What is the interest rate charged by 1-800-GOT-JUNK? on late installment payments?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Late payments will incur interest from and after their respective due dates until paid in full at the rate of 24% per annum or such other rate as we may specify in writing from time to time or the maximum rate permitted by law if lower. (See Item 5 for additional details regarding the initial franchise fee, and Item 10 for additional details regarding financing of subterritory initial fees.)
ITEM 8. Restrictions on Sources of Products and Services
You must purchase or lease certain items for your Franchised Business from us or our approved supplier(s) or under our specifications. All orders for Services and customer inquiries must be placed and processed using our designated Sales Center, and our designated customer relationship management system (the “CRM System”). We are the only approved supplier of the Sales Center and CRM System.
Source: Item 10 — Financing (FDD pages 24–33)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the company may allow the initial franchise fee for some subterritories to be paid in monthly installments without interest, provided the payments are made on time. The specifics of these installment plans will be detailed in Schedule B of the Franchise Agreement. Franchisees have the option to prepay any outstanding amounts without incurring penalties.
However, if a franchisee fails to make timely payments, 1-800-GOT-JUNK? will charge interest on the overdue amount. This interest accrues from the date the payment was originally due until the payment is made in full. The interest rate applied to these late payments is 24% per annum, but 1-800-GOT-JUNK? retains the right to specify a different rate in writing. In any case, the interest rate will not exceed the maximum rate permitted by law, if that rate is lower than 24%.
All owners of an entity franchisee must personally guarantee the payment of initial franchise fees made through installment arrangements. This means that the individuals behind the franchise are personally liable for these payments. If a franchisee materially defaults on these installment payments, 1-800-GOT-JUNK? has the option to revise the territory by removing subterritories for which payments are in default or to terminate the Franchise Agreement altogether. Defaulting on payments can also lead to acceleration of the total amount due and responsibility for collection costs. However, franchisees are not required to waive any legal defenses and can assert their rights.