Project Ozark

Financial Highlights

Executive Summary

TOC-23 is pleased to present Project Ozark — a direct investment opportunity to develop, manage, and operate a 25-location Lapel’s franchise laundromat portfolio across New England over five years, representing $39.0M of total project value ($27.5M equity + $11.5M debt at the store level). The opportunity is structured for Anchor Investors who fund the Phase 1 capital raise to join the General Partnership alongside Vazza (60%) and TOC-23 (25%), capturing 15% of all sponsor fees and 15% of carry/promote across the entire 25-store portfolio. Phase 1 capital raise targets June 1, 2026 with funding in Q2 2026.

The lead sponsor is Richard Vazza, an experienced real estate developer with deep roots in the Greater Boston market. TOC-23 has the opportunity to partner with Mr. Vazza following the unexpected passing of his longtime financial partner, John Sullivan of Sullivan Auto Group, in December 2025. Mr. Sullivan served as Mr. Vazza’s financier, college roommate, and close friend, creating an opening for a new capital partner.

The defining feature of this opportunity is the structural elevation of Phase 1 anchors into the General Partnership. Phase 1 anchors deploy $7.3M of equity (net of a 30% per-store debt recapitalization completed after one year of stabilized operations) to build seven anchor stores in Greater Boston, and in exchange become a 15% partner in the GP across the entire 25-store program — capturing 15% of fees and 15% of carry on stores they did not have to fund. The combined LP-plus-GP economics on the anchor's $7.31M of capital target a 20.8% net levered IRR and 4.27x net MoM over the 10-year hold, with capital payback in Q1 2032.

The first location in East Boston is already operational, with its first cash-out in May 2025 and first cash flow in July 2025. We have negotiated the East Boston acquisition with the Sullivan estate at $600,000 all-cash — a 46.4% discount versus the $1.1M standard cash equity required for a templated location, representing roughly $519,047 of capital savings. The acquisition carries no debt, providing an unlevered cash-flowing anchor asset from day one. The remaining six anchor locations — Quincy, Dorchester, Roslindale, Waltham, Somerville, and Everett — are templated for development over the next three years, each following the proven East Boston model.

Investment Highlights

• 25-Store Base Case: $39.0M of total project value across New England over five years — a programmatic franchise platform, not a single-deal opportunity
• Anchor Net Levered Returns (LP + GP): 20.8% net IRR / 4.27x net MoM on $7.3M of Phase 1 capital, including 15% of fees and carry across all 25 stores
• Capital Payback in Q1 2032: approximately 6.2 years from initial commitment to full anchor capital recovery
• Market Capacity Confirmed: 25 stores represents 14–18% of estimated Greater Boston laundromat-dependent demand; Providence (Phase 3) provides ~12 additional stores of headroom (see Market Capacity)
• Founding-Location Discount: East Boston acquired all-cash at $600,000 vs. $1.1M standard cash equity (46.4% discount, $519,047 of savings); zero debt on the founding asset
• Proven Operating Model: East Boston operational and generating cash flow since July 2025
• Experienced Sponsor: Richard Vazza brings extensive real estate development experience in Greater Boston
• Established Brand: Lapel’s franchise provides technology-enabled equipment, brand recognition, and operational support
• Recession-Resistant: Laundry services are a necessity-based business with stable demand
• Templated Rollout: Standardized approach reduces execution risk across all 25 locations
• Conservative Underwriting: 4 turns/day base case

25-Store Portfolio Strategy

Project Ozark is structured as a phased capital deployment from 7 to 25 locations. Phase 1 deploys $7.3M of anchor equity to build out the first 7 stores in Greater Boston, anchored by the discounted East Boston acquisition. Once these locations have demonstrated the operating model at scale, we raise institutional capital to fund the remaining 18 locations across New England, reaching a 25-store portfolio over 5 years.

Phased Capital Structure

Phase 1 equity is the net capital requirement after each store is recapitalized with 30% debt approximately one year after opening. The recap recycles equity back to anchor investors as new stores ramp.

East Boston: Anchor Acquisition Discount

The portfolio's first location, East Boston, is acquired at a meaningful discount to the cost of building a comparable greenfield store. This is a unique, time-limited opportunity created by the Sullivan estate situation, providing immediate equity value to the founding investors and establishing operating proof-of-concept on day one.

The $519,047 cash savings on East Boston versus a greenfield equivalent provides immediate value accretion to the anchor pool. East Boston is operationally identical to the standard store template (same equipment package, same revenue model, same operating margins) — the discount reflects the seller-specific circumstances rather than any compromise on asset quality.

