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Industry Overview
Commercial laundry along with uniform and linen rental services are essential for many businesses, from hotels and restaurants to hospitals and gyms. These services exist to help businesses save time, money, and the headache of managing laundry inventory in-house. These companies also provide many operational benefits such as reducing employee turnover, lowering labor costs, and a great way to elevate your company’s image.
However, it is important to carefully review the contract with any commercial laundry or uniform & linen rental service before signing it. This is because these contracts can be complex and they can have a significant impact on your business for years down the road.
The industry is dominated by four large companies that share over 50% of the industry market share, that is Cintas, Aramark, Unifirst, and Alsco. Although there are slight differences, most vendors in the industry share the same contractual terms and similar customer service issues.
Key Terms to Understand in Commercial Laundry and Linen Rental Contracts
It’s important to understand these key terms within the contract (Service Agreement) in order to know how your contract will play a part into your overall service experience.
Here are some key terms to understand in commercial laundry and linen rental contracts:
Weekly Price: This is the amount you will pay for the laundry and linen rental services. Also be aware of the itemized line item costs as well as ancillary items (eg. Inventory Maintenance, Fuel, Service Charge, etc.), they may be avoidable or potentially waived depending on the volume of your needs.
Contract Term: Most companies provide a standard term of 5 years within their contract. Furthermore, most often there is a clause that allows the contract term to rollover over another like-term - meaning your contract will be 5 years and if you do not cancel at the end of the term you will enter into another 5 year contract. In many cases you can negotiate the contract term down to a 3 year or even a 1 year term, renewal contract terms are also much more flexible in term length.
Price Increases and Frequency: One of the most unexpected outcomes for most businesses who use this service is the frequency of price increases. Please be sure to clearly define and/or cap your rate increases and the rate change frequency in your contract.
Service Guarantee or Warranty: This is the company's promise to clean the laundry and linens to a certain standard, along with a general standard of service. When reviewing this clause, make sure you get a clear understanding of what the process is to enforce this when service does not meet your expectations.
Lost, Ruined, or Damaged Goods: This is what you will pay if the laundry and linens are damaged or lost. Make sure you check your initial replacement rate and be aware of how this rate may increase during the duration of your contract.
Cancellation policy: This is what you will need to do to cancel the contract. Understand the cancellation process and what the penalty (cost) will be.
Service Issues to Be Aware of
Unfortunately, there are thousands of unsatisfied customers (mainly small business owners) out there that have experienced shockingly poor service and are still required to pay a penalty to cancel due to language in the contract that was signed.
Here are a few service issues that you should be aware of when working with a commercial laundry or linen rental service.
Shortages: One of the most common complaints are discrepancies with delivery amounts. Customers don’t receive the correct quantities that they are paying for.
Late or Missed Deliveries: This can be a major inconvenience, especially if you need the laundry and linens for a specific event or occasion. Be sure to communicate your delivery hours and preferred delivery times to avoid any confusion.
Damaged Products: Unfortunately many customers receive damaged or unusable goods, this can affect the perception of your business.
Lost laundry and linens: This can also be costly, and it can also be a hassle to replace the items.
Poor quality of laundry and linens: This can be embarrassing, especially if you are using the laundry and linens for customer-facing purposes.
How to Avoid Service Issues
The best way to avoid service issues is to choose a reputable commercial laundry or linen rental service. You can do this by reading online reviews, getting recommendations from other businesses, and inspecting the company's facilities before signing a contract.
You should also carefully review the contract and make sure that you understand all of the terms and conditions. This will help to protect you in case there are any problems with the service.
Conclusion
Commercial laundry and linen rental services can be a valuable asset for many businesses. However, it is important to carefully review the contract and be aware of the potential service issues before signing it. By doing so, you can help to ensure that you are getting the best possible service for your business.
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FlexLinen - CEO