If you rely on uniforms, linens, or facility services, you may have heard of Cintas or UniFirst. Cintas is the largest uniform and workplace services provider in North America, generating over $10 billion in annual revenue and serving over one million locations. UniFirst is one of their largest competitors, with billions in annual revenue from serving over 300,000 customers. Cintas recently announced their plans to acquire UniFirst.
The merger of these two titans could reshape the entire uniform rental industry. And if you’re a UniFirst or Cintas customer, you may be wondering how this merger will affect you.
A smooth merger may bring more products or service capabilities, but a messy merger could lead to service interruptions, missed delivery or inventory, and billing and contract confusion.
Here are some of the questions we’ve heard from UniFirst customers:
Will my service and product quality stay the same?
Will my driver change?
Will my pricing increase? How often?
Will I be asked to sign a new contract?
Will I see new charges on my invoice?
Which products and services are going to change?
Keep reading, and we’ll break down how big industry mergers like this can affect your business. We’ll explore the potential benefits and risk to your uniform, linen, and facility services, and we’ll discuss what to watch out for when your provider gets acquired. And if you’re looking for a new option, we’ll talk about how Alsco Uniforms can help your business.
How Could the Cintas-UniFirst Merger Affect Your Business?
Nobody can directly predict how a merger like this will impact your business and the services and products you receive, but we can look at examples of mergers that went well, mergers that didn’t, and what you can expect from a best- and worst-case scenario.
Ideally, a merger will go smoothly. Customers won’t notice any changes, and they have the same person delivering their workplace uniform services. Customers may even benefit from a merger, as a larger company may be able to serve more locations, provide better products, and offer more services. This is the goal for Cintas and UniFirst, and Cintas’s CEO Todd Schneider recently said, “By combining, we will be better positioned to drive growth and deliver on efficiencies…”
However, mergers don’t always benefit the customer. They can result in price spikes and quality dips. Companies may lay off staff while they consolidate operations, resulting in a new provider that doesn’t know your business. A new uniform rental company may lead to new charges showing up on your invoice or a new way of calculating inventory that leaves you paying more than you should.
Some companies even try to lock customers into new long-term contracts after they acquire their previous provider.
A Successful Merger – Disney and Pixar
Disney acquired Pixar in 2006, a key part of their journey to media juggernaut. As part of this merger, they ensured a focus on long-term quality and collaboration to provide entertainment for families around the world. Pixar could continue their creative approach with Disney’s resources and support, and their culture influenced Disney’s animation style, leading to some of their most successful hits like Frozen.
A Less-successful Merger – Charter and Time Warner
Charter acquired Time Warner in 2016, merging the company into its cable, internet, and phone provider Spectrum. The deal faced legal challenges from regulators. After it went through Spectrum became notoriously disliked, with one customer stating that “People are furious. If you go anywhere in this town and mention Spectrum, they go ballistic.” Customers faced rising bills, poor customer service, and difficult cancellations.
How the Merger Could Impact Pricing
Reduced Competition in the Market
With fewer large providers, the providers that remain have more control over pricing. Some companies will initially offer lower pricing to attract customers. Then, once they’ve acquired or outcompeted most competitors and become a de-facto monopoly, they can raise prices at-will.
Contract Changes and Hidden Costs
A new vendor will mean new invoices and new contracts. Mergers are expensive, and providers may try to recoup those costs by increasing uniform rental pricing or adding new fees. Customers may pay more for loss and ruin charges, and they might get locked in new long-term agreements with their new provider after a merger.
What Businesses Should Watch For
If your provider is acquired, keep an eye on your invoices and any paperwork you are asked to sign during the contract. Watch for rate adjustments, new ways of calculating inventory, and any additional fees or charges. Check for any clauses about renewing a long-term contract with the new vendor.
What It Means for Service Quality
Potential Benefits
When a uniform, linen, and facility services provider is acquired, it can sometimes lead to better service and products for their customers. A larger provider may be able to provide new products, handle a higher workload, or service additional locations. They may have more capabilities to meet your business’ needs, especially if you have a massive quantity of laundry or many locations spread across a wide geographical area. Large providers can invest in more efficient and sustainable technology to better serve your business.
Potential Risks
A merger can also lead to a decrease in quality for customers. After an expensive merger, some companies try to cut costs by sacrificing quality. Your representative might change if they lay off workers, or they may be stretched thin with additional stops on their route. There may be interruptions or delays, especially as the company deals with the challenges of the merger actually going through. As your familiar provider is acquired, you might face less personalized service and slower response times.
What Businesses Should Watch For
If your provider is acquired, keep in touch with your team and monitor how the quality of your service changes. Does pick-up or drop-off take longer? Are you missing inventory or receiving damaged product? Does your new provider offer any new products or services that you want? Ask your new provider about any changes to how your account is managed or how they will resolve any customer service issues.
Should Your Business Reevaluate Its Uniform Provider?
If you’re dealing with rising costs, ongoing service issues, or confusing or misleading billing, it might be time to switch providers, whether or not they are being acquired. By exploring alternative vendors, you may be able to find savings, improved service, and more customized solutions.
Here are some questions to ask your provider:
How do you calculate inventory?
How do you handle price increases?
What steps will you take if I’m not satisfied?
Can you walk me through what everything on my invoice means?
What is the contract length and exit terms?
Is There a Different Way?
If you’re a UniFirst customer concerned about how your service might change, or any business dealing with an unreliable provider, Alsco Uniforms can help. We are a fifth-generation, family-owned and operated uniform, linen, and facility services provider with a focus on service excellence.
We offer:
Uniforms and workwear for every industry, including healthcare, industrial, and food and beverage
Hygienically-clean linens including table linens, bedding, cleaning towels, and more
Floorcare solutions like floor mats, wet and dry mops, and microfiber mops
First Aid Cabinets, Eyewash Stations, and Automated External Defibrillators (AEDs)
Restroom products like toilet paper, paper towels, soap and sanitizer, air fresheners, scent clips, bio screens, and period care
Managed cleaning chemical concentrates
Everything is available through our regular delivery service. We pick up your used uniforms and linens, drop off fresh and clean products, and hygienically clean your laundry. We restock restroom, cleaning, and First Aid supplies, so you get everything from one delivery and one representative. And we’ll develop a custom delivery schedule, so you will always have what you need, when you need it.
Contact us to learn more.
Conclusion: Navigating Change in the Uniform Industry
As the uniform, linen, and facility services industry continues to change, businesses that rely on these services need to be aware of how they might be affected. If your vendor is acquired, you may be able to take advantage of new products and expanded services, but you should also watch for price increases, tricky fees or legal wording, or drops in service quality.
And try to keep your options open, there may be a better alternative.
Contact us if you’re still concerned about how this merger will affect your business. We can help you understand your invoice and any new agreements or contracts, and we can explore how Alsco Uniforms can take the worry away.