FINISHING EQUIPMENT BY FUJISTAR

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THE DRY CLEANING REPORT

by Ron SchubertA

ONE OF THE TOP FIVE UNI Q UE

BUSINESS OPPORTUNITIES OF THE MILLENIUM

Copyright (K) 1992- by Silver Hanger Systems, Inc. Jacksonville, Florida

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Dry Cleaning is reported to have started in France in the early 1800's when Mr.. Belin turned over a lamp and the Kerosene ran out on the tablecloth and dissolved a grease spot. Mr.. Belin joined with a Mr. .J oily and are reputed to be one of the first commercial Dry Cleaners and Launders.

From that modest beginning it has grown to over 8 billion dollars a year business in America alone, worldwide it's probably 5 or 6 times that.

Laundry and Dry Cleaning has long been the premiere service industry worldwide. Yet it doesn't get a lot of attention because it's basically meat and potatoes, Mom and Pop business sis. People think of the fact that it's just a $20 or $30 transaction.

, But, it is people bringing their shirts and cleaning in week in and week out-spending that, $20 or $30 during good times and bad, during the summer and winter, the fall and spring

For years and years, generations and generations.

Quite literally, Dry Cleaning and Laundry is probably the greatest single annuity type business operating in the entirety of the United States. Business executives and professionals need it, blue-collar workers need it, and the military and peace officers need it. Even in bad times, while people may reduce the frequency, they are not going to wear their suit 25 times without cleaning it. They're not going to wear their shirt 15 days in a row without laundering it. We're one of the most recession- resistant industries ever established.

Proof-positive is evidenced by analyzing a recent study done by Thomas Stanley, marketing professor at the University of Georgia, where he looked at the performance, stability and the profitability of 35 small businesses. Dry Cleaning and Laundry were right at the top!

Basically, what these people studied was the historic performance and the stability of 35 different industries. The best 35 industries, 1 might say-not the worst or the most volatile, but the best ones-over 14 decades. The results were very startling. What everyone thought would be the preeminent winner wasn't. It had really dropped during this time, and it only had a marginal growth rate. What very few people even thought would be relevant was Laundry and Dry Cleaning because it endures. Some of the reasons Laundry and Dry Cleaning did so well was a readily available low wage labor market, no receivables, no spoilable inventory, medium priced rental space and always a good supply of dirty clothes and constant repeat business from neighborhood customers. And, all their high marks were with the typical old, obsolete Laundry and Dry Cleaning equipment and systems. They were not labor efficient, energy efficient, or space efficient.

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At Silver Hanger we've dedicated the last few years of our corporate life to bring the most labor, energy and space efficient products to the industry. Developing, researching and perfecting the most state-of-art equipment capable of doing twenty percent more work per hour, per square foot. Than the old, and yet doing it with 10-200/0 less energy. The result is a Dry Cleaning or Shirt Laundry plant that can be set up in a fraction of the space, which the old style plant required and can be operated with fewer staff.

What does this mean to you? All things being equal-with our equipment, doing the same volume as an old-rime dry cleaner-you can make 20-300/0 more money, operating with less down time, fewer hours, less energy and less people. Also, you can take advantage of much smaller retail facilities than most. Or you can take advantage of facilities outside of the expensive retail environment-more about this later.

HISTORY

In the early 1900's, most laundries and cleaners picked up and delivered at people's homes. The most popular service was called wet wash. The family laundry was picked up early in the morning, washed, extracted and returned damp the same afternoon or the next day. Dry Cleaning was done in naphtha and one-week service was the general rule of thumb. Many hundreds of wet wash laundries sprang up all over the country. Even at 6 cents a pound, they were very profitable business. And, that was during the Great Depression.

As the country came out of the depression, the number of services provided by the laundries increased. There was a service called "rough dry" where the flatwork (sheets, pillow slips and table linen) were ironed and the terry towels and wearing apparel were dried and folded.

During the Second World War, this services prospered and the laundries and cleaners providing it did too. Also, hospitals and hotels increased in number and there too laundries prospered some growing to staffs of 3 or 4 hundred employees.

After the Second World War, a number of changes came to the industry. Kansas City introduced the: first shopping center-with a cleaner. Synthetic dry cleaning solvent (non- flammable,), carbon tetrachloride, came into the picture. A company called Band Box Cleaners started offering same day dry cleaning. Bendix, Westinghouse and Norge started the Laundromats and Sears introduced the home washer on time payments. All this resulted in large changes in the laundry and dry cleaning industry.

The large family laundries with pick up and delivery gave way to the Laundromats, home laundries and small package dry cleaning plants where the consumer could get one-hour service on dry cleaning.

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In the big cities there are only a few family laundries left that still pickup and deliver at homes. There are literally thousands of small dry cleaners across the country now; in almost every shopping center in America you will find a cleaner. Rarely do you ever see one go out of business. Those large family laundries that pick up and deliver also, seem to be making a comeback offering a whole list of services: drape removal and re hanging, furniture cleaning, rug cleaning, blind cleaning, fur cleaning and many, many others.

