SPEAKER_00 0:14

Welcome to CCI Drive Time, the podcast for vended laundry distributors. I'm Didi with CCI using your drive time to cover laundromatic trends, payment systems, and practical topics that you can use in the field. Today I sat down with Brian Wallace. He is the president and CEO of CLA, the Laundry Association. And I wanted to give Brian an opportunity to talk to me about how CLA works in tandem with distribution. There are so much content is um produced by CLA, good content to help new investors and existing store owners learn more about the industry and how to better improve their business. But I've known Brian for a long time and I know that CLA does more than that. They do work across other parts of the industry. And distribution is obviously my focus. And Brian did a great job of kind of talking about his perspective on distribution, how they can participate better within uh CLA's um sphere of influence, and uh just a great conversation. So um here we go with Brian Wallace. Mr. Wallace. Steve. Thank you for joining me. Yeah, yeah, this is great. You know, uh moments ago before I hit the uh the go button here, we were just chatting about this. Uh we've had these conversations for years, uh, you know, and just finally had the uh the thought that maybe we should record and share it. And uh um, you know, I have also shared that I like to so far in this very early stages of this this podcast is talking to people that I like and that I feel comfortable with to get me up to speed. So thank you for indulging me and in this.

SPEAKER_01 1:52

Yeah, yeah, no, looking forward to it. And you said we've probably had 20 or 25 years of rehearsals going up somewhere. So if we uh can't talk shop at this point, God help us.

SPEAKER_00 2:03

Yeah, yeah, exactly, exactly. You know, and let's talk about some of that history too. You know, I think, you know, um I know I've heard this story before, and uh, you know, I I've heard you speak so many times, and I'll I'll just start to begin is that actually you're probably the best speaker. No, you are, there's no question, the best speaker in our industry for sure. Not just from a content perspective, but your delivery, your engagement. And I I certainly uh um emulate you whenever I can because I think it's it's uh it's uh something you've been very, very good at and and I and I like um I like what you're doing. But I wanna I want to take a step back into asking you some questions here about you know, like kind of how did you e I I how did you get into this? I mean I know you know how I got into this, you know, my family. I had I did I maybe had m less choices than you did about the industry that I was gonna be selected to to be in. But you've probably had more selections and in your days with the CLA go back over 30 years now?

SPEAKER_01 3:02

Yeah, 34 years ago, which is probably around the time I met Dion. And speaking of uh family history, uh well, look, I just uh, you know, like a lot of people you talk to uh that are laundromet owners, they kind of say, well, I just kind of fell into it. I had a piece of property or a friend brought this opportunity to me. Or uh, you know, so for me, it was honestly, I was just looking for a job uh out of college. Uh I had an uh organizational corporate communications degree, which what do you do with that? Um so you have to do a lot of uh door knocking, and uh luckily I found uh a coin laundry association that was looking for a sort of an entry-level uh communications uh specialist, and I had a great mentor, a couple of great mentors, many great mentors at the time, but specifically here at CLA, uh the communications director at the time, a guy named Dick Torp, um was an old school, like with the press hat and the little thing and the Northwestern uh university degree in journalism, which is you know still kind of the gold standard. And so I was able to jump in here and um you know start writing and uh working on our publication, working on press releases. So it was really kind of a ground floor you know opportunity and gave me my first uh chance to really work with entrepreneurs uh that are laundromat owners and distributors and manufacturers, and I was pretty much hooked uh early on and uh luckily had an opportunity to um you know run for the executive director position uh just a few years into my tenure here and was lucky enough to land that, but all of a sudden that's been 25 plus years. Uh so uh yeah, that's been a great experience, and I tell people it's it's uh may seem from the outside as sort of one job or one position, but uh as you well know from being on our board and and just knowing each other so long, you know, we've certainly are in the nonprofit business, we're in the foundation business, we've been in the publication business, the trade show business, uh, the insurance business. Uh the list goes on and on. So it's really been a great opportunity to get involved in a lot of different things. But the uh sort of the touchstone for me is just really enjoy working with entrepreneurs and doing what we can to help them get to where they're going.

SPEAKER_00 5:30

Yeah, you know, you um you answered probably where my follow-up question was going to be is like what's kept you interested here, and um, you know, I think um I too like to be involved in more than one thing at a time. And so the fact that CLA has gotten themselves you know involved in so many layers of the industry, it probably helps keep you engaged. But at the end of the day, um watching entrepreneurs find, you know, find some success or something. It's that's a lot of fun, actually, to kind of see people evolve. And I you've been in this long enough to probably see people start with uh uh one and and maybe and and maybe many uh locations uh towards uh you know over the years, and there's got to be some sense of accomplishment or pride that you maybe you had some some say in there, some involvement in that, you know, and at least you got to watch the journey.

SPEAKER_01 6:23

It's been very rewarding, and um I've I've said many times uh my MBA has really come from you know working with uh so many incredible board members over the years, you know, a couple hundred probably. Uh my involvement with the didn't we talk about the clean show or the government affairs work uh that we do. So it's really been an opportunity to be a sponge. And I always make this distinction, Steve, that you know, I I'm not an operator. I've never been an operator. Uh I'm I'm an academic, if you will. I've studied uh the industry and try to listen and synthesize and and uh try to communicate that back as as best I can. But I've just got the utmost respect for uh people like yourself that have built a business, and if we can uh as an organization, you know, play a supporting role in that, uh it feels really good.

