This is my laundromat love story

Hey Contrarians,

If you’ve been following CT since the OG days, then maybe you remember how cheeky I used to be about laundromats.

“They’re the gateway drug to investing,” I said.

“They have one of the highest success rates of any small biz,” I said.

“We just bought one, and we’re going to scale it,” I said.

Well, I’m coming back to you now, head hung low, with an update…

It actually happened.

We bought one, scaled it, and exited.

Want to know how?

Today in 10 minutes or less, you'll learn:

✔️ Contrarian framework: The BRRT Strategy

✔️ Operators make all the difference

✔️ Tips to scale a laundry biz

✔️ How it could’ve gone sideways

Contrarian framework: The BRRT Strategy

Here's a question I get asked weekly:

"Codie, how do you keep the dollars flowing in a downturn?"

My answer?

It ain’t easy, but it is simple, and it sounds like an A-10 Thunderbolt:

• Buy a cash-flowing biz (ideally one that’s inexpensive and under-performing but profitable, like that grungy laundromat down the street)
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• In a Recession-resistant sector (nobody likes wearing dirty clothes, even when cash is tight)
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• Raise prices with inflation and as value is added (the estimated average cost of washing one load: $1.27)
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• Add Tech (toss in digital payments, reliable machines, free wifi, and tell me people won't pay more than $1.27)

Easy? No. Possible? You bet.

When the business cycle fluctuates, I know I can rely on the spin cycle. That said, none of this matters if you don’t have an all-star operator running the show…

Operators make all the difference

I may own and invest in dozens of businesses, but am I running around like a headless chicken managing all their day-to-day operations? Hell no.

My key to staying sane is working with kick-ass operators, like Mark.

Let’s rewind.

For Mark, before there was laundry, there were fishing accessories for kayaks and canoes, a business he’d worked on since 2012.

In 2017, Mark made the pivot to dirty clothing with a clean-cut vision – Uber for laundry – and started The Folde with a focus on delivering for other businesses.

With demand exceeding capacity in 2019, Mark and co. opened their first laundromat in Austin. By day, it was a self-serve operation. By night, The Folde’s team processed delivery orders – margin magic.

Come 2021, The Folde saw its first year with $1M in revenue. (This was also the year I invested in the company.) The Folde opened location number two in 2022, marching toward millions more in revenue, and the company was acquired earlier this summer.

In case it’s unclear, the takeaway here isn’t “Go deliver laundry.” It’s that business owners and investors should seek out great operators.

Here’s how I spot them a mile away:

1. Great operators cut costs

A great operator looks for ways to cut as much as they look for things to add.

For example, did you know clothes don’t get any cleaner after a couple cycles? I didn't. Did you also know modern washers have a USB port to change their software settings? I didn’t.

But Mark did, and he spent the time adjusting his programmable washers, removing duplicate prewash and rinse cycles.

The result?

According to Mark, the move cut the monthly water bill in half. Plus, faster cycles meant happier customers.

2. They’re acquisition-oriented

More profit means a better valuation when it's time to sell. Sometimes, expanding out and buying profits is the best way to achieve that.

Mark never set out to own that corner laundromat with a half-dozen blinking lights, two working dryers, and a broken ATM.

He wanted to be the Mister Car Wash of laundromats: squads of uniformed employees, shirts tucked, operating a service so good it’s hard to forget, no matter if you’re a customer or an investor.

3. They know where the money is

Nobody likes wearing dirty laundry, and nobody wants to spend time dealing with it.

But will some people happily spend money to solve both of these problems simultaneously?

Absolutely.

Offer to seamlessly pick up, fold, and deliver laundry for a small premium, and you’re preaching to the choir of human behavior.

With a delivery service baked in, buttoned-up processes, and a whole lot of sweat behind the scenes, Mark found avenues for steady growth.

The best operators know where to look.

Tips to scale a laundry biz

Owning a business is just one part of the puzzle. The rest is finding creative ways to attract customers and operate efficiently.

Below are some ways The Folde scaled to hundreds of weekly orders and millions in revenue. As you’ll see, some are less common than others.

1. Dating apps

Renters. Families with kids. Sure, these are meaningful demographics for laundromats. But are they the only ones worth serving?

Nope.

What if we look to the young, single, and ready to mingle?

Young people are active in more ways than one. Polls have shown they accumulate laundry relatively quickly and spend more on it. So, The Folde looked to advertise on dating apps.

As it turned out, according to Mark, those ads saw 3x the ROAS (Return on Ad Spend) as his brand’s family-targeted marketing campaigns. We had to swipe right on those profits.

2. SMS marketing

Get a local customer’s phone number, and you’d better treat it like a Rolex, offering top-notch convenience, service, and trust.

The Folde uses automated texting software to offer customers discounts when a driver’s route in their neighborhood isn’t filled.

According to Mark, maximizing delivery routes this way makes a difference of thousands of dollars in daily revenue.

3. Buying in bulk

Most people think Costco is the end-all-be-all of “buying in bulk.”

​Think again.

For Mark, buying in bulk means buying wholesale, and buying wholesale means getting 55-gallon drums of detergent delivered monthly to escape steep retail markups.

4. Picking up the phone

It sounds like an overplayed business tip. And it is. Because it works.

Whereas many laundromats don’t even have a phone number, Mark’s landed all kinds of valuable clients — from an assisted living community to Ireland’s National Women’s Soccer team — by simply… answering their phone calls.

When you need something done, you don’t necessarily pick the best service. You pick the one that actually answers your call.

Be the one who picks up.

How it could’ve gone sideways

Let me make one thing clear:

This is a success story.

I don’t mean this to brag, I mean it to set your expectations straight.

There are plenty of ways this deal could have turned on me:

• I could have vetted my operator poorly. Instead of the Mark I got, I could have partnered with the evil version of Mark, who knew nothing about running laundromats and/or tried to steal money from me.
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• I could have bankrupted myself. If the money I invested was my every last penny, this deal wouldn't have been so pretty. As a general rule, I never invest more than 20% of my net worth in a single place. I recommend you make a similar rule for yourself.
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• I could have picked a sh*tty laundromat. But I did due diligence. I had my team triple-check everything, and I considered every concern and potential pitfall. But, the financials checked out. The location was good. I saw a clear BRRT-style opportunity for this biz, and I had an operator who could execute.

Low risk never means no risk.

These are just a couple ways my laundromat deal could have spun me ‘round, but luckily… It didn’t. I got the happy ending every biz owner wants – a cushy exit after a successful scale.

I believe you can successfully own and scale a laundromat too.

As long as you do it wisely.

If you want to learn how to buy your own business and get expert guidance doing it, you should see if our Mastermind is right for you. Note: It's not right for everyone.

Fill out the questionnaire here if it does seem like a good fit. (Btw, we're raising the price mid-September to adjust for value we've added to the group over the past year. If you've been thinking about joining... Now is the time.)

Main Street > Wall Street
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- Codie

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👖 Btw, if this is you, you’re gonna need an operator for your laundromat

🐐 Warren Buffett turned 93 this week. His total return since 1965: 3,787,464%​

📉 It appears we’ve hit a tipping point after years of tipping overload

🍷 A college dropout’s investing platform manages $100M of wine & whiskey​

😳 Some 69k young'uns applied to be Citadel interns, a gig paying $120/hour​

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