SPEAKER_01 0:15

Welcome to CCI Drivetime, the podcast for Bended Laundry Distributors. I'm Steve with CCI, using your drivetime to cover laundromat trends, payment systems, and practical topics you can use in the field. Today I sat down with Steve McKaelick with ML Equipment in the uh Ohio uh area. They actually are part of HM equipment as well. Um, Steve and I have known each other for a number of years and uh is just uh a great example of doing distribution correctly. And um, you know, we got to talk about all kinds of things from technology to investors to leads to hiring um to all kinds of things that uh you know that everyday distributors deal with. And so um excellent conversation. Uh uh look forward to sharing with you. Without further ado, here's Steve McHaylor.

SPEAKER_00 1:03

Steve, how are you? I'm good. How are you, Steve?

SPEAKER_01 1:08

Terrific. We'll have to uh uh the Steves Unite here today for uh this episode is Steve M's. Yes, thank you. Uh the Steve M's Unite today. Yeah, can't get any more uh confusing, but um but I'm excited to have this this chat um today because um there's a couple things about you that I want to know more about. We we certainly have known each other over the years. We both have been distributors for a long time. You work with us on the manufacturing side and you've used some of our CCI products. And uh um although this isn't necessarily an advert for that, certainly I'll I'll take any uh any applause or or or or that you may have for the product if we get to it. Um but um my my hope is to just to kind of understand your experiences um run and distribution out in in your part of the the world and kind of some of the uniquenesses. But before we dive into that, um I've I've been researching you just on, you know, I guess stalking you on LinkedIn uh or recently, but uh um you know, how did you make the transition to laundry? I think you were in the insurance business for a while. So what what gets you in what gets you in the laundry business?

SPEAKER_00 2:19

Well, so uh ML was my family's company and I'm you know it was third generation. Um I avoided it for a long time, um, but you know, I grew up around it for the most part. Um, but they just they reached a point um, you know, where I think they were looking to add another salesperson, and you know, I I liked my previous job, but I was kind of bored with it, and um, so you know, I decided to to make the move.

SPEAKER_01 2:48

So yeah. So M L is um because I know there's there's it's kind of you guys have had a uh a merger acquisition. I don't know, what do we call this uh with HI?

SPEAKER_00 2:59

It was acquisition, yeah. So acquisition, okay yeah. Uh my dad was ready to retire, and I just didn't want to do everything, you know. I'm more of a relationship guy, you know, a sales guy. Um, so it it just seemed like a good time. And you know, I had met with uh Adam Heldman with uh HM previously, and you know, he casually mentioned, hey, if you guys are ever looking to sell, uh, you know, give me a call. And uh so you know, Adam and I started talking about it, and you know, it just seemed like a great fit. He's you know, he's he's he's a good guy. Um, you know, philosophically, we kind of, you know, we're in the same place, and uh so we made it happen. We s we sold the company officially to him January 1st of last year. So of last year. Okay.

SPEAKER_01 3:50

Yeah. Well, yeah, you know, I it's um I I actually, you know, not to get out off track a little bit, but I I actually really like seeing that transaction in in contrast to some of the other types of acquisitions that we're seeing, and I want to get into that a little bit uh down the road, but uh, you know, I'm glad to see two like-minded um organizations find a way to kind of get stronger together and and and obviously meet some needs of uh of the principles around that. So um, you know, congrats on on finding that. But so you know, again, so it's been about 15 years, I think you've been in this business. If I'm doing the math right, uh, you know, I can I've I've been stalking you online. So I think um just over 15, yes, sir. 15 years. And um, you know, you've you've played a sales role prom predominantly, but you're you're obviously in some leadership um there too. So um, you know, I guess um, and then again, I don't want to ignore the fact that you're also uh now a multi-store operator as well. So uh you're you've dipped your toe all the way in uh to this. Live and breathe laundry. Yes, you know, and uh that just makes it harder to get out. So you're any any aspirations of you getting back out again is probably gonna far too gone now. Yeah.

SPEAKER_00 5:06

Far too gone, yeah. I mean far too gone. I I'm enjoying what I do. Um you know, the uh the laundromats for kind of a you know uh an opportunity maybe to uh you know if I wanted to kind of step back and focus on just that in the future, you know, the that's what basically what that's for.

SPEAKER_01 5:26

The option is there, yeah.

SPEAKER_00 5:28

Yeah, despite you know what Adam wants, I don't want to work forever. So um so you know, I mean the laundromaters still work, don't get me wrong. But yeah, of course, yeah.

SPEAKER_01 5:42

Yeah, like I said, the flexibility around that is a little nicer uh when it compares to you know some of these more demanding roles that we get involved in. So good to see it. Um I'm curious, you know, um, you know, 15 years is a is a is a good amount of time to see enough change, you know. What what what kind of perspective change? And again, you you you we you say you were part of this as a family business that started and you kind of avoided, so you were kind of aware of a lot, probably, you know, coming up through that. How what would you say is the what how's your perspective changed going from those early years to getting into more of an you know more of an executive role, but you still you're still a sales guy, I think, at heart, right? What have you seen change over that time? What would you say is noticeable?