There are approximately 70,000 cleaners in America today and the list grows by between 12 to 15 hundred a year .I t proves the incredible growth rate of this industry and the need for this service. In the late 60.s and early 70's, when our country was deluged with polyester and wash and wear, even then the cleaners survived. However, those plants with obsolete equipment and poor locations faded and gave way to the modem, up-to-date service oriented cleaners in the shopping centers.

As the consumer rejected the pure polyester garment for natural fibers like cotton and wool, the cleaning industry was again on the rise. Cotton shirts increased in use ten fold and so did the need for shirt laundries. It looks like the natural fibers are here to stay and with them, more and more need for cleaners. Also, according to all reports, Americans are spending more time in leisure pursuits, which means more and more items are sent to the laundry and cleaners.

The things we have learned in more recent times are that consumers are better educated than ever and demand quality work and prompt, on time, service. They are sensitive to the environmental issues and are going to shop with the business that addresses these issues. That's where Silver Hanger comes in.

We have been on the cutting edge of all the environmental improvements and technology since our inception. We have studied and analyzed the most successful cleaners in the industry. From the results of these studies we have put together a comprehensive program with two pilot program(s), Silver Hanger Cleaners and Shirt King Wholesale Laundries.

These programs have proved extremely successful in the plants we have installed and those start up plants we have sold from the program. We have owned and operated fifty plants in the Florida, California and New Jersey .In these plants, we test and evaluate the newest technology from all over the world.

One package is retail DRY CLEANERS dealing directly with the public. The other is the WHOLESALE SHIRT LAUNDRY dealing with other businessmen, or a combination of both.

Why two packages? There's a simple reason. Some people looking to go into business want and like public contact. For them it's a pleasure to be in the dry cleaning business. The main one is ongoing relationships. Many businesses you could start are one-shot or erratically patronized. The dry cleaning business is a friendly sort of a business where you meet and sustain lots of good friendships.

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People keep coming back. My father and grandfather had customers who have been sending their laundry and cleaning to us for three generations.

It's good for two reasons. One, once you get a customer, there worth to you is that they keep coming back over and over again. Number two, psychologically; unless you're an incredible salesman, it's hard to make new acquaintances. It's fun-actually enjoyable-and satisfying to see relationships grow over years or decades, which is what you do with the dry cleaning business. Think about whomever you take you cleaning to. You've got a relationship, you know them, and you talk about their family and its probably not just idle talk. You sit there, and over the years you grow, maybe they give you something at Christmas or you give them something at Christmas. It's a very satisfying feeling.

Another thing is overlooked volume. Most people don't understand that $30 per week is $120 a month. And $120 a month for 500 customers is close to 3/4 of a million a year in sales. It's a very subtle, disarmingly lucrative, low-key, low profile business. When you establish a successful dry cleaning business, no one knows how well you're doing. They can't figure it out. Just a lot of little transactions. People keep coming back every week, every two weeks, every month, year-in and year-out. It's a very lucrative, a very consistent, and a very predictable and very stable stream of income known as good positive cash flow. It's not a feast and famine business. For the most part, it is not a seasonal business.

In winter, in cold climates, it tends to be a little bit better than summer. But by and large, plus or minus 15%, it's incredibly stable and non-cyclical. Interestingly, and this isn't always the case, but in some down economies dry cleaning businesses can actually go up because both people in the family work with little time for laundry and dry cleaning chores.

In good times it flourishes because people spend more time in leisure pursuits. They don't want to stay home and iron shirts or do the laundry. People travel more. Airlines, limousines and buses use more cleaning and laundry services. The consumers have more money to spend for clothes and in good times tend to buy better quality and high fashion clothes. This means they need to go to the cleaners often. More sleeping bags, ski clothes, down filled jackets, suede's and leathers, wedding gowns, tuxedos and evening gowns increase the cleaning volume. The yuppies that are more fashion conscious than most tend to use dry cleaning service more. Current fashion trends are emphasizing more natural fibers, which need to be cleaned. Trends such as sheep skin car seat covers and fur throw rugs also increase the cleaners' volume in good times. Cruise ships, resorts ~d hotels need more laundry and dry cleaning services.

There are several ways you can approach the business.

Some people prefer basically finding their own site, their own equipment, figuring out what to do, coming up with their own name, hiring their own staff, negotiating their own lease, going into a loan, and more.

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There are advantages when you are your own contractor, although you can make some ~ mistakes. Because you are your own contractor some costs are eliminated. However, you have nobody but yourself to blame if you blow it.

Some people like to go to a successful franchise where you normally have to pay a very high premium for the program. The worst part is you must pay an on going percentage of the sales whether they give you help or not. Once you are operational, the help is usually not needed. Some advertising and name recognition are usually provided but the latter sometimes can be a big negative.

Franchise. Who should buy a franchise? The only people we recommend buying franchise are people who are insecure. You are paying a big premium for everything; equipment, start-up, site negotiations, everything including a name. It makes sense only if it's McDonald's. If you've got a prime location in a high-traffic area, it doesn't matter, whether you're "no IT CLEAN," or whatever name you choose.

In our opinion, the cost for a franchise is too high. You pay 20 or 30% more for the equipment and may pay 5% or whatever of the gross for life. You're going to be surprised how much cash you can generate. Let's say you gross $500,000 a year. Paying a $25,000 franchise fee each year, equals the cost of a great vacation, or will pay for two more employees, or will pay for the one of two kids in college. It seems like a lot of money to spend for just a little bit of help.

