Technology, Innovation and Disruption in Franchising – The LaundroLab Story

Welcome to another episode of Atlanta Franchise Today with host Leslie Kuban, expert franchise consultant and owner of FranNet Atlanta. Atlanta Franchise Today is dedicated to bringing entrepreneurs and business owners the best practices and tips for their franchise goals.

Investment in technology is important for any business, and franchising is no exception. On today’s episode, Leslie sits down with Dan D’Aquisto, Co-Founder and President of LaundroLab, to learn more about this franchise brand and technology company that happens to be in the laundry business. Dan was born and raised in Minnesota and then moved down to Charlotte, North Carolina in 2015 to start a laundry company with his best friend.

Transcription: 

Leslie Kuban:
Dan, welcome to the show.

Dan D’Aquisto:
Hey Leslie, thanks for having me.

Leslie Kuban:
Absolutely. I’m really excited to have the opportunity to learn about this fascinating story of your company. LaundroLab began on a college campus, and now you’re this technology company that’s offering multiple services in the laundry industry. Please tell us and our viewers more about the story and your business model.

Dan D’Aquisto:
Yeah. No, I’m sure, that’s the first question. Why laundry? That’s always the first thing that we get asked, and I do believe we have a pretty unique story and background. But it goes the way back to sixth grade. My co-founder and I have been best friends since then. And fast forward to about 2015, after he had exited a successful laundry entrepreneurship project on campus at Wake Forest, we always knew we wanted to get into business together. And what better to do that with a business that he had success with during college? And so we were about 23 at the time and somewhat complacent in “our big boy jobs,” I like to say. We ultimately decided that, “Hey, we only have typically one good chance at our age to give it a shot and jump into the deep end and start a business.”

Dan D’Aquisto:
And we recognized, at that time, that there was a lot of opportunity with companies at the hype of Uber’s success. I mean, there was Uber for dog walking, Uber for grocery delivery, massages. And we saw these companies on the west coast raise a pretty significant amount of venture capital to go after this Uber for laundry model. And so we were fascinated with that space, and ultimately, broken it down into how we wanted to jump into the industry. And so we checked a lot of the boxes on convenience. Laundry’s one of those things that everybody has to do, but it is one of the most inconvenient chores, has the most antiquated solutions to doing it, and if you couple the Uber-style success, coupled with the convenience, you could really bring a solution to market. And so that’s when we, ultimately, joined forces in Charlotte in 2015 with the intention of starting what’s now called 2ULaundry.

Dan D’Aquisto:
And fast forward over the last few years here, we’ve iterated and evolved on that model. It started out being a pickup and delivery service, marketplace-type model, providing a solution to consumers all over Charlotte to pick up things you’d put in your washer and dryer or things you’d bring to the dry cleaner. And so, over that time, we iterated pretty significantly through the supply chain process, the operating procedures, and it really was an industry that… Or a solution that we saw significant interest in the service from consumers. So we recognized that that wasn’t necessarily going to be the problem at scale, but what was going to be was how we executed and operated. And it’s all about operational excellence. And so, over the last few years, we evolved pretty significantly through our supply chain. And we’ve raised about 10 million in venture capital from some pretty significant investors all over the country, most predominantly, actually in Atlanta, with some major mentors, investors from Techstars and Cox Enterprises.

Dan D’Aquisto:
So Atlanta, where you’re sitting, is our second home, big influential part of our story. And ultimately ,what we’ve iterated on over the past few years is working backwards into building a very significant, technologically advanced pickup and delivery service for laundry. And our platform that we do that under or operate our supply chain on is through a typical coin-operated laundromat. And that’s where we are today. Now, we’ve perfected the pickup and delivery process. We’ve perfected the laundromat industry with some very exciting numbers from an investment perspective. Ultimately, I know we’ll get into the franchising story, but now we have this double-edged sword of technologically-enabled laundromat and pickup and delivery service, ultimately tying two big pieces of an industry together for what can be a multi-billion dollar opportunity. And we couldn’t be more excited that we figured that out. And now we’re ready to scale.

Leslie Kuban:
And you’ve talked about this industry being one that is very ripe for disruption. Say more about that and how that’s manifesting now in your franchise model.

