Technology is creating opportunities in markets where traditional laundromats struggle to work.

SERIES: Big Tech for Small Spaces

By Jeff Moak

This month’s topic is timely. A couple of weeks ago I was speaking with a friend in the industry. He operates a 4,000 sq ft store, and we’re preparing to add a couple of 3,000 sq ft-plus locations ourselves. Surprisingly, our conversation wasn’t about large stores at all—it was about smaller, sub-1,000 sq ft laundromats.

There is a big push in the industry, especially south of the border, toward larger stores. I’m not saying there isn’t a place for these large stores — there definitely is, and it’s a whole conversation for another column—but the more I look at our markets in Canada, the more I see a need for smaller stores to fill voids where a big store just won’t work.

Why Large Stores Don’t Fit Every Market

There are a number of factors that contribute to this. Rents in major Canadian cities are very high. Places like Vancouver and Toronto face demolition and redevelopment clauses in which a commercial lease gives the landlord the right to terminate the agreement early if they plan to demolish, significantly renovate, or redevelop the property. Obviously, such leases are not ideal for someone looking to put $500,000 or more into a new store build or even a remodel.

In many of our larger cities, redevelopment clauses have become a reality. A traditional 3,000 or 4,000 sq ft laundromat often requires a 15- to 20-year lease to make the ROI work. A smaller-format laundromat with a smaller equipment package, reduced construction costs and lower occupancy costs may be able to work within a 10-year lease term, creating opportunities in markets that would otherwise be too risky.

Most of our downtown cores are being transformed through high-rise development featuring in-suite laundry. For everyday laundry, those compact machines are usually enough. At the same time, suburban growth continues to push farther outward—places like Edmonton outside the Henday or Pickering outside of Toronto. That raises an interesting question: are these residents still ideal laundromat customers?

Where the Opportunity Exists

Let’s first look at cities like Toronto or Vancouver. The rent is high, large space is at a premium and there are demolition clauses in the lease. Not ideal for someone looking to purchase or build a laundromat, but I see lots of opportunity.

Those residents can still be laundromat customers—just perhaps not customers of a 2,500 sq ft store. Yes, they have an in-suite washer and dryer, but often a compact unit. Where do they wash blankets or duvets? What do they do when their machine breaks? Modern residential washers are not as reliable as industrial strength equipment. These customers need somewhere to go.

This customer base is perfect for a different type of laundromat than the ones we typically see now.

What makes this opportunity more viable today is technology. Modern payment systems, auto-dosing and services like Wash & Fold allow these smaller stores to offer a customer experience that wasn’t possible twenty years ago.

The same opportunity exists in suburban neighbourhoods. These customers already have a washer and dryer at home and may not think of themselves as laundromat users, but they still face the same challenges: oversized items, broken machines and limited time. With suburban sprawl reducing density, smaller stores may actually be a better fit than a single large location.

In addition, most new retail development is geared toward quick-service restaurants, barbershops and dentists with higher rents and smaller unit sizes. This is where a smaller-format laundromat can serve the market, but it can’t do it with the old, dated stores I’ve touched on in previous columns.

So how does this model serve both a downtown clientele and work equally well in the sprawling suburbs? Glad you asked.

Technology Changes the Equation

Both groups are looking for the same thing. They don’t need more machines—they need the right machines. Larger-capacity washers and dryers for comforters, duvets, pet beds and oversized family loads. They want to get in, get it done and get on with their day.

This is where technology starts to tie everything together. I’ve written about auto-dosing, payment systems and Wash & Fold before. In a smaller store, they become even more important.

In a smaller footprint, with a lower lease rate but larger-capacity equipment, your throughput can be comparable to that of a much larger laundromat.

There are benefits beyond the lease as well. A smaller store generally requires less construction, a smaller equipment package and lower upfront capital investment. In markets where rents are high and redevelopment risk is a reality, reducing both the initial investment and ongoing occupancy costs can make opportunities viable that otherwise wouldn’t work with a traditional 3,000 or 4,000 sq ft laundromat.

These customers want convenience. Auto-dosing systems allow detergent, bleach and fabric softener to be vended directly into the machine without carrying bottles or purchasing products separately. They also want to pay by phone or card rather than searching for cash and feeding coins into a machine. Every one of these improvements reduces friction and makes the experience easier.

A Different Kind of Customer

They may not be your traditional laundromat customer. You should absolutely treat every customer equally, but understand that not all customers have the same expectations.

The last thing we can do is the opposite of what most owners would do with a small space: make it attended. An attendant improves the customer experience, while creating opportunities for services like Wash & Fold. Add a Presso Garment Care machine and you’ve suddenly created a small store capable of serving a wide range of customer needs.

Not Every Opportunity Needs to Be a Big One

Looking back at the conversation I had with my friend, we both understand why so much attention is focused on larger stores. In the right market, with the right demographics, they can be incredibly successful.

But we’re also very aware that they’re not the only solution.

The more I look at our major cities, growing suburbs and changing customer habits, the more opportunities I see for a different type of laundromat. Smaller stores with the right equipment mix, the right services and technology that helps them operate efficiently.

Not every opportunity needs to be a big one. Not every neighbourhood needs a 4,000 sq ft laundromat. Sometimes the best opportunity is a smaller store solving a specific problem for a specific customer.

With the right approach, these stores can work in markets where a traditional laundromat struggles to make sense. And if one small store works, why stop there? Maybe the better question isn’t whether you can build one large store. Maybe it’s whether you can build two or three smaller ones.

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