Does the 1-800-GOT-JUNK? Franchise Agreement specify who bears the costs associated with the guarantee agreement?

The 2025 Franchise Disclosure Document for 1-800-GOT-JUNK? includes a Guarantee, Postponement, and Covenants Agreement as Exhibit F. This agreement is between the guarantor (typically a shareholder, director, officer, member, or partner of the franchisee) and 1-800-GOT-JUNK? LLC. The guarantor agrees to ensure the franchisee fulfills their obligations under the Franchise Agreement. However, the FDD does not explicitly state who bears the costs associated with this guarantee agreement.

While the agreement outlines the responsibilities and obligations of the guarantor, it does not specify whether the franchisee or the guarantor is responsible for covering any costs that may arise from the guarantee. These costs could potentially include legal fees, expenses related to enforcing the guarantee, or any other financial burdens associated with ensuring the franchisee's compliance.

A prospective 1-800-GOT-JUNK? franchisee should seek clarification from the franchisor regarding the allocation of costs associated with the Guarantee Agreement. Understanding who is responsible for these potential expenses is crucial for assessing the overall financial implications of the franchise agreement and the guarantor's obligations. It would be prudent to consult with a legal professional to review the Guarantee Agreement and ensure a clear understanding of all associated responsibilities and potential financial liabilities.