! Turnkey-licensee. In many respects this is the best of all worlds. You get the advantage,

! Of a franchise without tile ongoing fees and responsibility .In the case of Silver Hanger,

: You also get the state-of-art equipment actually priced below comparable equipment. We are the distributor-importer and sell to you at legitimate prices. So, it's a very interesting turnkey package. No ongoing royalties, or fees, and you get a proven marketing plan. You get ongoing advertising and promotional sales help and personnel training. You get a recognizable name. You get site selection. You get lease negotiation help. You get full on- site training, all for a very affordable package price. Better yet, all that which you normally have to spend out of pocket, which would drain your working capital, can be financed. (As we said earlier, if you're very credit-worthy, you can finance most off which can be a great advantage to get you off and running).

There are advantages and disadvantages of going into a loan. The best possible scenario is to go into business debt free. No interest means lower overhead and you can reach the break-even point sooner. Not many of us can do that. The most important thing is to make sure you have enough start up capital, and that depends on lease payments, tenant improvements etc. With a 100% lease on equipment and installation, it becomes 100% deductible, with no concern about depreciation. It is totally expensed. If you're really good at realization, actualization, if you can take a concept into application, if you're good at finding locations, if you have a good sense of what's a good location, good center, good traffic, etc.) And you're a good negotiator you can save a lot of costs. If that's the case, then

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All you have to do is decide what equipment you want. There is a lot to choose from. Some are better, some are worse. Some use more energy, some don't. Some have no financing, some do. Some require three times the stamina to operate. With our program. You can select what you want to do and we will do the rest. We will help you make the most prudent, intelligent and well-reasoned decision possible. Basically, we can provide you with any kind or make of equipment you want. However we strongly recommend the Silver Hanger Package.

One thing we can tell you is we evaluated all of them. Basically, my family and I have been in the dry cleaning and laundry business for over 100 years and have cleaned and laundered, conservatively speaking, 25 million garments in the last 30 years. We've studied, we've evaluated, we've owned every kind of equipment on the market, we have been to every major trade ~how, and my technicians are more demanding than consumer tests or reports. We've analyzed the performance, the dependability, the energy and labor efficiencies of every item on the market, and we have determined that the Silver Hanger Equipment Package is the absolute hands-on best buy, for a number of reasons.

It's efficient, durable, functional, simple to operate, affordable, good looking, reliable, guaranteed, and more. For this reason, we have put together an incredible, state-of-the-art package that anybody can operate. The package includes everything you need to operate a turnkey plant that can handle up to a maximum of 6,000 shirts, or 5,000 garments a month. What does that mean' That means that with a $250,000 cash gross this small, compact, energy efficient plant, with a maximum of 3 -4 people running it, can handle that whole amount of business at a cost to you of approximately $150,000 to $175,000 a year.

You take home from $75,000 to $1 00,000 per year pre-tax. If you wish to grow above that, with more facilities or equipment, it's available at a very moderate cost. And, we can finance that as well.

Our recommendation is do as much as you can and let us do the rest. If you are not sure you can choose a good site and are not sure about the set up and all the details that it takes to start a new business, let us do it for you. You probably should not be doing the whole thing yourself unless you have experience and knowledge in this field.

As we said earlier, the most intelligent compromise we could come up with, the one that we felt would give you the best value is THE TURNKEY PACKAGE. For a very modest increase above the do-it-yourself price, we package it for you. You get the complete package of equipment, design, layout; you get the complete training and start-up supplies; you get your own site; you get all this, plus you get assistance and support. If you have a serious problem a technician could be out on the spot; when you have a promotion, we can help you. Whatever it is, we'll help your business grow.

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A perspective on choosing dry cleaning over other business opportunities...

The philosophy you should probably adopt, in our opinion, when trying to decide what

Business to go into is as follows. First, you've got to decide if this is going to be a primary business or a passive business? Second, is this going to be a business that you're going to enjoy investing and operating for a 1ife- time, or is it something you just want to buy and turn? Third, depending on your personality, depending on your goals, depending on your desires, needs and finances, one business may be better over another.

HERE IS A CHECKLIST OF THE TEN Top PRODUCING BUSINESSES AS PUBLISHED IN USA TODAY, PREPARED BY THOMAS STANLEY ...

These businesses are the ten best fields where fortune beckons according to an exhaustive study done by Thomas Stanley, a renowned authority on how to become a millionaire.

Which one makes the most sense to? Most of this business are really capital intensive and require your full attention.

1. COMMERCIAL MACHINES AND EQUIPMENT WHOLESALING: Price tags are steep. Profits can be, too, but it is a highly specialized business and takes a ton of capital.

2. COMMERCIAL PRINTING: Customers want high quality on a tight schedule. Lots of franchises available. Erratic volume, lots of money tied up in stock, pressure galore and a very small profit margin.

3. DESIGNING COMPUTER PROGRAMS: It needs high I. Q., lots of education and it's not easy to market.

4. DRY CLEANING BUSINESS: I operated five cleaners, basically as an absentee owner. The investment is low. The break-even point (depending on debt reduction) can also be low. Excluding the equipment lease payment you can break even in a sm.a1l plant with a gross sales of $4,000 a month -that's $1000 a week or about $150 a day, that's only five customers a day at $30 a customer. What does that mean?

