Content about North Carolina

RALEIGH, N.C. — The yellows, blues, greens and shades of red at Calvary Laundromat in Raleigh are decorator-designed to create an inviting atmosphere, says owner David Makepeace. But the intangible atmosphere, the one that customers find welcoming, is created by his staff.

Makepeace says he’s “extremely” happy with sales at the 3,000-square-foot laundry, located in a small shopping center in the midst of large apartment complexes. “The success of it depends on the people you hire,” he says. “I have wonderful attendants.”

He names several other contributing factors, including the technological sophistication of its 30 front loaders and 28 dryers.

STARTING ON GOOD FOOTING

Makepeace is a former commercial banker in Charlotte and Raleigh who decided 13 years ago that “I wanted to go out on my own, to find a business and learn it and eventually buy it.” He was drawn to a cleaner/laundry because “It’s not going to go out of fashion like the buggy whip. Everybody’s going to need to get their clothes cleaned.”

He approached the then-owner of Medlin-Davis Cleaners and proposed, “You train me, and I’ll buy it from you.” Over the years, he rose to president, supervising three cleaning plants, three pickup and delivery routes and nine stores in Raleigh and neighboring towns, plus one small coin-op in the long-established Cameron Village shopping center in Raleigh.

Four years ago, unsure about the owner’s intentions of selling, he determined to start his own laundry while continuing to supervise Medlin-Davis. His wife Lee offered her full support.

It was at the beginning of the recession, but some businesses, including laundries, do well in that environment, he believes.

To financially strapped customers who need to clean their clothes, “This is a very affordable way to do that, rather than going to Lowe’s or Home Depot to purchase a washer and dryer.”

He’d worked with Medlin-Davis’ 1,500-square-foot laundry so he “had a general feel of how they operate.” Plus, T & L Equipment Sales gave him the specific knowledge he needed.

Makepeace discovered the Coin Laundry Association and joined immediately. “They had an absolute wealth of information they could give me.”

Co-owner Lee worked as full-time attendant the first six months, and David gives her credit for starting the laundry off on a good footing. “She did a wonderful job of establishing relationships.”

In 2010, he bought the part of Medlin-Davis that operated in Raleigh and the nearby town of Wake Forest: two cleaning plants, four dry cleaning stores, three pickup and delivery routes for cleaning and wash/dry/fold, and the Cameron Village coin-op.

His wife became head of accounting and administration, while he functions as head of operations. They have 60 employees.

Wash/dry/fold work for the routes is done at one of the cleaning plants. Wash/dry/fold work for the Cameron Village coin-op, which is unattended, is processed at Calvary along with its work.

Makepeace is a firm believer in keeping up not only equipment but appearances. Four-year-old Calvary has already been repainted once, and the checkerboard of floor tiles there is stripped and waxed every quarter, he says. Recently, some floor tiles were replaced, and a chair rail was added. “It’s very important that we keep up with wear and tear.”

At the 1,500-square-foot Cameron Village coin-op, Makepeace renovated everything: floor, walls, ceiling. He replaced all the machines with new ones after he found, “Stuff was always breaking down. I was losing business.”

Once again, he turned to his wife’s decorator friend for a color scheme. This one is more subdued—lots of pale blues and browns—in keeping with the supposed preferences of the retirees and North Carolina State University students who are its customers.

He added a large-screen TV, Wi-Fi, and new furniture.

He’s now enlisted the help of a marketing firm in designing not only a marketing plan but a logo, revamped storefronts for the cleaners, and even “the lettering on our vans.” And he says he wouldn’t mind having another coin-op.

After a 10-year apprenticeship and now four years of ownership, Makepeace believes he knows “what it takes to be successful.”

NEW YORK — Most family business owners expect their thriving enterprises to transfer to the younger generation with minimal fuss and bother. Reality, though, can be far different. Absent a carefully designed plan, misunderstandings and disputes can turn any business transition—including ownership of coin laundry stores—into a costly train wreck.

Parents must analyze the skills and proclivities of their children before assigning future management roles. While such assessments can help smooth the transition, even the best of such plans needs the support of legal documents that ensure power flows to the right people and sufficient cash is available to make everything happen on cue.

SETTING TERMS

Often the most important transition document is the so-called “buy-sell agreement,” which specifies how ownership will be allocated and how the sale of shares will be funded. “A buy-sell agreement is crucial to a smooth ownership transition for a family business,” says Gregory Herman-Giddens, a board certified specialist in estate planning at the law firm of TrustCounsel, Chapel Hill, N.C. “It allows for one or more of the children who are active in the business to buy out a parent who retires or dies.”

Buy-sell agreements typically cover an array of issues that go beyond the basic transfer of ownership upon the death or retirement of the original owners. They also typically cover how ownership will transfer when one of the children exits the business, either through death, disability or even a decision to go into another line of work. Will the business itself, as an independent entity, buy up the shares of the departing individual? Or will the remaining siblings as individuals have the right to buy up the shares?

Here are some other issues that buy-sell agreements often cover:

• What if one of the siblings desires to sell shares to an outside third party?
• Must the siblings be offered the shares first?
• How much time do they have to reach a decision?
• And what if a child wishes to withdraw capital from the business? How much money can an individual owner take out, over what period of time, and how much prior notice must be given to the other owners?

These agreements also often specify the methods by which internal disputes are resolved. Some issues will lend themselves to arbitration or third-party mediation. For those which can be resolved by voting, the agreement will specify who has the power to vote and whether a simple majority or super majority is called for.

Buy-sell agreements can be real lifesavers in sticky situations. For example, they can avert unexpected shifts in power to unqualified individuals. “Often one member of the second generation receives share of ownership, then gets divorced,” notes John J. Scroggin, a partner at the estate planning law firm of Scroggin & Company, Roswell, Ga. “That individual’s former spouse now owns the equity. Unreasonable demands can follow, and that can be a thorn in the side of the family.”

