A profitable investment without staff or time constraints
ILR: Hello Bruno, so tell us about yourself. How did you start and how did you come to invest in Speed Queen laundries?
Bruno Blanchard: I started because of a change of career. I was the manager of a family road transport company and after selling it I was looking for an activity, necessarily a profitable one, that would leave me free, without social and time constraints. I looked around and went to trade fairs. Two things were interesting: a car wash or a laundromat. Today, for car washes to be profitable, you have to be there. I wasn’t interested in being present in a business, in having a very regular schedule, or having a staff. That’s why I started to look for laundromats instead. I went to a trade fair in Paris where I met several manufacturers on the spot.
“It was Speed Queen that I found the best by far. First, I liked the concept and I still like it (…) Then, and above all, the professionalism, honesty, and reality of the projections made by the people I met.”
And it was Speed Queen that I found the best by far. First, I liked the concept and I still like it. In terms of appearance, cleanliness, friendliness, quality of the machines, the follow-up of the project with a presence of Speed Queen from the beginning to the opening of the laundry and even after. Then, and above all, the professionalism, honesty, and reality of the comments made by the people I met. Because as in all jobs, you can find a bit of everything. So, people who promise you wonders and tell you that you will earn three times what you invested in one year. I haven’t believed in Santa Claus for a long time now.
ILR: So, you mentioned the car wash, so the car wash business. Why did you finally choose to open a laundromat in the first place?
Bruno Blanchard: The car wash, as I said, was too time-consuming in terms of presence and the investment is much more important because the cost of the location is much higher.
ILR: And what was your initial business objective in terms of profitability or absolute value? What was the threshold you set for yourself?
Bruno Blanchard: The objective was at least to pay back my investment in four or five years. So quite quickly. And then to have small profitability. Speed Queen team was announcing about 25% profitability, which is lower than what the competition is saying. I’m well above that. I used to say to myself: “10 percent return on my capital per year would already be interesting.”
One of the key elements of a laundromat: the location, city vs. countryside
ILR: I’d like to get into the expertise you have on the laundromats you’ve set up. What type of location, for example, do you prefer in your region for laundromats? Is there a typical location that works better in the Pays de Loire than in the Paris region or very large cities or very rural areas? What would you recommend?
Bruno Blanchard: We have two types of locations. We have the classic one, which we will find in all the big cities, the metropolises, with very limited catchment areas because there is a lot of verticality and a lot of population density. So, I have this case in Pays de Loire, in cities of varying sizes. And then we have what I call the semi-rural. These are medium-sized towns. It’s not a dormitory town, it’s a town that has life, where there are large stores, but of average size, generally supermarkets: Intermarché Super or Super U. Relatively large stores. The catchment area will be larger because the population density is also more spread out. And there, we are going to be more on a family clientele. So, we have more and more customers who come to wash their traditional clothes, who no longer have a washing machine at home. It’s a choice for many now. We’re going to be more on big machines for everything that is duvets, bed linen, sheets, blankets, etc. In rural areas, what is developing quite a bit is what we call the animal column. It is the washing machine and the dryer which are on a column, which is dedicated to the clothes, linen of the animals.
ILR: In your region, are there any cities where you think there are good opportunities to open a laundry?
Bruno Blanchard: Yes, there are still cities. In Nantes itself, we have already opened two. My laundromats are in the suburbs. If you count Nantes and the outskirts, yes, we have six laundromats. And there’s still plenty of room in the center of Nantes. So afterward, there is competition, yes. This is not bad, because it means that there is a potential clientele. It’s up to us to know how to bring, and today it’s the case, something better than what’s on the market. There is Cholet which is interesting. Niort, there is potential and today, I have very few requests. And then all the Bretagne, which is quite close, is still to be developed.
ILR: That’s interesting. So, if people are looking to invest in Niort, Bruno can help you.
Opening more than one laundromat and the reasons why. What marketing actions are ideal to promote them?
ILR: And financially, how did it go? Did the first laundromat grow fast enough to make you want to start another one very quickly? How did it go from zero, one, two to three laundromats?
