How does the initial franchise fee for 1-800-GOT-JUNK? in Item 5 compare to the trademark usage described in Item 13?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 13. Trademarks
We license the right for you to operate a Franchised Business under the name “1-800-GOT-JUNK?” You may also use our other current or future System trademarks to operate your Franchised Business, as we designate. You may not license or sublicense to others any trademarks, service marks, trade names, logotypes or commercial symbols owned by us or our affiliates. Rubbish Boys has licensed to us the right to offer and sell licenses, and to sublicense to you the right to use the System, including the principal trademarks, for the operation of your Franchised Business (the “License Agreement”). The License Agreement expires in 2057 and will only terminate before that time if we fail to pay royalties to Rubbish Boys, become bankrupt or otherwise insolvent, or breach the terms of the License Agreement, which prohibit us from misusing or attempting to transfer the License Agreement. If the License Agreement is terminated, you may be required to stop using the trademarks. By principal 4899-8658-3815.1
What This Means (2025 FDD)
According to the 2025 FDD, Item 5 outlines the initial fees, including the initial franchise fee and an Initial Marketing Expense of $25,000. Item 13 details the trademarks licensed to the franchisee for operating the 1-800-GOT-JUNK? business. The FDD states that franchisees are granted the right to operate under the "1-800-GOT-JUNK?" name and may use other trademarks as designated by the company.
The initial franchise fee and the right to use 1-800-GOT-JUNK?'s trademarks are connected. The franchise fee grants the franchisee the right to operate under the 1-800-GOT-JUNK? brand and utilize its established trademarks. Item 13 specifies that Rubbish Boys has licensed to 1-800-GOT-JUNK? the right to offer and sell licenses, and to sublicense to the franchisee the right to use the System, including the principal trademarks, for the operation of the Franchised Business. This license agreement extends until 2057 but could terminate earlier if 1-800-GOT-JUNK? fails to pay royalties, becomes bankrupt, or breaches the agreement.
A prospective franchisee should understand that the initial franchise fee provides access to 1-800-GOT-JUNK?'s established brand and trademarks, which are critical for operating the business. However, this right is contingent on 1-800-GOT-JUNK? maintaining its licensing agreement with Rubbish Boys. If that agreement were to terminate, the franchisee's right to use the trademarks could be affected.
The FDD also mentions that the franchisee cannot sublicense the trademarks to others. This restriction ensures that the 1-800-GOT-JUNK? brand remains exclusive and under the control of the franchisor. The initial marketing expense of $25,000 is separate from the franchise fee and is used to promote the franchisee's business in their local area during the first six months of operation.