Does the 1-800-GOT-JUNK? Franchise Agreement specify whether the guarantor is required to waive any rights of indemnity?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
AND:
1-800-GOT-JUNK? LLC, a Delaware limited liability company having its head office at 887 Great Northern Way, Suite 301, Vancouver, BC, V5T 4T5, Canada (the “Franchisor”)
WHEREAS:
A. By a Franchise Agreement made effective the effective date hereof (the “Franchise Agreement”), the Franchisor granted a licence to ____________________ (the “Franchisee”) for the establishment and operation of a retail business offering junk removal services under the name “1-800- GOT-JUNK?”.
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.
D. Capitalized terms used but not defined in this Agreement shall have their respective meanings as defined the Franchise Agreement.
THIS AGREEMENT WITNESSES that in consideration of the Franchisor entering into the Franchise Agreement and other good and valuable consideration (the receipt and sufficiency whereof is hereby acknowledged by the Guarantor), the Guarantor covenants and agrees with and in favor of the Franchisor as follows:
PART 1 - GUARANTEE
1. The Guarantor warrants that the facts contained in Recitals A, B, and C are correct.
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:
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 1-800-GOT-JUNK? does not explicitly state that a guarantor is required to waive rights of indemnity. However, the document includes a section addressing guarantees related to the franchise agreement. Specifically, it outlines the guarantor's responsibilities and representations, indicating that the guarantor benefits from the franchise agreement and has the authority to enter into it. The agreement also includes a spousal consent clause, acknowledging the guarantee as a community obligation in certain circumstances.
While the FDD does not directly address the waiver of indemnity rights, it does emphasize the guarantor's commitment to ensuring the franchisee fulfills all obligations to 1-800-GOT-JUNK?. This commitment extends throughout the term of the franchise agreement, including any extensions or renewals, until all terms and conditions are met or discharged by 1-800-GOT-JUNK?. The guarantor's role is to induce 1-800-GOT-JUNK? to enter into the franchise agreement with the franchisee, suggesting a significant level of responsibility.
Prospective franchisees should carefully review the guarantee agreement and consult with legal counsel to fully understand the implications of acting as a guarantor. It is important to clarify whether the guarantor is waiving any specific rights, including indemnity, and to assess the potential financial risks associated with the guarantee. Understanding the full scope of the guarantor's obligations is crucial for making an informed decision about the franchise opportunity.