The Business of Laundromats

It's Sunday, September thirteenth. Laundromats. I spent two hours in one this morning, which is something I have never said before in my life.

For as long as I can remember, I have lived in a place with a washing machine and a dryer inside the unit. Growing up, it was just there — a white box in the hallway you didn't think about. In Atlanta, same thing. In every apartment I ever rented, the laundry was inside the apartment. Then I moved to San Francisco, bouncing between Airbnbs, and suddenly the laundry was not inside the apartment. I walked six blocks with a bag of dirty clothes and nine dollars in quarters and discovered an economy I had never seen.

I have been one of the people who doesn't think about laundromats. And it turns out that's the most interesting thing about them.

Roughly one in nine Americans doesn't have a washing machine or a dryer at home. That's about thirty-seven million people. If you live in a dense city, the numbers are way higher — older apartment buildings in San Francisco, New York, Chicago were built seventy or a hundred years ago, before anyone imagined putting a washer in a two-bedroom. There's no hookup, no drain, no room. So you leave your apartment and you walk.

The laundromat industry in the United States generates seven point two billion dollars a year across about seventeen thousand five hundred locations. That makes it bigger than the entire movie theater industry, by the way — your local AMC, with its reclining seats and twenty-dollar popcorn, is part of a sector that generates less revenue than the buildings where you wash your socks.

The first laundromat opened in Fort Worth, Texas, on April eighteenth, nineteen thirty-four. It was called a washateria — "wash" plus "cafeteria," a self-serve restaurant but for laundry. It had four electric washing machines. You paid by the hour. The idea was so obvious, and so perfectly timed — during the Great Depression, when most families couldn't afford their own electric washer — that within a decade the model was everywhere. By the late nineteen forties, the first unattended, twenty-four-hour laundromats started appearing. The machines were coin-operated. You didn't need an employee. You just needed the machines to keep running.

Here's what I didn't understand about laundromats until I sat in one for ninety minutes this week. They're not really a service business. They're a real estate play with industrial equipment attached.

The business model is startlingly simple. You buy commercial washers and dryers — a big eighty-pound machine costs about sixteen thousand dollars. You charge people to use them — three to eight bucks per wash, depending on the machine. At a busy location, that machine turns over three or four times a day. A single machine can generate nine to ten thousand dollars a month. A recent Forbes piece profiled an owner whose eighty-pound monster loaders bring in about two hundred and fifty dollars a day each. That's more than ninety thousand dollars a year in gross revenue from one machine.

The numbers stack fast. A medium-sized laundromat — thirty machines, maybe an attendant, maybe not — brings in two to three hundred thousand dollars a year in revenue. Profit margins run between twenty and thirty-five percent. That sounds unremarkable until you compare it to restaurants, which average three to five percent margins and require a kitchen staff and food that spoils.

Laundromats have no inventory. Nothing expires. Your input costs are water, electricity, and gas. Your customers do the work themselves. During a recession, demand doesn't fall — people still need clean clothes. If they lose a job and move to a cheaper apartment without a washer, your customer base actually grows.

The industry has been shrinking — the number of locations is down about one point five percent a year — even as revenue inches up. Fewer laundromats serving the same number of people. Which means the ones that survive get more valuable.

Having a washer and dryer in your apartment is one of the quietest class signals in America. Nobody walks into your home and says, wow, an in-unit washer. But if you don't have one, you spend two to three hours a week in a building with fluorescent lights and a vending machine that sells single-use detergent pods, and you plan your laundry around quarters. Somebody without an in-unit washer is spending roughly a hundred hours a year — two and a half work weeks — just getting their clothes clean. The people who don't have to don't think about it at all.

The next time you walk past a laundromat, look inside. There's probably someone in a plastic chair scrolling through their phone, waiting for the spin cycle to end. That building generates more profit than the restaurant next door. And the person in the chair probably lives in a nicer apartment than you do — it just doesn't have a washing machine. Stay informed, stay curious, and we'll see you Monday.