Laundromat Due Diligence Checklist

Most buyers who get burned on a laundromat deal skipped due diligence — or rushed it. This 47-point checklist covers everything from tax returns to water pressure. Work through it methodically, and you'll either close with confidence or walk away before you lose your shirt.

📄 Section 1: Financial Records

Financials are everything. If the numbers don't hold up here, nothing else matters.

• 013 years of federal tax returns (business) — verify gross revenue and net income match asking financials
• 023 years of profit & loss statements — compare to tax returns for consistency
• 0312 months of bank statements — verify revenue deposits match reported income
• 04Coin vault collection logs — weekly/monthly cash collection records going back 12 months
• 05Vending machine revenue logs (if applicable)
• 06Wash-dry-fold / drop-off revenue (if applicable) — separate logs from self-service revenue
• 07Seller's discretionary earnings (SDE) calculation — confirm add-backs are legitimate
• 08Accounts payable — any outstanding vendor debt or unpaid bills transferring with the business?
• 09Equipment financing balances — any loans or leases on machines that will transfer to you?
• 10Revenue trend — is revenue growing, flat, or declining over the last 3 years? Get month-by-month if possible

🏢 Section 2: Lease & Location

A great laundromat in a bad lease is a ticking clock. Verify every detail before you assume anything.

• 11Full copy of the current lease — term, rent, renewal options, annual escalations
• 12Remaining lease term — minimum 5 years remaining (ideally 10+) or strong renewal options
• 13Landlord assignment approval — confirm lease can be transferred to you without penalty or landlord veto
• 14Base rent vs NNN breakdown — know what you're actually paying (CAM, insurance, taxes)
• 15Exclusivity clause — does the lease prohibit the landlord from renting adjacent space to a competitor?
• 16Parking access — dedicated spots? Shared? Adequate for peak hours?
• 17Neighborhood demographics — density, income levels, renter vs owner mix in the surrounding area
• 18Competition audit — visit every laundromat within 2 miles. Condition, pricing, and hours

⚙️ Section 3: Equipment

Equipment is your revenue engine and your biggest capital risk. Know exactly what you're buying.

• 19Complete equipment list — brand, model, size, quantity, and year installed for every machine
• 20Cycle counts per machine — most modern machines log total cycles. Request the data
• 21Service/maintenance records — who services the machines? How often? Any recurring issues?
• 22Out-of-order machines — visit unannounced to see how many machines are actually running on a typical day
• 23Remaining useful life estimate — get an independent equipment appraisal if machines are over 10 years old
• 24Payment system — coin only, card readers, app-based? Condition and software version
• 25Water heater age and condition — replacement cost is $3K–$10K+ for commercial units
• 26Dryer venting system — clean, unobstructed, and up to code? Fire hazard if neglected
• 27Capital replacement reserve — what's the estimated cost to replace all machines if needed? Factor into your offer

💡 Section 4: Utilities

Utilities are your largest variable cost. Don't guess — verify.

• 2824 months of water bills — gallons used per month, cost per unit, seasonal variation
• 2924 months of gas bills (if gas dryers) — seasonal patterns and cost trends
• 3024 months of electric bills — total kWh and cost, especially if electric dryers
• 31Utility rate increases — check with local utility company for planned rate increases in the next 2–3 years
• 32Sewer/drain condition — any history of clogs, backups, or municipal sewer issues? Lint trap condition?
• 33Water pressure — run multiple machines simultaneously. Pressure drop under load is a red flag

⚖️ Section 5: Legal & Compliance

Legal problems don't show up in the P&L. You have to look for them.

• 34Business entity documents — articles of incorporation/organization, operating agreement, ownership breakdown
• 35Business licenses and permits — active and current? Any pending renewals or violations?
• 36Health department records — any violations, complaints, or inspections on file?
• 37Zoning compliance — is the business legally permitted for laundromat use at this location?
• 38Pending litigation — UCC lien search and judgment check on the business entity and seller personally
• 39Environmental records — any prior water/chemical contamination issues at the location?
• 40Employee agreements — any employees transferring with the business? Existing contracts or non-competes?
• 41Seller non-compete — does the purchase agreement include a non-compete clause preventing the seller from opening nearby?

🕵️ Section 6: Operations & Ownership

Understand how the business actually runs before you take the keys.

• 42Why is the seller selling? — document the answer. Retirement and relocation are fine. "Tired of it" needs scrutiny.
• 43Hours of operation — current posted hours vs actual peak traffic times. Visit at different times of day
• 44Owner time investment — how many hours/week does the current owner put in? What would you need to hire?
• 45Vendor relationships — who services the machines? Who supplies detergent vending? Will they continue post-sale?
• 46Google reviews and online reputation — read the last 50 reviews. What do customers complain about?
• 47Training period — does the seller agree to a 30–60 day transition period to train you on operations?