Managing Laundry Contracts Coming Clean

Having a well-lit, well-maintained laundry room in one's building is a definite plus. Residents don't have to traipse out to the overcrowded Laundromat in the dead of winter or in the pouring rain to spend hours waiting for machines when the facilities are right in their own building. Residents depend on their building's facility to be clean, modern and in good working order. The building's board and management company will expect that the laundry vendor will provide new machines, good service, updated technology—bye-bye coins, hello smart card!—and regular maintenance.

Taking Care of Business

"In most instances, we provide the equipment, carry the insurance, conduct repairs and pay the building a rental fee for the use of the facility," explains Denise Savino-Erichsen, vice-president of Automatic Industries in Hempstead, New Jersey. "We'll also include amenities and room furnishings such as tables, chairs, carts and so forth."

There is no initial outlay for most buildings when creating their laundry room—and again for most buildings, laundry rooms are moneymakers.

"They get their money based on the revenue stream of the building," says Ron Garfunkel, president of Service Directions Inc. in Yonkers. "There is no cookie-cutter approach as to how that's figured out. It can be a flat fee or a percentage. If we've been in buildings for a long time, we will know what the income stream is and we may pay them flat rents. We like to pay percentages, because if the volume goes up they lose out if they don't get paid by percentage."

A Plan for Everybody

According to Steve Breitman, president of SEBCO Laundry Systems in Green Brook, New Jersey, there are three common types of agreements: the laundry lease agreement; license agreement; and the management agreement.

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