Anchor Investor Financial Leverage

By committing capital to fund Phase 1, anchor investors join the General Partnership and receive 15.0% of all sponsor fees and 15.0% of carry/promote — not just on the 7 stores they fund, but on the entire 25-store portfolio. The anchor's $7.3M of Phase 1 capital is the structural mechanism that earns this GP slice across the full program.

The anchor's GP economics — fee share and carry — apply to the full 25-store project base, not just the Phase 1 stores anchors fund directly. Phase 2 institutional LPs put up the $20.1M of Phase 2 equity, but the anchor retains its 15% slice of GP fees and carry on those 18 stores. This is what produces the headline 20.8% net levered IRR / 4.27x net MoM on anchor capital — meaningfully higher than what a Phase 1 LP without GP economics would earn.

Phase 2 Build-Out Timeline

Following stabilization of the 7 anchor stores in 2027, we plan to deploy Phase 2 capital across New England over five years (2028–2032). The expected deployment cadence is shown below; specific markets will be selected based on demographic fit and site availability.

Phase 2 timing is indicative and subject to capital markets conditions, Phase 1 stabilization, and site availability. The $20.1M Phase 2 equity raise is anticipated to come from institutional LPs (PE/RE funds, family offices) attracted by demonstrated unit economics.

Lapel’s Brand & Franchise Partnership

Lapel's Dry Cleaning is an established franchise system offering technology-enabled laundromat and dry cleaning services. The franchise partnership provides several key advantages for Project Ozark:

• Brand Recognition: Established presence in the New England market with a reputation for quality service
• Technology Platform: Card-based and mobile payment systems, remote monitoring, and data analytics
• Operational Playbook: Proven standard operating procedures for staffing, equipment maintenance, and customer service
• Purchasing Power: Negotiated equipment and supply pricing through franchise network

Franchise Fee Structure

Value Proposition: Laundromat Business

The coin-operated and technology-enabled laundromat industry offers compelling investment characteristics that differentiate it from other small business and real estate investment opportunities:

• Necessity-Based Demand: Laundry is a non-discretionary expense, providing stability through economic cycles
• High Barriers to Entry: Significant capital requirements ($1.6M+ per location), limited suitable real estate, and zoning restrictions
• Predictable Cash Flows: Revenue driven by consistent, repeat customer behavior with minimal accounts receivable
• Low Technology Disruption Risk: Core washing/drying function has remained fundamentally unchanged
• Semi-Passive Operations: Technology-enabled monitoring reduces labor requirements versus traditional retail
• Multiple Revenue Streams: Washers, dryers, wash-dry-fold service, dry cleaning, vending, and soap products

Revenue Mix (Per Location, Year 1 Stabilized)

East Boston Flagship — State of the Art Facility

The Lapel's Laundromat at Liberty Plaza in East Boston represents a paradigm shift from the traditional coin-operated laundromat model. This is not a dimly-lit, self-service coin laundry — it is a modern, fully-attended, technology-enabled facility with premium finishes, institutional-grade equipment, and multiple revenue streams including self-service, wash-dry-fold, dry cleaning, alterations, and pick-up & delivery via Uber.

State-of-the-Art Facility: Customer Service Counter, Product Sales, Vending & Card Access

Full-Service Offerings: Wash-Dry-Fold, Cashless Payment, Pick Up & Delivery, Alterations

Advanced Equipment & Technology: Cents POS System, Delivery Fleet, Commercial Washers

Demographic Analysis

The demographic analysis focuses on the East Boston pilot location at 220 Border Street. Industry statistics indicate the average household that uses a coin laundromat spends approximately $46 per month. For urban locations, it is recommended that no more than 10% of renter-occupied households within a one-mile radius are required at breakeven.

East Boston Demographic Summary (2024 Data)

Target Locations

Local Competition (East Boston)

Market Capacity & Saturation Analysis

The 25-store base case rests on an underlying assumption: the Greater Boston market can absorb 25 tech-enabled franchise laundromats without the program running into demand saturation. This section sizes the addressable market in Greater Boston, validates that 25 stores represents a reasonable share of underlying laundromat demand (rather than a stretch into an oversupplied market), and frames Providence as the natural next-market thesis when Boston build-out is complete.

Methodology

We size laundromat-addressable demand using a four-step funnel: Total Population → Total Households → Renter-Occupied Households → Renter Households Without In-Unit Laundry. Renter households without in-unit laundry are the structural target customer for laundromats — owner-occupied housing in this region typically includes in-unit washer/dryer hookups, while older multi-family rental stock (triple-deckers, walk-up apartments, urban brownstones) often does not. Industry benchmarks suggest a single store at full utilization serves approximately 2,000 laundromat-dependent households (Coin Laundry Association industry guidance · ~6–8 turns/customer/month at standard store throughput). Saturation capacity = dependent households ÷ 2,000.

