Does the 1-800-GOT-JUNK? General Security Agreement define 'value received' in the context of sales in the ordinary course of business?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS AGREEMENT WITNESSES that in consideration of the Franchisor entering into the Franchise Agreement and other good and valuable consideration (the receipt and sufficiency whereof is hereby acknowledged by the Guarantor), the Guarantor covenants and agrees with and in favor of the Franchisor as follows:
PART 1 - GUARANTEE
1.
The Guarantor warrants that the facts contained in Recitals A, B, and C are correct. 2.
The Guarantor shall at all times during the term of the Franchise Agreement and during any exercised extension or renewal of the term of the Franchise Agreement and until all of the terms, covenants and conditions of all agreements and dealings between the Franchisee and the Franchisor have been fully and completely performed by the Franchisee or otherwise discharged by the Franchisor:
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the General Security Agreement for 1-800-GOT-JUNK? does not explicitly define 'value received' specifically in the context of sales in the ordinary course of business. However, the agreement does refer to 'good and valuable consideration' within the context of the Guarantor's obligations. This phrase generally indicates something of worth exchanged for a promise or performance, but it's not specifically tied to sales.
The General Security Agreement outlines the obligations secured, which include all debts, liabilities, and obligations of the debtor (franchisee) to the secured party (1-800-GOT-JUNK?). It also grants a security interest in the franchisee's assets as collateral. The agreement mentions that the security interest created shall be a purchase money security interest to the extent that any of the Obligations are monies advanced by the Secured Party to enable the Debtor to purchase or otherwise acquire any of the Collateral and were so used.
While the agreement does not define 'value received' in the context of sales, it does state that capitalized terms shall have the meaning ascribed to them in the applicable Uniform Commercial Code (UCC) unless otherwise defined in the agreement. Therefore, if a definition of 'value received' is needed, the UCC definition would likely apply. A prospective franchisee should seek clarification from 1-800-GOT-JUNK? regarding how 'value received' is interpreted and applied within the context of the General Security Agreement, particularly concerning sales and financial obligations.