The laundry industry doesn’t seem to be a particularly wild and dangerous place to make a business investment, and yet there are dangers and risks. Leases and sales contracts are normally as straight forward as anything concocted in the minds of lawyers can be. Still there are those occasions when something is slipped into the lease or sales contract that can result in fatal disaster for a laundry owner.

We should always remember that these pieces of paper, leases and contracts that we are asked to sign are products from the minds of lawyers who are paid by the hour. It’s kind of the more they slip in to a lease or contract, the more they will be paid. And their main goal is to protect the person or persons who will be paying. Little thought is given to fairness to the signer.

One case in point is that of a multiple coin laundry owner who was selling off all of his assets to consolidate and move to a better climate and retire. He chose an area that had good housing prices and felt he and his wife would be happy there. He did have a bit of concern that he might become bored in his -retirement, so he looked around for a laundry in the area.

The operator of the first laundry he -visited was glad to see him and anxious to sell. The price was reasonable. He asked for and received all pertinent information including a copy of the assumable lease, that had several years left to run. Plus there was an option to renew for five more.

It seemed like a win-win situation, until he read the lease. Included in it was a clause allowing property owners to buy out the laundry by paying the laundry owner only ten percent of the annual rent. It was a clause which had never been used, and one which this experienced operator had never seen. The current owner never had seen it, because he admitted to never having read the lease in the first place.

He had owned the laundry for over ten years and renewed it just two years before. The property owners were not aware that the clause existed either. They used a standard preprinted form. They were glad to remove the clause and our retiring operator went through with the purchase deal.

Perhaps the worst example of a big mistake that the News has heard of is the case of the man who owned a very successful laundry that had two five year options to run. The options and the underlying lease were with very favorable rents. As the end of his initial lease term was coming to a close, he wrote a letter to the landlord saying that he wanted to renew.

“Too late,” said the landlord, “because your lease reads that notice must be sent to us six months in advance, and by certified mail.” In the legal process that followed, the operator felt he was lucky to keep his laundry running. Lucky, yes, but with current rents that were nearly thirty percent higher than they would have been had he sent notice per the lease.

One other very professional laundry -owner signed a lease with a personal friend who owned a shopping center. He was given a ten year lease with two five year options. Based on this he built a large laundry and ran if for over five years, then his friend died. His estate put the center up for sale.

It was bought by an aggressive fellow who didn’t think the rents were high enough, but what could he do? He studied the lease carefully and discovered a clause that canceled the leases when the center changed hands. Since it had changed hands, he took the position that the laundry lease was void, and had to be renegotiated. It was, and for considerably more in monthly rent. The laundry’s proprietor hadn’t picked that up in the lease, and it cost him big time.

Another example is the case of the laundry owner who purchased a bunch of new vending machines. He spent a bunch of cash to buy them. Within a month of installing them in his laundry he got a letter from the landlord saying he was in violation of his lease because it read that he could do -laundry only. The folks who owned a convenience store in the strip center had complained to the landlord that the laundry was hurting their business

Sales contracts for the purchase of dryer and washers would seem to be simple, direct and innocent of hooks and dangers. However, in real life they often contain clauses which may not be exactly kosher as far as you are concerned. There can be penalties for late payment and terms allowing for acceleration, which mean everything is due when payment is even a few days late.

Many of these terms are negotiable and the great majority of distributors and dealers are honest and ethical, and their contracts are too. Every now and then there are less ethical lenders who finance equipment. It’s their clauses and terms of sale one has to watch out for.

Some of the examples previously offered may not have cost their owners tens of thousands of dollars, even though they could have.

There are all kinds of “cute” clauses one may find in leases and equipment sales documents. The best way of avoiding them, and the consequences can be summed up in one -simple phrase.

Perhaps it’s because many people in the laundry business deal in quarter increments that they sometimes psychologically hesitate to spend money for such things as engaging an attorney or accountant. But that is exactly what should be done if they can’t read and understand a legal document and do not comprehend what it means and it’s significance to their laundry business. Spend a little money on an attorney, and save in the long run.

If there is a sales or lease document that you’ve been asked to sign, first read it and note all of the questions you have about any of the verbiage or clauses. Then take it to someone who understands what those terms mean. If there are dates that are important, mark them on a calendar.

It could require some of the dollars that you might feel could be better spent on beer or hot dogs, but so little compared with the risk of losses that could happen in the future. Go ahead. Spend a little to save a lot. Yes, it’s money, but aggravation, legal costs and loss of personal time happens when you don’t know contract terms. The gut wrenching is about the worst thing that happens.

Imagine your sinking feeling when you -discover you have made a -mistake by signing -papers you didn’t understand. Now there could be big -problems which could have been avoided in the first place. Such -mistakes can end up costing you your -business. Avoid such clauses from the beginning. Read and understand what you sign. Being careful is -almost always the smart way to do business.