It means, that if you get five people a day to bring in their cleaning and laundry, you've cracked the nut. Ten customers get you into black ink. How does that compare with other businesses you might be considering? Yogurt for example.

People, if they want yogurt, don't come and buy $20 worth of yogurt every week forever, do they? Yogurt goes in and out of style. It's more desirable in the summer than it is in the winter-it's seasonal. It's very simple to build, sustain and endure a successful dry cleaning business. We don't promise success, only a great opportunity to be successful.

5. DATA PROCESSING SERVICES: It takes a big investment in computer equipment, which is obsolete in a very short time.

 

 

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6. EXCA V ATING AND FOUNDAION CONTRACTING: Could be big money but also, huge investment in equipment and very seasonal.

7. MONEY MANAGERS: New financial products make investment advisors a commodity only good in a rising economy.

8. INDEPENDENT INSURANCE BROKERAGE SERVICES: Baby boomers and their families are a fertile market. Need education in insurance but a low investment. A lot of time learning the business. May require licenses, degree, etc. Just a few of the disadvantages of this type of business.

9. SPECIALIZED TOOL AND DIE MANUF ACTURIN a: High investment in equipment and again a highly spcciali7.cd field.

I O. JEWELR Y RET AILIN a: The investment is high, -’you better know the business but t the profit margins for precious gems are the jeweler’s best friend.

Ask your self this question. Why do you think so many foreigners (Koreans, Chinese, and Iranians} come and put their money into the cleaning business? Do you think they are shrewd? The: -f knows the safest way to protect and expand their capital and grow the business. This expandable business that can be easily managed and won’t fall apart, won't unravel. Won’t give them grief, \\'on't be robbed (and this can be easily documented} is the dry cleaning business.

Next. Try this little test. If you don't belie\'e us, go to any high-traffic, retail center in your area \\rith a cleaner. Sit in you car five days in a row between 7- l0 in the morning, and between 3-6 in the evening. Count how many people come and go. Look what's in their hand. Count the garments. You can easily' figure \\~at each garment is worth. Tally up the total. Then call the landlord for that store and ask about the rent Try to figure the square footage. Calculate for yourself. Here's the rule: typical old-time dry cleaners takes four people and average of 2,000 square feet and parenthetically, ours takes three people and an average of 1,500 square feet. So it's going to be 20% more efficient, and \\'e translate it to be 20% more profitable. Nevertheless, you can figure it up yourself, is it profitable or not? Then go and watch. Calculate how many people go to the yogurt store. Calculate how may people go to the florist. Then make your own intelligent decision.

One thing is certain in this time of uncertain economic conditions. As long as there are weddings, funerals, dinner parties, lunches, theaters, vacations, cruises, graduations, proms, military bases, police forces, conventions, sporting events, trade shows, banquets, holidays, business trips, band concerts, and the list goes on and on, there will be soiled clothes and dirty shirts for the cleaners.

Here are some success stories you'd probably like to know about. We've taken the liberty of presenting a number of fascinating success stories and case studies that tell you how various people, in various parts of the country have used dry cleaning or laundry to create their own fame, fortune and financial security.

 

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Here are just a few real success stories of people who have recently made their mark in the cleaning and laundry business. There are literally thousands more with over 70,000 cleaners in America today.

1. In the May, 1990 issue of American Drycleaner, McNatt's Cleaners & Laundry, Tampa, FL, owned by Henry McNatt III.

(A super success story from a modest beginning)

2. In the April, 1990 issue of American Dry Cleaning Magazine, Albett's Fine Cleaners, Santa Barbara, CA, owner: Neil Ablett.

3. In the June 1990 issue of American Dry Cleaning, Nu -Way Dry Cleaning, Forest, MS, Bill and Gaybie Fortinberry.

(A real Mom & Pop success, a real cash cow)

4. Hollyway Dry Cleaning, Los Angeles, CA, Milt & Burt Chortkoff.

(A real marketing story, small beginning to a volume of over $2 million per year, recently sold for over $2 million)

5. Off Broadway Cleaners, Sonoma, CA, Barry B30sshaud.

(Decided to build his own building with office rentals above the cleaners and has boomed as a result)

6. Bryan's Cleaners & Laundry, Irmo, SC, Stan Folk. {Another busy store doing great)

7. Pilgrim Dry Cleaner, Minneapolis, MN, Donald Rosen.

(Donald has grown to the point that he is franchising his Pilgrim store now)

8. Brigade Wholesale Shirt Service, Atlanta, GA, Lane Berryhill and Ken Wellborn. (Started with a Silver Star plant in Columbus, GA now has grown to a Brigade Shirt Laundry in Atlanta less than two years)

9. Executive Shirt Service, Durfee, MA, Don Desrosier

{Incredible start up volume, adding a new account per day for the Ist 16 days in operation, planning expansion in the Ist month of operation)

10. Real Cleaners, Elgria, OH, Dave Walker. (Small town, big volume business)

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11. Pilgrim Clothing Care Center, Richfield, MN, Jerry Fingerman. (One of Donald Rosen's very successful franchises)