Dan D’Aquisto:
Yeah, absolutely. So the disruption really comes in from what the most antiquated piece of this model is, and that’s the laundromat. Laundromats, everyone knows what they are. They’ve been around for years and years and years. And technology has never really been at the forefront. It’s really been four walls allowing customers in those areas to come in and basically take care of themselves through putting quarters into the machines. And so we look at this as an opportunity to not only disrupt how a laundromat actually operates and to maximize revenue, to maximize the customer experience, and really bring this modern day approach to a very old school industry with technology, with driving different revenue streams, and there’s really no dominant brand or player in this space. And you may leave the studio today, as you’re driving home, you’ll look to your right. You’ll look to your left. There’s a regional or national dominant player in a gas station, movie theater, even a dry cleaner. There really hasn’t been that approach to the laundromat industry. And that’s where we recognize that there’s a massive opportunity to do that. And that’s really what we’re doing now with really bringing the technology, the services, and a national brand mission and vision to both laundry lab and 2ULaundry.

Leslie Kuban:
So we’re talking about cleaning clothes, Dan. How technologically sophisticated can this really get? And I the answer’s there. I’ve just been so impressed by what you guys are doing and continue to grow and how and the plans for next year, but unpack that for us. How is the-

Dan D’Aquisto:
Yeah, absolutely. And I think-

Leslie Kuban:
How is this a technically-sophisticated business?

Dan D’Aquisto:
Yep. No, I think that’s a great question, and I think that’s where our expertise and our excitement over industry comes. And so we really look at it on a few different levels. One is the customer and two is the franchisee. And if you break down the customers you have, what makes the most sense is your 2ULaundry customer, your customer who’s probably not going to go into a laundromat or doesn’t live near one. And so, with technology, you can provide a solution to them to clean their clothes, which nobody likes doing, but everybody has to do. With them not needing to go into a laundromat, they’re going to use a mobile app or our service, 2U, to pick up and deliver their clothes and provide that solution. Within the laundromat industry and through LaundroLab, we look at the customer lens of how do you use technology to impact the customer experience and the experience that they have while they wait? Can you provide them the WiFi, or how do you give them a marketing promotion or a discount?

Dan D’Aquisto:
We’re really thinking about how to do that in a very simple manner, all the way down to how they clean their clothes. We see a vision through a cashless or coin experience, where a customer can walk up to a washer with their cell phone. They can say, “I’m cleaning sheets.” It’ll automatically inject certain solutions into that washer so that all they have to do is click what they’re cleaning, click start, and they’re hands-off, ready to go. And so that’s the type of technologies that we’re thinking of on the customer side. On the franchisee side, what we’ve recognized was the maximizing revenue. And so we’re having all of these solutions in place to allow our franchisee to remain passive, semi-absentee, where they can lock and open the store from their phone or from their office. They can maintain the level of management and sophistication right from their smartphone or their computer. They can check the diagnostics of the machines. They can check revenue per machine. And so we’re coupling all of that into one central, cloud-based solution that are franchisees and our customers can access right from their fingertips. And so there are a lot of opportunities to use technology to make advancements not only for the customer but also for the franchisee and providing a maximized customer experience and a maximized profit for our franchise investors.

Leslie Kuban:
And again, in your laundry services franchising company, you employ how many technologists? And you are planning on to bring how many more?

Dan D’Aquisto:
Yeah. We have a team of about 10 full-time developers, VP of engineering, product managers that are working around the clock to build this technology for our companies. And that’s where we see most of our investment going over time. There’s so much opportunity in this space, in the short term and long term, to continue to invest in technology to, again, really focus on maximizing multi-store ownership for our investors, maximizing revenue, and then ultimately, on the customer side, maximizing what’s really true to our core is our customer experience and ultimately the convenience that they have inside of our store, or while they’re sitting at home with the pickup and delivery. And so there’s just so much opportunity there, and we have the right team and resources to go do that now and the platforms to continue to test and innovate. And now we’re really looking for those, what we call, laundropreneurs, those LaundroLab investors and owners across the country, to come into a system, at a pretty early stage, to help influence that roadmap and really making it entrepreneurial, which is true to our core. And that’s really what we’re excited about is creating that network effect as we scale.

