Valuation Guide
How Much Is Your Laundromat Actually Worth?
Laundromats sit at a unique intersection: they're asset-heavy businesses with significant equipment value, but their sale price is ultimately driven by cash flow. Understanding how both methods work, and when each one matters, is the difference between leaving money on the table and getting what your business is truly worth.
Two Methods, One Business
Every laundromat transaction comes down to the same fundamental question: is the business worth more for what it owns or what it earns?
Asset-Based Valuation
Adds up the fair market value of every physical asset: washers, dryers, folding tables, change machines, water heaters, HVAC systems, and leasehold improvements. This method establishes the floor value of the business.
Best used when
- •The business is underperforming or has declining revenue
- •Equipment was recently purchased or upgraded
- •You need to establish a minimum sale price
Typical range: $150K - $800K based on store size and equipment condition
Earnings-Based Valuation
Multiplies Seller's Discretionary Earnings (SDE) by an industry multiple. For laundromats, that multiple typically falls between 2.5x and 5.0x, with the average sitting around 3.5x. This is the primary method for profitable operations.
Best used when
- •The laundromat is profitable with documented cash flow
- •Revenue is verifiable through card or POS data
- •You want to capture the full going-concern value
Example: $80K SDE x 3.5 multiple = $280K asking price
The reality? Most laundromat deals use both.
A buyer runs the earnings multiple to set the offer price, then checks the asset base to make sure the equipment supports the valuation. If the earnings say $300K but the equipment is worth $350K, the assets become the negotiating anchor. If the earnings say $300K and the equipment's only worth $150K, the cash flow is the driver, and the buyer's paying a premium for the income stream.
Equipment Depreciation and Its Impact on Sale Price
Commercial laundry equipment depreciates predictably. Buyers use these benchmarks when building their offer. Knowing where your machines fall on this scale is pretty essential before you list.
| Equipment Age | Typical Condition | Value Retention | Impact on Sale Price |
|---|---|---|---|
| 0 - 3 years | Excellent - minimal wear, modern features | 70 - 85% | Premium. Buyers pay full multiple knowing no immediate CapEx is needed. |
| 4 - 7 years | Good - fully functional, showing normal use | 40 - 65% | Neutral. Buyers factor in replacement of select units within 3-5 years. |
| 8 - 10 years | Fair - increased maintenance, older technology | 15 - 35% | Discount. Buyers deduct estimated replacement costs ($3K-$8K per machine). |
| 10+ years | Poor - frequent breakdowns, energy inefficient | 0 - 15% | Significant discount. Full replacement cost deducted; may push to asset-based pricing. |
Based on commercial Speed Queen, Dexter, and Continental Girbau pricing. Individual machine values vary by brand, model, and maintenance history.
What Drives Laundromat Multiples
Not all laundromats get the same multiple. The difference between 2.5x and 5.0x comes down to these factors, ranked roughly by their impact on buyer confidence.
Lease Terms and Length
A lease with 10+ years remaining (including options) can add 0.5x or more to your multiple. A lease with under 3 years remaining is a red flag that'll push you toward the low end. Buyers can't risk investing $200K+ into a location they might lose. Assignment clauses, renewal options, and rent escalator caps all factor into this assessment.
Revenue Verifiability
Card and app payment systems create a digital paper trail that buyers and lenders love. A laundromat processing 60%+ of revenue through traceable systems commands materially higher multiples than a cash-only operation. And SBA lenders in particular will scrutinize revenue documentation, so verifiable records make financing easier, which expands your buyer pool.
Equipment Age and Condition
Newer machines mean lower risk. A store with equipment averaging 3 years old versus 9 years old is a fundamentally different proposition. The younger-equipment store represents stable cash flow; the older one represents cash flow with a ticking CapEx clock. Buyers price this accordingly.
Location Demographics
Laundromats in densely populated areas with a high percentage of renters and limited in-unit laundry are more defensible businesses. A store serving an apartment-heavy neighborhood of 50,000+ people has a fundamentally more stable customer base than one in a suburb full of single-family homes with washer/dryer hookups.
Ancillary Revenue Streams
Wash-and-fold services, commercial accounts with local businesses, vending machines, and drop-off laundry service all diversify revenue. A laundromat generating 25%+ of revenue from services beyond self-service wash shows the kind of business sophistication that buyers value. These streams also tend to carry higher margins than base machine revenue.
Absentee vs. Owner-Operated
A laundromat that runs profitably with a manager and minimal owner involvement is worth more than one that requires the owner to be on-site daily. Buyers are paying for a business, not a job. Documenting your weekly time commitment (and showing it's low) is a genuine value-add.
Laundromat Valuation at a Glance
SDE Multiple Range
2.5x - 5.0x
Average: 3.5x
Typical Deal Size
$200K - $2M
Often SBA-financed
Time to Sell
4 - 9 months
Preparation through closing
Equipment Useful Life
10 - 15 years
Commercial washers & dryers
Ideal Lease Remaining
7+ years
Including renewal options
Financing
SBA 7(a)
10% down, 10-year term typical
Frequently Asked Questions
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