Third-party Lease Review

The tip of the iceberg of the problem is well known. For example, the problem consistently arises when volume unpredictably fluctuates, and the basic printing needs change before the life of the lease is up. The lease contract dictates fixed monthly or quarterly minimum charges regardless of lower volumes. Also, premium prices are levied above the all-inclusive charges when volume spikes back up the next period. Converting to the annual volume equivalent “is not possible.”

Again almost all of the digital print manufacturers have historically and consistently introduced new equipment and/or software that is faster, cheaper and better than they locked their clients in on only a few months before. Upgrades are certainly possible, but never at a reduced price even when the upgrade sells for less money.

One of the most frustrating case studies was presented during the 2006 MFSA-NAPL Fulfillment Conference. A Philadelphia printer bought the unused and unopened branded toner supplies from a bankrupt competitor at a heavy discount. A manufacturer sued this entrepreneur because his contract stipulated that only toner purchased from that manufacturer was permitted.

The University of Central Florida’s in-plant, which was responsible for managing the remote digital copier contracts throughout campus, came up with the best solution ever witnessed by this author. The in-plant manager split this three-year contract between the two top vendors. The resulting competition ensured timely response to service calls and faster implementation of new product offerings. (See sidebar for full details.)

While most every college and university could easily follow this UCF model with equally good results, many corporate entities may not have the economy of scale to take advantage of this “split-and-conquer” approach. Actually this article is intended to highlight an altogether different course of action that will benefit every printer, regardless of size. And that is the use of an independent third party expert to review each lease prior to its initiation or during the lawsuit due diligence if need be.