What constitutes a curable default that could lead to termination of a 1-800-GOT-JUNK? franchise?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
g. “Cause” defined – defaults which can be cured 17.1 Failure to cure a non-payment default within 15 days after written notice; or failure to cure non-compliance with any other obligation or lack of good standing with us within 30 days after written notice of default. h. “Cause” defined – defaults which cannot be cured 17.2; 17.3 Three or more curable defaults within a 12- month period; failure to commence operation by the scheduled opening date; if you cause the Franchised Business to be closed or not operating for five business days in any 30 consecutive day period without our prior consent; failure to assign within required timeframe after death or permanent disability; termination of or failure to remain in good standing under all vehicle leases; failure to comply with Security Agreement; you become insolvent or become bankrupt; you cease your corporate existence; unauthorized assignment; you lose possession without release of any items of personal property used in the Franchised Business; failure to satisfy judgment entered against you; you
Source: Item 16 — Restrictions On What the Franchisee May Sell (FDD pages 38–42)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, a curable default that could lead to termination includes failure to cure a non-payment default within 15 days after written notice. Additionally, failure to cure non-compliance with any other obligation or a lack of good standing with 1-800-GOT-JUNK? within 30 days after written notice of default also constitutes a curable default.
This means that if a franchisee fails to make payments or meet other obligations outlined in the franchise agreement, 1-800-GOT-JUNK? will provide written notice, giving the franchisee a specific timeframe to correct the issue. For non-payment, the franchisee has 15 days to cure the default. For other breaches of the agreement, the franchisee has 30 days to resolve the issue.
It is important to note that repeated curable defaults can lead to termination even if each individual default is cured within the given timeframe. Specifically, three or more curable defaults within a 12-month period are considered defaults that cannot be cured and can result in termination. This highlights the importance of consistent compliance with the franchise agreement to maintain good standing and avoid potential termination.