Does the 1-800-GOT-JUNK? franchise agreement require the franchisee to indicate they are operating under a license from the franchisor?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
20.2 Legend on Share Certificates. Franchisee shall cause all shares of its capital stock, unit certificates or similar agreements or indications of ownership, to include the following legend, with necessary changes:
The Company and the securities evidenced by this certificate are subject to, and the disposition and transfer of such securities are restricted by, a franchise agreement dated as of [Effective Date], between the Company and 1-800-GOT-JUNK? LLC, a Delaware limited liability company, a copy of which may, at the request of any [shareholder] of the Company, be examined at the principal business office of the Company during normal business hours.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, franchisees must include a legend on share certificates indicating that the company's securities are subject to a franchise agreement with 1-800-GOT-JUNK? LLC. This legend must include the effective date of the franchise agreement and state that a copy of the agreement can be examined at the company's principal business office during normal business hours upon request by any shareholder.
This requirement ensures that all shareholders of a 1-800-GOT-JUNK? franchise are aware of the existence and implications of the franchise agreement. It also protects 1-800-GOT-JUNK?'s interests by ensuring that any transfer or disposition of shares is subject to the terms of the franchise agreement.
For a prospective franchisee, this means that if they operate their 1-800-GOT-JUNK? business as a corporation and issue shares, they must include the specified legend on all share certificates. This is a standard practice in franchising to maintain brand consistency and protect the franchisor's rights. Failing to comply with this requirement could result in a breach of the franchise agreement.