In this FDD Talk post, you’ll learn the following:

• Section I – Estimated initial investment (franchise costs) for a LaundroLab franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a LaundroLab franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned LaundroLab 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 LaundroLab franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of LaundroLab’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2018, 2019, 2020, and 2021 revenue, expenses, and estimated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for LaundroLab’s affiliate-owned business substantially similar to the business offered in the disclosure document, except that it operated during the Measurement Periods under the mark “The Laundry Room”

• Section VI – Key ratios, comparables, computations, and analyses for the LaundroLab franchise opportunity (exclusive content for Platinum subscribers)

Section I – LaundroLab Franchise Costs

• LaundroLab franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $49,500
• Lease Deposit (First Month):  $3,000 to $10,000
• Grand Opening Advertising:  $20,000
• Leasehold Improvements:  $360,000 to $540,000
• Architecture/Engineering:  $20,000 to $35,000
• Signage:  $4,000 to $10,000
• Camera & Security System:  $13,000 to $30,000
• Computer Equipment:  $500 to $2,000
• Point-of-Sale Equipment:  $500 to $1,000
• Inventory:  $2,000 to $4,000
• Laundry Equipment:  $650,000 to $930,000
• Office Equipment:  $500 to $1,000
• Televisions:  $2,000 to $5,000
• Furniture:  $3,000 to $5,500
• Uniforms:  $100 to $500
• Licenses and Professional Services:  $500 to $1,000
• Real Estate/Construction Management Fee:  $15,000
• Prepaid Insurance Premium:  $900 to $2,700
• Training Expenses:  $1,000 to $4,000
• Legal Fees:  $2,000 to $10,000
• Additional Funds for 3 Months:  $20,000 to $45,000
• Total Estimated LaundroLab Franchise Costs:  $1,167,500 to $1,721,200

Section II – LaundroLab’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• LaundroLab’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $49,500
• Royalty Fee: Royalties will not begin until 6 months after the opening date or 18 months from signing the Franchise Agreement, whichever occurs earlier (the “Waived Royalty Period”). During each of the first 12 months after the Waived Royalty Period, your Royalty will be 3% of your Gross Revenues. Beginning in the 13th month after the Waived Royalty Period, and continuing throughout the remainder of the Term, your Royalty will be the greater of: (i) $500 per month; or (ii) 6% of your Gross Revenues.
• Brand Fund Contribution:  currently, 0% of Gross Revenues
• Local Advertising, Marketing, and Promotional Expenditures: Beginning in the month the Franchised Business is opened and continuing through the 12th month after the Franchised Business is opened, you must spend a minimum of $1,000 per month on local marketing and promotion. Beginning in the 13th month after the Franchised Business is opened, and continuing throughout the remainder of the Term, you must spend a minimum of $500 per month on local marketing and promotion.

Section III – Number of Franchised and Company-Owned LaundroLab Outlets

Franchised

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Company-Owned

2019

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2020

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2021

• 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 LaundroLab Franchise

11 Things You Need to Know About the LaundroLab Franchise

Launches Franchising

1.  In early February 2021, the team behind venture-backed 2ULaundry launched LaundroLab, a modern laundromat franchise concept that provides a safe, welcoming, and convenient experience for customers while creating a new and exciting business opportunity for entrepreneurs across the country. The $5B and growing laundromat industry currently has no market leader. With its innovative model and technology-first mentality, LaundroLab aims to become the first nationally-recognized laundromat brand, providing a 5-star experience to customers and franchisees.

2.  Alex Smereczniak and Dan D’Aquisto founded on-demand laundry service 2ULaundry in 2016 to cater to busy professionals and families that needed a better solution. The Charlotte, NC-based startup has raised $10M in venture capital from top investors such as Cox Enterprises, Florida Funders, Techstars Ventures, and Engage. In just two years, 2ULaundry expanded beyond Charlotte across the Southeast, serving thousands of customers and employing hundreds of clothing care professionals.

3.  By 2018, 2ULaundry needed a new kind of facility to manage the thousands of pounds of laundry they were managing daily in Charlotte. They worked with appliance giant Electrolux to create The Laundry Room, a first-of-its-kind laundromat that brought the same level of innovation to laundromats that 2ULaundry did to its on-demand delivery business.