SPEAKER_00 7:16

Yeah, that's that's that's per very uh perfectly said. And I think you know, even though you don't have any you know first hand store ownership, you know, experience, I don't think that I don't think that necessarily that that is needed in every uh and in every layer of getting advice because there's also uh something that I always get from you when I hear you speak or when I've had my conversations with you, is uh your ability to look past our industry into other maybe kind of similar um industries and maybe be able to kind of pull some ideas in that sometimes as a business owner you get so tunnel visioned into the operational side of thing that you you kind of forget to look outside of that. And I've always thought that you've done a good job of trying to look at the parallelism, you know, the parallel industries and kind of how they've been able to overcome maybe some similar challenges, and um, you know, great, great job with that.

SPEAKER_01 8:08

Well, thank you. We you know uh you always run the risk of it being sort of an insular thing, and you only talk to the people that you talk to. And uh I'll give uh shout out to an association executive mastermind group that I'm part of uh and have been for many years that includes my counterpart at the Car Wash Association, uh includes my counterpart in the uh building contract services, uh so very close parallels and uh really through the clean show uh we've built uh some some cases again 20 or 30 year relationships with the dry cleaning association, with the uh TRSA on the textile rental side. So I think it I think it uh helps all of us if we can be keeping an eye on what's happening around us and see if there's some lessons we can pull from that.

SPEAKER_00 8:54

Yeah, no, that's great. That's great. So, you know, as as you're aware, you know, I created this podcast to really target distributors. And I know that um there's a lot of content nowadays, and certainly you're in the early you you are the original content creator, I think, in this industry, even just from a live perspective now, and now we're finding all these new avenues to share that content um out there. But uh, you know, most of the stuff that I see, and and I'm sure you know you guys have spent a really you've done it, you've really stepped up the game in your content creation is for store owners, you know, it's for the and it's as it should be. That's the first um that we if we don't have good store ownership, we don't have an industry, right? So we have to we have to focus on that. But uh coming from distribution, you mentioned my dad, Dion, you know, and and I've always been fond of uh the distribution layer of this industry. Um and uh you know CLA um does stuff does does some things that are similar to what a distributor should be doing. I'm gonna, you know, say should very, very carefully there. And so, you know, I thought that we could take some time here and as a part of this is not uh not over focus on what store owners are doing per se, because you've you've done a great job kind of sharing the stories there, but uh, you know, you've also worked with uh pretty much every distributor that's in the in this industry, and you know, there's things that work, there's things that don't. You have an ob a view of observations there that I thought we could dive into a little bit, but where I where I wanted to kind of start was you know, is it kind of you define you know where you see CLA and distribution um doing the same things and where you think distribution needs to step forward and CLA needs to step back and maybe in the other direction too. Like where is CLA better off when it comes to providing this consultative layer of um you know helping store owners get going or adding or whatever?

SPEAKER_01 10:54

No, I appreciate that. And uh, you know, I told you when we saw each other recently that I love that you've taken the content right to the distributor with this uh you know, with this series, because I do think it runs the risk of getting overlooked uh at times. And you know, when it comes to CLA, you know, I think part of our secret sauce is that we are a vertical association. You look at a lot of these other industries, the operators have their own group and the wholesale distribution has their own association, and the manufacturers of allied trades have their own uh thing where you know uh people long before me decided it was a good idea to try to do this working together in this vertical. And occasionally there are rubs and scrapes and differences of opinion, but for the most part, we found that we can really get a lot more done working together. So I looked before we started, we've got 105 uh distributor members uh of CLA, so that's no small uh chunk of folks, and that you know, certainly that reflects some of the consolidation that's gone on uh as well. But uh no, I I certainly consider distributors to be a very integral part of all this and uh key to uh success. Um, you know, the you know, certainly learned a lot from distributors over time. We've had distributors serve on our board, and um with a few exceptions, I would hazard a guess that maybe I've been to more distributor shows than any human being alive, and that's uh you know, the good, the bad, and the ugly, uh, you know, mostly, mostly good. So you're right. Yeah, we we can provide a lot of guidance really at the top level uh directionally, uh, certainly try to bring people's uh base of knowledge up. We can, like I said earlier, sort of share some of the synthesized, you know, best advice uh that can come through, but there's really no substitute for that local distributor with boots on the ground with that local experience. And um so I don't see a lot of you know conflict. I really see it as a complementary um you know uh roles that we play. And you can imagine we make you know we're brand agnostic and certainly distributor agnostic, but we do make a lot of these referrals and connections and introductions, particularly for our new members. And I I've uh come to learn that they really see that as a valuable part of what we do. Uh one uh thing that I've shared uh far and wide uh is that you know, when a new investor or store owner joins CLA, one of the first things they get is a link to my personal calendar to book some time. I want to get on a first name basis, I want to get that immediate uh contact so we can figure out the best way to help those folks. And those are incredibly insightful conversations. I say it's like a daily focus group as to what's happening uh out there, and um there's just a lot of very positives. But if I uh and I have been asked, well, what's the number one complaint that you get over the course of all these calls? Hundreds and hundreds and hundreds of calls. Honestly, the number one complaint that I've I've gotten, and it's not certainly not every call, but the most frequent is I can't get a distributor to call me back. Wow. Um, and I've you know, and I've certainly shared that. Um, and when someone's a member, I said, I guarantee someone's gonna call you back uh because I know so-and-so. Uh and I'll make sure that you get connected, but you know, to kind of this general theme of what's happening in distribution right now is that it's awfully busy. Uh you know, you have a family distributorship, the inquiries are coming fast and furious. Uh, in this age now of social media content and the TikTok, uh, we know we get hundreds of inquiries a month here uh from people that may or may not be really qualified financially to get into it. And I can certainly empathize with uh you know distributors that are being inundated with uh I saw on TikTok I've got $10,000 I can do a laundromat. So um so I think that um when we kind of look at these evolving roles and what distributors need to do, and I think a lot of them are really sort of adapting to you know, how do you take these, you know, uh just this high volume of inquiries and suss through, you know, who are the folks that are really ready to do business and how can we both support them and get people to to where they're going. So it's it's certainly been a challenging, the more challenging role. I've I said this five years ago, ten years ago, twenty years ago. I've always said I think the distributors have the toughest job in this industry. Uh you may or may not agree, because you've got experience uh in store ownership, manufacturing, and distribution, but uh no one has it easy, but the distributors certainly have a tough, uh a tough job out there.