SPEAKER_00 6:28

Well, I mean, obviously there's a lot of technological advancements in the industry. Um, you know, from a distribution standpoint, you know, we you kind of touched upon this, but um the consolidation in this industry is you know really ramped up over the last you know five to I I don't even know how long, seven, eight years, something like that. Um that's that's a huge change. It really changes you know your perspective as especially as when I when we were just ML, we were you know pretty small compared to um you know some of these larger companies that are uh that are buying distribution, and it's kind of intimidating, you know. Yeah. Um yeah, but that's that's been you know a huge change. It's really made had a huge effect on our industry, in my opinion. Um, you know, whether it's good or bad to be determined, but um, you know, uh it that kind of helped lead us to um you know selling the company uh because yeah, it's like well, strength and numbers, you know, we're we're part of a larger organization now, and uh, you know, that that just gives you a little bit more stability and you know, a little little less uh uncertainty, you know. Sure, sure.

SPEAKER_01 7:45

So both companies, HM, uh MNL, are both kind of in somewhat the same territory. Um but you have the same, can you carry the same lines of equipment? And I also know that you're you know, which I want to get into a bit about is that you you guys are op you do quite a bit of OPL, and it's not it's not just vended laundry. I'm I'm kind of a vended guy, but um, but you guys do both. Um so tell me how do you how do you split the the territory space or do you guys do you have a geographic territory that you split or do you share share the territory?

SPEAKER_00 8:18

Um excuse me. Well, you know, historically MNL kind of had the first the the top half of Ohio, and you know, we butted up against HM somewhere in the middle, you know. Some lines we shared, you know, uh like the Columbus, Ohio market. But um, but now you know we're we're working kind of as one team. You know, I'm VP of sales for both companies. Um you know, we've got you know a team of of sales reps, and so like the the Columbus market that we used to share, you know, one of the people that are you know that were an HM that was an HM salesperson handles the OPL there. And then um, well, you know, Chloe uh with HM or with ML, she's doing doing the vended side in the Columbus market. So we're not treating it as separate territories per se. It's just you know, uh we've just got a list of all the counties, you know, in in all of our territory and and who covers that county at this point.

SPEAKER_01 9:17

So Okay. And you cover all of Ohio essentially, and then what what other uh how far outside of Ohio do you go? Do you go into I know you're Cincinnati, so that sometimes means you end up in Kentucky?

SPEAKER_00 9:28

Yes, yes. So we have we have the whole state of Ohio. Um we we well, we've always done a little bit of stuff in western Pennsylvania, but we okay uh we did pick up um you know an alliance line in Western PA. And then in as you go south, uh we have northern Kentucky and southern Indiana as well. Um we also do OPL in uh parts of West Virginia, but we we don't we haven't sold any vended products in West Virginia.

SPEAKER_01 9:59

Okay. Interesting. Uh I'd like to know across those territories, and even state doesn't even matter if you leave the state, but do you see anything um different or the same about selling in one market? Do you actually categorize them as different markets or is it pretty much the same across the board? Whether, you know, is it is is doing business in one place harder than others? Is it the customers different? Are the investors different? Is what what have you noticed in having kind of such a big territory?

SPEAKER_00 10:29

Um, you know, realistically, the I mean the territories that we had previously. I mean, Western PA again, that's pretty new to us. So we're we're still getting into that market. Um, you know, we're we're being aggressive there, um, but it's you know, it's it's it's kind of it's a little tricky because our our name isn't out there as much uh on the vended side of things. Um so people aren't as familiar with our company. Um and we also recently picked up, I mean, we had the you know, the the northern Kentucky, southern Indiana counties that were close to Cincinnati before, but uh when another distributor uh sold to a company, they lost a certain line that we picked up. And uh so a lot of that is new to us as well. So like the Louisville market. Yeah, okay. In fact, we just hired a uh sales rep about a month ago uh to handle that the Louisville and you know, northern Kentucky, southern Indiana. Um so he's still learning, but you know, making making progress.

SPEAKER_01 11:36

Good. Yeah, I'm gonna ask you about new salespeople and that in a moment, but um, but so how uh what's the balance of OPL to vended? You know, for us in Chicago here, we're like almost all vended. I mean, we you know an OPL deal has to literally fall in our lap for us to do it. But but I know that there's all but there's also a lot of companies out there that are the other way, you know, it's like they're pretty much just really good at the OPL. And then I would find there's a fairly small group that do both, actually in that way. But what I'm curious what your what your what your balance is between those two.

SPEAKER_00 12:12

Um so you know, I can't I it's gonna be hard for me to answer that, you know, accurately, particular, particularly with the uh, you know, like the HM kind of territory. But yeah I would say HM had a very good balance of both. Um, you know, they have a very strong sales rep on the vended side, um, you know, and and some strong people that focus on OPL. And you know, their service department um, you know, is uh well, you know, their specific service department before we be came together was larger than ours. And you know, I think in on the OPL side of things, service is is what drives sales. Um critical.

SPEAKER_02 12:53

Yeah.

SPEAKER_00 12:53

It really is. Um, so you know, we're we're working on that up here. We already had been working on that, but um ML until about 10 years ago, we also were, you know, we were an ML supply company, and um, you know, we we sold supplies to dry cleaners, you know, laundries, etc. Um, and that man, that's that was a crazy business, and it it took a lot of resources. Um, you know, a lot of people don't like to pay their bills on time and things like that, you know. A lot of chasing. Okay. Yes.

SPEAKER_01 13:27

Yeah.

