Does the 1-800-GOT-JUNK? Franchise Agreement specify whether the guarantor is required to waive any homestead exemptions?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS:
B.
In order to induce the Franchisor to enter into the Franchise Agreement with the Franchisee,
the Guarantor has agreed to execute and deliver this Agreement.
C.
The Guarantor, who is a shareholder (directly or indirectly), director, officer, member or
partner of the Franchisee and thereby benefits from the Franchise Agreement and stands to benefit from the
grant of the licence to the Franchisee, has agreed to execute and deliver this Agreement.
2.
The Guarantor shall at all times during the term of the Franchise Agreement and during any
exercised extension or renewal of the term of the Franchise Agreement and until all of the terms,
covenants and conditions of all agreements and dealings between the Franchisee and the Franchisor
have been fully and completely performed by the Franchisee or otherwise discharged by the
Franchisor:
I understand that my spouse, [name of spouse] has signed a Guarantee, Postponement and Covenants
(“Guarantee”) with respect to the franchise granted to [name of Franchisee] by 1-800-GOT-JUNK?
LLC
(“Franchisor”) pursuant to a Franchise Agreement.
The Guarantee is an obligation binding upon the
separate property assets and income of my spouse and is also binding upon the community property of
our marital community.
I have read and I understand the terms of the Guarantee.
I further understand that
under the terms of the Guarantee, if my spouse defaults under the Guarantee, Franchisor may collect from
the community property owned by my spouse and me.
Such community property includes the income of
the marital community and the assets of the marital community.
I acknowledge that the Guarantee is a
community obligation, and I consent to my spouse’s participation in the Guarantee.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 1-800-GOT-JUNK? does not specify whether a guarantor is required to waive homestead exemptions. However, the document does include a sample Guaranty Agreement. This agreement requires a guarantor, who is often a shareholder, director, officer, member, or partner of the franchisee, to guarantee the franchisee's obligations to 1-800-GOT-JUNK?. The guarantor benefits from the franchise agreement and the grant of the license to the franchisee. The guarantor must fulfill all terms, covenants, and conditions of agreements between the franchisee and 1-800-GOT-JUNK? until all obligations are completely performed or discharged by 1-800-GOT-JUNK?.
The Guaranty Agreement also includes a spousal consent section. This section requires the spouse of the guarantor to acknowledge that the guarantee is binding on their separate and community property. The spouse must consent to the guarantor's participation in the guarantee, understanding that 1-800-GOT-JUNK? can collect from the community property if the guarantor defaults. This highlights the significant financial risk a guarantor and their spouse undertake.
Because the FDD does not explicitly address homestead waivers, prospective franchisees should carefully review the Guaranty Agreement with a legal professional to fully understand the scope of the guarantee and any potential waivers of rights. It is important to determine what assets could be at risk in the event of a default by the franchisee. Franchisees should also inquire with 1-800-GOT-JUNK? about specific requirements or implications related to homestead exemptions in their jurisdiction.