Under the 1-800-GOT-JUNK? Franchise Agreement, what is covered in Section 1?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW THEREFORE in consideration of the recitals and the covenants and agreements herein contained, the parties covenant and agree as follows:
1. DEFINITIONS
1.1 Definitions and Interpretation. In this Agreement and in every amendment hereto (unless otherwise specified in any particular amendment), the following shall apply:
(a) “Affiliate” means any entity that, directly or indirectly through one or more intermediaries, is in control of, is controlled by, or is under common control with Franchisor. For purposes of this definition, “control” of an entity means the power, directly or indirectly, either to (a) vote 50% or more of the equity interests having ordinary voting power for the election of directors (or persons performing similar functions) of such entity, or (b) direct or cause the direction of the management and policies of such entity, whether by contract or otherwise.
4908-1371-6037.2 Franchise Agreement 4/22 (b)
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, Section 1 of the Franchise Agreement pertains to definitions used throughout the agreement. It clarifies the meaning and interpretation of terms to ensure consistency and understanding between 1-800-GOT-JUNK? and the franchisee.
Specifically, Section 1.1 defines terms such as "Affiliate," which refers to any entity controlling, controlled by, or under common control with 1-800-GOT-JUNK?. Control is defined as the power to vote 50% or more of the equity interests for electing directors or to direct the management and policies of the entity. This definition is important as it clarifies the scope of related entities that may be involved in the franchise agreement.
Understanding these definitions is crucial for a prospective 1-800-GOT-JUNK? franchisee because it sets the foundation for interpreting the rights, obligations, and relationships outlined in the rest of the Franchise Agreement. Ambiguity in such definitions could lead to disputes, so clear and precise language is essential for both parties.