SPEAKER_00 13:27

Um so so I think HM had kind of you know, they were focused on equipment for a lot longer than we were. You know, we we've grown the equipment side tremendously at ML since we sold you know that division of our business. But um, you know, it takes some time and you know, we have some strong competitors with with you know pretty solid service departments. Um so it, you know, it takes a while. So yeah, that long story short, um, you know, I I would say the MN ML was is probably a little stronger vended than OPL, but you know, we're starting to see that balance out soon.

SPEAKER_01 14:05

Yeah, good. Well, well, I I I appreciate that. And um and when you are when you talk about hiring new salespeople, I'm curious. Um when uh do you generally try to hire a salesperson to focus on one of those two areas or do you want them to do both?

SPEAKER_00 14:21

Um it it kind of depends on where we're at geographically. Um it's hard, and I you know I've done this myself, it's hard to to juggle both. Um you know, particularly with you know, if you're in the middle of several laundromat projects, I mean, you know, you don't have time to to go knocking on doors, you know, trying to get our our name out there for OPL. Um so you know, I would say that the way that we're set up now, I mean, we're we pretty much have um you know reps to handle different segments of the business. Now, our rep in western Pennsylvania, he's kind of doing both, but he actually came from the industry from another company. So he had some experience already. Um part of it too is when you you know when you're hiring somebody that's new to the industry, I mean, there's a lot to learn, and you know, you don't want to overwhelm them so much. Um, so like the you know, the the rep that we just hired in uh Louisville, he you know, he's pretty much gonna be focused on vended sales for now. And you know, as he becomes more comfortable with that, you know, he might do a little bit of OPL, but you know, we we have a very strong competitor there in the OPL market, and you know, they're friends of ours as well. So you know that's not gonna be our focus, you know.

SPEAKER_01 15:44

Yeah. Um and then and then I mean that's where I'm gonna go next with this, is that so when you do hire somebody new, so you you know, and I think that's probably wise, particularly if they're not experienced in the industry yet, is you don't want to overwhelm them with both market segments at the same time. Maybe start with where you need the most uh where you see the most opportunity in a market and then you know give them the opportunity to get uh proficient before you throw them into another uh den of uh snakes. Yeah, absolutely part of that. Absolutely. What is your distributor, what does your salesman training consist of when you bring somebody in? Let's talk about fresh. You know, never never been in the industry, obviously showed you something that made you feel like, ah, you know what, he could probably do this. So what does it look like? What does training look like?

SPEAKER_00 16:31

I mean, really, it's spending time with either myself or you know, some of our other, you know, more experienced sales reps. Um, you know, uh his name's Nathan, that uh just recently started with us, but he's let's see, he spent his first week, you know, up in northeast Ohio. Um, you know, he spent a day with me at my new laundromat. I I thought that would be a good way to you know kind of just see all the aspects of a laundromat and you know sure get a good good feel for what's involved. Um, and then he spent a few days you know in the field with Chloe, going, you know, either cold calling or you know, going to visit customers of hers. Um the next week I went down there. We spent a few days uh just popping in in laundromats in the Louisville market. Um and then the last two weeks he's been up here uh a mix he's splitting his time with Chloe and uh Sam, who's our uh Western Pennsylvania sales rep. Um gotcha. I think next week we're gonna we're gonna see how he does on his own. Um okay.

SPEAKER_01 17:34

You know, so it's a it's kind of an immersion technique, you know. It's like just kind of uh watch and uh and and ask questions and and go from there. Is there are there are there you know, and and and I ask because I kind of know the answer is that there aren't really a lot of resources that we can leave. There's not to get to get a new person kind of like introduced and kind of just start them on stuff. Part of the reason why I even started this was this right realiza a small piece of it, but just giving them something to listen to while they drive around a little bit about other people's experiences. So I'm curious what magic you had to how do you train somebody new? I don't, man. I don't.

SPEAKER_00 18:16

I mean, I that's what I did with Chloe. I figured, well, it worked there, so you know. Yeah.

SPEAKER_01 18:20

So but you know, I think it takes the right personality then too. You know, not that the the not that the individual maybe not may not be a good salesperson, but if they don't have the patience for the time that's gonna take to kind of self-learn by observation and just asking a lot of questions, you know, there I I think there are some good people out there that would be good in front of customers and probably be very good at understanding product, but they may not have the patience to wait for them to get good at it. And I and I and I worry sometimes that that just is gonna it discourages things. So I think, you know, I think it's a challenge for all small businesses. We're not uh exempt from it as coming up with good training tools so that they have something to lean on, something they can work on when they're not sitting in front of you because you have a job to do too. Right, exactly. You've got things that you've got to work on as well. So new people can be a burden as well, but you have to do it. You know, yeah, you gotta commit the time to it. Yeah. Absolutely. And I see. Okay. But have you found that those courses result in meaningful knowledge that they've taken aback? Have you found, I mean, I I have to be fair, I haven't gone through any of them myself, so um, I don't know how well they are, but and again, we're not trying to beat on anybody, but do you find that the that your people are getting stuff something out of it, or is it just eating up some time?

SPEAKER_00 19:52

Um you know, I'll have to let you know because Okay Um He's he's really the first one that I've had doing that. Um go through it.

SPEAKER_01 20:00

Okay.