12. Bailey's Mini Cleaners, Chapel Hill, SC, Brent Sexton (former Pittsburgh Steeler).

(In the Ist 3 years in business has added 6 new stores in the Research Triangle are of South Carolina)

13. Milt & Michael Master Drycleaners, Burbank, CA, Milt Chartkoff.

(Super success story. From 6K a week to 60K a week. Biggest in the West)

14. The Shirt Laundry, San Diego, CA, Charles Gudaitis.

(Started from scratch, steady growth, recently added a Dry Cleaning Plant)

15. Academy Cleaners, San Diego, CA, Walter Duckworth. (Years in the business, solid, steady moneymaker)

16. Admiral Cleaners, Annapolis, MD, Earl Chaney. (Old plant, newly modified, steady growth)

17. Catalina Cleaners, Tucson, AZ. Bobby Jean Norman.

(Second generation, Bobby has become a millionaire, probably won't admit it)

18. Aristo Craft Cleaners, Worcester, MA, Mike Roth.

(Another case of steady solid business year after year)

19. Arthur's Laundry, Redondo Beach CA, Bob Haas.

(The inspiration plant for the wholesale shirt laundry, Bob's retired now)

20. Battiston's of Avon, Inc., Avon, CT, Michael Mauluccl.

(Michael has done an incredible job with this one, $3 million per year plus)

The list goes on and on. I'm sure there are some in your area that have made it big in the cleaning business. I'm equally sure that there are few, if any, in your neighborhoods, which have failed.

The conclusion is, in my opinion that it doesn't matter about your goals. If you want to make a nice livelihood, if you want to become rich and wealthy, if you want to be an innovator, if you want to do something safe or want something simple, if you're ambitious, if you want a cash flow, you can find an application of our system that will work for you.

From a practical standpoint, the best possible thing about a laundry or dry cleaning facility is, it doesn't matter what part of the country you locate it in. Admittedly, it's better if you're in an affluent area where the weather is bad, but from a practical standpoint-plus or minus 20%, any City in any State in the United States can probably work.

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Now you have to admit that obviously there are qualifications, a couple of States are terribly impaired economically right now. I would say that you'd probably lessen-this is just conjecture-you might lessen your success by 15% if you lived in the worse part.

Conversely, of any business you could go into, you'd probably enhance your success many times in going into this over anything else. It's very important that you weigh these factors. If you're in Oregon, you'll probably do 15% less than you would in Los Angeles and-bottom line you can make much more. However, of any business you're going into, dry cleaning is probably the safest thing you could do. It is a heck of a lot better than being a florist, gas station owner or a restaurant owner.

Dry cleaning was number five on the list of how Americans became millionaires reported by JouT1lal of Accountancy, February '86, where they studied 10,000 companies.

I have lived, eaten, slept and drank dry cleaning all my 50 years. I know about it. How to get started? There's different ways you can start. You can start with one facility or you can start \with multiple facilities. You can buy it all for cash or you can finance part. We have a number of different alternatives available depending on your circumstances. If you don't have any capital to put into it and if you have good credit? You can start for as low as $148?000. Lease for a small plant or with a healthy down payment and lots of collateral you can build a large plant.

If you want to start with a small operation, just you, your wife with one of your family members running it, you could keep your present job and parlay that into other stores or simple 'drop stores.'

You can also start a new plant or buy one that is operating. We have some existing ones that are already throwing off good cash flow.

There are a number of pros and cons to consider in deciding whether to start a new business or to buy one that's already operating. An existing plant has a track record that may be good or may not give a true picture. Your personality will definitely make a difference as to whether the customers repeat their business. Also, there is a certain amount of pride attached to starting a new business and building it up to a real moneymaker. The expenses of tenant build-out in a new center can be high, depending on the ability to negotiate with the landlord. We will help you with this if you wish. Many times build-out can be included in the rent. In an existing plant someone else has already gone through pulling the permits and dealing with the inspectors. The problem is that when you buy an existing plant you pay for all these things. Often it's quite a high premium. That brings us to a major point.

How many businesses can you start up and ask double what you have in it months after you open your door? Many cleaners have done just that. The stability of a cleaning plant is excellent. .

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Even better than mortuaries. As long as you have the numbers to confirm your volume, you " can sell a cleaner in almost any city or state in the country. Generally, a cleaner will sell for anywhere from 1 to 12 times yearly volume, depending on the age of equipment and the location. I 'know of a new plant in a major shopping center that recently sold for 12 times its volume. Other businesses sell from 3 to 4 time net profits. This would be a much lower figure than a multiplier of dry cleaner’s gross sales per year. That’s the way your sales price would be determined.

The ultimate retirement investment. If you're looking for something to invest your money in and you have a lot of capital you want to live off, that's great. If you don't have enough capital to live on and you want to try to make capital go far, you can move into a warm Sunbelt area and start a small cleaner. Simply put, our existing plants are fairly priced, but they are priced based on annual sales! Probably, your best bet is to start your own. The premium you can get for it is incredible if and when you decide to sell.

Anywhere from $150,000-$300,000 up to $500,000 for your operating business. So a plant grossing $500,000 per year would sell for about $500,000. If it has new equipment, it could be more.