Bruno Blanchard: Personally, even if the first one grew quite quickly, I didn’t wait because I opened one per month. So obviously, I didn’t have time to wait until the figures were there and spoke for themselves. But in general, in Pays de Loire, the dozen or so stores that I set up, ramped up about three months after the opening. Some laundromats have a fairly high turnover from the second month. It depends on the catchment area and the location of the laundromat. For me, I did not wait to be profitable since I had the project to invest in several laundries to invest my capital.
ILR: You’re a pretty dynamic entrepreneur. What did you do to boost your laundromats in the beginning? Did you try to contact a possible audience? Did you do any promotional stuff? How did it go at the beginning?
Bruno Blanchard: At the time, in the concept, some flyers were distributed in the mailboxes before the opening of the laundry. And I was physically present at the beginning. Not 24 hours a day, but you have to be there. You must be on the phone when customers call, and even more so when you set up a Speed Queen. It’s still a new generation, premium laundry concept. If customers don’t know how it works, you have to be able to answer them, help them, direct them. So, the commercial aspect is important. About a year, a year and a half after the opening of my last one, I did target advertising on bus shelters in my region. That actually, was not very convincing… Now, what we have in the concept, Speed People. It’s very interesting because it’s digital visibility: Facebook, mini-site, the different maps (Maps, Mappy, Google Earth, Apple Maps) Google, all these things. I contracted Speed People for my three laundromats, a month ago now. Visibility on the web is very important and that’s what makes you visible. When I ask my customers, they tell me that they have looked on the Internet for laundry near them and Speed Queen has come up. So of course, they go to the site, and it attracts them.
What type of investor is most successful?
“(…) those who are the most successful are the most dynamic investors who are the most involved in their projects.”
ILR: Bruno, we were talking earlier about your entrepreneurial profile, how you came to work for Speed Queen, you mentioned your need for autonomy. What kind of entrepreneur are you? How would you define yourself?
Bruno Blanchard: I find it very difficult to delegate and that’s also why I wanted to work alone. The company that my wife and I had before, had up to 150 employees, and even if things went well with the employees, I didn’t want to have the constraints that you can have when you have a company with people you depend on to do your work. So, I was looking for something where I could be autonomous, alone and above all be able to manage my time as I wanted.
ILR: When you meet investors interested in opening a laundromat, how do you sound them out? For you, what are the successful types of investors?
Bruno Blanchard: Some investors have more or less my profile. People who are in their fifties, who have sold their company, and who are looking for more or less the same thing. That is to say, they want to stay in business, and they want to have an activity that is not very demanding, but relatively profitable. That’s one of the profiles. We have a profile of young people in their thirties and forties who are settled, with or without a family, which is the same profile, and who have a professional activity. They have savings and they say to themselves: “We’re going to prepare for the future”. They invest, they don’t take a salary from the laundry business. What they want is to make their investment profitable. Of course, the goal is to make a profit and to be able to reinvest in a second and third laundry. I help them to do this so that they can, at some point, reduce the main activity in terms of time.
“Of course, the goal is to make a profit and to be able to reinvest in a second and third laundry. I help them to do this so that they can, at some point, reduce the main activity in terms of time.”
Finally, we have much younger investors who are at the beginning of their careers, who have two objectives. I would say the objectives of the two previous categories. They are going to look for a little extra income. Not the totality of what the laundromat will bring them, but a small compliment because they also want to be able to develop the laundromat activity, to make several of them, to arrive afterward in the second category, the people who are 30, 40 years old and say to themselves: “I will reduce a little the time that I have on my principal activity and increase my activity on the laundromat and especially increase my free time. And have the means to have interesting free time. Financially, of course.”
ILR: So, the investor is a bit of an epicurean, a bit of a hedonist who wants to enjoy his free time. And do you see something that we see quite often in France and other countries, especially in Spain and Italy? Do you see additional services being developed in laundries, i.e., porterage services or B2B development services, to wash the laundry of neighboring businesses during off-peak hours, for example, this kind of thing?
