Rental Contracts: 3 Tips Before You Sign

July 23, 2020

If your uniform rental (“rental”) contract is expiring soon, you’re probably in the process of deciding whether or not to renew. Or maybe you’re considering signing onto a rental program for arc-rated and flame resistant (AR / FR) for the first time.

Be sure to consider these three major factors before you sign a rental contract, or allow your existing rental contract to renew. Individually, each of these factors – among others – is a problem. But collectively, they make these contracts difficult to live with and even more painful to move on from:

1) Automatic Renewal

- - Make sure you have – or request a copy of – your existing or prospective contract.
  - Read it carefully, taking note of both the term (length) of the contract, and the renewal process.
  - Often, rental contracts automatically renew if you don’t follow a prescribed process and specific timeline – directly impacting your product options, service level, and bottom line for years to come.
  - If you’re considering a transition and want to keep the agreement from automatically renewing, circle the date on your calendar for when you’ll need to send your notice of non-renewal – and be sure to start preparing in advance.

2) Service Inflexibility

- - Take a look at the contract to see what happens if business needs change and you need to reduce service levels – like when some companies reduced staffing during COVID-19.
  - The fact is, most rental customers are locked into the initial service level and costs – or are contractually obligated to meet a significant weekly minimum – for the full duration of the contract term.
  - Most contracts have exclusivity clauses that prevent the customer from sourcing products from other suppliers during the life of the contract – leaving customers with no other options or flexibility.

3) Relative Inability to Exit an Active Contract for Non-Performance

- - Most rental contracts spell out a service guarantee, along with a process to address poor service.
  - However, in practice, the customer has to follow a complicated process and tight timeline just to get the level of service they are entitled to. Attempting to leave a contract for just cause is even more difficult.

For complete details, join Scott Margolin, Vice President of Technical, and Chad Barker, Tyndale’s Regional Sales Director with over 15 years of past experience in uniform rental and industrial laundry:

Remember: as Chad explains, rental contracts are designed to benefit the rental company and not the customer. That’s why it’s critical to dig into the details and understand the implications before you sign. Follow along with our series at TyndaleUSA.com/blog and visit our uniform rental resource hub for:

More factors to consider before entering a rental contract for AR / FR clothing
Unintended consequences of uniform rental to look out for
Strategies other companies have used to make an efficient transition away from rental

Looking for an alternative to rental for AR / FR clothing? Reach out today to a National Account Executive serving your area to explore a managed direct purchase solution – and direct purchase programs’ answers to rental program challenges.