CHICAGO — Determining where to start or expand a drycleaning company is one of the most important decisions an owner can make, and the changing demands of customers are forcing many cleaners to reevaluate this step in their business life.
In Part 1 of this series, we examined some of the considerations dry cleaners should keep in mind when deciding whether to buy or lease space for their companies. Today, we’ll explore the balance between visibility and cost when finding a location in today’s drycleaning landscape, along with how perceived environmental concerns can impact landlord relations.
Visibility vs. Cost: Finding Balance
“Location, location, location” has long been the mantra of commercial real estate, but the challenge of balancing visibility with cost is significant. Evolving business models have given dry cleaners more options when it comes to this factor.
Andrew Rivkin, owner of New York’s Embassy Cleaners, suggests using technological solutions to maximize a location’s value.
“It may be worth considering adding an automated kiosk that will allow customers to be serviced 24/7/365,” he says, “as not only will this offer more convenience to more customers and allow you to grow your business that way, but you’ll get more sales per square foot. In this way, you can more readily afford more expensive real estate.”
A mobility-focused approach is what’s recommended by Wayne Wudyka, CEO of The Huntington Company, a Michigan-based business that includes Huntington Cleaners, Wesch Cleaners, Camelot Cleaners and the Certified Restoration Drycleaning Network (CRDN) franchise.
“I think you really want to be as mobile of a business as you can,” he says, “and not reliant on real estate. The high price of real estate is prohibitive for a lot of dry cleaners, especially in brand-new locations. So having mobile business — lockers, routes, restoration — coming in your plant is just added volume at a lower cost.”
Impact of Pickup and Delivery Services
Pickup and delivery services have changed the equation for many cleaners. Rivkin observes that, while “in theory, location becomes less important if a substantial portion of revenue is derived from pickup and delivery service,” his experience suggests that physical stores still matter.
“Having a highly visible brick-and-mortar presence in the community you’re serving will definitely drive increased delivery customers to your business,” he says. “That really helps to promote trust and confidence between you and your customer.”
Steve Rettler, owner of All Seasons Garment Care and Tailoring in Minneapolis, sees pickup and delivery enabling more options when it comes to real estate strategies.
“I think you can be much more selective about location, and you may not have to open as many drop stores, because you can capture a certain area with pickup and delivery,” he says. “We’ve had cases where we’ve closed stores and yet retained market share because we have pickup and delivery operations that basically take over from that store location.”
Robert Strong, president of Country Club Cleaners in California, emphasizes that, with today’s customer, convenience has become the differentiator.
“We just did a price-and-quality survey of my competitors,” he says, “and what we found out, generally, is that my competitors provide good quality at approximately the same price. So, the only way to keep a customer coming back is with convenience, convenience, convenience.”
Environmental Concerns and Landlord Relations
When seeking to lease space, dry cleaners face unique challenges regarding environmental perceptions.
Rivkin believes that “landlords have concerns about contamination of their property because, depending on the state in which you live, this can be highly regulated and very costly to clean up. Some landlords refuse to even consider renting to dry cleaners as prospective tenants.”
Wudyka suggests being proactive and explaining that today’s dry cleaners use safer chemicals than in the past.
“If you’re going to a landlord, obviously it’s going to be a new location,” he says. “You have to be able to show them that you’re bringing in safe alternative solvents, and that you won’t have any hazardous materials coming on-site. Have the documentation to prove that to them in advance.”
This is necessary because of the industry’s history, he says.
“Many landlords and real estate holding companies like REITs (Real Estate Investment Trusts) will not lease to a dry cleaner just because of the historical perception that they’re going to contaminate the site,” says Wudyka. “Obviously, we all know today there are alternative solvents that don’t put the property owner at risk.”
Rivkin agrees that, when approaching a landlord, it’s advisable to come prepared with documentation that describes the environmental impact of the solvent and chemicals that the dry cleaner will use.
“You could perhaps allay their fears over the potential risk factor,” he says, adding that “this information is readily available from the main drycleaning trade associations, such as the National Cleaners Association (NCA) and the Drycleaning & Laundry Institute (DLI), as well as your suppliers.”
Come back Tuesday for our conclusion, where we’ll explore methods dry cleaners should use to protect their business interests in agreements, and common mistakes made when securing business spaces. For Part 1, click HERE.
Have a question or comment? E-mail our editor Dave Davis at [email protected].