Leslie Kuban:
So you mentioned something a minute ago that is a very hot and popular topic, investor ownership, also called semi-passive ownership. So LaundroLab falls in that bucket of business models that can be run while someone owns other businesses or has a full-time corporate job. Is that true? And any examples of your franchisees coming on board that fit that model?

Dan D’Aquisto:
Absolutely. So we’ve brought on 12 investors. As of today, 100% of those investors are still working. They’re in corporate jobs. They maybe run other businesses, and they are truly looking at LaundroLab as a very exciting investment opportunity with an exciting brand that has the capital, that has the resources, that has the right team that they can buy into and work with without reinventing anything. And the exciting thing, as you mentioned, about LaundroLab and the laundromat industry itself is that it is very passive, semi-absentee business model that now we’ve ultimately only increased that level of semi-absentee with technology. And so our franchisees are working their professional jobs. They’re looking at this as an investment opportunity, where in three to four, five years, they’re passive income that they’re collecting from LaundroLab will be able to replace and supplement the income that they’re getting through their corporate jobs. And so they love that opportunity to invest today for the future, ultimately to create that optionality for them to come full-time into their LaundroLab network of 3, 4, 5, 10 stores or continue to diversify their portfolios. And so that’s something that I’ve seen common across all of our franchisees, why they’re attracted to LaundroLab. The number one reason is that passive semi-absentee ownership. And I think LaundroLab is that solution because we are making that investment ourselves internally on technology, which continues to make that passive ownership even more achievable.

Leslie Kuban:
That’s really exciting. That’s the best of both worlds. And not all franchise opportunities are structured that way. And I think that’s something that viewers have to really be careful about is that they’re asking and validating that if they are looking for a semi-passive investor model, can it truly be run semi-absentee? And what are the technology and tools that the franchisor has provided and embedded in their systems in order to make that viable and possible? So, congratulations, on having that put together. And-

Dan D’Aquisto:
Thank you so much.

Leslie Kuban:
And as you are starting to… You’ve immersed yourself in this wonderful world of franchising. Now, have you found that there’s any particular mentors or role models who’ve really been meaningful to you in your franchising journey?

Dan D’Aquisto:
I think that’s honestly been one of the most inspiring things with being new in the franchising space is, as massive of an industry and sector of business that franchising is, you’d think that there’d be a lot of different, scary ways to navigate this form of business. But, in reality, it’s a very small world, and everyone is working together to ultimately improve the franchising ecosystem. And I’m so excited to even be just a small part of that. We get to meet incredible people all the time who have had experience running franchise businesses, being a franchisee, being a consultant, being a service provider, whatever it is. And everyone comes together with that same common knowledge and understanding that we just want to make the industry better. And that’s what makes networks strong. That’s what makes Silicon Valley known as what it is for the startup world. And franchising just feels like that small network of people who are very knowledgeable in what they’re doing and very welcoming and inviting. And so we’ve experienced that the short period of time that we’ve been in the franchising part of business, and we’ve been thankful to meet a lot of awesome people.

Leslie Kuban:
And I certainly expect someone will cite you as a mentor very soon in our industry.

Dan D’Aquisto:
I hope so.

Leslie Kuban:
It is a big world and small family in the world of franchising, indeed.

Dan D’Aquisto:
Yep. It really is.

Leslie Kuban:
Well, this has been a wonderful conversation, Dan. Really enjoyed learning about your business and excited to see what more is coming next year, and congratulations on your very rapid growth that you’ve enjoyed thus far.

Dan D’Aquisto:
Thank you so much. It was a pleasure to be on. I love what you’re doing. And again, love being a part of the franchising ecosystem. It’s one of the best. It’s flourishing. It’s a major, major growth industry. And again, I couldn’t be more excited to be a part of it.

Leslie Kuban:
Thanks for joining today, Dan.

Dan D’Aquisto:
Thanks, Leslie.

Leslie Kuban:
And folks, if this conversation has piqued some interest and you’d like to learn more about LaundroLab, you’re going to see a QR code pop up on your screen that will let them know that you’d like to get some more information. Thanks for joining me on this episode of Atlanta Franchise Today, and I look forward to seeing you next week.


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