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Should your Knife Leasing Company have contracts with customers?

Posted by Travis Jones on

We often get asked about contracts when knife rental companies get new accounts. Many sharpeners and rental companies feel that contracts are a good way to ensure that the business and income can be depended on for years. It can keep competition from coming in and taking accounts, and it gives the customer a since of security in knowing that they have locked in pricing for a certain amount of time. 

There are some knife leasing companies that have massive, national accounts. These accounts may consist of hundreds, or even thousands of restaurants across the country. These companies are big enough to ensure that these restaurants get cutlery rental services at all of their locations. These are big deals that involve big contracts, and may be negotiated over long periods of time. 

While this certainly occurs, it is not the norm. Most knife rental companies are local, and may only consist of a few people (or even one!). These small companies tend to serve the independent restaurants, catering companies, hotel kitchens, etc. in their particular area. So then the question is, should these types of companies have contracts for their customers?

With very few exceptions, the answer should almost always be no. Just like any service business, one of the biggest keys to success is providing exceptional customer service. The process of getting a new account for rental knife service is a sales process. You are asking that business to trust you and to give you money on a regular business. You have yet to prove that you are dependable, that your knives will stay sharp, and that you will not disrupt the flow of the kitchen. When you ask for a contract, you are starting off the relationship on the wrong foot. If you do what you say you are going to do consistently, you won't need to worry about somebody else taking your business.

Most competent people who run professional kitchens know that the big expenses are food and labor. The expense for knife rental barely registers on their radar, unless you are pricing it too high. If someone they don't know comes in and offers to save them $10 a week on knife service, it's going to come down to how you have treated them and what kind of relationship you have developed. It's not going to come down to a contract. And what if it did? Would you really try to sue a restaurant for breaking a contract? Talking to a lawyer about it for a couple hours would probably cost more than you could hope to recover. And you can imagine how much time that would take. It's just not realistic for the smaller sharpening businesses. 

There may be occasional exceptions to the rule. For instance, if a small chain wants you to travel outside of your normal area to cover a location. Or maybe they bring up the idea of a contract to lock in pricing. Generally, it's best not to bring the idea up unless they do.The best way to avoid losing your knife rental accounts is to provide outstanding service and clean, sharp knives!

Please read through out other blog posts about knife rental businesses and sharpening equipment. We are here to help anyone, from brand new sharpeners to seasoned knife rental businesses.

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