Let ten you what this means. If you wanted to be the ultimate profiteer, you could set u p a facility, work really hard and smart for a year and a half, or so, build the volume, be profitable, then double your money, presuming you paid cash. If you financed it, the buyer could take over the loan and still give you a handsome profit. That's leverage!

For example, let's say, hypothetically, you bought the equipment with $40,000 down. And your payments are $2,000 per month. 1 t took $50, 000 of your capital. Let's say you got the sales to $200,000 a year. And then you sell it for 1 times the gross. That would mean a sale for $200,000. That's a super return on a $50,000 investment for two years. Whether they take you out of the note or whether you have them take it over, it is still a great deal.

Most people don't tell you that stuff, is it possible? Absolutely. People are doing it every day. Prove it to yourself and check the Sunday paper and see what cleaners are selling for. Will you want to do that? Maybe, maybe not.

The truth of the matter is the more you build the business the more its worth. Only you can know what's better for you... ongoing cash flow or capital gains. Some people enjoy having an income for life of $100, 000-$200, 000 a year. Other people prefer a 3/4 million - dollar lump sum check. Of all the areas, of all the opportunities you can select that can give that to you, a dry cleaning business probably can come closer to fulfilling it. It has a higher probability of success than anything else I know. Don't take my word. Ask the American Journal of Accountancy .Ask the Wall Street Journal. Ask Thomas Stanley. Ask USA Today. The experts all agree there's a good chance you can clean lip in the cleaning business.

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WE HA VE FIVE FINANCING PROGRAMS:

1- the purchase of a plant can only be made when you get financed. Listed below are the five

Possible programs that you can have as options to be funded.

1. SBA FUNDING: Required for this loan is collateral such as lst and 200 mortgages. The rate is 2 to 3 points over prime. The preparing bank or local office adds on service charges, closing fees, appraisals, preparation of documents and filing.

2. BANK FINANCING: The banks are difficult as they are also looking for collateral and a previous trade record of from 2 to 3 years of successful and profitable business ventures on your part. The rates are lower than leasing but you must be prepared to have collateral for the loan. They shy away from start-ups.

3. CONDITIONAL SALES CONTRACT: You actually buy the equipment with a private finance company making the loan. Your down will vary depending on your liquid net worth but usually it will fall in the 20-30~o range. When you finish the payments, you own the equipment free and clear. Rates are about 11% APR.

4. SECOND MORTGAGE MONEY: if you have good equity in your real estate, you can go to a local bank and pull out this equity, at much lower rates. You can finance the balance from one of our sources if you are still short. It is a much safer investment. We can help arrange this 20 mortgage.

5. LEASING: The rates for leasing are higher than conventional Financing, but are available for a new business start-up. No down payments but you pay first and last 2 lease payments depending on the company. This leaves 57 payments on your 60 months lease.

Buy-out at the end of the lease is generally 10? /0 of the value of the equipment. Sometimes this also is paid up front.

These five programs should be able to handle all of your needs. If you have a special situation, please call us and let's discuss it. We are always willing to help you get your store built.

We can put together a whole package for as low as $148,000; compare that to every other business. Everything else is about twice that if it's good. There are some that are less. Take a look at what they really cost you. They're not proven. You may have little help and their success rate would be about 10 percent. What is it worth to have about 10 times the probability of succeeding? What's it worth to know that not only can you succeed, but anytime you got tired of it there will be people eager and willing, to take it over, not for your investment, but for many times that, assuming you are successful? What it's worth to know that if you got tired, you could hire capable help and still make a five-figure income, or sell it?

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With your imagination you can come up with all kinds of options. Weigh the facts and you can make your own well-reasoned decision. We've given an objective evaluation of the advantages we think a dry cleaning facility offers. Add to that list. There are more unique advantages we think our Silver Hanger program offers. TURBO CHARGING YOUR SUCCESS' QUEST, in our opinion, by opting for this package, you may increase your profit by a function of 20-300/0. This represents the saving in efficiency, the savings in labor, and the increase in productivity. Frankly, most people that we've looked at in the dry cleaning industry were studied operating with the old kind of systems. These were not labor efficient, energy efficient or space efficient.

What if you don't like dealing with the public?

Wholesale Shirt Laundry is the option. Low break-even and very profitable. The beauty of this is you operate this from anywhere. All it has to be is zoned properly. You could even operate it from your garage, or an out-of-the-way warehouse.

How many clients; do you need to make it work? We say about 20 good accounts. That of course depends on your equipment or your labor, whether you do it yourself or hire it out, but truthfully speaking, it can be as low 2 or 3 clients if their volume is large enough. Executive Shirt Service (See page 9, number 9) has one client with 14,000 shirts a week,

How big can you get? Well, the sky's the limit, but let's tell you about some people we know. Bayonne Laundry, Bayonne, NJ, 40,000 shirts a week. Tuxedo Junction, Buffalo, NY, with 12,000 tuxedos a week.

We've started six Shirt Laundries that are operating now, and they're real success stories: Boston, Los Angeles, Atlanta, Redondo Beach CA, La Habra CA and San Diego CA. There are hundreds of other locations where the shirt LAUNDRY BUSINESS could be a resounding success.

