What happens if a 1-800-GOT-JUNK? franchisee fails to comply with the Security Agreement?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
h. “Cause” defined – defaults which cannot be cured 17.2; 17.3 Three or more curable defaults within a 12- month period; failure to commence operation by the scheduled opening date; if you cause the Franchised Business to be closed or not operating for five business days in any 30 consecutive day period without our prior consent; failure to assign within required timeframe after death or permanent disability; termination of or failure to remain in good standing under all vehicle leases; failure to comply with Security Agreement; you become insolvent or become bankrupt; you cease your corporate existence; unauthorized assignment; you lose possession without release of any items of personal property used in the Franchised Business; failure to satisfy judgment entered against you; you
Source: Item 16 — Restrictions On What the Franchisee May Sell (FDD pages 38–42)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, failure to comply with the Security Agreement constitutes a default that cannot be cured. This is a serious breach of the franchise agreement with significant consequences.
Specifically, if a 1-800-GOT-JUNK? franchisee fails to comply with the Security Agreement, it gives 1-800-GOT-JUNK? grounds to terminate the franchise agreement. Unlike some other defaults that allow a franchisee a period to correct the issue, this particular default provides no such opportunity. This means 1-800-GOT-JUNK? can terminate the agreement immediately upon discovering the non-compliance.
This provision underscores the importance of understanding and adhering to all aspects of the Security Agreement. Prospective 1-800-GOT-JUNK? franchisees should carefully review the terms of the Security Agreement and seek legal counsel to fully understand their obligations and the potential ramifications of non-compliance. Given the severity of this default, franchisees must prioritize compliance to avoid the risk of immediate termination of their franchise agreement.