What happens if a 1-800-GOT-JUNK? franchisee repudiates the Franchise Agreement or causes a consequence where they cannot rectify any material term, condition, covenant, provision, or obligation?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Provision Section in Franchise Agreement Summary are enjoined from operating the Franchised Business; foreclosure by a secured creditor upon the real or personal property used in the Franchised Business; unauthorized use or transfer of interest in the System; continual failure to offer for sale any approved Service or offering to sell services not approved; intentional falsification or misrepresentation of information provided to us; you engage in misleading advertising or operate in dishonest, illegal or unethical manner; if your license to operate is suspended or revoked; failure to rectify any order issued by a government or regulatory authority; your Principal Operator fails to complete initial training; conduct or offenses that harm goodwill of System; you repudiate the Franchise Agreement or cause a consequences where you cannot rectify any material term, condition, covenant, provision or obligation. i. Your obligations on termination/non-renewal 17.8; 18; 21.2 Discontinue operations; payment of all accounts by bank draft; return all items belonging to Franchisor; transfer telephone numbers; immediately discontinue use of the Marks; comply with the non- competition provisions; within 60 days either sell the dump body truck boxes to another System franchisee or destroy them. We may purchase some or all of the assets of the Franchised Business at fair market value (determined by agreement or appraisal) if the franchise terminates or expires.
Source: Item 16 — Restrictions On What the Franchisee May Sell (FDD pages 38–42)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, if a franchisee repudiates the Franchise Agreement or causes a situation where they cannot fix a material term, condition, covenant, provision, or obligation, it constitutes a cause for termination of the franchise agreement. This means 1-800-GOT-JUNK? has grounds to terminate the agreement with the franchisee.
Upon termination, the franchisee has several obligations. They must discontinue operations, ensure all accounts are paid via bank draft, return all items belonging to 1-800-GOT-JUNK?, transfer telephone numbers, and immediately stop using 1-800-GOT-JUNK?'s marks. Additionally, the franchisee must comply with non-competition provisions. Within 60 days, the franchisee must either sell the dump body truck boxes to another 1-800-GOT-JUNK? franchisee or destroy them.
1-800-GOT-JUNK? also has the option to purchase some or all of the assets of the franchised business at fair market value, which will be determined either by agreement or appraisal, if the franchise terminates or expires.