SPEAKER_00 15:42

Yeah, no, I I actually won't disagree having having uh all lay all three of the categories, uh, you know, manufacturing, distribution, and store ownership. I would say the distribution is absolutely the toughest part of that. Um you know, it's you know, I may have heard you say that before that though one of the biggest challenges is getting somebody to call back, and that's uh something that infuriates me as much as it as it is maybe eye-opening at the same, but it infuriates me because um, you know, I I don't know if you've heard this term sometimes in sales. It's like it's like half the battle is just showing up. And to me, picking up the phone is showing up. Um, and it's there's a ton of stories that you know that I've that I've witnessed firsthand and have been involved in where showing up just has an incredible payoff, you know, for everybody involved in that. And so, you know, this this is you know, I I spend a lot of time talking about just even basic sales 101 things, not not because we've never heard these things before, but obviously we need to be reminded of them occasionally. And so that's it's good hearing from you about that and and if if nothing else. You know, there there are a lot of people out there that are getting some I'm gonna say bad advice, but it's a troubling advice about what it really takes to get in this industry. And the last thing a distributor who's already very busy needs to do is explain to you know 20 people a month that you don't have enough money to do this, and I don't know how else to say that to you nicely.

SPEAKER_01 17:08

I get it. I I I because again, we get the inquiries too, and you know, one of the uh strategies or maybe just a tactic that I've shared with some of these uh distributor salespeople who are just inundated uh is that you know what you this sounds a little self-serving, but you know, have them sign up for our monthly webinar at CLA. We do a how to start a laundromat. We just did one on Tuesday, 140-something people registered, we get hundreds of people a month, and it's a way to sort of pre-qualify uh because we're gonna give them the scoop on the business. It is brand agnostic, and uh most importantly, perhaps we tell them what the resources are that you really need, uh as well as what the what the day-to-day looks like. So um if people are struggling with the volume of uh inquiries, you know, let us uh help uh in that we can uh try to provide that education in uh in a clear, hopefully a clear and concise way. So when they do approach uh a vendor, uh it's certainly better if they've got a little bit of a foundation beneath them and have a better understanding of whether or not uh they're really ready uh to go for it. Uh I saw you at an event in Detroit a few weeks ago, a woman who joined. Uh uh, we had our new member call just a few days ago, and you know, she she really said it was a very helpful uh opportunity to meet up because she had a better understanding of what she really needed financially. You know, this this was the you remember this meeting, this 300,000, 300,000, 300,000 coming up, and she said, Oh my goodness, you know. But we talked through what that really meant, how the financing works, and she said, you know what? Now I've got a game plan. I know what I'm gonna need to do. I'm not gonna get there this year, but maybe in a year or two or three I'll be ready to uh to get moving. So um I think all of this really comes in this consultative sale. Like, how do we um you know really make sure that we're giving the people the information that they need?

SPEAKER_00 19:04

Yeah, no, that's that's great. And and those are some of the stories that I've heard about, you know, you know, you don't want to not help everybody to some level because there are those opportunities where like, well, I don't have that now, but I'm gonna work for this. Now, you know, that game plan is really important, and I we've been involved in that here at Laundry Concepts in the Chicago market, where we've seen that happen, and they'd be very successful, you know. But it took a couple years for them to find their way there. Um I I I'd be curious, you know, when you have all these uh consults with new investors and people interested in a business, is you know, where what is the big is it is it the money, but what is the the knowledge gap that you think exists from what people are learning now that we all need to somewhat be kind of aligned with, you know, whether it's CLA and distribution that's talking to new investors, where is the gap? You know, what is the knowledge gap? Is it the funds needed to get into it or is there other things?

