Does the 1-800-GOT-JUNK? franchisee have an opportunity to cure a default if the franchisor terminates the agreement under Section 17.2?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee has received a notice of default pursuant to Section 17.1 on three (3) or more occasions (whether or not cured) during any consecutive twelve (12) Month period during the Term, then Franchisor may terminate this Agreement immediately upon written notice to Franchisee made expressly pursuant to this Section 17.2 and Franchisee shall have no opportunity to cure the current default.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, a franchisee typically has the opportunity to cure a default under the franchise agreement. However, Section 17.2 outlines a specific circumstance where this right to cure is forfeited. If a 1-800-GOT-JUNK? franchisee receives a notice of default under Section 17.1 on three or more occasions within a consecutive 12-month period, regardless of whether those defaults were previously cured, 1-800-GOT-JUNK? has the right to terminate the agreement immediately. In this situation, the franchisee will not be given an opportunity to cure the current default.
This policy of 1-800-GOT-JUNK? is important for prospective franchisees to understand, as it means that repeated, even if temporary, failures to comply with the franchise agreement can lead to termination without a chance to rectify the latest issue. This differs from a standard single-instance default where a cure period is usually granted. The franchisee's history of compliance within the past year is a critical factor.
This clause in the 1-800-GOT-JUNK? franchise agreement emphasizes the importance of consistent adherence to all contractual obligations. A franchisee should implement strong operational and financial controls to minimize the risk of multiple default notices. The inability to cure a default under Section 17.2 represents a significant risk for franchisees, potentially leading to the loss of their franchise and associated investment due to repeated instances of non-compliance, even if each instance is minor on its own.