Does the 1-800-GOT-JUNK? Franchise Agreement specify any geographic limits related to the 'Territory and Subterritories' in Section 2.2?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2 Territory and Subterritories. So long as Franchisee is in full compliance with the terms and conditions of this Agreement, Franchisor shall refrain from establishing or operating or granting to anyone else a franchise to establish or operate a 1-800-GOT-JUNK? business within the Territory. The Territory will be divided into subterritories, which will be set out in Schedule B (the “Subterritories”). 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, Section 2.2 of the Franchise Agreement addresses the territory and subterritories granted to the franchisee. The agreement states that as long as the franchisee is in full compliance with the terms and conditions outlined in the agreement, 1-800-GOT-JUNK? will not establish, operate, or grant a franchise to anyone else to operate a 1-800-GOT-JUNK? business within the franchisee's designated territory. The territory will be further divided into subterritories, which will be detailed in Schedule B of the agreement.
The Franchise Agreement specifies that the franchisee must pay an additional franchise fee for each subterritory, referred to as "Subterritory Initial Fees," as outlined in Schedule B or as otherwise agreed upon in writing between 1-800-GOT-JUNK? and the franchisee. The franchisee is prohibited from offering services in any subterritory until the Subterritory Initial Fee for that specific subterritory has been paid in full, unless they obtain prior written consent from 1-800-GOT-JUNK?.
Furthermore, if 1-800-GOT-JUNK? and the franchisee mutually agree to add additional subterritories to the territory, 1-800-GOT-JUNK? has the option to require the franchisee to enter into an amending agreement or, at 1-800-GOT-JUNK?'s discretion, its current form of franchise agreement, specifically for these additional subterritories. The term of this agreement may coincide with the term of the original agreement. The agreement also states that if the franchisee is unable to operate in any one or more subterritories due to government regulations, this does not limit the franchisee’s obligation to perform due diligence prior to entering into the agreement.