Does the 1-800-GOT-JUNK? franchisor have to provide written notice to the franchisee before terminating the agreement for failure to pay sums due?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Renewal Term and notwithstanding anything otherwise contained in this Agreement, Franchisor shall have the right to terminate this Agreement and the right and license granted hereby to Franchisee on account of one or more of the following defaults by Franchisee:
(a) failure to pay any sum when due to Franchisor, any Affiliate or nominee of Franchisor, Franchisee’s landlord, any governmental authority, the lessor of any Vehicle, supplier of any item of Supplies or other inventory, equipment or products to the Franchised Business, or any other third party providing any goods or services to the Franchised Business, and Franchisee fails to cure such non-payment within fifteen (15) days after written notice of such default has been delivered to Franchisee; or
(b) failure to comply with any other obligation of Franchisee contained in this Agreement or any other agreement between Franchisee and Franchisor or any Affiliate or nominee of Franchisor, or any other failure to be in good standing with Franchisor, including for failure to conduct the Franchised Business in a businesslike manner, and Franchisee fails to cure such default within thirty (30) days after written notice of the default has been delivered to 4908-1371-6037.2 Franchise Agreement 4/22 Franchisee; provided, however, that if the nature of such default is such that it cannot be cured within a thirty (30) day period, and Franchisee takes reasonable action to cure such default immediately upon receiving such notice and diligently continues to do so, then Franchisee shall have such additional period of time as is reasonably necessary to cure such default.
17.2 Termination for Multiple Defaults. 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, 1-800-GOT-JUNK? can terminate the franchise agreement if the franchisee fails to pay any sum when due. This includes payments to 1-800-GOT-JUNK?, its affiliates, the franchisee's landlord, governmental authorities, vehicle lessors, suppliers, or any third party providing goods or services to the franchised business.
However, 1-800-GOT-JUNK? must provide the franchisee with a written notice of this default and allow fifteen (15) days for the franchisee to cure the non-payment. If the franchisee cures the non-payment within this 15-day period, 1-800-GOT-JUNK? cannot terminate the agreement on those grounds.
It is important to note that if the franchisee receives three or more default notices (whether cured or not) within a 12-month period, 1-800-GOT-JUNK? can terminate the agreement immediately upon written notice, without providing an opportunity to cure the current default. This highlights the importance of maintaining timely payments and addressing any defaults promptly to avoid potential termination of the franchise agreement.