SPEAKER_01 19:55

No, really awesome question. I th I think I think about this a lot because obviously we're all trying to try to fill those gaps as best we can. So yeah, I think the if I was thinking about the knowledge gaps with the newbies, um, I would say uh certainly better understanding of the finances, not just how much I need, but then how does the financing work uh in what I would call our sort of captive financing ecosystem in the industry where we're you know we've created this uh you know these financing opportunities uh internally. Um I would say that there's also a knowledge gap in terms of you know sort of process or sequence. Well, all right, well, if I find a location, then like what happens next? Like, do I have to get pre-qualified? Is this where I talk to the distributor? Do I have to sign a deal? Uh, you know, and then same thing on acquisition, Steve. I get that question a lot about sequence. Well, this I see this store, do I start with the LOI or is that too soon? Or then this the NDA is before that? And so um, you know, some of the better content I've seen here recently are attempts to try to help that first timer kind of understand process or sequence and where do these other industry uh resources kind of play into it? My distributor, my broker, my association, my finance person, my insurance. How many times have we gotten to closing and oh my gosh, no one got the insurance? Uh so uh helping people better understand that sequence, I think, is part of the knowledge gap. Um, you know, and and we all need to do our level best to try to help people better understand it. And sometimes it's not linear, right? Yeah, you know, it's not step A, B, and C. Sometimes you have to zig and zag a bit to get there.

SPEAKER_00 21:43

Well, that's that's actually really, really good advice, I think, if you want to take it a step further from a distributor's perspective, because you know, we do have a lot of consolidation, and we'll I'm gonna talk about that here in a little bit, but but we're also seeing a lot of new faces being Hired by these consolidated because people are leaving, you know, there's some of them are retiring, and then they've got to they've got to backfill the the army, that boots on the ground army for these distributors. And so not all of them are um they they know how to open up the laundry. They've been trained on what the equipment can do, how the equipment works for them, you know, that's their first priority is to make sure they understand the products that they're selling. But I, you know, I think uh maybe you'll agree with me that some of the most successful distributors out there, the ones that really understand all the layers of what it takes to be in there and be advisory that. And what I'm hearing, one, is that CLA can be really a leaned-on partner in that regard to help that, but not just to get the customer up to speed, but I think a few distributor salespeople could probably learn a little bit from those, you know, a fly-on-the-wall conversations if they've never helped somebody start a business before, you know. And there's maybe somewhat of an expectation that just because you're a laundry equipment distributor that somehow you know how to start a new business, you know, forget that it's a laundromat. And so you know, there are a lot of effort, I think, should be made. Um, you know, advice to new people, hopefully this is a resource for them that say is learn what it takes to open a business, not just to sell them the laundry equipment. You got to be part of the whole equation. Um, yeah, it may be hard to to justify the um their ROI of time that goes into that, but really our ROI is when we move the machines. But if you have no mechanism to move the machines, then what's the point? So that's really good advice. And I think um it's something that I think people maybe don't realize uh that CLA can be a part of. And so, you know, kudos to you.

SPEAKER_01 23:34

Well, no, it's it's our it's our job, it's our role to try to help facilitate people doing business and and do it in a successful way. And um, you talked about other sort of affiliated industries or similar industries. I mean, a lot of them have gone through this, you know, sort of this brain drain, this wave of retirements, uh, people aging out. Um and uh you know, one of the I think one of the things that's been really beneficial on this uh of this wave of more information through social, through influencers and through CLA, and really manufacturers like yourselves putting content out there is uh what had long been a sort of a tribal knowledge, literally kind of passed down oral tradition of um sitting around uh for a cup of coffee or a cold beer and sharing all these insights to how do we open that up and make that more accessible uh not just to the operators, but to this new generation of distributor salespeople that have uh that have entered the business. Now they're bringing other strengths, right? They're bringing maybe a maybe, in my opinion, maybe a little stronger knowledge of kind of the nuts and bolts of sales, uh, certainly a better facility with uh technology. But you know, learning those uh inside uh inside baseball insights about the industry is something that uh we need to be able to push through. And I know that it's a point of emphasis uh for a lot of the manufacturers and certainly uh some of the larger uh distribution groups now. Like, how do we get our our new men and women coached up and uh make sure that they're ready to help our customers?

SPEAKER_00 25:09

Yeah, that's great. Hopefully there's an even an opportunity maybe for CLA to to be guiding uh, you know, providing best practices as it relates to that because you're you're hearing the stories already that they're gonna hear when they when they get involved with these customers. There should be some alignment there. Um so you know, a lot of this information um gets disseminated at distributor events. You know, we talked about all the years you've been to more distributor events than probably anybody in this business. Um and so I I'd love to pick your brain a little bit about uh kind of what makes a great distributor event. And I've I've told this uh you know this story uh before, which is that you know, my dad who's been he's been in the business for a long time, he'll talk about doing events in the 80s where they would just sell so much equipment. I mean that was uh that was when you just sold millions of dollars of equipment at these events. And ever since and I j I've been in the industry 27 years now, and I don't I there are very few shows that I've been to where there's been you know millions of dollars of equipment probably moving at those events. Now he will uh he he he clarifies, which is a really key point, is that in the 80s uh discounting of laundry equipment was maybe not as prof uh prolific unless you went to the event. There was a real reason to go to this event because that was the best time to get a good price. You know, it's like it's a real incentive. And you know, as there's been more competition, there's more manufacturers, there's just a lot of there's a lot of things. The just the discounting and so forth, you get a bet you get a good deal kind of uh almost every day of the week if you know how to negotiate correctly. And so the the incentive to attend a distributor event is is different now. You know, it's not the same thing. Certainly there's opportunities to save some money at an event, but you know I'd be curious how is you've observed the best events, maybe you've also been to the ones where maybe you're the only one there. You and I you and I were going to be.