4.  Today, the LaundroLab model opens up to business owners across the Southeast. Aspiring entrepreneurs can now apply to become a LaundroLab owner, buying into a recession-resistant, semi-absentee stream of income that positively impacts the community.

5.  CEO Alex Smereczniak said, “The Laundry Room was initially intended to support the growth of 2ULaundry, but it also allowed us to test a completely new concept in the traditional laundromat market. The Laundry Room is more than a place to clean clothes. It’s a welcoming, safe, and satisfying experience that creates a loyal and recurring customer base. We look forward to bringing our innovative service model, eco-friendly machines, and industry-leading technology to markets across the country.”

6.  LaundroLab franchisees will receive a business playbook, technology assets, education, and support from a team with a long track record, and a well-regarded brand to build their business.

7.  LaundroLab co-founder Dan D’Aquisto added, “Our corporate store in Charlotte grew about 10% year over year through the COVID-19 pandemic, further proving that this is one of the most economically-stable industries for business owners. We’re excited to open up the opportunity to take part in our growth by providing franchisees with a playbook and bespoke model to become a successful laundropreneur.”

8.  In mid-July 2022, LaundroLab said it has awarded more than 30 franchise licenses since launching its franchising program in early 2021. The brand has developed particularly strong momentum in Texas, thanks to a team of committed franchisees buying into the business model in major markets like San Antonio, Dallas-Fort Worth, and Austin.

Company History

9.  LaundroLab was founded in 2020 by the founders of 2ULaundry, Alex Smereczniak and Dan D’Aquisto. Smereczniak and D’Aquisto set out to develop a reliable laundromat franchise and challenge the out-of-date laundromat industry. After opening the first LaundroLab location, Smereczniak and D’Aquisto quickly sold a dozen franchises and launched an official franchising program in 2021.

10.  LaundroLab is a brand new franchise with only one corporate store open for now. However, several franchises have been sold and new locations are set to open soon in the Southeastern U.S.

Entrepreneur’s Franchise 500

11.  LaundroLab did not rank on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the LaundroLab Franchise (Item 19, 2022 FDD)

• This Item sets forth certain historical data submitted by LaundroLab’s affiliate-owned business substantially similar to the business offered in the disclosure document, except that it operated during the Measurement Periods under the mark “The Laundry Room”.

• The information presented is from the affiliate unit’s (i) operations from opening in July 2018 through December 31, 2018; (ii) operations from January 1, 2019 through December 31, 2019; (iii) operations from January 1, 2020 through December 31, 2020; and (iv) operations from January 1, 2021 through December 31, 2021 (the “Measurement Periods”).

• The affiliate-owned unit did not pay royalties or make advertising fund contributions during the Measurement Periods but this Item imputes those charges to the business.

• LaundroLab has not audited this information, nor independently verified this information.

• Some outlets have sold this amount. Your individual results may differ. There is no assurance that you’ll sell or earn as much.

January 2021 to December 2021 (12 months)

Revenue

• Arcade Games:  $20,206 (2.6%)
• ATM:  $3,872 (0.5%)
• Discounts:  -$3,213 (-0.4%)
• Dryer Revenue:  $134,485 (17.5%)
• Laundry Pay Revenue:  $100,059 (13.1%)
• POS Sales:  $4,887 (0.6%)
• Vending Machine Revenue:  $55,788 (7.3%)
• Wash/Dry/Fold:  $43,867 (5.7%)
• Washer Revenue:  $406,669 (53.0%)
• Total Revenue:  $766,619 (100.0%)

Expenses

• Advertising & Marketing:  $2,880 (0.4%)
• Bank Charges & Fees:  $1,082 (0.1%)
• Internet & Telephone Expense:  $1,602 (0.2%)
• Janitorial Services:  $6,110 (0.8%)
• Laundry Equipment Repairs & Maintenance:  $8,001 (1.0%)
• Legal & Professional Services:  $6,000 (0.8%)
• Merchant Account Fees:  $6,279 (0.8%)
• Miscellaneous Expenses:  $1,748 (0.2%)
• Office Supplies, Expense & Software:  $5,377 (0.7%)
• Other Repairs & Maintenance:  $7,662 (1.0%)
• Payroll Expenses:  $105,735 (13.8%)
• Rent & TICAM Expense:  $115,120 (15.0%)
• Security Expense:  $3,334 (0.4%)
• Supplies Expense (COGS):  $24,270 (3.2%)
• Utilities:  $113,397 (14.8%)
• Royalty Fee:  $44,552 (5.8%)
• Technology Fee:  $3,000 (0.4%)
• Total Expenses:  $456,149 (59.5%)

