What is the 1-800-GOT-JUNK? Franchisee's obligation to pay Subterritory Initial Fees?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pay an additional franchise fee for each Subterritory (“Subterritory Initial Fees”), as set out in Schedule B or as Franchisor and Franchisee may otherwise agree in writing.
Franchisee shall not, without Franchisor’s prior written consent, begin offering the Services in any Subterritory until the Subterritory Initial Fee for that Subterritory has been paid in full.
If Franchisor and Franchisee desire to add one or more additional Subterritories to the Territory, Franchisor may require, as a condition of granting such additional Subterritory, that Franchisee enter into an amending agreement, or at the election of Franchisor, Franchisor’s then current form of franchise agreement, in respect of such additional Subterritories, the term of which may coincide with the term of this Agreement.
Without limiting Franchisee’s obligation to perform due diligence prior to entering into this Agreement, in the event Franchisee is unable to operate in any one or more Subterritory due to government regulations, Franchisor
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 is obligated to pay an additional franchise fee for each subterritory, referred to as "Subterritory Initial Fees." The specific amount of these fees will be detailed in Schedule B of the Franchise Agreement or as otherwise agreed upon in writing between the 1-800-GOT-JUNK? franchisor and the franchisee.
The 1-800-GOT-JUNK? franchisee cannot commence offering services in a subterritory until the Subterritory Initial Fee for that specific subterritory has been paid in full. This requirement ensures that 1-800-GOT-JUNK? franchisees are financially committed to each subterritory they intend to operate in.
Furthermore, if a 1-800-GOT-JUNK? franchisee wishes to add more subterritories to their territory, the franchisor may require the franchisee to enter into an amending agreement or the franchisor's current form of franchise agreement for those additional subterritories. This may be a condition for granting the additional subterritories. The term of the new agreement may coincide with the term of the original agreement. However, if the franchisee is unable to operate in one or more subterritories due to government regulations, the franchisor may provide assistance.