Greater Boston Demand Funnel & Existing Supply

Sources: U.S. Census Bureau ACS 2022 5-Year Estimates (population, households, renter-occupied units); TOC-23 estimate of in-unit laundry penetration based on ACS housing characteristics & multi-family stock age; Coin Laundry Association industry benchmarks for per-store coverage. Existing supply count from Yelp/Google business listings density survey. The chart shows ~280 existing legacy laundromats in Greater Boston, of which only ~11 (~4%) are branded or franchised — the remainder are single-operator independents with dated equipment. Lapel's 25-store target represents only ~9% of total existing supply but ~227% of current branded supply, making this a consolidation opportunity rather than greenfield expansion.

Providence Demand Funnel & Existing Supply (Phase 3 Market)

Same methodology as Boston. Note the higher in-unit laundry deficit (42% est.) reflecting Rhode Island’s older housing stock — particularly the prevalence of pre-WWII multi-family construction in Providence, Pawtucket, Central Falls, and Woonsocket where in-unit hookups are uncommon. ~110 existing laundromats in the metro, of which only ~3 are branded. A 12-store Lapel's footprint would more than triple the current branded supply in Providence.

Demographic Snapshot — Boston vs. Providence

Lapel’s Penetration vs. Saturation

The 25-store Phase 1+2 deployment in Greater Boston represents an 18% share of estimated saturation capacity — a meaningful presence but well short of saturation. Importantly, the existing supply of ~280 stores already exceeds the saturation estimate; this reflects the heavily fragmented, sub-scale nature of the legacy laundromat market (single-operator, dated equipment, no brand). Lapel’s thesis is not to compete against unmet demand but to displace legacy operators with a tech-enabled, branded, premium offering. A 25-store branded footprint represents only ~9% of existing supply — entirely consistent with what franchised premium operators have achieved in adjacent service categories (e.g., car washes, fitness studios) over comparable horizons.

Providence offers an analogous opportunity at ~25% of Boston’s scale. A 12-store Phase 3 deployment would represent 25% of estimated Providence saturation capacity, leveraging the same playbook with an even higher per-capita concentration of laundromat-dependent renters (lower median income, older housing stock, dense student population). We see Providence as the logical next market once Boston build-out approaches completion in roughly Year 6–7 of the program.

Sequenced Market Roll-Out

Phase 3 is indicative and not part of the current capital request; included to frame the addressable runway beyond the 25-store base case. Other candidate Phase 3+ markets in declining order of fit include Hartford-Springfield, Worcester (if not absorbed in Phase 2), and Manchester-Nashua.

Financial Model Summary

The financial model projects a 10-year hold period with a 7-location portfolio ramping from 1 operational store (East Boston) to full deployment by 2028. Key assumptions include 4 turns per day, quarterly revenue growth of 1.2% in years 2-4 and 0.8% in years 5-10, and an all-equity capital structure (no debt).

Up-Front Cost Per Location

10-Year Consolidated Proforma

Cash-on-Cash Return by Year

Full 25-Store Program Economics

This section presents the full economics of the 25-store base case — the cash flows to LP equity, the 3-way GP split among Vazza/TOC-23/Anchor, and the combined return picture for an Anchor Investor (Phase 1 LP + 15% GP across all 25 stores). Numbers are pulled from the live Consolidated_25Store, MoM_IRR_25Store, and Anchor_Returns sheets in the model.

25-Store Portfolio — Headline Returns

Levered MoM uses net equity invested (capital contributions minus debt drawn at recap) rather than gross capital, to reflect the LP's actual out-of-pocket. Net LP IRR/MoM applies the sponsor carry waterfall to the levered LP cash flow stream.

3-Way Sponsor Economics — Total Comp Across 25 Stores

Anchor Investor Combined Returns (Phase 1 LP + 15% GP Across 25 Stores)

The Anchor Investor commits $7,314,284 to fund Phase 1 LP equity and joins the General Partnership with a 15% slice of fees and carry across all 25 stores. The combined return picture has two distinct sources:

Base Case vs Downside — Anchor Returns Comparison

7-store downside GP comp estimated as 7/25 of the 25-store GP comp (Anchor's 15% slice scales linearly with stores). Actual downside GP comp depends on per-store revenue ramp and may differ slightly. The key takeaway: Phase 2 expansion adds ~$3,869,507 of pure GP-layer upside to the Anchor with no additional capital commitment.