Estimated EBITDA:  $310,470 (40.5%)

January 2020 to December 2020 (12 months)

Revenue

• Arcade Games:  $21,219 (3.4%)
• ATM:  $3,232 (0.5%)
• Discounts:  -$2,907 (-0.5%)
• Dryer Revenue:  $116,681 (18.6%)
• Laundry Pay Revenue:  $65,422 (10.5%)
• POS Sales:  $7,566 (1.2%)
• Vending Machine Revenue:  $42,502 (6.8%)
• Wash/Dry/Fold:  $19,050 (3.0%)
• Washer Revenue:  $352,951 (56.4%)
• Total Revenue:  $625,717 (100.0%)

Expenses

• Advertising & Marketing:  $2,406 (0.4%)
• Bank Charges & Fees:  $1,065 (0.2%)
• Internet & Telephone Expense:  $1,500 (0.2%)
• Janitorial Services:  $5,404 (0.9%)
• Laundry Equipment Repairs & Maintenance:  $5,873 (0.9%)
• Legal & Professional Services:  $4,580 (0.7%)
• Merchant Account Fees:  $3,944 (0.6%)
• Miscellaneous Expenses:  $864 (0.1%)
• Office Supplies, Expense & Software:  $15,523 (2.5%)
• Other Repairs & Maintenance:  $3,516 (0.6%)
• Payroll Expenses:  $90,372 (14.4%)
• Rent & TICAM Expense:  $115,120 (18.4%)
• Security Expense:  $522 (0.1%)
• Supplies Expense (COGS):  $20,069 (3.2%)
• Utilities:  $75,756 (12.1%)
• Royalty Fee:  $36,076 (5.8%)
• Technology Fee:  $3,000 (0.5%)
• Total Expenses:  $385,590 (61.6%)

Estimated EBITDA:  $240,127 (38.4%)

January 2019 to December 2019 (12 months)

Revenue

• Arcade Games:  $21,323
• ATM:  $1,695
• Discounts:  -$849
• Dryer Revenue:  $103,248
• Laundry Pay Revenue:  $41,441
• POS Sales:  $28,020
• Vending Machine Revenue:  $21,838
• Wash/Dry/Fold:  $18,120
• Washer Revenue:  $310,132
• Total Revenue:  $544,967

Expenses

• Advertising & Marketing:  $6,031
• Bank Charges & Fees:  $696
• Internet & Telephone Expense:  $1,075
• Janitorial Services:  $11,756
• Laundry Equipment Repairs & Maintenance:  $1,552
• Legal & Professional Services:  $5,960
• Merchant Account Fees:  $2,650
• Miscellaneous Expenses:  $893
• Office Supplies, Expense & Software:  $4,877
• Other Repairs & Maintenance:  $1,643
• Payroll Expenses:  $88,744
• Rent & TICAM Expense:  $115,120
• Security Expense:  $2,225
• Supplies Expense (COGS):  $20,156
• Utilities:  $64,730
• Royalty Fee:  $31,317
• Technology Fee:  $3,000
• Total Expenses:  $362,425

Estimated EBITDA:  $182,543

January 2018 to December 2018 (6 months)

Revenue

• Arcade Games:  $8,834
• ATM:  $525
• Discounts:  -$11,252
• Dryer Revenue:  $39,074
• Laundry Pay Revenue:  $5,984
• POS Sales:  $9,951
• Vending Machine Revenue:  $8,325
• Wash/Dry/Fold:  $3,658
• Washer Revenue:  $122,469
• Total Revenue:  $187,568

