What happens if a 1-800-GOT-JUNK? franchisee terminates or fails to remain in good standing under all vehicle leases?
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, if a franchisee terminates or fails to remain in good standing under all vehicle leases, this constitutes a default that cannot be cured. This means 1-800-GOT-JUNK? can terminate the franchise agreement immediately without providing an opportunity for the franchisee to correct the issue.
This has significant implications for a prospective 1-800-GOT-JUNK? franchisee. Maintaining good standing under all vehicle leases is critical. Failure to do so provides 1-800-GOT-JUNK? with the right to terminate the franchise agreement. This could result in the franchisee losing their business and investment.
In addition, upon termination of the franchise agreement, 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. The franchisee must also comply with non-competition provisions and, within 60 days, 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.