Are all directors, officers, shareholders, partners, or members of a 1-800-GOT-JUNK? franchise required to personally guarantee the franchisee's obligations under the Franchise Agreement?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
800- GOT-JUNK?”. B. In order to induce the Franchisor to enter into the Franchise Agreement with the Franchisee, the Guarantor has agreed to execute and deliver this Agreement. C. The Guarantor, who is a shareholder (directly or indirectly), director, officer, member or partner of the Franchisee and thereby benefits from the Franchise Agreement and stands to benefit from the grant of the licence to the Franchisee, has agreed to execute and deliver this Agreement. D. Capitalized terms used but not defined in this Agreement shall have their respective meanings as defined the Franchise Agreement. THIS AGREEMENT WITNESSES that in consideration of the Franchisor entering into the Franchise Agreement and other good and valuable consideration (the receipt and sufficiency whereof is hereby acknowledged by the Guarantor), the Guarantor covenants and agrees with and in favor of the Franchisor as follows: PART 1 - GUARANTEE 1. The Guarantor warrants that the facts contained in Recitals A, B, and C are correct. 2. The Guarantor shall at all times during the term of the Franchise Agreement and during any exercised extension or renewal of the term of the Franchise Agreement and until all of the terms, covenants and conditions of all agreements and dealings between the Franchisee and the Franchisor have been fully and completely performed by the Franchisee or otherwise discharged by the Franchisor: 4934-9833-2741.1
- 2 - (a) guaranty the full and punctual payment and performance of all present and future obligations, liabilities, covenants and agreements required to be observed and performed or paid or reimbursed by the Guarantor under or relating to the Franchise Agreement, plus all costs, expenses and fees (including the reasonable fees and expenses of the Franchisor's counsel) in any way relating to the enforcement or protection of Franchisor's rights hereunder, including without limitation, (i) royalty, minimum royalty, marketing royalty, amounts owing for products and inventory p
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 37–38)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, a guarantee agreement may be required. The franchise agreement is made between 1-800-GOT-JUNK? and the franchisee, but to induce 1-800-GOT-JUNK? to enter into the agreement, a guarantor may be required to execute and deliver a guarantee agreement.
The guarantor is typically a shareholder, director, officer, member, or partner of the franchisee who benefits from the franchise agreement. By signing the Guarantee, Postponement, and Covenants agreement, the guarantor agrees to uphold the terms of the franchise agreement until all obligations are fulfilled by the franchisee or discharged by 1-800-GOT-JUNK?.
The guarantor also warrants that all facts in the agreement are correct and has full power, right, and authority to enter into the agreement. Additionally, the spouse of the guarantor may be required to provide spousal consent, acknowledging that the guarantee is a community obligation and allows 1-800-GOT-JUNK? to collect from community property in case of default.