Current Position: Riaz Chauthani (born to Indian parents in Riverside, California) is a principal owner, agent and sales executive at Rix Business Sales. A second generation dry cleaning owner over the course of nearly 40 years, Chauthani has owned and operated sixty-seven dry cleaners in California and Nevada. He currently owns Polo Cleaners in the Orange County area of Southern California.
Chauthani graduated from the University of Southern California (USC) with a degree in Real Estate Finance and had negotiated over 500 real estate leases. His strong background in finance coupled with relationships he has developed with various lending sources has enabled Chauthani to negotiate the acquisition of many dry cleaners from $500,000 to $10 million in revenues.
His accomplished business background in both the dry cleaning and real estate industries uniquely qualifies and positions Chauthani to efficiently assist those who are serious about acquiring a dry cleaning business as well as those motivated to sell their existing dry cleaning business.
In addition to his multiple business ventures, Chauthani carves out time to be an active member of Dry Cleaning and Laundry Institute (DLI). He is also on the board of directors for the California Cleaners Association (CCA) and serves as their treasurer.
The Company: Founded by well-known industry giant Robin Rix, the company is headquartered in Southern California and maintains offices in Redondo Beach and Dana Point. In January 2016, Chauthani and George Ross acquired Rix Business Sales. In addition to being a principal of Rix Business Sales along with Chauthani, Ross serves as the company’s broker.
Rix Business Sales is one of the leading brokerage firms exclusively dedicated to the dry cleaning industry. Chauthani says that what he’s most proud of about Rix Business Sales is his team’s sincere desire to create a win-win situation for both the buyer and seller.
Groomed By Father: Chauthani’s dad, Abdul, was an entomologist when the company he worked for was bought out by Amway. In place of stock options, Abdul took the cash, went to dry cleaning school and subsequently purchased a dry cleaner in Riverside.
At the age of 13, Chauthani started working with his father, and by his senior year in high school, the duo had grown the business to nine locations (Chauthani was managing five of the stores while enrolled in high school). “When I graduated high school I swore to him that I would never come back to dry cleaning,” said Chauthani. “So he sold seven of the nine stores bringing the total down to two.”
After graduating from USC, Chauthani worked in real estate as a director of leasing for one of the top developers in Los Angeles for three years. “Then the market crashed in 1991, and I went into dry cleaning on my own,” Chauthani said.
Do Over: When asked if he would do anything differently if he had to start over, Chauthani’s response was rapid. “I would have stayed in real estate,” he said tersely. “No doubt about it, I made the biggest mistake of my life in 1991.” Nonetheless, he is secure and at peace with the curve balls life has thrown at him. “When the market collapsed in 1991, I went back to what I knew best, and I have no regrets!”
Under Their Influence: “My number one mentor is obviously, my father; the one who taught me everything I know, as far as it relates to dry cleaning,” Chauthani said. The elder Chauthani passed away two years ago at age 82.
“The biggest mentor would be Robin Rix. He has been in the industry for over thirty-plus years and has helped so many people; everyone I’ve talked to has met or talked to Robin at some point in their lives,” recalled Chauthani. “He is a vast tool of knowledge, references, historical and current information.”
New Breed of Buyer: According to Chauthani, the primary challenge to his efforts with Rix Business Sales is that the buyers have drastically changed over the years. “They used to be immigrants coming over with cash, and that’s no longer the case,” stated Chauthani. “The buyer pool has changed, and therefore the amount of buyers has decreased.”
Chauthani said that the supply of people wanting to sell their dry cleaning business is increasing. He is encountering owners who have been in the industry since the 1970s and 1980s that are now looking to retire , but their children don’t want to inherit the family business. “In the old days, we would just hand it over to our kid, and they would take over because it’s what they knew and what they grew up in.”
This situation is compounded by owners that don’t have a clear-cut, internal exit strategy and a different type of immigrant that in the past would buy into a dry cleaning business. “There’s supply in the market and less demand because the immigrant today can come over into the United States and get a job in the tech field or engineering field or whatever and make a hundred grand versus opening a dry cleaner and being tied to a 7 to 7, 8 to 5, six to seven days a week job to make the same hundred grand,” he said. Chauthani continued, “The immigrants coming in now are more educated than in the past, and they don’t have as much cash as they did in the past.”
Advice to Owners: “Develop an exit strategy early on; five years before you decide to sell and no less than two years before you sell,” Chauthani admonished. “And have a retirement plan that’s not solely based on the sale of the business.”
Future of Dry Cleaning: Chauthani senses that the industry is ripe for change. “I believe that the industry is craving a national brand of more than one,” said Chauthani. “I believe the consumer wants consolidation of the industry so that there’s less mom and pops.” He even took his assessment further by indicating that stores that are doing less than $20,000 per month in sales either need to change the way they do business and offer more services or they will not be able to compete in the years to come. “We will see a shrinkage in the amount of stores in the industry, and I think we need that because the labor force is becoming less and less attractive for pressers and even counter people; therefore we need less dry cleaners because we don’t have the labor to fill all the dry cleaners right now.”
“I met six owners today who are selling their business,” remarked Chauthani. “Every single one of them was old, every single one of them complained about the same thing, which was labor and every single one of them did not want to modernize and do lockers, offer other services, do a lot of SEO or anything that was outside the box because we as an industry have become lazy.”
Defining Success: “To be able to look yourself in the mirror in the morning and know that you’re doing the right thing for the right reasons. Money is not the answer; it’s quality of life.”
Being brutally honest with himself and with others are the markers Chauthani uses to gauge his effectiveness in living up to his standard of accomplishment and prosperity. “I’m harder on myself than anybody else, but to be a broker and to be honest is almost an internal conflict because nobody wants to hear the truth about what their store is worth or the reality of what it is. No matter what they say, they want to be lied to, and when the offers come in lower, I don’t play that. I believe in being honest and committing to what I can do and then going out and executing.”
Tis the Season: As an avid football fan (both college and the NFL) his rooting interests are unwavering and unequivocally loyal to his alma mater. He occasionally travels with the tradition-rich USC Trojan football team when they are playing on the road.
On the Wagon: On top of celebrating his 52nd birthday next month, another important milestone that Chauthani has on his radar occurs in a couple of months. January of 2019 will mark his tenth consecutive year of sobriety. “Everybody knew me when I was a drunk, and everybody knows me now that I’m sober,” a grateful Chauthani proclaimed. “But I don’t know; some might like the old version better,” he said with a hearty chuckle.
Personal and Family: His son, Boston Chauthani, is a real estate agent and working as a commercial broker. Boston is a senior at Arizona State University and is on target to graduate in May of next year with a degree in Finance.
When Riaz Chauthani is not grinding and hustling for Rix Business Sales or Polo Cleaners, he loves to smoke cigars, play poker with his buddies, travel (especially to Mexico with his girlfriend, Nancy Perez) and hang out with Boston.
Riaz and Nancy live together in Dana Point.
