QoE (Quality of Earnings)
QoE, or quality of earnings, is an independent analysis. It tests whether reported earnings are real, recurring and transferable. It traces revenue back to source documents. It tests each add-back rather than taking the seller's list on trust.
Why Does QoE Matter in a Laundromat Sale?
A formal QoE study is rare at laundromat deal sizes. The method is what a careful buyer uses anyway. In a coin-and-card store it means checking tax returns, deposits, card reports, machine exports and collection logs against each other. Then it asks whether earnings survive paying for the owner's work and setting aside cash for new machines.
What Does It Look Like in Practice?
A seller presents $148,000 of SDE. Diligence removes $9,000 of add-backs with no support. It puts back $6,000 of repairs that recur every year. It also finds that a family member works 15 unpaid hours a week. Adjusted earnings are $118,000, and the price moves by that gap times the multiple.
What Should You Check?
- Check tax returns, deposits, card reports, machine exports and collection logs against each other.
- Test whether earnings survive paying someone to do the owner's work.
- Split one-off costs from yearly ones using documents, not adjectives.
Where Does This Come Up?
- Laundromat Add-Backs Explained: What Survives Buyer Scrutiny
- How to Verify Laundromat Income: The Six-Source Reconciliation
- Reading Laundromat Financial Statements Without Getting Fooled
Related Terms
- SDE (Seller's Discretionary Earnings) — SDE, or seller's discretionary earnings
- Add-Back — An add-back is an expense removed from reported earnings during valuation because a new owner will not incur it: owner compensation
- Collection Audit — A collection audit is a buyer attending multiple coin collections in person
- Water-Bill Analysis — Water-bill analysis is a revenue cross-check that compares a laundromat's metered water consumption against the manufacturer's per-cycle water usage for its...
See the full laundromat glossary for all 78 terms.
The Next Step
This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.