What Percentage of Revenue Should a Laundromat Spend on Rent?

A laundromat should keep rent to roughly 20% to 25% of gross sales — and, unlike almost every other retail benchmark you will read, that figure is base rent alone, before common area maintenance, property taxes, and insurance are added on top. The number is the Coin Laundry Association’s own guidance to owners. In its white paper The Laundry Owner’s Guide to Leases, the trade association writes that “in the self-service laundry business, most operators are comfortable with a rent that is somewhere in the range of 20 percent to 25 percent of gross sales.”

Is that rent alone, or does it include CAM, taxes, and insurance?

Rent alone. This is the single most important thing to get right about the 20–25% figure, because most occupancy benchmarks published for retail are quoted the other way round, as an all-in number.

Laundromats typically sit in shopping centres on triple-net (NNN) leases, and the Coin Laundry Association is explicit about what that means. The triple net charge “consists of three main elements — (1) common area maintenance, also known as CAM; (2) taxes and (3) insurance,” and “these charges are assessed in addition to base rent.” The charge is billed monthly against an estimate and reconciled once a year to actual expenses, with the tenant responsible for any shortfall.

So an operator at the top of the band is not spending 25% of sales on occupancy. They are spending 25% on rent, plus whatever the triple-net load adds on top of it. When you compare your own deal against this benchmark, compare base rent — not your all-in monthly figure.

Why is a laundromat’s percentage so much higher than other retail?

Because a laundromat produces unusually little revenue per square foot, and pays an ordinary retail rent against it anyway.

The arithmetic comes straight from the Coin Laundry Association’s own published figures: about 29,500 coin laundries in the United States, generating nearly $5 billion in gross revenue annually, in stores that averaged 2,170 square feet. That is roughly $169,000 of revenue per store, or about $78 per square foot per year.

$78 per square foot is very low retail productivity. At the association’s own 20–25%, it implies rent of about $15.60 to $19.50 per square foot per year — an entirely ordinary secondary-retail rate. The ratio is high not because laundromat landlords charge more, but because a normal rent is being measured against far less revenue.

For contrast, the National Restaurant Association puts full-service restaurant occupancy costs at a median of 5.7% of sales — and that figure already includes taxes and insurance. The two numbers are not measured the same way, so the exact multiple between them is not a figure worth quoting. But the mismatch runs in one direction only: counting a laundromat’s costs the same all-in way the restaurant figure is counted would push its percentage up, not down. See the restaurant occupancy-cost benchmark for how that side is measured.

There is a second reason operators tolerate a ratio no other retailer would: they cannot leave. As the association puts it, “commercial laundry equipment is bolted to the floor. Floors have been cut to allow for drains, ceilings and roofs opened to accommodate venting, and half-walls and bulkheads built to hook up equipment. Once a laundry is in, it is in for the long haul.”

How much revenue does a given rent actually require?

Turn the percentage around and it becomes a revenue target you can test a specific space against before you sign.

Take a 2,000 square foot space at $18 per square foot per year. That is $36,000 a year in base rent, or $3,000 a month. To keep that inside the 20–25% band, the store needs gross sales of roughly $144,000 to $180,000 a year — about $12,000 to $15,000 a month.

Read that range carefully, because it inverts. The low end of the percentage band is the demanding one: sustaining the same rent at 20% of sales requires more revenue ($180,000), not less, than sustaining it at 25% ($144,000). If you are stress-testing a location rather than justifying one, plan against 20%.

And because the band is base rent only, the triple-net charge sits on top of that target rather than inside it. A revenue figure that just covers rent at 25% does not cover CAM, taxes, and insurance as well.

How long should a laundromat lease be?

Far longer than most small retail tenants would sign. The Coin Laundry Association’s rule is “the longer, the better,” and it recommends maintaining a lease that, with options, “spans a period of 20 or even 25 years.” A common structure is a 20-year lease built as an initial 10-year term with two five-year options.

The association gives three reasons a lease needs that much runway. It should exceed the length of the operator’s debt service, provide a subsequent period of debt-free improved cash flow, and maintain a duration that is attractive for the purpose of selling the store.

That last one is the reason a short lease is a financial problem rather than a scheduling one. In the association’s words, a laundry with the latest equipment “but which occupies a space secured only by a five-year lease and no options, is essentially not much more than a room full of equipment from the point of view of a prospective buyer.” The lease is a large part of what you eventually sell.

Which lease clause should I look at first?

The percentage rent clause. The Coin Laundry Association notes that “almost all triple-net leases have a clause regarding percentage rent, which is typically based on 10 percent of the gross income of the business.” Under it, if 10% of gross income exceeds the normal rent, the tenant pays that higher amount instead — “a consequence that can be particularly costly for high-grossing laundries.”

Commercial real estate firm Northmarq describes percentage rent as “a lease structure that mixes fixed rent with performance-based rent,” triggered at a breakpoint — “the sales threshold above which percentage rent is triggered.” A natural breakpoint is the annual base rent divided by the agreed rate; an artificial one is simply negotiated.

The association’s advice is direct: a prospective tenant should seek to have the clause stricken if at all possible, and “the vast majority of the time, getting this clause stricken is easy to do,” because a self-service laundry does not typically reach the revenue thresholds that trigger it. A clause that rarely bites is also a clause a landlord rarely defends — which makes it one of the cheapest things to remove before signing, and an expensive thing to discover afterwards.

How do I know if a specific location can support the rent?

Every number above turns on one unknown: what a specific address can realistically take in. A 20% target and a 25% target are the same lease until you know whether the store will do $144,000 or $180,000 — and that depends on the households within walking distance, how many of them rent rather than own, the competing laundries already serving them, and how easily customers can carry a load to your door.

That is what an OpenReady LocIQ report calculates for a specific commercial address before you sign: the revenue a location’s real-world conditions can plausibly support, the occupancy-cost range that implies for your rent, and whether the two actually line up. One report, one price, results in minutes — a sensible check before a lease you cannot walk away from.