What fee must the 1-800-GOT-JUNK? Franchisee pay for each subterritory?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pay an additional franchise fee for each Subterritory (“Subterritory Initial Fees”), as set out in Schedule B or as Franchisor and Franchisee may otherwise agree in writing.
Franchisee shall not, without Franchisor’s prior written consent, begin offering the Services in any Subterritory until the Subterritory Initial Fee for that Subterritory has been paid in full.
If Franchisor and Franchisee desire to add one or more additional Subterritories to the Territory, Franchisor may require, as a condition of granting such additional Subterritory, that Franchisee enter into an amending agreement, or at the election of Franchisor, Franchisor’s then current form of franchise agreement, in respect of such additional Subterritories, the term of which may coincide with the term of this Agreement.
Without limiting Franchisee’s obligation to perform due diligence prior to entering into this Agreement, in the event Franchisee is unable to operate in any one or more Subterritory due to government regulations, Franchisor
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, a franchisee is required to pay an additional franchise fee for each subterritory, referred to as "Subterritory Initial Fees." The specific amount of these fees will be detailed in Schedule B of the Franchise Agreement or as otherwise agreed upon in writing between the franchisee and 1-800-GOT-JUNK?. The franchisee must pay the Subterritory Initial Fee in full before offering services in that subterritory, and they cannot begin offering services in any subterritory without prior written consent from 1-800-GOT-JUNK? until the fee is paid.
This requirement means that a prospective 1-800-GOT-JUNK? franchisee needs to carefully review Schedule B of the Franchise Agreement to understand the financial commitment required for each subterritory they intend to operate in. The fees can vary, and it's crucial to factor these costs into their business plan and financial projections. Furthermore, the franchisee should be prepared to negotiate these fees in writing with 1-800-GOT-JUNK? if they believe the initial fees are not aligned with their expectations or market conditions.
If a franchisee wishes to expand their territory by adding more subterritories, 1-800-GOT-JUNK? may require them to enter into an amending agreement or a new franchise agreement for those additional subterritories. The terms of the new agreement may coincide with the term of the original agreement. This implies that expanding into new subterritories may involve additional legal and administrative processes, and the franchisee should be prepared for these potential complexities.
Finally, the document states that if a franchisee is unable to operate in a subterritory due to government regulations, this situation does not alleviate the franchisee's obligation to perform due diligence before entering into the agreement. This highlights the importance of thoroughly researching and understanding local regulations before committing to a specific territory or subterritory. Franchisees should consult with legal and regulatory experts to ensure they can operate in their chosen areas.