Laundromat economics after the coin slot

The visible change in laundromats over the last few years is the way customers pay. In an American Coin-Op operator survey reported by PaymentsJournal, about 37% of self-serve laundries now take credit or debit cards and close to half accept a mobile app, while 67% still keep the coin option; slightly more than half of operators said most of their self-service revenue already arrives as something other than coins.1 The laundromat is leaving the quarter behind, and it was one of the last consumer businesses to run on it.

That transition matters less than it looks. The card reader fixes the problems a cash business has with itself. Every wash is now recorded, so an unattended store is far harder to skim; an owner can raise a cycle by fifteen cents instead of the full quarter that coin pricing forces; and there is no bag of change to count or armored pickup to pay for. What the reader does not touch is the cost of running the machine, and that is where the business is actually decided.

A laundromat is closer to a utility reseller than a store

The largest controllable cost in a self-service laundry is not rent and not labor. It is the utility bill. Water, sewer, gas, and electricity run around 25% of revenue in a typical store and climb toward 40% when the equipment is old, according to operating breakdowns from Cents, a laundry payments and management platform.2 Cents puts electricity at roughly a third of the utility spend and water at about an eighth, with gas to heat that water in between.2 Read plainly, the store buys cold water, heats it, and sells the heated water and the tumble. The margin is the spread between what the utility charges to deliver and warm a gallon and what the customer pays to use it.

This is why the equipment on the floor matters far more than the payment terminal ever will. A new high-efficiency washer uses a fraction of the water and gas of a twenty-year-old one, and on a cost line that large, that difference is most of the profit. When I read a laundromat’s books, the utility bill and the age of the machines tell me more than the revenue does.

The payroll line is close to empty

The second unusual thing about the model is labor. An unattended laundromat runs with almost no payroll; the owner or a part-timer cleans and collects, and the machines do the rest. Attended and full-service stores that add wash-dry-fold or staff carry payroll at roughly 15% to 25% of revenue, per the same operating data, which is why net margins vary so widely, from the low 20s to the mid-30s in percentage terms depending on how the store is run.3 An owner can hold several unattended stores at once precisely because none of them needs a person standing in it.

The card system and the unattended model reinforce each other. You can only leave a store unstaffed if the collections are trustworthy without a cashier watching the till, and a recorded electronic payment is exactly that. The move off coins is less about customer convenience than about letting the owner take the last human cost out of the building. That is also what makes these businesses portable into an ownership portfolio; the labor model is the same reason the boring, repeatable businesses we look at under our criteria tend to hold up.

Demand that leans the right way in a downturn

The Coin Laundry Association argues the industry expands in a recession: as homeownership falls and households move into apartments without hookups, the self-service market grows.4 The association has an interest in that claim, so I would not take it at face value, but the structure holds up on its own. Laundry is not discretionary. The customer base skews toward renters and lower-income households, which is the group that grows when the economy turns, and a family that loses its in-unit machines does not stop washing clothes. In its 2024 industry survey the CLA reported that independent laundromat revenue rose about 8% over the prior year, through a stretch of high inflation.5

The honest counterweight sits on the cost side. The same customers most likely to fill a laundromat in a downturn are the ones with the least room to absorb a price increase, and vend prices are sticky because a coin store historically could only move in quarter increments. So a utility-rate spike can squeeze the store at the exact moment demand is strongest. This is the quiet argument for the card reader that has nothing to do with cash: fifteen-cent price steps let an owner pass through a gas bill without shocking the customer. Demand is resilient. The margin still rides on utilities.

Where I land

The cash-to-card story is a distraction for a buyer. By the time a laundromat is on the market with a working card system, the conversion is mostly done and already in the price, and the terminal was never the thing generating the return. What I would underwrite is an unattended store with efficient, well-maintained machines, favorable or sub-metered water and gas rates, and a long lease, in a dense renter neighborhood. Get those right and the payment method is a footnote.

The number that separates a good laundromat from a bad one is the cost of heating water, set by the equipment and the local rate base. Buyers tend to notice the card reader because it’s the visible upgrade; what actually decides whether the store makes money is the utility bill sitting underneath it.