In the event of a renewal for a 1-800-GOT-JUNK? franchise, what is the minimum increase in royalty payable for each subterritory?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
in the event of a renewal, except as specified in any renewal agreement, no less than the Minimum Royalty payable during the last calendar year of the term of this Agreement or the previous renewal term (as the case may be) plus an increase of no less than 10% for each Subterritory in the Territory.
Whether any Minimum Royalty payment is due is evaluated for each Subterritory separately, and independent of any Royalties paid with respect to other Subterritories.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, in the event of a renewal, the minimum royalty payable for each subterritory will increase. Specifically, the minimum royalty will be no less than the amount payable during the last calendar year of the original term, plus an increase of no less than 10% for each subterritory.
This means that if a 1-800-GOT-JUNK? franchisee chooses to renew their agreement, they should anticipate paying at least 10% more in minimum royalties per subterritory than they were paying at the end of their initial term. This increase is calculated independently for each subterritory within the franchise territory.
It is important to note that the renewal agreement may specify different terms for the minimum royalty. Therefore, franchisees should carefully review the renewal agreement to understand the exact terms and conditions related to royalty payments. This clause ensures that 1-800-GOT-JUNK? franchisees will experience an increase in their royalty payments upon renewal, reflecting potential growth and increased value of the franchise over time.