Sensitivity Analysis — Anchor (LP + GP)

The sensitivity analysis below presents the Anchor's combined LP + GP returns across the 25-store program under varying turns-per-day (operational performance) and per-store leverage (capital structure) assumptions. All figures are net, levered, and inclusive of GP economics — meaning they reflect what an Anchor Investor actually earns on Phase 1 capital after fees, after debt service, and including the 15% slice of GP fees and carry across all 25 stores.

The base case is highlighted: 4 turns/day at 30% per-store leverage, producing 20.8% net IRR and 4.27x net MoM on $7.3M of anchor capital. Disposition is assumed at end of Year 10 (2035) at 7.00x EBITDA per the Assumptions sheet.

Anchor Net Levered IRR & MoM (LP + GP Combined)

Anchor Returns Sensitivity — Turns per Day vs. Leverage

Two-dimensional sensitivity of Anchor combined LP + GP returns on Phase 1 capital across the full 25-store program. Base case = 4.0 turns/day, 30% leverage per store (highlighted).

Anchor Net Levered MoM (LP + GP Combined)

Rows = Leverage per Store · Columns = Turns per Day

Anchor Net Levered IRR (LP + GP Combined)

Rows = Leverage per Store · Columns = Turns per Day

Source: TOC-23 Project Ozark Detail Model · ReturnSensitivityMatrix.xlsx · 25-Store Anchor View

Anchor Capital Required by Leverage

Anchor capital scales inversely with per-store leverage. East Boston is always all-cash ($600K) regardless of leverage assumption; the remaining 6 Phase 1 stores recap at (1 − leverage) cash equity. The matrix below shows how anchor capital required varies with the leverage assumption:

All scenarios assume the same 4 turns/day base case operations and identical Phase 2 build-out schedule (4/4/4/3/3 stores in 2028–2032). Higher leverage produces higher returns on smaller capital but increases per-store debt service exposure. The base case 30% LTV is recommended for balancing return profile with debt service coverage.

Downside Floor — Worst Case in the Matrix

The worst combination in the sensitivity matrix is 3.5 turns/day with no leverage: Anchor still earns 12.0% net IRR / 2.41x net MoM on $10.2M of capital. This represents a meaningful downside floor — even if turns underperform by 12.5% AND the program elects to operate without store-level debt, anchor capital is still recovered with double-digit returns. The 7-store-only scenario (no Phase 2 build-out) is documented separately in the Strategy section.

Operational Sensitivity Reference

Market Assessment & Valuation Benchmarks

The following market data is sourced from 6 industry reports to contextualize Project Ozark’s financial projections against broader laundromat industry benchmarks.

Industry Transaction Benchmarks (BizBuySell, 2021–2025)

Valuation Multiple Context

Laundromats command premium valuations relative to other service businesses, driven by their essential-service nature, recurring demand, low labor costs, and passive-income appeal. The BizBuySell data shows laundromats trading at a 3.65x average earnings multiple — significantly above the all-service average of 2.62x and nearly double that of dry cleaners (2.09x).

EBITDA Multiple Distribution (PPMVIC/EBITDA — Coin Laundry Comps)

Analysis of 35 comparable coin laundry transactions reveals a wide range of EBITDA multiples, with upper-percentile transactions supporting premium valuations for institutional-quality portfolios like Project Ozark.

Source: GCF 2025 Market Data, n=35 transactions. PPMVIC = Pure Play Market Value of Invested Capital. Project Ozark’s 7.0x exit assumption falls between the 75th percentile (5.5x) and 90th percentile (10.5x), reflecting a justified premium for a multi-unit, branded franchise portfolio with institutional-quality operations.

Transaction Trends (2021–2025)

Project Ozark Premium Justification

Exit Multiple Analysis

The base case assumes a 25-store portfolio disposition at the end of Year 10 (2035) at 7.00x EBITDA, producing a 14.3% cap rate. Selling costs are assumed at 5.0% of gross proceeds. The disposition is valued on forward Year 11 (2036) operating income per the standard "exit cap rate × forward NOI" methodology used by institutional buyers.

Disposition Waterfall — 25-Store Portfolio

Project-Level Return Waterfall — 25-Store Portfolio (10-Year Hold)

The "Net LP" line above represents what a generic LP investor (no GP economics) earns on a dollar invested into either Phase 1 or Phase 2. The Anchor Investor — who funds Phase 1 capital and joins the GP — earns a layered return: 100% of Phase 1 LP cash flows plus 15% of all GP fees and carry across the full 25 stores.

