For many new (and potential) laundromat owners, signing a lease feels like checking a box. You need a space, the landlord has a space, and you just agree to the terms, right? Wrong. Your lease is one of the most powerful tools you have to set your laundromat up for long-term success. If you sign the wrong lease, you’re locking yourself into years of financial stress and operational headaches. If you negotiate the right lease, you can save hundreds of thousands of dollars and give your business breathing room to thrive.

Here’s what you need to know before you ever put pen to paper.

Who You’re Dealing With: Big Leasing Companies vs. Local Owners

Not all landlords are the same, and how you negotiate depends on who owns the property.

• Commercial Leasing Companies: These guys play hardball. They have layers of approvals, standardized contracts, and usually less flexibility. However, they also have deep pockets, and if you make a good case, they’ll sometimes give better tenant improvement packages (more on that below) because they know your laundromat will draw traffic to their center.

• Local Owners: Smaller property owners are often more flexible and easier to deal with. They may not understand the full financial commitment of building a laundromat, so you’ll need to educate them. But if they like you and believe in your vision, they’ll often work with you in ways a leasing company never would.

Both scenarios require strategy. Don’t confuse “easier to talk to” with “easier to win.”

Negotiating Buildout Costs

Building out a laundromat isn’t like opening a coffee shop. You’ll need heavy plumbing, upgraded electrical, increased HVAC capabilities and possibly floor reinforcement. These costs can easily climb into the six figures.

Here’s where Tenant Improvement Allowance (TIA) comes in. Push for the landlord to cover some or all of the infrastructure upgrades that benefit their property long-term. Even if you move out in 10 years, they’ll keep the upgraded plumbing, water lines, and electrical capacity.

• With leasing companies: They’re used to TIAs. Aim high.
• With local owners: They may not understand the concept, but you can frame it as an investment in their property’s value.

Free Rent: Why 6-12 Months is Standard in Our Industry

Never underestimate the importance of free rent while you’re building and ramping up. Laundromats often take 6-12 months to reach breakeven, and you’ll be bleeding cash without customers in the early days.

• Ask for at least 6 months of free rent to cover your construction timeline.
• Push for 12 months total if possible, structured as 6 months during buildout and 6 months post-opening to stabilize. (all 3 of my “new builds” have had free rent during construction, then 6 months of free rent, once we officially open)

This isn’t greedy, it’s survival. Smart landlords know that if you fail early, they lose too.

Who Pays for HVAC, Plumbing, and the Building?

This part of the lease is often hidden in the fine print. If you don’t nail it down, you could be responsible for a $15,000 HVAC replacement in year two. *NEVER ASSUME what the landlord will cover. Get EVERYTHING is writing!

• HVAC: Push for the landlord to remain responsible. If they won’t, at least negotiate a cap on your costs.
• Plumbing & Electrical Infrastructure: Try to keep these as landlord responsibilities since the improvements benefit the property. If you’re paying, it should reduce your rent or be offset by TIA.
• Roof, Structure, and Exterior: Always the landlord’s responsibility. Don’t budge here.

If the lease says “tenant responsible for everything,” run!

Why Financing Companies Demand a 10-Year Lease

Your laundromat’s biggest expense will be equipment, and financing companies want assurance you’ll be around long enough to pay for it. That’s why lenders typically require a minimum 10-year lease (assuming you don’t own the property).

But here’s the trap: a 10-year lease with no flexibility locks you in. The solution? Negotiate additional 5-year options. That way you’re guaranteed security for financing but also have the ability to walk after 10 years if things change.

Example: Sign a 10-year lease with two 5-year options. On paper, that gives you a 20-year runway if business is great. But you’re not legally bound past 10 unless you want to be.

Other Lease Points Too Many Owners Miss

• Exclusivity Clause: Make sure your lease prevents another laundromat from opening in the same center.
• CAM (Common Area Maintenance) Fees: These can quietly destroy your profit if they’re not capped. Always ask for an itemized breakdown and a maximum annual increase.
• Right to Assign/Sublet: Life changes. You may want to sell your store someday. Make sure your lease doesn’t trap you.
• Signage Rights: You’ll need visible signage to pull in drive-by traffic. Don’t assume it’s included.
• Utilities Access: Ensure your space has access to water, sewer, and sufficient power before signing. A great location without utilities is worthless.
• Right of First Refusal: I always request this to be added to my leases. If the landlord decides they want to sale the property, they have to give you the first shot at purchasing it, before they list it publicly.

The Bottom Line

A laundromat isn’t just a business, it’s a long-term marriage with your lease. If you negotiate from a position of knowledge, you set yourself up for success before the first load ever hits the drum. If you sign blindly, you’re gambling with your future.

Approach lease negotiations as if you’re buying the property itself, because in many ways, the lease terms are just as important. Push for landlord contributions, secure enough free rent to breathe, and structure your lease for both stability and flexibility.

Remember, every dollar you negotiate on the front end could be worth ten down the road.

A Pilots Adage:

When I was getting my pilots license years ago, after landing from a day of turbulent flying, my instructor told me that it was always better to be on the ground, wishing you were in the air, instead of being in the air and wishing you were on the ground.
The same is for a lease. I’d rather be looking at a property, wishing I had the perfect lease signed for it, instead of having a property, wishing I never signed the lease.

NEVER be afraid to walk away from negotiations! I’ve walked away from 10 negotiations for every 1 store I’ve opened.

My Dad always told me growing up to “never get emotionally involved.” Meaning that if you let your feelings and emotions, over run your common sense, you’ll lose every-time.

I have created a Lease Negotiation Check List for Laundromats from my personal experiences over the past few years. Send me an email and I’ll forward you the pdf. [email protected]