What constitutes 'reasonable action' for a 1-800-GOT-JUNK? franchisee to cure a default that cannot be cured within 30 days?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
failure to comply with any other obligation of Franchisee contained in this Agreement or any other agreement between Franchisee and Franchisor or any Affiliate or nominee of Franchisor, or any other failure to be in good standing with Franchisor, including for failure to conduct the Franchised Business in a businesslike manner, and Franchisee fails to cure such default within thirty (30) days after written notice of the default has been delivered to 4908-1371-6037.2 Franchise Agreement 4/22 Franchisee; provided, however, that if the nature of such default is such that it cannot be cured within a thirty (30) day period, and Franchisee takes reasonable action to cure such default immediately upon receiving such notice and diligently continues to do so, then Franchisee shall have such additional period of time as is reasonably necessary to cure such default.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, if a franchisee fails to comply with any obligation outlined in the Franchise Agreement, or any other agreement with 1-800-GOT-JUNK?, they have 30 days after written notice to correct the issue. However, if the default cannot be resolved within 30 days, the franchisee is granted additional time to cure the default, provided they take 'reasonable action' immediately upon receiving notice and diligently continue to do so. The FDD does not define 'reasonable action'.
This clause protects 1-800-GOT-JUNK? franchisees from immediate termination for defaults that require more than 30 days to resolve, offering some flexibility. However, the ambiguity around what constitutes 'reasonable action' introduces uncertainty. Franchisees could face disputes with 1-800-GOT-JUNK? over whether their actions are sufficient to avoid termination.
Many franchise agreements include cure periods to allow franchisees time to fix breaches of contract. The inclusion of an extended cure period for issues that take longer than 30 days is relatively common, but the lack of a clear definition of 'reasonable action' is a notable point for potential franchisees to consider. It is important to clarify expectations upfront to avoid potential conflicts.
Prospective 1-800-GOT-JUNK? franchisees should seek specific examples of what 1-800-GOT-JUNK? considers 'reasonable action' in various default scenarios. Understanding 1-800-GOT-JUNK?'s expectations can help franchisees develop strategies for addressing potential defaults and ensure they are taking appropriate steps to maintain their franchise agreement.