RIGHT OF FIRST REFUSAL
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. Some laundry companies not only have the right of first refusal in their contracts, but they will take your property to court over it.
Sometimes known as an ‘evergreen clause’ is a clause that allows a contract to self-renew at the expiration of the current term unless the property owner notifies an intention NOT to renew. The language used is invariably a bit muddy as well. Typically, the clause requires the property to provide such notice in writing no less than 90 days and no more than 120 days before the current contract expires. So mark your calendar because someone is going to have to remember to cancel the contract. Unfortunately, in that time there may be a new owner and a new manager at the helm, which may mean that no one is going to remember that a given contract is going to automatically renew in five years. In fact, a copy of the contract may not even be around.
Many big laundry companies put this clause in their contracts. They get the first cycle of each machine per day. For instance if you have one washer and one dryer in a location at $1.00 each, they would get $2.00 per day times 30 days in the month. So if the machines each took in $50 for the month, they would get $60 out of the $100 right off the top. Then they would split the commission with the property. So if it was on a 50/50 commission, the laundry company would end up getting $80 and the property $20. So remember if the promise you a 50/50 split, that may only happen after the daily cycle is satisfied.
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Flynn Sales & Service does NOT put these clauses in their contracts
Before choosing a laundry provider you must read this. These are special
or 'hidden' clauses that most laundry companies put in their contracts.
Flynn Sales & Service
Laundry Industry Leader Serving Illinois & Missouri