SPEAKER_00 20:01

Yeah. And part of that's because just like how far we are away from each other geographically. You know, like when when Chloe started, you know, she was in the same, you know, within 30 minutes of me, um versus you know, five plus hours um down the highway. So you know, I just was trying to find something for him to do, like while, you know, the day I drove home from Louisville or you know, the day I was driving to Louisville. Um just you know, something that that you know can be valuable to him, but you know, something to take up some time, I guess, as well.

SPEAKER_01 20:33

So sure, sure. And and I I'm curious, you know, again, uh I'm curious about a lot of things, but how how do you um how do you differentiate? You know, I think we talk, we I try to talk about, you know, you know, sales 101 is is something that is everybody seems, oh yeah, I know all of that, but we do but then there's so few people that actually do some of these steps. I'm curious, you know, how do you differentiate yourself? You talked about having some strong competitors in some of your some of your areas that you support. You know, what do you think helps you guys stand apart?

SPEAKER_00 21:07

Well, I mean, you know, in my opinion, we we have a premium product, you know, which doesn't always work in our favor because we're not always going to be, you know, the winners based on cost. Um, we we do what we can, but you know, there's definitely some lower cost manufacturers coming into the market and uh sure always have been. But um, but really, you know, this kind of leads to when we were hiring Nathan, some is you know, our focus is our customers. You know, we want to do what's best for the customer, even if that means you know, not selling equipment or selling less equipment to them. You know, we want to show them that we're committed to them and you know that them being successful makes us successful. So when we were interviewing people, um, you know, we interviewed some solid candidates, but um, we got off our initial call with Nathan. I immediately called Adam. And I was like, this is our guy. You know, he's going to fit in with our team. You know, he's got that kind of laid back, customer focused mindset.

SPEAKER_02 22:07

Yeah.

SPEAKER_00 22:08

You know, and that's really how I, you know, like to do business with people. It's a lot more fun if you can make friends with your customers. And so that's my focus. And, you know, that's what I've preached to my team. You know, like become friends with them. You know, go grab a beer with them after work or, you know, even if you're with a customer, even during lunch if you have to. Um, you know, it's just, you know, become friends. It's more fun that way. And, you know, it goes a long way with the customer and it shows their commitment, or our commitment to them.

SPEAKER_01 22:38

I'm so, I'm so grateful to hear you say that because, you know, when you can you can talk to people who have been in sales a long time, and sometimes you can just, and I don't want to use this analogy the wrong way, but you can just hear the used car salesman in their voice every time they talk about or they try to, even if you're like pseudo-role-playing something with them, just to kind of get a vibe for how they communicate. Um, and boy, is that a that is such a turnoff to me, but maybe not to everybody. I don't I don't know. I just it's not something that I feel is attractive to an investor. And the relationship side of things seems so much more genuine, like you said, let's just go grab a beer if you know after the after this meeting and you know, grab some dinner or whatever and just form a relationship. I've said it before. Nurturing that kind of relationship is almost going to guarantee you a much better opportunity to excel that uh that investor something else. You know what I mean? Not what not and and the the key is what you said is like don't sell them too much because you want to make sure he doesn't feel like you were used car salesing him into every option, every you know, rust protection, everything that goes on there because he doesn't know whether he's gonna be there or care for that matter. And so building that relationship is um man, it's it is 101, isn't it though, still? But it but it but it doesn't happen everywhere.

SPEAKER_00 24:05

No, it doesn't. And and that is, I mean, that I'm that is exactly what I don't want in somebody that use car salesman um yeah type of mindset and and selling style. It's just that's that's not who we are, you know. Yeah there's other people out there that if you want to deal with that.

SPEAKER_01 24:23

Yeah, and and um I just I just recorded um an episode with Brian Wallace, you know, uh over at CLA. And one of the things he said that I thought was uh was it just really well taken uh was this idea of the sales experience, uh the distributor sales experience to the to the investor and whether or not that experience is um commensurate with the amount with the investment that you're asking that person, let's just talk about building a new store or retooling a store. I mean, this is a serious investment. I mean, this is no joke. And compare it to other large investments that you know consumers might make, like buying a luxury car or you know, making a big investment in like a some type of stock investment that you're moving, you know, maybe some funds around to. And you think about how those people in the sales side of there treat you versus how are we treating our customers in that way. And I think where we add a lot of value is maintaining a relationship with them. You know, I don't necessarily want to go and have dinner with the guy that sells me a new Cadillac, but but but nonetheless, but nonetheless, you know, I think the guy that sold me a million dollar laundromat, you know, I probably should stay connected with.

SPEAKER_00 25:38

Absolutely. No, 100%.

SPEAKER_01 25:41

Yeah, so um, I love I love that.

SPEAKER_00 25:44

Yeah, and and quite frankly, I mean, you know, if if you help somebody be successful with their first store, you know, there's a good chance there's gonna be others to follow. And uh, so it's a win-win for everybody. They're successful, we're successful. For sure.

SPEAKER_01 26:00

And uh let's talk about how you're how are you finding opportunities. Um, you know, and again, we're in Chicago, and again, I don't know if this is the same. And you know, and and and it's it's what's really unique about where you you have the kind of this, you have some cities, of course, too, but in Chicago, we really can't even find our way outside of the the the Chicago land area because the density is so full there, you know, it's like there's just too much to cover, even in that, and there's a lot of people there. But I I would imagine um in areas where you're you don't have a Chicago per se, you know, with that kind of density, you know, that that there's maybe some uniquenesses here in that, you know, what what are you doing to find opportunities? You know, I mean, what do you how are you finding leads? Are they coming to you? Are you having to go dig for the opportunities? Are you do you do you try to spec a location out short of signing a lease? Uh what are you doing to to draw business? Knocking on doors. It sounds like you are.

