What constitutes a non-curable default that allows 1-800-GOT-JUNK? to terminate the agreement without notice?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Prior to expiration of the Term or any Renewal Term and notwithstanding anything otherwise contained in this Agreement, Franchisor shall have the right to terminate this Agreement and the right and license granted hereby to Franchisee without prior notice to Franchisee upon the occurrence of any of the following default events which are deemed non-curable:
(a) Franchisee fails to commence operation of the Franchised Business on the Scheduled Opening Date;
(b) Franchisee does anything or omits to do anything which causes the Franchised Business to be closed for business or otherwise not operating in full compliance with this Agreement for five (5) consecutive Business Days or any five (5) Business Days in any thirty (30) consecutive day period, without the prior written consent of Franchisor;
(c) Franchisee fails to assign this Agreement within the time frame set out in Section 20.7 and in accordance with the other terms and conditions set out in Section 20.7 upon the death or permanent disability of the Principal Operator or the controlling shareholder of Franchisee;
(d) Franchisee fails to remain in good standing under all Vehicle Leases, or does or omits to do anything which gives anyone the right to terminate a Vehicle Lease or take possession of any Vehicle;
(e) Franchisee fails to comply with any of Franchisee’s obligations under the Security Agreement;
(f) Franchisee becomes or threatens to become insolvent (as revealed by its books and records or otherwise) in that it is unable generally to meet all of its obligations as they become due, or one of the following events occurs:
(i) Franchisee files, or has filed against it, a petition (or similar pleading) in bankruptcy under federal bankruptcy laws or any similar legislation;
(ii) a receiver, receiver-manager, trustee in bankruptcy or similar officer is temporarily or permanently appointed to take charge of Franchisee’s affairs or any of Franchisee’s property;
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, there are several events that constitute a non-curable default, allowing 1-800-GOT-JUNK? to terminate the franchise agreement without prior notice. These events include failing to commence operation of the franchised business on the scheduled opening date, or closing the business (or not operating it in full compliance with the agreement) for five consecutive business days, or any five business days within a 30-day period, without prior written consent from 1-800-GOT-JUNK?.
Additional non-curable defaults include failing to assign the agreement within the timeframe specified in Section 20.7 upon the death or permanent disability of the Principal Operator or the controlling shareholder, failing to remain in good standing under all Vehicle Leases, or doing anything that allows someone to terminate a Vehicle Lease or take possession of any Vehicle. Furthermore, failing to comply with any obligations under the Security Agreement also constitutes a non-curable default.
Finally, 1-800-GOT-JUNK? can terminate the agreement without notice if the franchisee becomes insolvent or threatens to become insolvent, meaning they are unable to meet their obligations as they become due. This also applies if the franchisee files for bankruptcy or has a bankruptcy petition filed against them, or if a receiver, receiver-manager, trustee in bankruptcy, or similar officer is appointed to take charge of the franchisee’s affairs or property.