50 WaveMAX laundry facilities open and operating by 2022.
2. Agreements were signed to bring the brand to New Orleans and Houston as demand for trusted, quality laundromats continued to skyrocket in markets across the country. The brand’s strong 2020 performance primed it to forge ahead confidently into Q4 as the need for cleanliness among consumers and business owners was at an all-time high.
3. Building on this momentum, WaveMAX had immediate plans to expand into New Mexico and Central Florida before the end of 2020. One of the newest WaveMAX franchisees, James Allen, signed the milestone 100th agreement to bring a WaveMAX Laundry to New Orleans. With site selection next on the agenda, the brand anticipated a grand opening in Q2 of 2021.
4. Allen said, “The first time I stepped foot inside a WaveMAX, I thought to myself, ‘New Orleans needs this.’ The services and experience customers feel in a WaveMAX are unparalleled bar none. This will no doubt be an incredible asset to the community and I’m looking forward to leading the charge on this development.”
5. The brand is actively seeking partners to help the brand continue its positive growth through franchising. The estimated investment for a “30-30” store – 30 washers and 30 dryers in a 3,000-square-foot space – ranges between $600,000 and $800,000. This includes $250,000 in construction, $325,000 in equipment, and a franchise fee of $49,950. Up to 75% of the total investment can be financed through WaveMAX’s equipment partner.
6. Mike Roberts, CEO of WaveMAX Laundry, said, “We’ve kept our foot on the gas ever since we started franchising three years ago. The innovation and fresh ideas our team brings to this historically stale and seemingly forgotten sector is creating huge demand for our services – WaveMAX is convenient, efficient, clean and changing how people think about laundromats.”
7. Each WaveMAX facility is outfitted with top-of-the-line equipment, featuring the industry’s most efficient and environmentally friendly washers and dryers. The washers conserve water by automatically weighing clothes and using the precise amount of water required for the best possible wash. The dryers have built-in sensors that determine the “dryness” of the clothes and automatically adjust the temperature for optimum drying.
8. The WaveMAX franchise is also already equipped for contact-less operation. Each machine has a contactless card system that allows customers to load value with cash, credit, or EBT. In order to maximize efficiency, the app also alerts customers via text message about cycle completion and can be used to check machine availability ahead of visiting the laundromat. This helps with traffic flow and frees up machines for others to use sooner.
9. Time-starved customers can also take advantage of WaveMAX’s wash-dry-fold service. Soap, dryer sheets, hangers, and storage bags are included, and service is typically completed within 24 hours after drop-off.
Partners with OMNI Solutions to Tackle COVID-19 Concerns
10. In late April 2021, OMNI Solutions, the global leader in UV technology, and WaveMAX Laundry, the nation’s largest, fastest-growing laundromat service provider, partnered to bring consumers the first hospital-grade cleaning and disinfection laundromat franchise in the country. Serving as an essential business throughout the COVID-19 pandemic, WaveMAX looked for ways to improve and guarantee laundry disinfection to support front-line workers and everyday families trying to stay safe.
11. While researching the benefits and costs of conventional ozone systems, WaveMAX found that OMNI Solutions’ LUX UV system checked every box and more, far exceeding conventional ozone systems in cleaning, safety, disinfection, and eco-friendliness.
12. Michael Roberts, CEO of WaveMAX Laundry, said, “The WaveMAX Advantage elevates the laundromat visit from an inconvenient chore to a positive experience in a clean, safe, eco-friendly environment. Now, with the addition of OMNI Solutions’ LUX UV system, it also provides the highest levels of clean and disinfection, including the ability to kill SARS-CoV-2.”
13. WaveMAX is disrupting the laundromat industry. 450 G-Force high-speed extraction washers allow a wash and dry in under an hour, giving precious time back to the consumer. All WaveMAX locations are impeccably maintained with a full-time attendant, a wash-dry-fold service, and free WiFi. The WaveMAX App enhances the experience with smartphone payment options and alerts for washer availability and cycle completion. The WaveMAX Advantage allows customers more time to focus on their lives and families, cutting hours from the laundry process.