SPEAKER_00 27:00

We are, yeah. I mean, you know, for uh retools and stuff, I mean, obviously, just you know visiting their laundromats, dropping off information if there's nobody there. You know, if you get lucky, you know, you find you you stumble upon the owner, have a conversation with them, um, you know, keep it very friendly, like we said. I mean, um, you know, that can go a long way. Uh for news stores. I mean, you know, we're lucky that Alliance does a great job with marketing and they provide us with a lot of a lot of leads. Um, good. Some quality ones, some not so quality, but you know, they can't help that. You know, their marketing team's doing doing the best they can, and they're doing a great job, if you ask me. Um so you know, for for new stores, I mean that's that's probably I would say that as far as quantity of leads, that's where the most of them come from. Now, we do have people reach out to us, um, customer referrals. You know, we again treat your customers well. You don't know, I mean, you a lot of opportunities can come from that.

SPEAKER_01 28:05

Um whether it's whether it's the store that you built for them or they know somebody that would also like to be in this business and had a good experience with you.

SPEAKER_00 28:13

Exactly. Yeah. I mean, that's happened multiple times for us where you know we've been connected with um people that either wanted to get into the business or you know, were thinking of buying one of the uh an existing customer's stores. Um, you know, that that's led to several multi-store owners um, you know, becoming customers of ours. Um that that goes a long way. I mean, that you know, word of mouth is huge for any business, quite frankly.

SPEAKER_01 28:43

Yeah. Um, I I you know I've talked to a couple of uh folks from different parts of the country, and generally when there's like a high population density um or other kind of restrictions, I'm I'm finding that you know that locations are very difficult to come by. You know, there's locations always hard to find. A good location is obviously the the you know the the needle in the haystack, and we all have to search for that. But in some markets, um I'm coming to learn that you just literally cannot build a brand new store. And so that market ends up being a lot of retooling of existing stores, whether they change hands or not, that that certainly may or may not happen. I'm curious, what are you running into? Are you running into a lot of retools? Are you laying into new reef, you know, new spaces that you're able to find? What's the what's the what's the what's it been like?

SPEAKER_00 29:31

Um, I'd say a pretty good mix. Um last year was a huge year for us for new stores. Um just everything, you know, a lot of projects that that we were working on just kind of fell into place at the same time. Um this year I would say, you know, so far it's more retool than anything. Um, but we do, you know, we have some projects in the works with uh with investors. Um I think mostly new investors too, not necessarily you know existing.

SPEAKER_01 30:01

First timers.

SPEAKER_00 30:02

Yeah. Um yeah, you know, one of the guys that we um that we worked with last year, he uh took over a space that it was a laundromat that had just closed. You know, he's looking for number two. Um, so you know, we are looking at real estate, you know, to build new stores uh for several people, um myself included.

SPEAKER_01 30:21

And uh keep your eyes open, yeah.

SPEAKER_00 30:25

Yeah, yeah. But uh, you know, I have to be very careful, you know. I I don't want to compete with any of my customers, so of course I'm pretty limited on where I can go, so it's it could be a while.

SPEAKER_01 30:36

But yeah, no, I understand. You got you want to find the right opportunity that is uh obviously good location, but also doesn't uh um threaten anybody that you're you're trying to do right by uh at the same time, right? Yeah, absolutely. Absolutely. You talked about an investor you know a little bit. I wanted to ask you a little about kind of like what I'm gonna call the investor profile, you know, which is this idea of you know, I would say that you know, years ago I would think about a new investor as being your very stereotypical entrepreneur, wants to be in business for themselves, maybe maybe had like a more salary-based role, you know, but but made good money because he got to have some money to be in this business, and is like, I want to take a shot at entrepreneurship. And when I when they look at all the things you could do, franchises, this and that, all these kind of small business opportunities, they land in laundry. And that was it's a lot of what we deal with is that kind of new investor. But now we have these like private equity groups that are, you know, money's no like object, not that they're not card negotiators, but they have they don't have any financing issues that come into getting someone there. What what are you seeing? Are you are you are are you seeing a shift in the owner profile?

SPEAKER_00 31:57

Um I I mean we don't we haven't really dealt with any private equity groups or anything like that as far as you know in um you know getting into laundromats. I'm sure that's to come. Um but uh you know it's it's a mix, it really is. Um, you know, some people are just trying to, you know, find a good solid investment. Um, you know, there's they're still working. I mean, we have people that you know have retired or you know, in in at least a couple cases, kind of retired early. Um, and you know, they did good for themselves, they have some money, you know, they want they want a you know, a source of income. Um it it really depends. But I am seeing that, you know, I mean, obviously the lawnmat business has become very popular, you know, particularly over well, since COVID, I would say, you know, a lot of people want their own business now, they're tired of working for big corporations and stuff. Um, but the the the investors are a lot more savvy now. They they seem to have a lot more industry knowledge, they're they're doing their research a little bit more ahead of time. And I think that's mainly, you know, A, due to social media, but B, you know, there's just a lot more resources for them, you know, to learn about the business. So that would be the biggest shift that I'm seeing. It just seems that they they they're more informed now.

