What should I check before buying a uniform rental business?

A uniform rental company earns its income by supplying garments to employers on a schedule, then collecting, cleaning and returning them. That makes it unlike general equipment rental. What you are buying is a set of customer relationships, a stock of garments that sit with those customers and a plant that keeps the cycle moving. Each of the three needs its own review.

Customer agreements and renewals

Ask for every service agreement and note its term, how it renews and what happens if the customer cancels early. Look for charges when garments are lost or damaged, and for any clause that needs the customer’s consent to move the agreement to a new owner. Ask whether a few large accounts carry most of the business. Your lawyer can tell you what the agreements allow on a sale.

Garments in circulation

Ask for a count of garments by customer and by type, how old they are and who owns them. Worn stock must be replaced, and custom items with a customer’s logo are hard to reuse elsewhere. Compare the records to what is on the routes. Missing or unaccounted-for stock is a cost that arrives after closing, so raise it before you finalize terms.

Routes, plant and fleet

Walk through the route sheets with the manager, noting how stops are grouped and which drivers hold the customer relationships. Then inspect the washers, dryers, conveyors and trucks, using the approach in how to assess equipment condition. Ask for maintenance logs and any leases. Staff who know the routes are worth keeping, so ask early who is likely to stay.