Is the 'Grant of License' in Section 2.1 of the 1-800-GOT-JUNK? Franchise Agreement dependent on any specific conditions or events?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
o 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. 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 may, but is not obliged to, grant one or more alternative Subterritories to Franchisee that are contiguous with or within fifty (50) miles of the boundary of the Territory. 2.3 Limitation on Grant / Territory. The grant and license contained in this Agreement is non- exclusive and gives Franchisee the right to establish and operate the Franchised Business at the Franchised Location and to sell the Services to persons or entities with property located within the Territory, provided that the Services shall only be provided at premises located within the Territory.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, Section 2.2 of the Franchise Agreement outlines conditions related to territory and subterritories that affect the franchise license. Specifically, 1-800-GOT-JUNK? will not establish or grant another franchise within the franchisee's territory as long as the franchisee is in full compliance with the terms of the agreement. The territory is divided into subterritories, and the franchisee must pay an additional fee for each subterritory.
A franchisee cannot begin offering services in a subterritory until the subterritory fee has been paid in full, unless 1-800-GOT-JUNK? provides prior written consent. If a franchisee wants to add more subterritories, 1-800-GOT-JUNK? may require an amending agreement or its current franchise agreement for those additional subterritories.
Furthermore, if a franchisee cannot operate in one or more subterritories due to government regulations, 1-800-GOT-JUNK? may adjust the territory or subterritories, and the franchisee may be entitled to a refund of a portion of the Subterritory Initial Fees. This refund would be based on a formula that considers the number of years remaining in the franchise term and the percentage of the subterritory that is restricted.