SPEAKER_01 33:19

Yeah, no, that's uh that's a great observation. And and you know, of course, that seems fairly natural. The the internet, social media, the amount of content available for everything, whether it's good content or or bad content, the content exists, which kind of just gets people one, it probably draws more eyes to the industry. So you're seeing people do that, but then they can then find through those channels how to get information that maybe historically they only got through you, you know, or you know, from a distributor, but now you can you can look it up yourself. And I mean with AI, you know, you you can almost get you get advice about anything right at this point. So uh who knows uh uh how that will continue to evolve. But I'm I'm sure I'm sure we will see that. Um let you you talked you talked a little bit about um doing the right, I think what I'll classify as doing the right thing when you're working with an with an investor, or even a retool when you're trying to put together like an equipment package for somebody. Um what you know what's your process like? You know, it's like how do you decide what the equipment package is gonna ultimately look like for a location? What are all the factors you're pulling in?

SPEAKER_00 34:28

Um, I mean, even if it's a retool and it's a laundromat that's been around for decades, same ownership. I mean, first thing we always do is look at the demographics, you know, see, see what's out there, see how much potential business, you know, we think there is in you know, a radius that they can pull from. Um, you know, we look at average household size, um, you know, kind of to help determine a mix. But I swear, any more, it that none of that matters. You just put big washers in and people go to them, you know. I mean, yeah, like I my last store, you know, the one that I just opened, and my smallest washers are a 30. Um, oh wow, okay. I made that decision because there's there's two other laundromats in town, they have a lot of small washers. You know, those aren't the people that are gonna bring you the most revenue. So I decided they can keep those people, you know. I want people that are gonna come fill up my big washers. You know, it's better for me, it's better for them because they can get in and out quicker, you know, just using several big machines. Um, and that's you know, uh you know as good as I as well as I do that that's how things are trending. You know, we got yeah, they're just they're getting bigger and bigger, you know. We we have Alliance has 120-pound washers available next month and 120-pound dryers. I mean, yeah, I thought my hundreds were big, but um yeah.

SPEAKER_01 35:54

Um yeah, we we're retool, we're retooling a store in in our own. It's been 18 years, and uh you know, I thought we we thought we had the biggest machines we could possibly fit in there, and now that we're you know 18 years later, we're like, oh we could go bigger, you know.

SPEAKER_00 36:08

Yeah, absolutely. You know it's always gonna go bigger, I think. Yeah, I don't know. I mean, once you get past 120 pounds, though, is it really cool for a long mat?

SPEAKER_01 36:18

You know, it stands over you, you know, about three or four feet. It's kind of like you know, you you end up with some other complications there, but uh but yeah, I mean I for years, I mean, it's always been kind of promoted or you know, advertised about bigger, bigger, bigger, and it's never stopped. I mean, again, the machines do just keep getting bigger and bigger. Um so we're gonna we're gonna run into real estate challenges, you know. I mean, obviously some of those machines you can't get through a normal door anyway. So you're going through all of this rigging to try to figure out how to get the machine through the door, take the front storefront out, crane it in from top, you know, all these complicated things. But I think I've never heard a story of someone to put in, let's say, you know, a hundred a hundred plus pound machine, say, I wish I didn't put that machine in. You know, like I shouldn't have I shouldn't have spent that money because it's an expensive machine. Um, every single one of them is like that's that's the machine I make the most money on. Now, now you can't build you can't put you can't put 30 of them in a store. But uh but you know, but that would be great. But uh but uh I've never had anybody turn away, never say a negative thing about having a machine that was too at least one really big machine, or obviously a row of big machines if you can if you can make it happen. Yeah. Yeah. That trend continues. Yeah, amazing.

SPEAKER_00 37:34

Um it's interesting, like in my laundromat, seeing people come in, because you know, I tried to spend a good amount of time there, you know, the first few weeks we were open. Sure. People would come in with 40 pounds of stuff and throw it in the hundred. And you know, I tried to explain to them you don't need this big a washer. They're like, oh, that's fine. I you know, it'll it'll get cleaner this way. I'm like, okay.

SPEAKER_02 37:54

Yeah.

SPEAKER_00 37:54

So cut customer perception is it's gonna get cleaner in a bigger washer, you know.

SPEAKER_01 38:00

That's exactly what I was gonna say is the perception has everything to do with this, not really the capacity. The only people that know what the true capacity of that machine is are are you and I. Right distributor and the store owner are the only one that really knows what the true capacity of a uh a consumer just has these big plastic bags full of clothes, and they're like, yeah, that'll fit in there. Absolutely. Absolutely. Um we've even experienced in our, and again, in the same story, we're in a process of retooling now that it's and it's changing brands. So we've gone from one brand to another brand. And the in the original brand was very clever in that they this that their machine looks bigger than it actually is. And that's a I can't believe that's not a strategy being taken on by more manufacturers because we're putting bigger machines in, and the customers are saying, Oh, I wish you were putting in the big machines like you had before. Like, no, this is a this is actually a bigger machine than the one that we took out of here, but it's all about perception, right? So it's like, how could you convince the you know the the mother that's got two kids, you know, dragging behind her with a couple bags of laundry that that machine is actually bigger than the one that they used, they've been using for years out of the store. But um, yeah, that's our job, I guess, is to figure out a way to set that perception correctly. Absolutely. Yeah, well good. Uh I'd like to talk about um technology a little bit. Obviously, we're a tech company, and I and again, I'm gonna um lean on you because I know you you're a customer of ours, not not just uh industry friend and uh and a and a co-distributor, but you know, you decided to open up a couple of stores in the last few years and you decided to use CCI products. And I'm curious, you know, what how did you come to the decisions that you did about whether you're gonna be coin, coin and card, card only? Uh what what was in your mind when you were making that decision for yourself? And I'm guessing you probably portray that to your investors too.