SPEAKER_01 27:22

Yeah, no, it's a great question and something I've thought a lot about and lived it, right? Um day to day. I I think that uh the events, in my opinion, again, I'm not gonna argue with Dion, you can't argue with success, and it was a different era, right? In terms of how, you know, and even access to information was was so much different. Yet you had to do it uh face to face. Uh but I think in recent years, I think the events that have uh really stood out to me are the ones that have been less focused on sales, frankly, and more focused on education uh and uh building relationships. Um and sure, I think that if you educate people, help people get connected, I think the sales are soon to follow, right? Because uh yes, there are price shoppers, but increasingly I think people are looking for uh you know a source of education and relationships and connections. And I think if you can create events and opportunities that are focused on that, you know, the sales uh will naturally follow. So uh and I also think honestly that um you and I can both walk into an event somewhere and we know instantly whether the distributor's heart was in it, whether they really invested in the marketing, uh, whether they really went out and pounded the pavement, or did they take a build-it they will come approach? And the latter doesn't work, the former does work, and you know it within minutes of showing up at an event. And I always assume that the new investor or the existing store owner walks into that room and they they can make that same assessment on their own.

SPEAKER_00 28:55

Yeah, yeah. No, I I I I agree a hundred percent. Um, I think I also, you know, the events um and and and interestingly enough, even though it seems like uh there was a kind of a period where I felt like distributor shows were just not being well attended. And because with you know, CCI, we attend a lot of these events, that's why we get to see you uh throughout the year, is you know, is that is trying to um we want to help the distributor uh be successful because we all don't want to go out there and stand and I'd love to talk to you, but we can do that here. We live not far from each other. We don't have to go to uh you know to the odds of the country to the uh to to have these conversations. And and so you know, I think we're putting together best practices for people to have these events, because I think you're right, uh-huh. They may not be necessarily sales events, and we should stop thinking about them as sales events in the same way. Certainly, if someone wants to buy something, we're not gonna turn their their their business away, but focus more on what they're gonna get out of that event. Um and part of that is I think which I think CLA has also done a really good job with unrelated to that, is the networking between the operators in a given market. And I would say that some of the best events that I've been to, and you've been to the same ones, you see the exact same people at them every year that they host them because they look forward to the opportunity, I think, to collaborate with each other, to discuss their pain points, their successes, you know, see what's going on, even even socially, they want to catch up. But that's all been associated with the distributor that brought them all together, you know, and your own events are great examples of all of that, you know, the CLA hosted events.

SPEAKER_01 30:36

Well, look, I mean, uh again, it's all about value, right? And you know, how are you what is the value proposition for an existing operator to show up at an event? You know, like Dion said back in the day, it was like, well, that was how you got your 20 off on the deal, and and you had to show up uh to get it. And and again, there's still you know, rebate programs and other incentives that are out there. But you know, I just think that the value proposition today is strongest when uh you're in a position as a distributor, as a host, to provide education uh on what's going on in the industry, you know, marketing, you know, the talks that I've seen you and your team give at these events are great. And it's not about your bells and whistles typically, you're focused on well, how do you leverage, in this case, a professional payment system to help you do more business or to make your life easier managing a store. Um and so I think we can focus on you know education, and if we can uh sort of uh you know backfill that with lots of opportunities to network with their peers, that's how you're gonna have uh people, new people coming every year and having those return customers come to the event. And I gotta imagine when it comes time to make a purchase, um, and if I've been to this event every year and I've gotten to know the team and I know uh the person at the front desk and I know my salesperson and I know the service, the service guy, I I think that's naturally where I'm gonna look first when it comes time to make a purchase.

SPEAKER_00 32:02

Yeah, yeah, well said. And and and I will I will grant it, as though the the pricing was certainly an advantage back in the day because there was maybe a little less of the discounting um outside of that. But the availability of information nowadays, since you can kind of get it, whether good or bad or indifferent, um you you had you needed to go to those events to get information, you know, you know, it was difficult. So um good. Um let's let's push forward a little bit here and talk more about, you know, we mentioned a little bit about distributor consolidation has been something that has been um very I mean, again, in the years that we've been doing this, it's it was in the past five or six years, this has been pretty incredible, you know, to kind of see the level of uh consolidation that's gone on. And I'm curious, um I think we all know, uh if if you don't know, that I think most of that reasoning is is that there's a lack of uh succession in a lot of these. These have been historically been a lot of you know family-owned businesses. We're fortunate here in Chicago that my brother and I were interested in uh in kind of continuing something that my father started, and and and I'm fortunate enough. I have a son that's joined, and he seems to be equally interested in kind of being involved. But that is not that's not true everywhere else. You know, I talked to I had Carl Hendricks on the f on the podcast a couple of weeks ago, and he tried to get his kids to do it, and they just said, Dad, you just work too hard. I don't want to do that. I guess truth is is uh is painful, but it's it's also good to hear. I'm curious, you know, are there other factors that you think are coming in outside of just the succession that's driving all of this consolidation?