Bruno Blanchard: Yes. Here, I have an example of a couple. They are 32 or 35 years old; they have children. They both work. The first laundromat that they set up, did what we call portage. They started to have customers, some companies, who give work clothes to be washed in the laundromat. So, he has a tour. Once or twice a week, he’ll pick up the laundry and then bring it back dry. We’re going to open their second laundromat. They are already planning a third. We’ve already found the premises. The town halls where they have set up their laundromat call on them for the porterage. Now, they only dedicate themselves to that, while leaving him a lot of time because in parallel he has completely renovated his house.
ILR: It’s a common trait among all investors, when we talk to consultants, those who are the most successful are the most dynamic investors who are the most involved in their projects.
Bruno Blanchard: Absolutely. It’s very important. That’s what I always tell them, I always insist on it. I would say that the projects, in my opinion, are all relatively well put together and are going to have a good return. I have an example concerning one of the last laundromats that I accompanied, from the second month its turnover is impressive. It is beyond the estimate made in the Speed Queen business plan. I knew it was going to work, but not that well. (Laughs)
Let’s talk about numbers – An investment during the pandemic
ILR: This investor, without naming him, can you give us a range of turnover, for example, that he makes?
Bruno Blanchard: It’s simple. In the second month of business, he made 7,500 euros in sales, which is quite a lot considering the size of his laundry. It’s a laundromat where we have three dryers and eight washing machines. Moreover, it started during the Covid.
ILR: But that means that he gets about 4,000 nets, 3,500 net per month, in the second month. Yes, he can be happy.
Bruno Blanchard: Yes, even more than that, because we negotiated the rent very well. We managed to get six months rent-free period. So, he’s not bad on this one.
ILR: So, at least someone who had a good 2020.
Bruno Blanchard: Oh yes, that’s clear. But I had a good year in 2020. I went around to all the investors. We all took a 50 percent drop in March but otherwise, the rest of the year was good.
ILR: It seems logical.
Bruno Blanchard: The month of the confinement, the attendance was catastrophic. On the other hand, as soon as the confinement was installed, as soon as the rules were laid down, as soon as we were considered as an essential business, we went back up to the sales figures of the year 2019, or even stronger. Because there have been fewer departures to the right, to the left, abroad. The French stayed in France, and so the turnover was more constant. And now, in 2021, we are all the same. We see a small drop of 10-15 percent because of the 6 pm curfew.
Is technology important in a laundry business?
ILR: Is technology a key factor for you today? We recently launched machines with touch screens, we have a payment application, a customer loyalty application, we have remote management software for laundries. Investors and users are very positive about the feedback we’ve had. What do you think?
Bruno Blanchard: I don’t have a touch screen because my machines were installed four years ago, so they didn’t exist at the time. On the other hand, of all those I have installed for investors lately, it is obvious that we are changing category, we are changing division. We’ve gone from the first division to the European Cup. We’re really at the top of the range. The end customers are sensitive to these technologies.
“There’s the Speed Queen Insight app, which allows you to pay with your phone, start the machine with your phone, know what your customer is doing and be able to make offers based on what they spend or when they spend it.”
There’s the Speed Queen Insight app, which allows you to pay with your phone, start the machine with your phone, know what your customer is doing and be able to make offers based on what they spend or when they spend it. Of course, they are very fond of this. They are fond of the technology of our machines. In addition, our machines are equipped to inject detergent and fabric softener directly during the cycle with a sanitization cycle each time. But if the investor doesn’t want integrated detergent, there is at least the hyalinization of the drums. In this Covid period, investors and end customers are hypersensitive to this. I did it again today. I have new customers who have arrived and to whom I have explained the equipment of my laundry. They congratulate us on the technology, on the types of machines, the cleanliness of the laundries and the reliability of the machines. The quality of the machines is very important, the Speed Queen machines are robust, reliable, and highly technological.
ILR: Bruno, thank you so much for sharing your experience with us today. We hope your business continues to grow and of course we’ll be watching for your progress and new laundries. To those who listened to us, thank you for staying, for your availability. If you have a project in Pays de Loire, do not hesitate to contact Bruno Blanchard. Thank you.