14. In keeping with the WaveMAX Advantage, the LUX UV System significantly reduces natural gas, lowers hot and freshwater consumption, and shortens dry time – all of which provide environmental benefits that no other ozone system can equal. Unlike conventional ozone systems, the LUX UV system generates no toxic gas, has no motorized parts, requires no extra floor or wall space, and is easy to install. Maintenance is minimal, requiring only annual lamp replacement.
15. Andrew Rupnow, chairman and CEO of OMNI Solutions, said, “OMNI is proud to partner with WaveMAX to further the WaveMAX Advantage by providing a patented, eco-friendly, hospital-grade laundry system in support of front-line workers and families.” Employing the best technology available nationwide, WaveMAX Laundry and OMNI Solutions deliver two priceless benefits to their customers – more time for life and family, and confidence in the hygienically clean linen they take home to their families.”
16. WaveMAX Laundry was founded in 2012 by Mike Roberts in Florida. The company is a coin-only laundromat franchise providing self-serve and wash-dry-fold service options for clients. Roberts started the business as a way to revitalize laundromats, which are often rundown and never receive new equipment or support for customers.
17. Additionally, Roberts wanted to change how things were done in the laundromat industry. According to Roberts, “the traditional model is built on equipment sales. The big washing machine manufacturers push business owners to buy as many machines as possible and walk away until the owner goes under; then they buy the equipment back for pennies on the dollar.”
18. One of the biggest factors that helps WaveMAX standout in the industry is its focus on safety and cleanliness. In order to provide such high quality service, WaveMAX does charge customers more than mom and pop laundromats. However, Roberts says this is not a hindrance as many people drive further to use WaveMAX’s safe and clean facilities.
19. Currently, WaveMAX Laundry has locations in a handful of states, with many more in development across the country.
Entrepreneur’s Franchise 500
20. WaveMAX Laundry did not rank on Entrepreneur’s 2022 Franchise 500 list.
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the WaveMAX Laundry Franchise (Item 19, 2022 FDD)
Part 1 – Franchisee Gross Revenue 2021
- Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2021 of the 20 franchised outlets it had in that time period who were open by January 1, 2021. As of December 31, 2021, WaveMax had 28 franchised outlets, 20 of which met the criteria for inclusion in the Financial Performance Representation stated below:
Gross Revenue in 2021
- Outlet 1: $518,121.57
- Outlet 2: $490,994.65
- Outlet 3: $466,369.62
- Outlet 4: $406,807.67
- Outlet 5: $377,443.37
- Outlet 6: $366,903.98
- Outlet 7: $312,004.25
- Outlet 8: $306,904.75
- Outlet 9: $301,799.52
- Outlet 10: $271,123.19
- Outlet 11: $254,555.75
- Outlet 12: $243,986.00
- Outlet 13: $241,841.95
- Outlet 14: $233,097.50
- Outlet 15: $207,342.87
- Outlet 16: $203,367.96
- Outlet 17: $194,997.06
- Outlet 18: $193,212.57
- Outlet 19: $171,619.90
- Outlet 20: $162,657.25
- Average: $296,257.57
Part 2 – Franchisee Gross Revenue 2020
- Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2020 of the 14 franchised outlets it had in that time period who were open by January 1, 2020. As of December 31, 2020, WaveMax had 18 franchised outlets, 14 of which met the criteria for inclusion in the Financial Performance Representation stated below:
Gross Revenue in 2020
- Outlet 1: $338,827.85
- Outlet 2: $329,856.03
- Outlet 3: $266,427.55
- Outlet 4: $265,121.98
- Outlet 5: $263,925.80
- Outlet 6: $258,112.55
- Outlet 7: $225,399.75
- Outlet 8: $198,530.60
- Outlet 9: $196,305.00
- Outlet 10: $183,437.00
- Outlet 11: $155,336.43
- Outlet 12: $133,920.10
- Outlet 13: $132,998.04
- Outlet 14: $123,664.93
- Average: $219,418.83
Part 3 – Franchisee Gross Revenue 2019
- Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2019 of the 4 franchised outlets it had in that time period who were open by January 1, 2019. As of December 31, 2019, WaveMax had 10 franchised outlets, 4 of which met the criteria for inclusion in the Financial Performance Representation stated below:
Gross Revenue in 2019
- Outlet 1: $186,405.96
- Outlet 2: $208,107.67
- Outlet 3: $228,813.25
- Outlet 4: $241,334.14
- Average: $216,165.26
- Gross Revenue means the aggregate sales price of all washing machine and dryer machine revenue earned by the Franchisee, in connection with or arising out of the operation of the Franchised Business, excluding only:
- (1) revenue derived by Franchisee through vending machines or ATM machines;
- (2) revenue derived from the Wash-Dry-Fold service offering;
- (3) the amount of any refund or credit given in respect of any services provided to a customer of the Franchised Business for which a refund of the whole or part of the purchase price is made or for which a credit is given in the ordinary course of business, and
- (4) any amounts collected by Franchisee for any governmental authority and paid out by Franchisee to that governmental authority on account of sales taxes or other taxes imposed upon the sale of goods or services by Franchisee in respect of the Franchised Business and which Franchisee is not entitled to subsequently recover.