With a Shirt Laundry you need to have a truck. You need to be ready to pick up and deliver. You need to be willing to supervise four to six people. You need to be willing to spend ten hours a day, or have somebody responsible managing your plant.

Hopefully, I've done my best to explain to you why I'm so thoroughly excited about the future of dry cleaning and laundry facilities. I've explained to you that the very fact that it's not an exciting, high visibility industry is actually an advantage, not a negative. I've explained to you that it has the third if not, the highest, success rate of any industry you can go into. I've explained that it has a demonstrated, 200-year history of enduring and surviving, unscathed, good times or bad. That you can get in for almost nothing. That you can operate it very modestly and make a little cash flows; that you can be ambitious and make more. You can do it yourself. You can secure our help. You call; if you prefer, go to somebody else and get a franchise.

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If you're seriously contemplating starting a business of your own, passively investing, financing a business for any member of your family, then you must seriously consider choosing one or multiple dry cleaning facilities. To make my point stronger, I'd like to personally talk to you. I'll be glad to answer every question, not any, but every question you have and even suggests some more. I'll be glad to refer you to people whose facilities you can see. I'll send you all the information. I'll send you more detail and facts and figures.

I'll give you references and case studies and facilities all over the country, and all over the world for that matter, that you can verify.

Then, I'll help you figure out the most intelligent, and logical, safe and prosperous strategy for you to take to achieve your specific goal. I'll work with you objectively with your best interest in mind. I'll make well-reasoned, intelligent and objective recommendations and

I'll support them with facts you can verify on you own. I'll te11 you every way I would go to minimize risk and investment. I'11 tell you the approach I would take, the locations I would go to with, why I would do it, how I would do it, and then if it made sense to you, I would be delighted to put together a turnkey package for you. There's no obligation to purchase. I know if you get all the facts on the industry, and compare it to all the other choices, you're going to decide unequivocally and inarguably, that this is the best choice.

You'll find that if you study the case for our state-of-art energy and productivity, efficient and cutting-edge technology you shouldn't buy any of the stuff that's 50-year-old technology. It's going to cost you more to purchase. It's going to cost you more in lost sales.

It's going cost you more in time. It's going to cost you more in space. It's going to cost you more in labor. It's going to cost you more in electricity and gas. When you see the case for the industry and for the equipment, you can't help but contact us. For that reason we're only too happy too make this report available to you. Now I'd like you to study this one more time and then go to the question and answer section that we've added. We've tried to ask every question you would have after reading this. We have taken every question from people we have already helped. We've taken questions, some pretty hot potatoes that you've never thought of asking and we've given you the best answers we can.

After you read all this, we encourage you too verify our facts. You can call the Wall Street Journal and read this article. After you've done all that, we'd really like hearing from you. As a courtesy, if I don't hear from you, I'm going to have one of my assistants con tact you and follow up. If you're about to make a substantial career and financial commitment to any business of your own and you don't seriously, and I mean seriously, give dry cleaning and laundry your best possible attention and consideration ...given the state of the economy I' d be worried. Whether you make your ultimate purchase from us or someone else, I truly hope that you come to the conclusion that I have. Dollar for dollar, for most people, the best and safest possible investment you can make in yourself and a business is probably in a retail dry cleaning facility. Once you've done that, it would be my pleasure to help you get into our Silver Hanger program. Thanks for taking your valuable time to read this and now ...on to the questions.

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Questions

1. Q. What is in it for me?

A. Good sound solid business, with great profit potential ...30-35%

pre-tax is not uncommon. And it's a ~ business. No inventory, no receivables.

2. Q. How safe is the business?

     A. 97% safe.

3. Q. What kind of investment does it take?

A. Generally a minimum of $60,000, which would be down payment with

working

Capital. The rest can be financed. On lease deal, with good credit and

collateral, about $40,000.

4. Q. What collateral do I need?

A. Usually the finance company will want some collateral besides the

equipment. For example, the equity in your house

5. Q. Is it hard work'?

A. Yes, and it can be long hours but generally no holidays or weekends. But

what start-up is a not hard work and long hour? Restaurants, donut shops and

yogurt stands all require hard work, and usually Sundays and holidays, as well.

However, once you are operating profitably, you can put someone else in

charge and start-up another cleaners. It's your option. Convenience stores and

liquor stores require longer hours and weekends!

6. Q. How soon can I expect to make profit?

A. Most plants are out of the red in 2 to 4 months. It depends on the intensity

of the advertising and the market. It's much quicker to make a profit in this than

in most business. Sometimes it can happen as soon as 3 to 6 weeks.

7. Q. What training will I need?

A. 3 to 6 weeks depending how quickly a learner you are. We provide a

complete training program, which includes a step-by-step operation manual.

We are also as close as your phone to help you in any way we can as long as

you own the business.

8. Q. How long before I should reach the break-even point?

A. Tough question. So many things affect this: debt reduction, tenant build-

outs, rent payments. Hopefully, in 2 to 3 months, but it could be longer. And it

could be much shorter!

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9. Q. What about government regulation?

A. We will assist you in obtaining all necessary permits and approvals wherever your location.

10. Q. is it easy to hire people to work for me? A. Yes, we will assist you with the ads to run and the methods that have prove successful for us over the years. Also a new clean working environment and pleasant atmosphere make it easier to attract good help.