SPEAKER_01 33:37

Yeah, but I I think I think that that um you know, again, it's it's nothing special about the laundry business. You look at wholesale distribution or other types of small businesses, uh, the lack of succession planning or exit strategy uh is is definitely a a big challenge. And I'm sure that the manufacturers saw that as well uh as we did. I remember, I won't name names, but I remember uh being at a distributor, uh maybe it was a cocktail party with the with the host manufacturer, and kind of looked around the room and said, man, there's just a lot of gray hair here. Um what you know what what comes next, not just for that family business, but then you can see it from the manufacturing standpoint, is like, boy, my distribution network is is aging out and and needs some help. So I definitely think that that was a a big factor. Um, I just think that there's also the industry's been terribly successful. And I think that just draws interest from uh outside resources that whether it be private equity or uh folks that uh have experience in wholesale distribution, saying, well, here's another channel uh that maybe we haven't uh explored yet, and maybe there's an opportunity there. So yeah, I think that I think some of the manufacturers were motivated to try to sort of secure or solidify or uh you know sort of reinforce their distribution network, and in some cases they saw the path uh from making acquisitions in order to do that. And I think outside groups that have seen success in wholesale uh distribution said, well, here's here's an industry that really was flying under the radar, maybe there's an opportunity for us to jump in and make an impact.

SPEAKER_00 35:20

Yeah, yeah, no, that's interesting. I think you know, I'm curious too, would you think that they're and maybe maybe you can share this whether you're you're comfortable or not, too, but as you talk to you know this the investors that are maybe leveraging your services and you're you're getting to the point where they need to really get engaged with the distributor, and maybe they've visited a few, you know. I mean, I think any good consumer should um uh interview, you know, who they're gonna kind of partner with in this this very big adventure. Um are you are you noticing any trends between this consolidation of working with a consolidated distributor versus a more independent one? Is there are there are there things to learn? Because I'm thinking about it, we're still a family-owned distributor, we're not owned by anybody, we're all bootstrapped and kind of always run that way. But we compete against the consolidated ones. And you know, we like to tout what we think is good about that, but I'm curious if what from your from your observations, are you are you noticing anything about how investors are in in getting engaged with these two different types of distribution, if any.

SPEAKER_01 36:26

Yeah, and I mean I would say that whether it's an independent distributor or a consolidated distributor, um, I think the fundamentals haven't changed a whole lot. You know, I think from the store owner perspective, uh whether it be an existing operator or a first-timer, you're looking for clear, concise information, you're looking for responsiveness, uh, you're looking for coaching, and you're looking for follow-through, right? And so I've seen uh plenty of instances where independent distributors have executed and on that, and lots of examples where they haven't. And I've certainly seen uh examples where a consolidated uh you know distributor uh delivers on those things, and plenty of examples where they haven't. So I I think that that gets to your point about shopping and reaching out and networking and trying to build your you know, sort of your laundry network as an operator or potential operator is I think at the end of the day, the the reliability, the responsiveness, the authenticity, the follow-through, those are the things that are gonna win the deal. You know, whether you're part of a 30 30 distribution group or uh you know what we've seen too, Steve, right, is a lot of you know new distributors, new independent distributors that have uh that have uh jumped into the fold. So, you know, I think you got to do that job. And you know, one of the notes I made coming into this conversation was uh this is an observation I shared with a at a chance to address a distribution group several years ago. And I kind of walked the group through um this notion of does the is the sales experience commensurate with the size of investment that you're asking for? And I kind of talked about well, has anyone bought you know a luxury vehicle recently? Although maybe you spent $80,000 or $100,000 on the vehicle. Oh, what was that sales experience like? Oh man, the folks were put together, you know, showroom. Yeah, and then I gave the example has anyone you know put you know a couple hundred thousand dollars or half a million dollars uh uh with a stockbroker and and a financial advisor, and what was that sales experience like? Oh my gosh, you know, the you know, the the place was beautiful and very professional salespeople. And I said, well, if someone's gonna put in a two million dollar laundromat, what does that sales experience look like? And I think some people had crickets a little bit of um you know self-reflection to do. And again, I wasn't trying to put anybody uh on the spot, but just really think about if we're asking new investors, let alone existing operator, to spend the better part of a million dollars just to pick a round number to buy equipment, uh, that sales experience, whether it's the physical experience, you know, the showroom, but really the quality of engagement with everybody on the team and the follow-through ought to reflect a situation where you're asking someone to spend a million bucks. And if there's a gap there, particularly I think the new investors that are tending to come to it with more business experience or certainly from a corporate background, I think the expectations have rightfully come up. And I think the real challenge for that distributor is um how do I make sure that I'm delivering at that level uh to win the deal?

SPEAKER_00 39:39

Yeah, that's that's a great observation and a great and great advice. I mean and what I get out of that more than anything else is that for those who are um you know maybe thinking about being in distribution, you know, you've got service techs out there, you've got uh salespeople out there that are maybe wanting to do something more, no different than uh than an entrepreneurial laundry owner wanting to open a store. You just you know, but there's people out there that want to maybe not own a store, but they want to get involved in equipment sales or you know, in that layer of it, is that you don't there's not nothing you said there meant that being part of a consolidated group was exclusive to being part of an excellent. You can be very successful by treating like an all business is treating the customer the right way and following through and sales 101 and everything else that we've already talked about. So that's excellent. I'm glad that you uh you were very um that you shared that with you. I I want to now move into a little bit because you started talking about not only is the consolidation happening on the distribution side itself, but we have all this uh kind of private equity, we have uh uh multi-store ownership. It feels like there's more multi-store owners than we've ever had. And we have this new form of uh financial backing that's coming into this with the PE firms. And I'm curious, you know, you've probably talked to all of them, you know, and they they probably find you at some point. Is do you think is there a different level of expectation that a group that is looking to uh one thing that makes it complicated, sometimes they're not even buying in one territory, they're maybe buying across multiple territories, multiple states, all this stuff is what is what are kind of expectations do you think they have, if any differently, from a distributor versus the mom and pop, you know, now you know, small town, one store, get started. Yeah.

