The Cooperator Expo New York

The 'Small Print' of Laundry Contracts Does Your Provider Have The

Looking for some interesting reading while you're doing the wash? You might want to take a look at your property's 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 your property gets, then your property is 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 your property to court over it.

Doing Business Without the Clause

Service Directions, Inc., a laundry services provider based in Pelham, New York with clients throughout New York, New Jersey and Connecticut, no longer has the clause in their contract. We dropped it about ten years ago because we believe we're here to provide a service, says company president Ron Garfunkel. 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.

Gordon & Thomas, a laundry services provider located in East Orange, New Jersey that has clients throughout the Mid-Atlantic East Coast, has also deleted the clause. There was a brief period in the late M-80s when we put it in our lease. It stayed for six months. We found it unconscionable and we removed it, says the firm's president Stuart Litwin. Our customers continue to do business with us because they choose to. The clause reduces the focus of this business to dollars and cents. Service quality and customer satisfaction must also be considered.

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