SPEAKER_00 40:03

I do, yes. Um, so for me, it's it it was a convenience thing. Um, you know, my stores are card only. I travel, you know, I travel for work. I like to travel personally. You know, I don't want to be, you know, uh limited. Um, you know, we went to Italy for two weeks in October. Nobody had to collect, you know. One one little tip, one little tip. Flex RF, you should have the thousand bill uh uh acceptors. Bill acceptors standard, yes. Okay. Um but anyhow, I gotta order one for the I gotta order one for the other store.

SPEAKER_01 40:38

So um and if and if your biggest problem is your bill acceptors are fill are filling up too fast, I guess we're doing okay. Yeah. Yeah.

SPEAKER_00 40:48

There's always there's always a second kiosk, you know. That's right, that's right. The one I mount lower for ADA purposes that never made fill. So um but uh but so coin just wasn't an option for me. Um, you know, when we bought our first store, um I you know I operated it for a couple months using coin, you know, went away for a week. I already had to have, you know, had to have uh Chloe actually help me and collect it for me. Um so it's just it's inconvenient, you know, and yeah, I just don't have the time to go in several times a week to collect coins. Um you know, you have obviously you could have other people do it, but then you know, there's the the trust factor, it just you know can make relationships weird. Um, so I opted to go card only. Um I also think it's safer as a laundromat owner. Um, you know, your kiosks can be uh open from the front or rear, but I always collect from the rear behind a closed door or at least a cracked door so people don't see me handling cash. Um, and and when there's not coin boxes on a washer, customers are, you know, what why would they vandalize that washer other than just to be a jerk, you know? So you know, it seems like there's a lot less, you know, riff-raff that goes along with it if if you're a card-only store. Um, so you know, I made that decision. And um, you know, quite frankly, I the re I've only really ever sold CCI, you know, personally when I was in a sales role. Um, you guys have always been very, very good to me. And uh, you know, we I mean I feel like we me and you and your brother, I mean, we've all traveled together on some uh some industry trips and become friends. So um, you know, when I heard about the flex RF system, um, you know, I was intrigued and went over that with with Paul a bit and decided to go that route because I I knew you know we've had good luck with with your you know fast card and laundry card systems for uh some of my customers, and I had a good feeling about it.

SPEAKER_01 42:53

So well, good. Well, yeah, thank you for saying that. And uh it's that's um, you know, you're you're like a walking sales pitch for us here. So those are all the reasons why people do this. So you're doing it for all the right reasons. I'm curious when you're communicating with your investors, are you um, and this is probably something you might remember from maybe 15 years ago to now, is what was the conversation like then versus what it is now about the technology they're gonna go in? Are you struggling to get people to adopt some kind of payment technology outside of coin?

SPEAKER_00 43:26

No, actually, I think everybody, yeah, I mean, there's always gonna be some, but yeah, um pr pretty much everybody understands, you know, the this world is getting more and more cashless. Um so you have to have, you know, uh the ability to accept payment in in a different way. I mean, and you can see it in the industry too. There's so many different, you know, options out there now for electronic payment. Um, so I would say, you know, the majority of our customers now go into it wanting to have the ability to accept payment electronically. Um, but you know. Some still like to take coin as well, and you know that's fine. Um, there's options for that. You know, obviously, you have options for that. You know, unfortunately for you, I guess uh a lot of the manufacturers have options for that now. But um, the and that does help a little bit when it's a sure a hybrid store because it you know can keep the the cost down a little bit. But um, you know, I recently dealt with a customer personally, and it's um you know, I a couple actually, but um one he uh I met him actually at washer I fold in Nashville, and um he was looking to add a couple washers, and you know, so I ended up handling it myself just because we kind of built a relationship and Chloe happened to be you know on vacation, you know, when when it was kind of a crunch time thing because there were rebates expiring. So um, you know, we got to talking and he eventually he had card readers on a few of his pieces of equipment, but you know, I was telling him how great it was not having to collect quarters, and uh, you know, it ended up with him going you know coinless. Um so it, you know, owning stores, have having technology like that in your own store, and you know, being able to speak from an owner's perspective really you know helps to sell that in my opinion. But um I think most people understand that you know where this world's going.

SPEAKER_01 45:27

So yeah, I I think I think you're right. And um to kind of piggyback on another interview I'd done a few weeks back, who also is a multi-store owner and a distributor, you know, he he when we talk about what is the advice you give like a new distributor, you know, to you know, that's getting into this business, and I may ask you the same thing, so be prepared, but is he's like buy a store or build a store. Like, not everybody can afford to do that, but that's it is really good advice because you get to not only witness you know the the trials and uh you know the challenges that come along with store ownership, but but all the positive things that come along with it, and you get to make some of the same decisions that you're asking your investors to make, and you can provide guidance based on you know your experience so far. So I I I'm uh I'm a fan of uh distributors owning locations. There's a you're right, there's a fine line that you gotta kind of uh walk on that to make sure that you're not interfering with you know your investors, and I think we're all um uh wise enough to do that in a in a responsible manner. But um yeah, it's it's I think it's probably made it easier for you to make certain statements and make certain claims and to um prove that something works when you can just say, here it is, look. And I can and if you do and depending on how open you are, you can share anything that you know you're willing to share.