- Outlet #1 was an existing laundromat location that was converted to a WaveMAX franchise location.
- The financial performance representations do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit.
Part 4 – Jacksonville, FL Company Outlet
- The following table presents an historic financial performance representation of the gross revenue and net profit that AU Hydro, LLC realized in operating a laundromat business in Jacksonville, Florida for 2015, 2016, 2017, 2018, 2019, 2020 and 2021.
- AU Hydro, LLC has been in business in this location since 2012 and operates substantially the same laundromat services as described in the Disclosure Document. However, AU Hydro, LLC does not operate a franchised unit. It is a separate company that is owned by the same persons who own a majority interest in the Franchisor.
- Gross Revenue: $346,904.10
- Net Profit: $197,036.05
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $32,605.03
- Adjusted Net Profit as if a Franchise Unit: $164,431.02
- Gross Revenue: $377,736.07
- Net Profit: $218,783.89
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $34,472.72
- Adjusted Net Profit as if a Franchise Unit: $184,311.17
- Gross Revenue: $409,047.57
- Net Profit: $236,570.87
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $36,158.14
- Adjusted Net Profit as if a Franchise Unit: $200,412.73
- Gross Revenue: $412,173.17
- Net Profit: $226,112.31
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $36,422.75
- Adjusted Net Profit as if a Franchise Unit: $189,689.56
- Gross Revenue: $428,959
- Net Profit: $207,354
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $37,507.30
- Adjusted Net Profit as if a Franchise Unit: $169,846.70
- Gross Revenue: $436,632.28
- Net Profit: $219,119.26
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $31,197.94
- Adjusted Net Profit as if a Franchise Unit: $187,921.32
- Gross Revenue: $489,385.97 (100.0%)
- Net Profit: $254,511.47 (52.0%)
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit: $33,911.87 (6.9%)
- Adjusted Net Profit as if a Franchise Unit: $220,599.60 (45.1%)
- Net Profit means Gross Revenue less total expenses, except for the cost of equipment financing.
- Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust as if Franchised Unit – WaveMax Laundry applied reductions to show additional costs that would be incurred if the outlet were a franchised outlet as follows:
- (1) a royalty reduction of 6% of Gross Revenue.
- (2) a $5,000 reduction for Grand Opening Marketing (you must spend $20,000 on Grand Opening Marketing, but WaveMAX Laundry normally applies approximately $15,000 of a manufacturer equipment purchasing rebate from LaundryLux to your Grand Opening Marketing, leaving your net spend at approximately $5,000). This is a 1st year of operation spend only and not an on-going annual expense. Prior to 2021, this spend would have been approximately $7,000.
- (3) Prior to 2021, a $4,800 reduction for Local Marketing (however, you can select a Local Marketing spend level at either $3,600, $4,800, or $6,000). In 2021, WaveMAX Laundry had local advertising spend included in the expense category.
- (4) Prior to 2021, WaveMAX Laundry deducted $600 for the monthly charges for your POS System (you would normally finance the upfront cost portion). In 2021, this line item was included in the store operation.
- Adjusted Net Profit as if a Franchised Unit – These figures represent the Net Profit as if the company store outlet was a franchised outlet, by subtracting out additional costs, as explained above, that a franchisee would incur. WaveMAX Laundry does not subtract out the cost of equipment financing.
- In the time period set forth above, WaveMAX Laundry had 1 affiliate outlet.