What should I check when buying a coin laundry directly from its owner?
In a private coin laundry sale, no one may have gathered the paperwork. Check which machines are owned, leased or financed, who holds the coin and card system accounts, what the change machine and vending contracts say, whether the landlord will consent, and build the records package yourself.
When a coin laundry owner sells directly, there may be no information package. A broker would normally gather the machine list, the contracts and the financial summary before showing the business. Without one, that work falls to you. Do the checks below before you make an offer, not after.
Machines: owned, leased or financed
Ask for a list of every washer and dryer, with age and make. Then ask, machine by machine, whether it is owned outright, leased, or financed. A leased or financed machine may be subject to the agreement terms or a lender’s claim. Ask for the agreements and have your lawyer look at them. Our guide to buying a laundromat covers the wider checks.
Payment systems and vending contracts
Find out who holds the account for the card or coin system, and whether it can move to your name. Read the contracts for the change machine and any vending machines, and ask who owns the equipment and who collects the money. Ask how the supplier is paid, and whether the contract can end or transfer when the business changes hands.
The landlord and your own records
Ask the landlord, not just the owner, whether the lease can be assigned to you and on what terms. Then build your own records package: utility bills, machine service records, the lease and the books. If the seller keeps cash records only, ask your accountant how to test them.
A short list to start
- A machine list marked owned, leased or financed
- Copies of equipment and vending agreements
- Account details for the coin and card systems
- Written word from the landlord on the lease
Related reading
15 pages on the same subject, grouped by topic.
Buying
- GuideBuying a laundromat in Canada
- Expert answerDo I need a lawyer to buy a business?
- Expert answerWhat are the biggest risks when buying a business?
- Expert answerHow do I take over a business after closing?
- Expert answerHow do I find a business to buy in Canada?
- Expert answerHow do I find a laundromat or coin laundry for sale?
- Expert answerWhat are the pros and cons of owning a laundromat?
- Expert answerCan I own a laundromat without being there every day?
- Expert answerWhat should I check before buying a laundromat with a wash-and-fold service?
Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Canada Revenue AgencyGovernmentBuying a business
- 03Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 04Federal Economic Development Agency for Southern Ontario (FedDev Ontario)GovernmentUnderstanding your business lease
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