Anchor-Specific Return Waterfall — LP + GP Combined

Anchor capital is recovered in Q1 2032 (~6.2 years from initial commitment). Operating distributions cover the cost basis before the disposition event; the 2035 exit is incremental upside.

Sponsor Economics — Three-Way GP Split (60% / 25% / 15%)

After investors receive their 8.0% preferred return, the sponsor is entitled to a 50.0% catch-up on excess distributions until the promote allocation is equalized. Carry rates above each hurdle are then split among Vazza (60%), TOC-23 (25%), and Anchor Investors (15%) as shown. Anchor Investors who fund the Phase 1 capital raise become full GP participants, sharing in fees and promote alongside the institutional sponsors — a structural feature designed to reward early conviction.

Risk Summary

• Phase 2 Capital Markets Risk: The 25-store vision depends on raising approximately $20.1M of institutional equity for Phase 2 — a successful Phase 1 operating record across 7 stores is required to attract that capital on attractive terms; if institutional appetite is unavailable, the portfolio remains a 7-store anchor business at Phase 1 returns
• Execution Risk: Six of seven Phase 1 locations remain to be built out, requiring site selection, lease negotiation, permitting, and construction management
• East Boston Acquisition Risk: The $600,000 acquisition price reflects negotiations with the Sullivan estate following Mr. Sullivan's December 2025 passing; closing timing remains subject to estate proceedings
• Market Risk: Competition from existing laundromats and potential new entrants in target neighborhoods
• Ramp-Up Risk: New locations require 6-12 months to reach stabilized revenue (60% initial capacity assumed)
• Lease Risk: Favorable lease terms must be secured for 24 additional locations at approximately $35/sqft + $9/sqft CAM
• Labor Risk: Greater Boston labor market is competitive; model assumes $15-20/hour wage rates
• Equipment Risk: $748K equipment package per location requires ongoing maintenance ($5K/year assumed)
• Concentration Risk (Phase 1): All 7 anchor locations in Greater Boston metro area, creating early geographic concentration; Phase 2 expansion across New England diversifies this exposure
• Sponsor Risk: Reliance on Richard Vazza as lead sponsor for development expertise and local relationships
• Franchise Risk: Ongoing royalty and advertising fees of 10% reduce operating margins versus independent operation

Investment Recommendation

Recommendation: APPROVE the 25-Store Project Ozark program ($39.0M of total project value across New England), to be funded in two phases beginning with the $7.3M Phase 1 Anchor Equity capital deployment that establishes the operating record and General Partnership platform for the full program.

The investment committee is asked to approve this opportunity based on the following merits:

• 25-Store Base Case is the Investment Thesis: The opportunity is a programmatic franchise platform — not a single deal — with $39.0M of total project value addressable over five years across New England
• Anchor GP Partnership: Phase 1 anchor capital of $7.3M buys a 15% slice of fees and carry across all 25 stores — capturing GP economics on the 18 Phase 2 stores funded by institutional LPs without committing additional anchor capital
• Bounded Downside (7-Store Floor): If Phase 2 institutional capital cannot be raised, anchors retain LP returns of 16.9% net IRR / 3.15x net MoM plus 15% of fees and carry on the 7 anchor stores — an attractive standalone outcome even in the absence of Phase 2 expansion
• Market Capacity Validated: 25 stores represents 14–18% of estimated Greater Boston laundromat-dependent demand; Providence offers an additional ~12 stores of headroom for Phase 3 expansion if desired (see Market Capacity)
• Founding-Location Discount (All-Cash): East Boston acquired all-cash at $600,000 — 46.4% below standard cash equity ($519,047 of capital savings) — with zero debt on the founding asset
• Proof of Concept: East Boston operational since mid-2025, validating the business model and revenue assumptions
• Experienced Sponsorship: Richard Vazza’s local development expertise combined with Lapel’s franchise operational support
• Conservative Underwriting: 4 turns/day (vs. 4.0 upside), 30% LTV recap debt at the store level (East Boston unlevered), and conservative exit multiple
• Recession Resistance: Necessity-based business with stable, recurring cash flows
• Portfolio Diversification: Phase 2 New England expansion across MetroWest, North Shore, Worcester, and Providence diversifies geographic concentration
• Clear Path to Scale: Templated approach proven at East Boston enables efficient rollout of remaining 24 locations

Capital Action (Phase 1): Approve the $7.3M anchor equity commitment (net of 30% per-store debt recapitalization after one year of stabilized operations), with capital raise target by June 1, 2026 and funding in Q2 2026. Full Program Authorization: Authorize the GP to pursue Phase 2 institutional capital ($20.1M equity + $8.6M debt for 18 stores) upon achievement of Phase 1 milestones.