SPEAKER_00 46:53

And and I do, and you know, and it's great to have like a a a nice showcase store to show to these people too. You know, that's great. I mean that you know, with our territory being so large, I mean, obviously that's yeah targeting. Not the case for yeah, exactly. But you know, I'm doing what I can.

SPEAKER_01 47:12

Sure. Of course, of course. So as we kind of get you know, kind of towards the end of our time, I want to talk a little bit about you know, kind of where you see things going. You know, if you have um do you have a crystal ball that where you can kind of tell me, like, you know, where's this industry going in five years and ten years? Uh what what kind of what kind of changes do you see coming?

SPEAKER_00 47:33

Um well, I mean, I can say, I mean, the industry is not going anywhere because people are always gonna have to do laundry. But um I I think, you know, which like you mentioned earlier, there there is gonna be more private equity. Um, you know, I I see, you know, I I mean they're already, you know, buying portfolios of stores from people, um, etc. But um I I think the demand is still gonna be there. I think the popularity of the industry is gonna stick around because it it is a great industry. You know, it's a we'll call it semi-passive, if you want it to be, um, yeah, you know, way to operate a couple businesses and you know not have to put too much time into it depending on on how you operate them. Um, my stores are unattended stores. Um, they're not big, so I don't, you know, have room really for drop off and things like that. But obviously, if you're you know looking to to go do more, yeah, yeah, do more. I mean, there's the ability to make more money in it too. Um, and you know, maybe I will do that at some point, you know, when I get to number three. But um, but I you know, it's hard to say what's gonna happen. I mean, I think we're gonna see more consolidation probably on the just distribution side. You know, it's tough for the little guys right now. Um, yeah. But uh, but as far as you know, investors and stuff, they're still gonna be around.

SPEAKER_01 48:58

That's good. And and you you started to touch on distribution too from there. You you you are you optimistic about the future of distribution as it relates to this kind of evolving uh world? Because we're we're obviously seeing a lot of consolidation there. Manufacturers are you know, they're they're either buying up distribution or maybe they've already kind of got spun something up in markets here. Um, how are you feeling about some of that kind of change in competition?

SPEAKER_00 49:28

Um, you know, I now that I'm part of a bigger organization, I feel better about it. I mean, you know, it's a little scary when you have half a state and that's your whole territory, you know. Um, but but no, I mean I I think you know, I've I've heard people you know express fears of um, you know, distribution just being wiped out, manufacturers going direct. But you can't, I mean, how are they gonna service these customers? You know, how are they gonna build these relationships? I mean, I just don't see it happening. I think the manufacturers recognize that, you know, in the in the OPL world, particularly industrial world, you know, there were some manufacturers that that you know historically had sold through distribution and they just wiped out their distribution network and went direct. But that's a little bit easier because you're you're selling to these large industrial plants that have their own service teams and you know they can they can handle anything that that's thrown at them. Um you're dealing with like smaller OPLs like a hotel, motel, nursing home, laundromats. I mean, they don't have any there. Yeah, no, exactly. I mean, a lot of laundromat owners can, you know, work on their own equipment, and you know, and I commend them. And I'll I'll dabble a little bit, but I I try not to get too deep into things personally. Um, but you know, we we need those people on the ground to service our equipment, you know, the the smaller guys do. So I I think the future for distribution is solid.

SPEAKER_01 51:00

I agree. And you know, it even if you were to eliminate the distribution company from the equate from the from the process of someone opening up a visit doesn't take away, I think is what you're saying, the responsibilities of whatever that company was doing there. And so, you know, having the manufacturer be able to execute on all of that from a distance, particularly with the micro nature of that business not having resources like an industrial laundry does, you know, they've got tons of maintenance people, and that's what they are. You know, they've got they're all about maintenance. Um, you know, I think I agree with you, and I'm glad you you echo this that distribution has got a lot of legs and it still, that layer needs to be there. Um, if distribution, if manufacturers are taking on that, they're not eliminated, they're just also doing those layers as well, which should hopefully mean that our that the margins associated will stay strong as well, because it costs money to do that piece of the puzzle. You know, that's not something that comes uh at no cost. Yeah.

SPEAKER_00 52:07

No, absolutely. Absolutely great.

SPEAKER_01 52:10

Well, I think that's a great place to close it up. Uh, Steve, this has uh, you know, been a great conversation. I appreciate you sharing uh some of your experiences. And I, you know, I think what I'm hopeful for is, you know, if for anything, new people that are looking for more resources to learn about kind of how distribution runs, how to do it right. I think you're a good example of that. Um, and uh just some of the things that we've seen out there, this has been perfect. So thank you very much for doing this. And uh, I'm looking forward to seeing you again. Uh, I know you guys are having uh an event in the fall, and I will be there, but uh look forward to seeing you then.

SPEAKER_00 52:44

Absolutely. Me too, Steve. I appreciate you having me on.