What conditions must be met to maintain the 'Territory and Subterritories' rights granted in Section 2.2 of the 1-800-GOT-JUNK? Franchise Agreement?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2 Territory and Subterritories. So long as Franchisee is in full compliance with the terms and conditions of this Agreement, Franchisor shall refrain from establishing or operating or granting to anyone else a franchise to establish or operate a 1-800-GOT-JUNK? business within the Territory. The Territory will be divided into subterritories, which will be set out in Schedule B (the “Subterritories”). Franchisee shall pay an additional franchise fee for each Subterritory (“Subterritory Initial Fees”), as set out in Schedule B or as Franchisor and Franchisee may otherwise agree in writing. Franchisee shall not, without Franchisor’s prior written consent, begin offering the Services in any Subterritory until the Subterritory Initial Fee for that Subterritory has been paid in full. If Franchisor and Franchisee desire to add one or more additional Subterritories to the Territory, Franchisor may require, as a condition of granting such additional Subterritory, that Franchisee enter into an amending agreement, or at the election of Franchisor, Franchisor’s then current form of franchise agreement, in respect of such additional Subterritories, the term of which may coincide with the term of this Agreement. Without limiting Franchisee’s obligation to perform due diligence prior to entering into this Agreement, in the event Franchisee is unable to operate in any one or more Subterritory due to government regulations, Franchisor
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, a franchisee must be in full compliance with the terms and conditions of the Franchise Agreement to maintain their territory and subterritory rights. As long as the franchisee adheres to the agreement, 1-800-GOT-JUNK? will not establish, operate, or grant another franchise within the franchisee's designated territory. The territory is divided into subterritories, detailed in Schedule B of the agreement.
To operate in a subterritory, the franchisee must pay an additional franchise fee, known as the Subterritory Initial Fee, for each subterritory as outlined in Schedule B or as agreed upon in writing with 1-800-GOT-JUNK?. The franchisee cannot begin offering services in any subterritory until this fee is paid in full, unless they obtain prior written consent from 1-800-GOT-JUNK?.
Furthermore, if the franchisee and 1-800-GOT-JUNK? decide to add more subterritories, 1-800-GOT-JUNK? may require the franchisee to sign an amending agreement or their current franchise agreement form for these additional subterritories. The term of this new agreement may coincide with the original agreement. The document also notes that franchisees are obligated to perform due diligence prior to signing the agreement, as 1-800-GOT-JUNK? is not liable if a franchisee is unable to operate in a subterritory due to government regulations.