Is Your Laundromat Lease Coming Up for Renewal? 6 Steps to Put You in a Position to Negotiate Better Terms

1. Show the Landlord Your High Replacement Value

What will it cost the landlord to replace your laundromat (or you) as a tenant? If you can make the case to the landlord that replacing the laundromat with another tenant business will require much investment and lost revenue, it moves the likelihood of better terms in your favor.

Research and document what it would cost for the landlord for utility build-outs. To transform the space into another type of business would be costly.

Highlight the improvements you have paid for. If you built out the laundromat, highlight these costs and the time it took to do so.

2. Be the Landlord’s Best Tenant

Whether your laundromat is the anchor tenant in a strip mall or shopping center, or the only tenant, being the preferred tenant will help you negotiate better terms when your lease is up for renewal. A good working relationship with the landlord is where it all begins. Submitting any maintenance requests promptly, paying on time, being professional in your communications and working amicably to resolve issues all go a long way to making the landlord want to continue working with you. Remember, landlords do not want headaches. Simplicity is what a landlord craves.

3. Bring Good Market Intelligence to the Negotiations

Do you know what the current market rents are for laundromats of similar size? What are adjacent or other stores on the same street or block paying? If you do not know, then your landlord will be able to set the “new” market rate as your new rent. Armed with good intelligence it will force the landlord to remain competitive.

Are there any vacancies in the area? Did another laundromat close nearby or is another space that may be beneficial for you available? If you have options, you are in a better negotiating position.

4. Make Improvements to Your Store

Your landlord will, more often than not, love it when you make your laundromat look good inside and out. Clear signage, bright lighting and other standard elements of a well-run laundromat help put your store in a position to be retained as a tenant by the landlord. If you have continually made upgrades over the life of your lease, it shows the landlord that you care – not just about your business but his property as well. In short, do not let your laundromat’s appearance deteriorate. A landlord will opt for a great store over ZombieMats™ virtually every time!

5. Provide Evidence of That Your Laundromat is Well-Run, High Performing Business

Laundromat landlords, like any other landlords, prefer low-risk, high-value tenants. Knowing that your business is viable and can pay future rent is important to them. To show this, build a file of documents and statics and reports as evidence of how well-run the laundromat is. Show revenue growth over the past few years. Include turns-per-day data and even customer numbers.

Document all the repairs and improvement projects you have made the store during the lease, including machine retools, adding of technology and security improvements. Though the landlord is likely to know your payment history, bringing evidence to the negotiation is a strong foundation from which you can start.

When the landlord sees documented evidence that you have operated the laundromat well, their appetite for change will likely diminish.

6. Initiate Negotiations Early

One of the greatest mistakes some tenants make is to wait until last minute or the date listed in the lease to begin negotiating a new one. If you wait until the last minute, you could be walking into a notice of non-renewal. Initiate a discussion well in advance, 12-18 months before lease expirations and signal your intent to remain in the space. This signals to the landlord that you are committed and serious about your business and that you value you landlord-tenant relationship.