What should I ask about a commercial laundry’s hotel and spa contracts?

Hospitality customers can make up a large part of a laundry’s volume, so start by asking how much of the work comes from each one. Read the agreements for term, notice, pricing, and what the laundry promises on turnaround, quality and losses. Ask whether prices can change during the term and who bears the cost when linen is damaged.

Then ask about the people. Contracts with a hotel or spa are often tied to one manager or purchasing contact. If that person leaves or the property is sold, the arrangement may be reviewed. Ask what happened the last time that occurred. Seasonal swings matter too: ask for monthly volumes so you can see slow periods and how the plant copes.

Finally, check profit by account. Some of the busiest customers can be the least rewarding once pickups, rewashes and late deliveries are counted. Ask whether the seller tracks this. A spa owner or association site may offer general insight into how that industry buys services, but the seller’s own figures are the better guide. Your lawyer can read agreements, and your accountant can test profit by account.

Key takeaways

• Read each agreement for term, notice, pricing and loss responsibility.
• Find out which contracts depend on one manager or purchaser.
• Look at monthly volumes and profit by account, not only total sales.
• Ask each major account how decisions are made and whether the person who signed is likely to stay on.