What is the 1-800-GOT-JUNK? Franchisor's obligation regarding establishing other franchises within the Territory, assuming the Franchisee is in full compliance?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
So long as Franchisee is in full compliance with the terms and conditions of this Agreement, Franchisor shall refrain from establishing or operating or granting to anyone else a franchise to establish or operate a 1-800-GOT-JUNK? business within the Territory.
The Territory will be divided into subterritories, which will be set out in Schedule B (the “Subterritories”). 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.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, if a franchisee is in full compliance with the terms and conditions of the Franchise Agreement, 1-800-GOT-JUNK? is obligated to refrain from establishing, operating, or granting to anyone else a franchise to establish or operate a 1-800-GOT-JUNK? business within the franchisee's designated territory. This clause provides the franchisee with a degree of territorial protection, ensuring that the franchisor will not directly compete or allow others to compete within the franchisee's area, so long as the franchisee remains compliant with the agreement.
The territory is further divided into subterritories, which are detailed in Schedule B of the Franchise Agreement. The franchisee is required to pay an additional franchise fee for each subterritory they wish to operate in. The franchisee cannot begin offering services in a subterritory until the subterritory initial fee has been paid in full, unless they obtain prior written consent from 1-800-GOT-JUNK?.
If the franchisee wishes to add more subterritories to their territory, 1-800-GOT-JUNK? may require the franchisee to enter into an amending agreement or the franchisor's current form of franchise agreement for those additional subterritories. The term of the new agreement may coincide with the term of the original agreement. This ensures that 1-800-GOT-JUNK? retains control over the expansion of the franchise and can update the terms of the agreement as needed. Franchisees should be aware of these conditions and the costs associated with expanding into additional subterritories.