Laundromat Resource › Forums › Laundromats › Making an Offer during the pandemic › Reply To: Making an Offer during the pandemic
Corey, what a great question! And it’s a tough one. Here’s a general philosophy that I encourage my clients to operate by as a broker: Pay for performance, not potential. Often times brokers will try to inflate the price of a laundromat because “the vend prices are under market rate for the area” or, “the fluff ‘n fold is primed to expand” or, “new machines are going to dramatically increase the turns per day,” etc. While all that may be true, if you’re the one making those changes, you shouldn’t pay a current owner for that potential.
Obviously, this situation is different and unprecedented. I’m curious to hear what other people have to say on this, but I think I would encourage you to maintain that same philosophy, only maybe hold it a little looser. We don’t know how long economic recovery will take. the timeline will obviously vary by location, but I tend to be in the camp that we’re looking at years of recovery. And while laundromats are essential businesses and are relatively stable, with so many people out of work there’s a good chance that laundromat revenues will be down for a while, in my opinion.
So, with all that said, I would say my answer is, factor in the last four years of revenue, but weigh the recent perfomance much more heavily than pre-COVID performance. I hope some other people weigh in on this one!
Do you have any thoughts on it, Corey?