SPEAKER_01 41:30

Yeah, I I I think you know, my answer is pretty similar to the prior one, which is uh again, they're gonna have an expectation, probably even more so. Maybe they're looking to spend five million dollars. Yeah, yeah, $10 million. So um, and again, I'm not I kind of using the the aesthetics as kind of an example of like what's the environment look like. I'm not saying you know that that belies you know some of the other key factors, but you know, looking for that professionalism, looking for that high level of responsiveness uh and feedback. And I think and you may have seen this where I think that it also requires even more uh sort of integration or partnership with the manufacturer, you know, where you gave the example of being in multiple markets. Well, boy, that regional salesperson at the manufacturer, a washer manufacturer, better be engaged in this process too, right? And they better be in a position to help you know engage in different markets, you know, with their with their distribution partners. Uh and again, I think that has been a leg up. I've seen several scenarios where the ability for the manufacturers, you know, regional sales reps or national sales reps to be able to help integrate uh in multiple markets, um, you know, I think is uh becoming more important uh than ever. But you know, I think again, it's no different in in a lot of ways from that uh you know that that well-resourced individual investor that wants to do their first store, um, as well as whether it's a PE backed or or multi-market uh scenario, I still think that they're looking for those same basic things. You know, information, concise, follow-up, clear path, clear next steps. And I think that's what's going to continue to win the deal.

SPEAKER_00 43:18

Yeah. Again, I'll I'll I'll piggyback on my other statement in in some regards that you know you don't any distributor can deliver on that. You know, any any person can deliver on the things that are important because it doesn't change just because you have five million dollars to invest instead of you know six hundred thousand. Um and uh the you know keeping the sale experience commensurate with the investment is in something we should all think about, you know, when we're when we're coordinating with investors and and making sure we're doing the right things when we're working with them on that store. Um I want to talk a little bit about um some of the other things that CLA does and and particularly if they're things that maybe distributors can can help with um is you know some of the advocacy and legacy uh you know legislative issues that you guys uh don't get enough credit for I think I I think I'm starting and I'm proud of you starting to talk a little more about it openly like might as well just share with the with the world with the things that you do. So you know maybe take just a moment or two to talk about maybe some of the topics that are maybe maybe hot right now and if there's anything that you know distributors can get involved in because we need a healthy industry uh you know not just selling equipment but if again we got it it's all layers of this have to kind of work together for us all to be successful.

SPEAKER_01 44:35

Yeah well yeah thank you and I you know certainly our our advocacy legislative and regulatory uh is a big part of what we do and yes we're trying to do a better job of talking about it. We just recently uh published an advocacy impact report that could be downloaded over at uh laundryassociation.org and as we did our homework and started looking back at the last 20-25 years we came up with a pretty conservative estimate of about $7.4 billion uh saved on behalf of the industry and so that's an aggregation of all the sales tax efforts on a state by state basis uh it certainly had a lot to do that number with our ability to get our industry classified as essential during the pandemic and the fact we were able to stay open those couple of months uh which was billions of dollars uh in itself and even the more recent efforts which have been uh related to the uh mandates being proposed for microfiber filtration on a per washer basis uh so these are all things that uh would impact everyone uh through the food chain and again another reason that we ought to be a vertical association and I think the ways that uh distributors can help is obviously number one be a member uh get connected on that basis but you know I think the distributors have a unique reach to the local operators when it comes to simply uh sharing the information right if you can help amplify hey guys this is an issue that we're dealing with here's the information and Steve one of the things that goes a long way is the grassroots and so if we need to be all reaching out to Senator so and so or representative so and so you know the distributor is in a great position to reach out to their client base and say hey you know let's let's knock on these doors let's make these calls and send these emails and one of the things I've learned in 30 plus years of doing the lobbying is that it makes a big difference. It really makes a big difference what are five phone calls going to mean or 10 phone calls going to mean it it means a lot. It shows up with the staff on behalf of these legislators and when it comes to the membership piece both as distributors being members and store owners being members you can imagine that one of the very first questions I get usually from a staffer is how many members do you have in my district? How many laundromats are in Senator so and so's district it sounds very transactional and very crass and very but believe me I get those questions and the more I can say well you know here's here's a few great operators that are uh in your district I love to introduce you to them in fact let's go down and pay a visit together uh that was one of the key factors on the microfiber issue in California was being able to get uh Assemblymember McKinner uh down to Jerry's uh store in Hawthorne California um that made a world of difference something that sounded kind of academic or what does this legislation really mean to going to the laundromat lifting up the bulkheads seeing how these things drain and um so distributors I think can keep themselves apprised of the issues and share with their customers.

