The Ins and Outs of FRC Laundry Rental Contracts
How do you know if you’re getting the best deal from your FR clothing program? Unfortunately, if you have signed a contract with a laundry rental company, you won’t know until you’re well into the contract period. Once you start seeing ancillary charges popping up and running into the pitfalls of a laundry program’s loopholes and requirements, you will soon know how to answer this question.
What is Under-Wash and Why Are You Paying for it?
One of the highest ancillary expense costs when using a laundry rental program for FRC is paying for something called under-wash. Under-wash is when a customer is being charged fees for weekly garment rental and cleaning services that are not performed; this is often due to employees not turning in their uniforms or FR clothing to be cleaned.
Many employees forget to bring in their work clothing or are sick/on vacation the day laundry pick-up occurs; whereas some employees simply prefer to wash their own uniform or FR clothing at home for hygienic reasons and convenience. As much as two thirds of employees in laundry rental programs do not turn in their clothing for cleaning purposes. For your company, that means that as much as two thirds of the cost of using an industrial launderer is literally being washed down the drain and will be billed with no real return on investment.
Understanding Laundry Contract Terms
The standard term contract for an industrial laundry rental uniform program is typically a five year commitment, although some programs are making the move to seven year contract terms. Plus, these contracts tend to lock customers into exclusively using a laundry program for that same period. If you are unhappy with your FRC laundry rental program, contracts will be difficult and expensive to break.
Most laundry contracts have significant buy-out clauses for premature termination and because of this, the customer is “locked in” and cannot change vendors due to poor performance. Therefore, it is in the vendor’s best interest to provide poor laundry services and discourage workers from using their service. This means the industrial launderer does not have to incur laundry costs, but is guaranteed revenue because of the contractual obligation.
Additionally, laundries are very successful in persuading customers to extend contracts because the realities of the work environment result in considerable challenges in locating and returning garments at the end of a contract. Workers are hired, retire and change departments, and their clothing is typically not a primary consideration. However, if these changes are not communicated to the laundry, the garments are not returned, and the customer will be invoiced for their replacement value if they decide to terminate the contract.
Guarantee Service Clauses
If you are unhappy with your laundry service provider, you can look into your contract to see if there is a Guarantee Service Clause. Guarantee Service Clauses were not as prevalent in the past but, to the customer’s benefit, are becoming more standard in laundry rental contracts today.
A Guarantee Service Clauses means that you can address whether or not your needs are being met and terminate your contract early if you are not happy with a laundry’s services, or lack thereof. Companies or safety managers who follow the process have a legal right to exit out of the agreement without buyout penalties or early termination fees.
Unfortunately, you will still be responsible for the lost or damaged garments but how does that cost compare to the cost of poor service over an extended contract? In the end, your laundry rental provider won’t want to incur any legal costs and will relieve customers with such agreements.
Look Out for Evergreen Clauses!
Checking the fine print of your laundry rental contract could reveal that the vendor has written in an automatic renewal or “Evergreen Clause.” Evergreen Clauses will result in an automatic renewal of the contract if written notice of cancellation is not provided before 90 days of the original contract’s expiration.
Some Evergreen Clauses even stipulate that if the customer receives an offer from a competing vendor, the servicing company needs to be given written notice of the offer and has the right to respond to the offer. Furthermore, certain Evergreen Clauses don’t require the service provider to notify the customer when the contact is ending and will automatically renew.
With many laundry rental programs, it is hard to calculate your fixed budget since the actual cleaning or rental costs are just the beginning. The most important factor in FR clothing is that employees have their garments to wear and protect them on the job. Management shouldn’t have to deal with the unnecessary headaches that come along with industrial laundry programs – there are better options out there!
Visit www.tyndaleusa.com to learn more about a safety clothing program that can be customized to fit your needs. Not only will there be no complex contracts to decipher, but you can also select from FR clothing your employees want to wear!