Can the 1-800-GOT-JUNK? franchisor terminate the agreement if the franchisee fails to pay a third party providing services to the Franchised Business?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
enewal 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;
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? has the right to terminate the franchise agreement if the franchisee fails to pay any sum when due to a third party providing goods or services to the franchised business. This includes suppliers of items, inventory, equipment, or products.
However, 1-800-GOT-JUNK? will provide a 15-day written notice to allow the franchisee to cure the non-payment. If the franchisee fails to cure the non-payment within the 15-day period after receiving the written notice, 1-800-GOT-JUNK? can proceed with terminating the agreement.
It is important to note that 1-800-GOT-JUNK? can also terminate the agreement immediately, without an opportunity to cure, if the franchisee has received three or more default notices (whether cured or not) within a consecutive 12-month period. This highlights the importance of maintaining good financial standing and adhering to the terms of the franchise agreement to avoid potential termination.