SPEAKER_00 47:50

That's great that's good and I think it's um it's not a difficult thing. You just um it it we all have to be aware that these issues are not just store owner issues. If the store owners can't do business the way we uh they they should be able to it's gonna hurt it's gonna hurt everybody. So excellent excellent um you know you also are um you know you you you've play you play a big role in some getting the commun you know giving back you know laundry cares is something that I know you're passionate about and you've been instrumental in you know making it uh what it is today um I'd love for you to share a little bit about you know how can distributors be involved in that in that part of it you know um um tell me a little bit on more you know take an opportunity to to say how how distributors can be involved in that yeah no thank you so much you know and and and you've been involved as well I mean the the Laundry Cares Foundation is really our idea like how do we give back to the communities that have supported our business you know when I think back on 34 years or multi-generations you know I I've always felt that that you know our livelihoods starts with that that mom dropping a quarter or swiping a card at the laundromat.

SPEAKER_01 49:02

And you know these are often under resourced neighborhoods and I feel like we have a unique opportunity if not an obligation to try to give back uh to those uh communities and you know by the way it's good for business right when you're when you do events when you engage uh it is just a it's a competitive advantage and so uh I think the way I've seen distributors uh engage is uh showing up as volunteers at events and one of the biggest takeaways I've heard from some of the distributors is number one they get addicted to a free laundry and literacy day event uh because you're there there's energy you're helping the community you're giving back but what they often tell me is you know what I got to meet a couple of my competitors here today you know Joe or Sam or Sally and it just changes the perspective right we're not uh fighting the death over a deal we're trying to help a lady out to a car with her laundry or giving a a book to a kid so um I would highly recommend that the distributors listening uh find a way to uh get engaged and maybe just start by volunteering and again invite some of your store owners to come out and volunteer and I think it'll really change their perspective on what laundromats can really do in the community.

SPEAKER_00 50:18

Yeah no I discredit I have been involved in a in a in a handful of events uh I certainly should be involved in more but and I've had employees actually um participate and really work you know because everybody has different passions you know I mean and some of my employees I had no idea that they that it was something they found passion in very quickly and it actually gave them a different level of respect for the industry that they worked in and even maybe a little bit I'll I'll I'll piggyback on it for us for helping them get involved in that and so you know by all means you talk about being good for business that can take many different forms beyond just the fact that uh um you know there there may be a sale somewhere down the road or better business for that store owner but it can have all kinds of impacts uh beyond that so yeah that's that's great you guys are doing great job there um as we kind of get we're kind of close to the end here I I I would love to have you as I ask everybody to pull out your crystal ball a little bit and uh and give me a give me a sense of I'm gonna ask a few questions here but one is like what is the future for CLA? What do you see changing? Uh what do you what do you what do you think we're gonna see uh what changes if any or what do you see the CLA evolving in here over the next few years? Obviously the industry is evolving what does that mean for CLA?

SPEAKER_01 51:31

Yeah well I mean I said earlier about how uh distribution companies need to evolve and change to meet the changing demands of their clients well we're trying to appeal to those same folks uh to become part of uh the organization so uh you know we've been in a sort of a perpetual state of change here the last few years everything from uh rebranding to just relaunching our magazine uh to uh creating the at the CLA spotlight channel uh for content and so what we're trying to do is uh you know it's a race for relevance right uh for really any organization in the industry how do you stay relevant how do you stay uh valuable and we're continuing to look at ways to how do we make uh the membership more valuable not just to manufacturers and service providers but uh distributors and ultimately to uh the owner operators and so uh we've leaned into uh education we've leaned into networking and events uh we've leaned into uh social media we've leaned into uh better and different ways to deliver that information uh our women's laundry network has been uh just an incredible uh cohort of women working together uh uh in the industry so I think really the future for us is continuing to evolve with the needs of the industry um and when it comes to things like government affairs frankly try to do a better job of communicating that and shining a light on the work that we're doing on behalf of the industry.

SPEAKER_00 52:58

Awesome awesome and then you know um what are you optimistic about in the industry as a whole? I mean what is uh you know uh I'm gonna be in this for a while longer. I have a feeling you're gonna be around for a while and what what what makes you have optimism about this industry moving forward?

SPEAKER_01 53:15

Yeah I mean my my first thought is to kind of go back to the getting conversation is just having a lot of faith in entrepreneurialism and uh what that motor that that uh drive that the entrepreneurs have that we all work with I mean that gives me just an enormous amount of optimism for the future are the are the challenges changing yes uh are is it more difficult is it more expensive you know all those things are true but uh going back to the early days of this industry when when CLA was uh first formed in 1960 uh you go back and look at some of that material what are they talking about boy this some this is some bad legislation we got to put an end to uh you know we need to have we need to have more conferences we need to get more people together so when I look back at minutes from 1961 uh it really is focused on some of the things we've been talking about uh you know here this morning so I I'm very optimistic and I know that that uh spirit of the entrepreneur is going to carry us a long way into the future.

SPEAKER_00 54:13

Yeah I agree. Brian this has been terrific um you know you you've uh um you're exactly what I was hoping was going to come out of this conversation you know again we we get to have these chats and I'm I'm grateful that you uh you were able to um make some time to have it and share it with with everyone that's interested because I think there's uh there's a lot to be learned here but thank you very much I appreciate you I appreciate what you guys are doing and uh you know I know I'm gonna see you on the road again here soon.

SPEAKER_01 54:42

Yeah well thank you for the invitation and appreciate your longtime support uh through membership through board service and uh you all have really uh you know been an emblem of what we need from all of our industry partners so thank you very much and yeah we'll see you on the road for a cold beverage sometime real soon.

SPEAKER_00 55:00

Appreciate you cheers