Beware the 'Small Print' of Laundry Contracts
by
David Killeen
on Sat 29 Nov 2008 09:51 AM GMT
Does Your Provider Have This?
Looking for some interesting reading while you're doing the wash? You might want to take a look at your laundry service contract; specifically, the controversial clause known as the right of first refusal. If your contract contains this clause, your present laundry services provider has an advantage over the competition and you may have a hard time switching to a different vendor, should you decide to do so.
Under the standard right of first refusal clause, when the current contract expires, your current vendor has the right to meet any authentic bid from any competitor. And if he does meet the best bid you get, then you are bound to allow his company to continue operating in your building, even if you'd prefer to switch.
Not long ago, the right of first refusal clause was standard operating procedure within the laundry industry. But things are changing. Today some service providers are vehemently opposed to it and others include it in their contracts with reluctance. However, there are a handful of companies that not only have the right of first refusal in their contracts, but they will take you to court over it.
Doing Business Without the Clause
Weightwash Limited, an industrial laundry company and workwear rental services provider based near Southampton with clients throughout Hampshire and Wiltshire, no longer has the clause in their contract. Weightwash provides laundry service contracts. We dropped it about ten years ago because we believe we're here to provide a service, says company director David Killeen. Our competitors may match our bid, but can they match the fact that I'm in my office at 6:30 p.m. talking to a customer? We've even created a program that offers shorter term options than usual to fight the right of first refusal. And when it comes to bidding against companies that still have it, we don't waste our time because they're not matching our bid, they're just copying it.
Enforcing the Clause
Negotiable, yes. But only when a company is willing to consider continuing with their current laundry services provider. Companies can and do find themselves in court to fight the right of first refusal when they want to go elsewhere and aren't able to show a default of service. They often find that the jury is out regarding the enforceability of the clause.
Can The Clause Be Stricken?
Many management company principals demand that the clause be stricken as a stipulation for laundry contractors to work with their companies.
We absolutely advise boards against signing contracts that include a right of first refusal clause.
Sometimes a company gets lucky and the laundry company does walk away. Others are not so fortunate, and find themselves embroiled in costly litigation.
Keeping Your Eyes Open
Boards may be well advised to take advantage of this flexibility and willingness to negotiate. If you have the right of first refusal in your existing contract, document your dissatisfaction throughout the course of the contract and make certain to terminate in accordance with the termination provisions. If it's a new contract, think twice before you sign. The right of first refusal is negotiable, and it should come out.
Your solicitor should be involved, and you should also know the history of the company you're getting involved with not only the type of machinery they're going to install, but also the attitude and the nature of the people you're dealing with. It's not just about the pounds. It's also about service, reputation and the inclination to litigate.
Weightwash now provides a high quality nappy laundry service for nappy businesses
Weightwash now provides a service for day nurseries
Weightwash now offers holiday home laundry services and holiday linens for hire
