Two Acquisitions That Could Affect Your Uniform Rental Service
If your company uses uniform rental services from G&K Services or Arrow Uniform, there may be changes coming your way. Recently, Cintas Corporation announced plans to acquire G&K Services and UniFirst announced plans to acquire Arrow Uniform, a Michigan-based uniform rental service. While both deals will require shareholder and government approval, companies that have current contracts with G&K Services or Arrow Uniform should be aware of how the acquisitions could impact future service.
In the meantime, executives should understand that the services currently outlined in either a G&K Services or Arrow Uniform agreement will remain in place, but they should be diligent in ensuring such services are upheld by Cintas or UniFirst going forward.
Review Your Current Contract
Executives should evaluate their current contract with G&K Services or Arrow Uniform to determine the exact scope of services and associated prices. If government agencies approve the acquisitions, companies will still be serviced by their original provider during the transition process, which could take two or three years. However, once the acquisition is complete, executives will need to keep an eye on how their facilities are serviced and make a note of specific tasks written into their agreement.
Watch for Service Changes and Price Increases
As Cintas or UniFirst takes over a contract, they will likely provide services based on their company’s standards, so executives should remain aware of any changes at their facilities. Special requests recognized by a regional servicer, such as a multi-weekly uniform drop-off, could become a once-a-week occurrence under the new provider if executives don’t enforce their contract’s details.
Companies currently serviced by G&K Services or Arrow Uniform with any current service issues should contact their G&K Services or Arrow Uniform representatives. Neither acquisition has been finalized and both companies will be run independently until the customer is specifically instructed otherwise.
It’s also important to be mindful of possible price increases. For example, Cintas’ services are typically 10-20 % higher than G&K Services, so clients should be aware of any subsequent price increases that are beyond the scope of their current G&K Services contract and require that Cintas honor it.
If Appropriate, Change Suppliers
Since the typical uniform rental contract lasts five years, companies that have just entered a new contract with G&K Services or Arrow Uniform will need to document any service issues that they are experiencing during the transition. Breaking the agreement without due cause can result in liquidation damages. Companies whose contracts will be expiring in two or three years may consider going to bid once the contract expires. Maybe the right solution is going to be the incumbent supplier, but having this information provides the leverage to fight back as opposed to just accepting what the marketplace has done.
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