What do franchisees fees cover? In a simple business model, why are fees necessary? Mike Roberts of WaveMax Laundry tells all.
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00:00 What do franchise fees pay for in a simple franchise business?
Out here in the big, bad world of franchising, people often ask me, "Kim, why do you need a franchise for a really simple business?" I present a company, and they say, "Well, couldn't I just go do that on my own?" Today, we have another special guest. Mike Roberts is the founder and CEO of WaveMAX Laundry. And I think a laundromat is one of these so-called simple companies, but I've had great success placing some amazing people into this franchise. It's one of my favorite companies to lead people to.
1:13 The value proposition of a seemingly simple franchise – where’s the value with the franchisor?
Everyone thinks, "Laundromat? Piece of cake!" But as soon as you step across that threshold and start looking at the overall business, it becomes very complicated and overwhelming. The industry was built by distributors who sell equipment. They make money selling equipment. So, the bigger the store, the more equipment, the more money they make, and then they're gone, right? A lot of guys slide deals across the table—just sign here, and we've got everything taken care of, the rent and the equipment mix and so on. It takes a long time to really vet this type of industry.
And then when you get into things like site selection, where do I put it? There are very specific demographics we look for and a very specific size of stores based on those demographics. And there's a very specific equipment mix that we analyze based on those demographics and the store’s location. And if you don't understand that, you can literally make a mistake that costs you hundreds of thousands of dollars. So, what we do for the franchisee is we are there to guide them to—I always say, two biggest things I do as the CEO and founder for everybody in the brand is I protect the franchisee from the franchisee, and I minimize risk.
We analyze. We run demos. We look at traffic counts. We look at the competition. So yes, it seems simple, but if we can get you into the right amount of rent and the equipment and make sure we're checking all of those proper boxes to set you up for success.
4:11 Everybody’s got to make money in a franchise
I've got a motto in my company: Everybody makes money. I want my franchisees making money. I want my employees to make money. I want people franchise consultants making money and wanting to sell the brand. And obviously, corporate is going to make money. So, everybody's got to make money. And if we can all do that and everybody's happy, then the brand grows. We get referrals, and we bring more people into the brand.
We build our stores for Monday through Sunday for efficiency and maximizing throughput. The industry has built stores typically just for Sunday. So, they build these gigantic stores that have massive debt, and then the biggest day of the week is Sunday. Then, Monday through Saturday, they don't have many customers, and they get way out over their skis on their payments, and they're struggling to make money. And what happens then is if that investor doesn't make it, great! You know who's there to buy those assets and resell them again to the next investor? The distributor.
6:40 The value of the franchisor’s experience
Even in the simplest of businesses, there can almost always be a case made for a franchise system, where somebody has gone out there and proven the path. They've walked the path, and they figured out what works. They're giving you that for that price of admission, which is that franchise fee. And then beyond that, there's the royalty back to the franchisor, but that's for that ongoing support.
10:10 Are laundromats still viable?
Our customers really run across the spectrum. We have a lot of people that value time. You can literally get 80 pounds in one washer—20-minute wash, 20-minute dry. You can stay and fold it at the store or take it home with you. We also have drop-off service.
We've only been doing this now about four and a half years, and we are now the largest laundromat franchise in the United States.
If I can help you find your way to the WaveMAX laundry franchise, please leave a comment below or reach out here: [ Ссылка ].
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