Dry Cleaning business

September 22, 2023

by a searcher in Queen Creek, AZ, USA

Hey Community, I am looking into multiple businesses but one has stuck out and I am in the beginning phases of looking into a Dry Cleaning business. I know it isn't glamorous but they do have great profit margins with good cash flow.
Of course they took a HUGE hit in the pandemic and lifestyles have changed a lot with more people working from home, but I would love to hear anyone's feedback around these businesses.
Do you think they are truly a dying business? Do you think this business is only profitable if it is owner operated? What are things that someone would need to look out for when running a Dry Cleaner?
Thanks in advance,

4 Likes

14 Replies

266 Views

Replies

Reply by a searcher
from Cornell University in Schaumburg, IL, USA

FWIW We met the founder of CRDN years ago. He started with one location in the Detroit area. Struggled. Then he realized at the time he could make more $ cleaning items damaged in an insurance claim. Took him awhile, but he got on the preferred vendor list of a large insurance carrier. He then switched gears and decided to franchise CRDNs. There are other players like COIT that sell franchises and clean items like textiles, soft goods etc. that suffered smoke damage etc. If its cheaper (um, I mean more cost effective) carriers adjuster will have the items cleaned as opposed to replaced. Again, I'm not sure how how hard it is to get on carriers preferred vendor lists, and you might want to investigate buying a franchise instead.

Reply by a searcher
from The University of Texas at Austin in Austin, TX, USA

Regarding watch outs - agreed with Bruce, environmental liabilities are a concern. You can partly neutralize by not purchasing real estate and structuring deal as an asset purchase rather than stock sale. Both moves keep liability on seller for any incidents that happened pre-close (as long as it can be proven that the incident indeed happened pre-close). You can ask owner if they have done any Phase 1 or 2 assessments.

Regarding the industry at large - you can ask seller for volumetric reports pre and post Covid. I think you will find volumes are down.

Let me know if you want to talk in more detail on industry.

+12 more replies.

Join the discussion