For 1-800-GOT-JUNK? franchisees in Maryland, what financial assurance has the Maryland Securities Commissioner required based on the franchisor's financial condition?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
MARYLAND
ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT, FRANCHISE AGREEMENT, FRANCHISE DISCLOSURE QUESTIONNAIRE AND CERTIFICATION, AND RELATED AGREEMENTS
This Addenda is an amendment to the Disclosure Document and Franchise Agreement.
The following modifications are made to the Disclosure Document and the Franchise Agreement:
Based upon the franchisor’s financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the Franchise Agreement and the outlet is opened. Items 5 and 7 of the Disclosure Document and Section 3.1 and Schedule B of the Franchise Agreement are amended accordingly.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the Maryland Securities Commissioner has mandated a financial assurance due to the franchisor's financial condition. This requirement directly impacts the payment of initial fees and other payments for franchisees in Maryland.
Specifically, all initial fees and payments owed by 1-800-GOT-JUNK? franchisees in Maryland are deferred. This deferral remains in effect until 1-800-GOT-JUNK? fulfills its pre-opening obligations as outlined in the Franchise Agreement, and the franchisee's outlet is officially opened. This amendment affects Items 5 and 7 of the Disclosure Document, as well as Section 3.1 and Schedule B of the Franchise Agreement.
This financial assurance measure provides a level of protection for new 1-800-GOT-JUNK? franchisees in Maryland. By deferring the initial fees, franchisees are not required to pay these amounts until 1-800-GOT-JUNK? has met its obligations to prepare the franchisee to open. This can significantly reduce the financial risk for franchisees, especially if there are concerns about the franchisor's ability to provide the necessary support and services. Prospective franchisees should carefully review Items 5 and 7 of the Disclosure Document, Section 3.1, and Schedule B of the Franchise Agreement to fully understand the implications of this addendum.