What is the laundromat business model?

The laundromat business model might seem simple — washers, dryers, customers — but beneath the spin cycle lies a surprisingly resilient cashflow engine. Whether you're eyeing passive income, diversifying assets, or starting small in local retail, understanding how laundromats work could clean up more than just dirty laundry.

Let’s unpack what really drives a self-service laundry — from revenue mechanics to behavioural triggers that keep machines humming week after week.

How does a laundromat business actually make money?

In a nutshell, laundromats generate revenue by charging customers for access to self-operated washers and dryers. But scratch the surface and you'll see a model built around automation, consistency, and behavioural psychology.

Here’s how the income typically breaks down:

Per-cycle fees: Customers pay a fixed rate per wash or dry. In Australia, wash cycles average $5–$8, while dryers go for $1–$2 per 10 minutes.
Upsell services: Think vending machines for laundry powder, fabric softeners, or even snacks and drinks.
Value-adds: Some locations offer “wash & fold” services, lockers, or even Wi-Fi and lounge zones to encourage dwell time.

Now here’s the kicker — because laundromats run on machines, labour costs are minimal, often limited to cleaning staff and occasional maintenance. That creates strong margins, especially when occupancy (machine usage) is optimised.

Why are laundromats often considered “recession-proof”?

There’s a phrase often repeated in this industry: “Laundry doesn’t stop for the economy.” And there’s truth to it.

Whether the economy’s up, down or sideways, people still need clean clothes. In fact:

Renters and inner-city dwellers without in-unit machines are consistent users.
Students, temporary workers and travellers rely on laundromats regularly.
During downturns, people avoid dry cleaners and instead DIY with coin-op machines.

This consistent demand, paired with low overheads, makes laundromats one of the few brick-and-mortar businesses that perform steadily through economic cycles. Add in the fact that many machines now accept card and app payments, and you’ve got a model that scales without heavy tech investment.

Who typically owns laundromats — and why?

In Australia, laundromats are often owned by:

Local entrepreneurs looking for stable cashflow
Passive investors seeking income with limited management
Franchisees (e.g., Speed Queen or Wash World models)
Property owners adding utility to high-foot-traffic retail zones

For many, the appeal lies in the “set and forget” dynamic — a well-located laundromat can run unattended most of the day, with staff only needed for maintenance, cleaning and cash collection (if it’s not fully digital).

But it’s not entirely hands-off. Owners still need to:

Monitor machine health and usage
Handle occasional customer issues
Keep the space clean and inviting
Stay ahead of local competitors with pricing and promotions

What are the startup costs of a laundromat in Australia?

Costs can vary significantly based on location, fit-out and equipment.

Here’s a rough breakdown:

Cost Component	Estimated Range (AUD)
Commercial Lease (Bond + Fit-out)	$50,000–$150,000+
Equipment (10–20 machines)	$100,000–$300,000
Renovation & Setup	$30,000–$100,000
Initial Marketing + Branding	$5,000–$20,000
Total Estimate	$185,000–$570,000+

While it’s not a shoestring startup, laundromats have the advantage of long asset life — machines can last 10–15 years — and generate daily revenue from day one.

How do you succeed in the laundromat industry?

Success isn’t just about location (though that helps). It’s about habit formation, ease, and trust — all behavioural levers that seasoned laundromat operators pull consistently.

Some proven tactics:

Ease of use: Card systems, intuitive signage, clear instructions. Reduce cognitive load.
Consistency: Machines that work, every time. Trust builds loyalty.
Cleanliness: Arguably the #1 driver of repeat business. Nobody wants to wash clothes in a dirty space.
Social proof: Display reviews, testimonials, or even photos of regulars. People trust people.
Liking: Local touches — “Meet the owner” posters or personal notes — create connection.
Reciprocity: Free dryer minutes on quiet days, or “locals discount” can nudge behaviour.

It’s less about gimmicks and more about becoming part of a person’s weekly routine.

What are the risks and challenges?

Like any business, laundromats have their pain points:

Vandalism or theft (especially if operating unstaffed or in low-security zones)
Maintenance costs (commercial machines aren’t cheap to repair)
Utility bills (water and power can bite into margins if not managed smartly)
Changing demographics (if your area gentrifies, your core customer base may shift)

Some owners offset these risks by installing CCTV, choosing high-traffic locations near schools or shops, and offering flexible pricing.

Also worth noting: environmental regulations and water efficiency are becoming bigger factors. Newer machines that use less water and energy are increasingly attractive (and in some councils, mandatory).

Is self-service laundry still growing in Australia?

Absolutely. While some thought on-demand pick-up services would replace self-service, the opposite has happened.

Rising rents mean fewer in-unit machines
The gig economy drives people to maximise time (laundromats offer multitasking time)
Gen Z renters are more likely to use digital-first, cashless laundromats
Co-located “laundry cafés” are becoming social hubs in urban areas

And with more automation — remote machine monitoring, app-based payments, even loyalty programs — the self-service laundry model is adapting fast.

A perfect example of how this works in practice can be found in this breakdown of self-service laundry operations — worth a read if you're considering the investment.

FAQs

Do laundromats make passive income?
Yes — many operate unattended and use automation. But passive doesn’t mean no work. Cleaning, restocking, and machine servicing are still needed.

How long before a laundromat breaks even?
Typically 2–4 years, depending on location, lease terms, and marketing. High-traffic areas tend to reach ROI faster.

Is franchising a better option than going solo?
It depends. Franchises offer branding, support and pre-vetted suppliers — but with ongoing fees. Independents enjoy more control, but need to do more legwork upfront.

There’s something quietly powerful about a business where the customer does most of the work, yet walks away feeling served. Laundromats, especially self-service ones, tap into a universal need, offer daily cashflow, and — when run well — become community anchors. Not flashy. Just reliable. Sometimes, that’s all you need.

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