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Week 14: Laundromat's FTW
A laundromat franchise + a new email format
Welcome to Franchise Breakdowns, a weekly email covering up & coming franchises & the entrepreneur’s behind them. If you’re reading this but haven’t subscribed, you can do so here:
Gm franchise fans,
November is upon us (wow!). I’m kicking it off by changing up the format (and name) of this newsletter. Rather than doing an analysis on 2 brands each week, I’ll now be doing 1, but will also include a dedicated section for franchise M&A and growth news, and a few other components.
My goal here is to provide a more comprehensive overview of franchising and the entrepreneur’s behind them, rather than just isolated analysis on individual brands.
If you absolutely hate the new format - feel free to reply to this email and let me know.
Also, I’m exploring the idea of creating a guide of sorts around the best way to find franchises and navigate that due diligence process. If there’s anything specific under that topic that you’d like to know about, shoot me a reply via email so I can cover it!
Thanks and see you at the bottom 👇👇
DISCLAIMER: Nothing in this email is financial advice or a recommendation for any franchise investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Spotlight: Code Wiz Acquired By Tutor Doctor
This story is important for two reasons:
1). The founder, Ruth Agbaji, is a Nigerian immigrant who grew up without electricity and running water. After teaching herself to code by spending hours in an internet cafe, she earned a scholarship for Computer Science at Tuft’s, which she then parlayed into a job at Microsoft. If that wasn’t enough, she decided the corporate life wasn’t for her so she started Code Wiz in 2017.
“We’re not investing in Code Wiz. We’re investing in you”, Tutor Doctor said to Abigail upon the acquisition.
What an amazing success story!
2) This story also highlights the growing trend of boutique education concepts being scooped up by private equity. Code Wiz joins Snapology, Engineering for Kids, Sylvan Learning, and Code Ninja’s as the latest brand to be acquired.
Sweetgreen Files To Go Public
The salad chain is reporting an AUV of $2.5M
The Crumbl Cookie Craze
A Crumbl franchisee is off to a HOT start in the northeast*
Fuzzy’s Taco Shop Owner To Start Acquiring Other Brands
The Private Equity Hold Co. Playbook is being rolled out once again**
Popeyes is Heading to Romania 🇷🇴
The fried-chicken giant has committed to 90 restaurants over the next 10 years
Founded in 2018, franchising since 2020
Based in Charlotte, North Carolina; 1 unit open, 17 in development
Each laundromat comes with cash or credit card payment options, free Wi-Fi, ample folding space, TVs, a kid’s area, games, vending machines, and a loyalty reward program
Fees + Investment
Royalty: 6% of gross revenue
Brand Fund: Up to 2% of gross revenue, currently set at 1%
Franchise Fee: $49,500
Initial Investment: $321,330 - $482,650
The following table illustrates historical data from the affiliate owned business. The affiliate did not pay royalties or make advertising contributions, but those costs were imputed to reflect that of a franchisee.
The Wolf’s Take 🍟
EBITDA of $230K in year two off of a $483k investment? Sign me up!
I am legitimately PISSED that I don’t have the cash available right now for one of these. If you follow @Codie_Sanchez on Twitter then you already have read the Gospel of Cash Flowing Laundromats and know how amazing these businesses can be.
I love what LaundroLab is doing because they:
A) use modern technology for everything and don’t require you to use spare change, and B) they’ve turned the typical laundromat (which is usually old, dirty & depressing) into a modern DESTINATION by adding free wifi and a few TVs, vending machines, arcade games, etc.
They’ve done this without driving up the costs to where the unit economics don’t make sense. The only drawback (or benefit depending on your risk tolerance) is that it’s super early in their growth - they literally only have 1 unit open and operating - so there is little proof of concept at the moment.
But remember, you aren’t subscribed to this newsletter to find out about big brands AFTER they blow up - keep an eye on them or go to their website and start due diligence now. 1 unit open means there’s nothing but open territory waiting to be pounced on. Happy hunting! 🚀
Twitter Watch 👀
If you’re free Tuesday afternoon, tune into the conversation!
That’s it for this week’s Franchise Breakdowns. Feel free to reply with any questions or feedback, or leave a comment. If someone sent this your way and you haven’t subscribed yet, you can also do that below. Thanks and see you next week!
NOTICE REGARDING FRANCHISE INFORMATION
The Wolf of Franchises does NOT guarantee the financial performance of any franchise mentioned. The decision to purchase a licensed affiliate or franchise must be based on your own independent research. The Wolf of Franchises is not liable for any representation made by an affiliate, associate, marketing material, or Franchise Disclosure Document of a franchise with respect to real estate, financial, operations, or marketing performance of the business being acquired.
This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for informational purposes only, and any financial data is based upon information provided by franchises in their respective Franchise Disclosure Document. The offer of a franchise can only be made through the delivery of a franchise disclosure document, from a certified seller of the brand, which The Wolf of Franchises makes no claim to be. Do not consider any information here as a guarantee of financial performance. The Wolf of Franchises has no affiliation or relationship of any kind with any of the brands covered in this newsletter, but simply provides data that is publicly available online or in Franchise Disclosure Documents.
All data from Franchise Disclosure Document’s is based on past performance, and if you were to purchase a franchise covered in the Wolf of Franchises newsletter, there is absolutely no guarantee that your business will perform similarly to existing owners of said franchise.