Expenses

• Advertising & Marketing:  $9,788
• Bank Charges & Fees:  $619
• Internet & Telephone Expense:  $665
• Janitorial Services:  $6,612
• Laundry Equipment Repairs & Maintenance:  $0
• Legal & Professional Services:  $1,855
• Merchant Account Fees:  $382
• Miscellaneous Expenses:  $1,402
• Office Supplies, Expense & Software:  $3,051
• Other Repairs & Maintenance:  $1,246
• Payroll Expenses:  $25,782
• Rent & TICAM Expense:  $57,560
• Security Expense:  $239
• Supplies Expense (COGS):  $10,062
• Utilities:  $23,406
• Royalty Fee:  $10,693
• Technology Fee:  $1,500
• Total Expenses:  $154,861

Estimated EBITDA:  $32,707

• Arcade Game revenue is defined as revenue generated from in-store coin-operated amusement games. Arcade Games were temporarily suspended in April 2020 and May 2020 due to the COVID-19 pandemic. Revenue from Arcade Games shall not be credited towards Gross Sales, therefore, franchisees will not be required to pay royalties against revenue from Arcade Games.

• ATM means the revenue received from use of ATM machines within the business. Revenue from use of an ATM within the business shall not be credited towards Gross Sales, therefore, franchisees will not be required to pay royalties against revenue from use of an ATM within the business.

• Discounts means the discounts provided to customers on washer and dryer runs.

• Dryer Revenue is defined as revenue generated by LaundroLab’s dryers.

• Laundry Pay Revenue is defined as revenue generated by customer use of the LaundryPay mobile application.

• POS Sales is defined as revenue generated from over-the-counter sales of retail items, including clothes hangers and laundry bags.

• Vending Machine Revenue is defined as revenue generated from retail items sold in vending machines, including drinks, snacks, detergents, softeners, and other miscellaneous laundry supplies.

• Wash/Dry/Fold revenue is defined as revenue generated from drop-off wash, dry, and fold services. Wash/Dry/Fold services were temporarily suspended in April 2020 and May 2020 due to the COVID-19 pandemic.

• Washer Revenue is defined as revenue generated by LaundroLab’s washers.

• Advertising & Marketing is defined as expenses for local, digital, and traditional advertising and marketing.

• Bank Charges & Fees means any business-related bank charges and fees.

• Internet & Telephone Expense means expenses incurred to maintain on-site high-speed internet and phone services.

• Janitorial Services includes expenses incurred for janitorial services as well as expenses incurred in purchasing cleaning supplies.

• Laundry Equipment Repairs & Maintenance includes expenses incurred for repairs and maintenance performed on specific equipment such as changers, washing machines, dryers, carts, etc.

• Legal & Professional Services means expenses incurred for legal and/or bookkeeping services.

• Merchant Account Fees means expenses incurred for third-party credit card processing services.

• Miscellaneous Expenses includes recruiting expense, uniforms, website hosting expense, contractors, meals and entertainment, customer reimbursement, fines and penalties, and pest control.

• Office Supplies, Expense, & Software includes expenses incurred from purchases of generic office supplies (pens, paper, laminating pouches, etc.), personal protective equipment, office furniture, and software pertaining to in-store television signage.

• Other Repairs & Maintenance includes expenses incurred from repairs and maintenance performed on non-laundry equipment such as arcade games, HVAC, plumbing, etc.

• Payroll Expenses means expenses incurred for payroll fees and wages paid to employees.

• Rent & TICAM Expense means amounts paid to the landlord, including rent, taxes, insurance, and common area maintenance fees. The laundromat portion of the building is 4,623 square feet.

• Security Expense means expenses incurred for security services, including monthly monitoring and security sensors.

• Supplies Expense (COGS), or cost of goods sold, means expenses incurred to purchase all supplies, including vending machine supplies, POS supplies, and laundry supplies.

• Utilities means expenses incurred in the payment of utilities costs, including charges for electrical and water services.

• Royalty Fee is imputed based on LaundroLab’s affiliate operating more than 13 months on the royalty fee (6%) set forth in the disclosure document.

• Technology Fee is imputed based on the technology fee set forth in the disclosure document, currently $250 per month.

• “EBITDA” means earnings before interest, taxes, depreciation, and amortization. The above figures exclude owner compensation/salary.

Section VI – LaundroLab Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️