The solution, says Scroggin, is to draw up clauses in buy-sell agreements that anticipate common and costly events such as divorce or unexpected death. To do this, the document should mandate a “call right” on shares that are gifted to children. The “call right” is a provision that empowers remaining family members to buy out the shares of a non-family spouse who may survive the divorce or death of a family member who was in an ownership position.

PRICING THE BUSINESS

The buy-sell agreement will usually specify the method for determining the business’ value upon the death or departure of an owner. “Commonly, the plan may call for a valuation to be done by a business valuation expert or CPA,” says Herman-Giddens. “There may also be a tie-breaker provision: Survivors who disagree over the business’ value might be able to choose their own expert, and then either those two experts agree on a third expert or the two values are averaged.”

An alternative valuation system specifies a formula to be used, such as a multiple of earnings. This can be problematic, though, since economic conditions at the time of a partner’s retirement or death may differ substantially from those at the time the plan is put together, making a pre-set formula inappropriate.

Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult an attorney or financial adviser for advice regarding your particular situation.

Tomorrow: Tips for avoiding the hidden pitfalls of family business transitions

NEW BERN, N.C. — New Bern lies about 110 miles east of Raleigh and about 90 miles northeast of Wilmington. Named after the capital of Switzerland, it is the second oldest town in North Carolina and home to some 30,000 residents.

Within easy walking distance of the New Bern waterfront are more than 150 homes and buildings listed on the National Register of Historic Places, hotels, restaurants, banks, antiques stores and specialty shops.

New Bern is known for a couple of other important reasons: Not only is it the birthplace of Pepsi-Cola, it is also home to arguably one of the most technologically advanced and energy-efficient Laundromats in the country.

Owned and operated by Anna and Richard Blair, the Clean & Green Laundry is built entirely on a “green” platform. The entrepreneurs see the long-term growth and profit potential of the coin laundry business, and are committed to making sure that every aspect of their new business is environmentally friendly, minimizing use of energy and water, while providing their customers with the cleanest garments possible.

An example of their commitment to energy efficiency is a state-of-the-art geothermal unit with solar panels to heat the laundry’s water.

Energy Conscious Around the Clock

Before moving ahead with a plan for their vision of Green & Clean, the Blairs wanted to know what the community thought. They surveyed many local residents in an effort to learn what they would like to have in a new Laundromat. Overwhelmingly, customers stated their preference for an energy-conscious laundry, and since the town is active 24 hours a day due to around-the-clock manufacturing, distribution and retail operations, they wanted one that was safe to visit at late hours. To that end, Clean & Green boasts a sophisticated security system.

Since approximately 2,500 square feet of space was available, a floor plan was developed that gave an open feel with a design that welcomed customers. In addition to providing the self-service washing and drying equipment, Clean & Green offers fluff-and-fold options, too.

The Blairs carefully evaluated the various equipment choices available to them before deciding upon Maytag Commercial Laundry equipment. With more than 50 years of unparalleled industry experience and having one of the longest product warranties in the commercial laundry industry, Maytag offers a variety of energy-efficient washer and dryer models from which to choose.

Working closely with their Maytag distributor, Tri-State Technical Services, the Blairs sought the perfect balance of laundry equipment that would accomplish their green objective.

Clean & Green selected an assortment that includes high-efficiency top loaders, front loaders, rigid-mount front-load washers (30-, 40- and 60-pound capacities), multi-load stack dryers, and single-pocket dryers (50- and 70-pound capacities).

With this assortment of equipment, no matter what garments need to be cleaned—even bulky items—in virtually any quantity, customers’ needs are met quickly, efficiently and with the best cleaning value, the Blairs says.

Ease of use was one of the reasons they chose Maytag washers that feature one-touch cycle selection; an automatic detergent, softener and bleach dispenser; front controls; flexible wash options; and shorter drying times due to high-speed extraction.

The dryers sport commercial-duty door handles; stainless steel top, front and sides; and a solid die-cast door-locking assembly.

Besides the look of the equipment, Clean & Green also wanted to furnish the store to make the customer experience pleasant. Modern change machines make the purchase of laundry cycles quick and easy. The bulkheads and equipment bases are also state of the art, and the various carts and tables make the preparation of loads and post-cleaning separation and folding a comfortable task.

An inviting color scheme welcomes customers. While waiting for their garments, patrons can relax in an outdoor patio while their children enjoy a special play area. Free Wi-Fi, televisions and a complete vending area offering a variety of refreshments are available 24/7.

Financing Package

US Capital Corp., a specialist in commercial laundry equipment financing and the financing partner for Maytag Commercial Laundry, assisted Clean & Green in getting started.

Working closely with the Blairs, US Capital provided a custom financing program designed to maximize the couple’s return on investment over the term of the equipment finance period. In any new business enterprise, conserving cash is essential, and US Capital designed a financing package that did just that.

Not only did US Capital provide the financing for the Maytag equipment, the company also handled financing of the equipment’s installation and important required “soft costs” such as the change machines, carts, tables, bulkheads and equipment bases, as well as the geothermal water-heating unit.

Location, Location, Location

Clean & Green Laundry’s customers find getting to the business quick and easy.  Located on the west side of New Bern, the Laundromat features two wide entrance-and-exit drives with a center turn lane for easy access.

Dr. Martin Luther King Jr. Boulevard is a major four-lane highway coming in and out of town, and drivers have an easy view of Clean & Green thanks to dedicated signage.

With more than 3,000 households and 3,000 renter-occupied households within a three-mile radius of the laundry, Clean & Green is positioned well for today and the future.