Utility Ratio
Utility ratio is utilities expressed as a percentage of gross revenue. It is used as a screening benchmark: a figure far above the norm signals a leak, an inefficient water heater, an unfavorable machine mix, or revenue lower than represented.
Why Utility Ratio Matters in a Laundromat Sale
Utilities ran a median 20% of gross revenue and a 21% mean among CLA survey respondents in 2023, and were the most-cited operator problem, selected by 53% (Source: CLA 2024 Laundry Industry Survey). A store above 25% has a cause worth identifying before purchase, and the cause matters: a fixable leak is a negotiating item, an unfavorable rate structure is a permanent condition, and overstated revenue is a reason to walk.
Example
A store reports $290,000 of revenue and $81,000 of utilities — 27.9%. Investigation finds a running toilet and a water heater cycling continuously. Repairs cut the ratio to 22%, worth roughly $17,000 a year of earnings and about $60,000 of value at 3.5x.
What to Check
- Compute it from original bills, not from a seller's summary.
- Investigate any store above 25% before pricing it.
- Distinguish a fixable cause from a permanent rate structure.
Where This Comes Up
- Laundromat Utility Costs Explained: Water, Sewer, Gas, Electric
- How Utilities Affect Laundromat Value: Rate Risk Is Priced Risk
- What Percent of Laundromat Revenue Goes to Utilities?
Related Terms
- 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...
- Turns Per Day (TPD) — Turns per day
- G-Force (Extraction) — G-force is the extraction force a washer applies during its final spin
- Sewer Impact Fee — A sewer impact fee
See the full laundromat glossary for all 78 terms.
The Next Step
Sources
- Coin Laundry Association, 2024 Laundry Industry Survey — https://member.laundryassociation.org/hubfs/IndustrySurvey24.pdf
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.