Does the 1-800-GOT-JUNK? Guarantor's obligation include amounts owing for products purchased by the Franchisee?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
ll 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: 4934-9833-2741.1
- 2 - (a) guaranty the full and punctual payment and performance of all present and future obligations, liabilities, covenants and agreements required to be observed and performed or paid or reimbursed by the Guarantor under or relating to the Franchise Agreement, plus all costs, expenses and fees (including the reasonable fees and expenses of the Franchisor's counsel) in any way relating to the enforcement or protection of Franchisor's rights hereunder, including without limitation, (i) royalty, minimum royalty, marketing royalty, amounts owing for products and inventory purchased by the Franchisee, rent, additional rent, monies, charges and other amounts of any kind whatsoever payable by the Franchisee to the Franchisor pursuant to any agreements or dealings between the Franchisee and the Franchisor, and (ii) the prompt and complete performance of any and all terms, covenants and conditions on the part of the Franchisee to be kept, observed and performed under any agreements or dealings between the Franchisee and the Franchisor, including without limitation the terms, covenants and conditions on the part of the Franchisee to be kept, observed and performed under the Franchise Agreement; and (b) indemnify and save harmless the Franchisor from any loss, costs or damages arising out of any failure by the Franchisee to observe or perform any and all of the terms, covenants and conditions contained in the Franchise Agreement, (collectively the “Obligations”).
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, the Guarantor's obligations do extend to amounts owed for products and inventory purchased by the franchisee. The guarantor is responsible for ensuring the franchisee fulfills all obligations, including payments for products and inventory. This obligation remains in effect throughout the term of the Franchise Agreement, including any extensions or renewals, until all agreements between the franchisee and 1-800-GOT-JUNK? are fully performed or discharged.
Specifically, the guarantor is responsible for the full and punctual payment and performance of all present and future obligations, liabilities, covenants, and agreements required to be observed, performed, paid, or reimbursed by the franchisee. This includes, but is not limited to, royalty fees, minimum royalty fees, marketing royalty fees, amounts owed for products and inventory, rent, additional rent, and any other charges payable by the franchisee to 1-800-GOT-JUNK?. The guarantor is also responsible for the prompt and complete performance of all terms, covenants, and conditions on the part of the franchisee under any agreements with 1-800-GOT-JUNK?, including the Franchise Agreement itself.
This arrangement means that if a 1-800-GOT-JUNK? franchisee fails to pay for products or inventory, the guarantor is legally bound to cover those costs. Additionally, the guarantor must indemnify 1-800-GOT-JUNK? for any losses, costs, or damages resulting from the franchisee's failure to meet the terms of the Franchise Agreement. The guarantor's liability is treated as if they were the primary obligor, not just a surety, reinforcing the comprehensive nature of the guarantee.
Prospective 1-800-GOT-JUNK? franchisees should carefully consider the implications of the guarantee and ensure that their guarantor fully understands the extent of their financial responsibility. This includes not only the initial franchise fees and ongoing royalties but also any purchases of products and inventory required to operate the franchise. The guarantor should be aware that their personal assets may be at risk if the franchisee fails to meet their financial obligations to 1-800-GOT-JUNK?.