Don’t Get Locked Into Higher Costs
Most commercial linen services in the Twin Cities, especially the national companies, won’t operate without a contract. Why do they do this?
Could it be they want to assure payment, protect their product investment, have mutually agreed terms in writing? Those are all good reasons for contracts. However, their contracts go further than that.
You get a great price to sign the contract, but once signed, the contract favors them. Their contract locks you into their service while they increase your prices and surcharges, and extend the contract.
A Few Things To Watch For With Their Contracts:
This makes it very difficult to get out of the contract if their performance is poor. You need to give them thirty days notice of the specific issue, and they have thirty days to fix it. Then, if still not fixed, you need to give them another thirty days notice! Sounds a little crazy doesn’t it? But, it’s simply how countless commercial linen services throughout the Twin Cities, and the country, do business.
Price Increase Clauses
The clause says they can only raise the price 5-7% per year. That might be reasonable if it ended with the 5-7%. Unfortunately, it doesn’t. Their contracts say they can raise the price more if they need to. You have the right to refuse the increase within thirty days, but do you watch your invoices? Most people don’t. Chances are you won’t know about the increase until the statement comes more than thirty days later!
Surcharges, Inventory Charges, Loss Charges
Their contract states they have the flexibility to raise these charges as needed.
Tucked into each of their contracts is a clause extending the contract for a “like term” unless notified in writing before the contract expiration. We constantly run into businesses that think their contract has expired, only to find it was auto-renewed. This means they’re “stuck” for another 5 years! Ouch.
If you do decide to take the risk and sign with one of the national commercial linen companies operating in the Twin Cities, strike this clause out before signing the contract. Now How Does That Super-Low Price Look?