What a $5 Billion Industry Really Means

Recently heard a CEO in the industry casually drop this on a podcast:

"Laundromats are a $5 billion dollar industry."

At first glance, it sounds impressive. But let's break it down.

I shared this exact breakdown on LinkedIn last month, and the response was interesting over 3,500 impressions and comments from industry insiders that basically confirmed what I suspected. The math doesn't match the hype we keep hearing about our industry.

The Reality Behind the Big Number

Here's what that $5 billion actually looks like when you do the math:

Total Laundromats in the US: 29,000²
Total Industry Revenue: $5 Billion²
Average Revenue Per Laundromat: $172,413.79 annually

Break that down further:

• $14,367.82 per month
• $3,591.95 per week

Now, before we get too excited about those numbers, let's put that GROSS number in perspective.

What Other Businesses Generate

Want to see how that $172K compares to franchise concepts? The numbers are eye opening:

Chick-fil-A: ~3,000 US locations generating $22.7 billion in systemwide sales³
Revenue per location: $7.6 million annually

Popeyes: ~3,100 US locations generating $5.7 billion in US sales⁴
Revenue per location: $1.8 million annually

McDonald's: ~13,500 US locations with estimated $25+ billion in revenue⁵
Revenue per location: $1.9+ million annually

Let that sink in for a minute. Chick-fil-A generates 44 times more revenue per location than the average laundromat. While their location numbers are far lower than the number of laundromats.

The Debt Service Reality Check

Here's where it gets really interesting. My man Ken Wimberly nailed it on my LinkedIn post when he said: "Factor in debt service, and the cash flow can look pretty small."

Let's create a hypothetical example using our $172K average annual revenue. According to BizBuySell data, laundromats typically sell for about 1.2 times revenue¹ (we have seen higher than that in many markets, but will roll with that for this example), so let's say this hypothetical laundromat sold for $206K. With a 25% down payment, you'd finance roughly $155K.

Financing at 8% interest over 7 years, you're looking at about $28,000 in annual loan payments. That leaves you with $144,000 in gross income before rent, utilities, maintenance, labor, and everything else.

With stated industry profit margins running 20-35%² (I see lower range in stores we look at, but will stick with this for this example), you might see $25,000-$47,000 in profit. That's $2,000-$4,000 per month in take home income, hardly the "passive goldmine" being sold online.

When Industry Hype Meets Personal Reality

This reminds me of a conversation I had earlier this year in Monaco at the EY Entrepreneur of the Year awards. A fellow entrepreneur shared his laundromat experience from a few years back. He'd been coached by an influencer who painted a picture of flowing money and minimal work. The reality? He ended up selling the business because it wasn't generating nearly enough revenue to justify the time and effort required.

The disappointment in his voice was clear. He'd been sold a dream based on industry wide numbers that had nothing to do with individual business reality.

This isn't the first time I've seen this pattern. Remember when I wrote about the famous "95% success rate" statistic?⁶ That number turned out to be loan performance data from one lender, not actual business success rates. Yet it gets repeated everywhere as gospel.

Now we're seeing the same thing with the "$5 billion industry" claim. It's a real number, but it doesn't tell the story most people think it does.

The Bigger Picture Problem

Here's what's happening. When vendors pitch to investors or when "gurus" sell courses, they love throwing around that $5 billion number. It sounds massive and impressive. But they rarely mention that it's spread across 29,000 businesses, most of which are generating what average Chick-fil-A location makes in about three weeks.

The truth is, location matters. Competition matters. Market saturation matters. That $172K average could be $50K in one market or $300K in another. But none of that nuance fits into a compelling sales pitch about "joining a $5 billion industry."

Thinking about the thinking of laundry:
When everyone's talking about the size of the pie, ask yourself, what’s the size of your slice?

The Path Forward

This isn't meant to discourage you or anyone from the laundromat business. It's meant to encourage honest assessment based on real numbers, not industry hype.

If you're considering entering our industry, look at the actual revenue potential of specific locations in your market. Factor in debt service, operating expenses, and your time investment. Compare those numbers to other business opportunities available to you.

And if you're already in the business? Focus on the fundamentals that can move your specific location above that $172K average, better client experience, additional services, operational efficiency, and smart effective marketing.

The laundromat business can be solid and profitable, but success comes from understanding the real numbers, not the hype. When you base decisions on actual data instead of industry cheerleading, you're much more likely to build something sustainable.

That's all I got for you today.

Waleed

Join me on Linkedin, YouTube, or X (Twitter)

Echoing the thoughts of Jack Welch.

Face reality as it is, not as it was or as you wish it were.

Footnotes:

¹ BizBuySell - Laundromat Business Valuation Multiples & Financial Benchmarks
² Laundromat Industry Growth
³ QSR Magazine - Chick-fil-A Sales Surpassed $22 Billion in 2024
⁴ Nation's Restaurant News - Chick-fil-A Sales Slowed in 2024
⁵ MacroTrends - McDonald's Revenue 2010-2025
⁶ Wash Weekly - Why Isn't Every Laundromat Successful?