Does the 1-800-GOT-JUNK? Guarantor's obligation include costs for the Franchisor's counsel's reasonable fees?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
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
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(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”).
3.
The Guarantor covenants and agrees with the Franchisor as follows:
(a) the liability of the Guarantor to the Franchisor shall be for all purposes as if the Guarantor was primary obligor under the Franchise Agreement and any other agreement between the Franchisee and the Franchisor, and not merely a surety for the Obligations of the
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the Guarantor's obligations include covering the franchisor's legal fees. Specifically, the guarantor must ensure the full payment and performance of all obligations related to the Franchise Agreement. This includes all costs, expenses, and fees, including the reasonable fees and expenses of 1-800-GOT-JUNK?'s counsel. These fees must relate to the enforcement or protection of 1-800-GOT-JUNK?'s rights under the agreement.
This obligation extends to various financial responsibilities, such as royalty payments, marketing royalties, payments for products and inventory, rent, and any other amounts owed by the franchisee to 1-800-GOT-JUNK?. The guarantor is also responsible for ensuring the franchisee adheres to all terms, covenants, and conditions outlined in any agreements with 1-800-GOT-JUNK?, including the Franchise Agreement itself.
Furthermore, the guarantor must indemnify 1-800-GOT-JUNK? against any losses, costs, or damages resulting from the franchisee's failure to meet the terms and conditions of the Franchise Agreement. The guarantor's liability is treated as if they were the primary obligor under the Franchise Agreement, rather than merely a surety for the franchisee's obligations. This means 1-800-GOT-JUNK? can pursue the guarantor directly for any breaches or failures to perform, without first having to exhaust all remedies against the franchisee.