Pizza Today - August 2021 - 70

FEATURE
Contract Best Practices
Be thorough or potentially get burned
By Mike Bausch
When your Equipment Mortgage
H
ave you ever heard the saying,
" There's nothing more expensive
than cheap legal counsel? " Well,
there's something a little more expensive,
and that's no legal counsel. In today's
rushed world where we blindly accept
contracts for iTunes and other random
apps, it becomes easy to just sign off on a
contract, even when it's a product for your
restaurant. But, like all contracts, they're
made to protect the one writing it, not
you, the one signing it. There's a litany of
problematic issues that can arise if you
rush the contract process. Some contracts
are written so horribly against you; they
make the " Columbia House Music Club "
seem like a fair deal.
Auto-renew
Most contracts will have automatic
renewal set as the default. Typically at a
more inflated price and will also
extend your contract by your in-action.
That means it's possible for a 60-month
contract to auto-renew all because you
said nothing; you've now signed on for
another period of time. Request these
parts to be deleted from the agreement.
If that's not an option, formally request
70 / PIZZATODAY.COM / AUGUST 2021
no auto-renewal per the contract terms
once you are under contract.
Guarantee of Services
Many contracts have little to sometimes
no guarantee of the service or items
provided per the contract. You might
infer extended service or parts coverage
as part of the deal, but it isn't real if it isn't
in ink. Ensure every detail of what you
expect to be included in the contract; if
it isn't, determine the price of what you
won't have in the agreement before you
sign up.
Contract Length
Twenty-four-, 36-, and 60-month
deals are all a long time. It's years, but
for whatever reason, months seem easier
to go unnoticed. They write it in months
and not years so that it doesn't seem as
egregious. If you aren't willing to commit
to five years, say that now and make it a
livable deal. When they ask, why do you
want to lessen the contract, reply with,
" If your product is all that you claim it to
be, the renewal will be no issue at all, but
on my terms. "
is really a Leased Rental
You might have a point-of-sale system
that you've been paying towards
for five years. You've paid in over three
times what it's worth because you could
only afford monthly payments. After
five years you find out that you don't
own the point-of-sale computer and
you need to keep paying a monthly fee
if you want to use it or give it back. It's
at this point you realize you never had
a contract to own that product; you had
a lease without a buyout option. And
then, at the end of five years, you don't
even own this POS, and you need to
turn it in or buy it at its original cost.
That's not hyperbole; I've seen that in
some contracts. Make sure this " investment "
doesn't bleed you dry on the way
out the door.
Your linen company, your internet
service provider, your surveillance camera
company, your point-of-sale company
are all going to give you contracts. The
people selling these products want to
sell them to you. They need to hit their
sales numbers, and if the contract isn't
completely in the company's favor, it
won't affect their sales numbers and their
bonus. KNOW THIS when you negotiate
that YOU have the upper hand. Any
salesperson worth their weight in salt
will want to work to get you a fair deal.
The only person in your way of a great
deal is you and your laziness or fear of an
awkward situation.
Lawyer Up
You need to know what is covered
and what isn't covered in any contract.
It would be best if you also had a clear
exit strategy for every contract you sign.
I've had simple phone contracts where
I added a phone line, signed a new line
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Pizza Today - August 2021

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