11. Q. Will I need to pay the employees a lot of money?

A. Most people we hire as trainees are paid from $5 to $6 per hour. Experienced spotters and presser. ..$8-12 per hour.

12. Q. Will the employees are reliable?

A. That depends on the working environment and largely on the supervision. We help there too. When employees work with the equipment that is engineered with them in mind they respond in kind. Our equipment is designed for easy operation and least amount of fatigue.

13. Q. Will I have to work there long hours?

A. Yes, in the beginning it's a good idea to watch the store until you are sure you have reliable help. Dry cleaning is not a 7 day, 18 to 24 hour a day operation. Most of our stores are open 7 AM to 7 PM, 6 days a week, closed on holidays. Shirt King Laundry is 5 days, 8 to I 0 hours a day.

14. Q. Can I really make money?

A. Yes, if you really work at it, you can make lots of money. Many owner-operators are in the six-figure income bracket.

15. Q. What is the total amount of money it will cost for the start u p package? A. $148,000. The amount of money may vary depending on how much construction and tenant improvements you will need. Costs can vary with the variety of plant opportunities; and the equipment package. Once we know your preferences, desires and location. A complete "turnkey" can be quoted. We will explore and explain all the options and possibilities with you and tailor a program to your preference and individual situation.

16. Q. What about service on the equipment?

A. We will include in our operation manual a preventive maintenance schedule.

When it's followed. Most service can be handled on the phone. We will also arrange for a local serviceman to handle service problems, as they arise.

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17. Q. how will we train the employees?

A. We train you how to train your employees. And you will train the employees. (Our manual can be a big help here).

18. Q. Who will answer my questions once I'm in business?

A. We offer unlimited assistance as close as your phone. Our 800 numbers is

Available every working day. Some equipment manufacturers have a customer assistance line.

19. Q. What if the equipment breaks down?

A. We purposely selected the most reliable equipment available in the world and in most cases you can handle the repair over the phone or with the local

Serviceman. The equipment carries 12-month warranty on all parts except seals, gaskets, belts, etc. Some parts of the dry cleaning machine carry a 5-year warranty. We furnish you the manufacturers written warranty.

20. Q. How can 1 be sure the company is reliable?

A. Please check us out. I've sold to over 500 plants through the country for the last ten years and will be happy to furnish you with references. Our staff has been involved with sale and installation of over 35 plants in the last 3 years.

21. Q. Can I talk to someone who has done this?

A. We'll be glad to give you names and addresses, also, check with the Cleaners in your area. Most people like to tell their story. Try the test we've suggested. It will prove every point we've made.

22. Q. What kind of money can I make? A. More money is made in the cleaning business than hundreds of other businesses. It isn't unusual for someone to make six figures. What you make depends on your effort, and the number of stores you operate. Drop stores can increase your volume quickly, so can delivery routes. We'll give you other innovative ideas to build profits.

23. Q. What is the worst thing that can happen if I go into this business? How would this be handled?

A. That you would not like the business. If that happens, we would assist you in

Selling it. Usually, you can make money on the sale. We might have a buyer for you.

24. Q. How would I go about selling it?

A. Local business brokers are a good place to start, sometimes just an ad in the local paper will get the job done. We will be glad to help you in any way we can.

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25. Q. How far along would the business have to be to sell it?

A. As soon as it is open, people are looking to buy, but you will make more if you have a good cash flow. The higher your yearly sales, the more you'll get!

26. Q. What kind of money could 1 make if I sold it? A. That depends on how long it has been open and how much volume you are doing. Every week you build your gross sales and the business becomes more and more valuable. For instance, $100 increase a day is $600 a week. In 52 weeks that totals out to $31, 200 a year. Sales price can be about one rimes annual sales.

27. Q. is a big business or a smaller one easier to sell?

A. The smaller plants are easier to sell. Ambitious people always feel they can make a small plant into a big one.

28. Q. What do I need to know to find a location? A. We l; 1.'Ill provide you with a site selection questionnaire but if you are lucky enough to find a store in a center with a major market, that is all you need to know. We will select the site, as well as work with local real estate developers. They are glad to show you what they have to lease. We will plan and check the necessary

Electrical requirements, gas pipe sizes and meters, sewage and other utilities.

29. Q. Do you have an operating procedure?

A Yes. We have an operating manual that covers every step of the plant operation available. We also have an employee manual.

30. Q. Can a store is purchased as an investment without my full time management?

 A Yes, provided you have a qualified manager to operate the store. However, we believe your personal attention is important to the success of the program.

31. Q. where do I purchase supplies?

A Approved supplies can be purchased from local sources throughout the United States. We will give you a complete list of what you will need and help you work out a good price from your local supplier. You get a free start-up basic supply package.

32. Q. What locations are available?

A. Free standing and shopping centers locations are available in areas throughout most of the country. Check vacant fast foods franchise buildings or empty gas stations.

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33. Q. Can I sell my store after a period of time?

A. Yes, a successful store represents a well-recognized business in\7estment and there are almost always people interested in such investments.

34. Q. Can I make a multi-store purchase?

A. It would depend on your financial qualifications. Many multi-store operations have been very successful, but if you're new to the business, we suggest one store initially.

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