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A Solution to the So-Called “Fixed Expense” of Waste Removal in Municipalities
Many successful Business Owners, CFOs, Profit Managers, and others charged with the task of keeping the cost of their business or organization under control have noticed one line item on their P&L statement that they cannot seem to make a dent in: waste disposal and recycling service. This single expense often costs businesses hundreds of thousands or even millions of dollars annually, depending on the size of the organization and amount of trash their locations produce. Many have scratched their heads and pondered: “How in the world can hiring a truck to pick up and dump a metal can full of trash a couple of times per week become so costly?”
This is especially true in cities and states where the local government or municipality takes it upon themselves to make the decision of who hauls the trash for residents and businesses who require this service within their borders, which happens to include everybody that lives or conducts business there. In these areas, referred to in the waste industry as “franchised markets”, business owners have lost the freedom to choose which vendor picks up their trash, even if several trash haulers are capable of servicing them. Many of these folks are asking questions such as: “Do I have to use the city for garbage service?” or “Why can’t I choose what trash company my business uses? I thought this was a free country?”
People who have taken this question to the local agency responsible for deciding who they must use for service, such as the public works department or sanitation division, are usually met with pat answers such as: “The city bids out waste services every 3,5, or 20 years, and whoever offers the best deal is awarded the contract with the city.” Although there is some truth behind this statement, it does not explain why costs are sometimes outrageous for trash removal in these areas, nor justify the restrictions placed on businesses and residents in the area.
Waste consultants at Global Trash Solutions can tell hundreds of stories of victory over the so-called “fixed expense” of trash removal in municipalities such as these. One of these stories is that of Joe Carone, a McDonald’s Franchisee based in Pittsburgh, PA. Mr. Carone owns 5 McDonald’s restaurants, one of them located in the Borough of Charleroi, PA. The Borough has an exclusivity agreement with a certain waste hauler, and Mr. Carone was under the impression that he was “stuck” with the vendor that the Borough had selected for him.
Global Trash Solutions helped Mr. Carone negotiate with the Borough Manager by providing him with evidence that there were less expensive options available, if not for the exclusivity agreement imposed by the Borough. After some time, Global Trash Solutions aided Mr. Carone in negotiating a rate 39% lower than what he was originally paying.
GTS has many other examples of success in saving businesses money in spite of franchise agreements. Our team of expert contract negotiators order and comb through the entire franchise agreement between the city and hauler they have selected to find opportunities for our clients to save money. We use proprietary tactics and strategies to help our clients that are not available to the layman. If you have found yourself asking questions similar to those at the beginning of this article, we can help you in the same way we are helping many clients save money each and every month.
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