Does the 1-800-GOT-JUNK? Franchise Agreement specify whether the guarantor is required to waive any rights of setoff?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
sor’s power. 19. The Guarantor represents and warrants to the Franchisor that: (a) no representations or agreements of any kind have been made to the Guarantor that would limit or qualify in any way the terms of this Agreement; (b) this Agreement is executed at the Guarantor’s request and not at the request of the Franchisor; and (c) the Guarantor has full power, right and authority to enter into this Agreement. 4934-9833-2741.1
- 8 - IN WITNESS WHEREOF the Guarantor and Franchisor have signed this Agreement under seal with effect from the date first above written. GUARANTOR: FRANCHISOR: 1-800-GOT-JUNK? LLC, a Delaware limited liability company By: By: (authorized signatory) Dated: Dated: 4934-9833-2741.1
- 9 - Spousal Consent 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.
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 setoff. However, the agreement does address the guarantor's obligations and representations. The guarantor must acknowledge that no limitations or qualifications have been made that would affect the terms of the agreement. The guarantor also confirms they have the full right and authority to enter into the agreement.
Additionally, the spouse of the guarantor must provide consent, acknowledging that the guarantee is binding upon their separate and community property. This spousal consent ensures that the franchisor can collect from community property if the guarantor defaults. This highlights the comprehensive nature of the guarantee and the assets that may be at risk.
While the FDD does not use the specific term "rights of setoff," the broad language regarding the guarantor's obligations and the ability of 1-800-GOT-JUNK? to pursue remedies suggests that the guarantor's rights may be limited. A prospective franchisee should seek legal counsel to fully understand the implications of the guarantee and spousal consent, including whether the guarantor retains any rights of setoff or other defenses.