According to the 1-800-GOT-JUNK? Franchise Agreement, what constitutes 'Gross Revenue'?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Revenue is defined in the Franchise Agreement to mean “the entire amount of the sale price, whether for cash, credit, payment in kind (valued at fair market value) or otherwise, of all sales from or in connection with the operation of the Franchised Business (including, but not limited to, the sale of any Services or products from or in connection with the operation of the Franchised Business). No deductions shall be allowed from Gross Revenue except for the following: (a) sums collected by or on behalf of Franchisee for any duly constituted governmental authority on account of sales taxes, good and services taxes or other taxes imposed directly upon the sale of goods or services (or both) from the Franchised Business, provided that the amount of any such tax has in fact been paid or otherwise accounted for by Franchisee to the appropriate governmental authority; (b) the amount of any refund or credit given in respect of any services or products provided to a customer of the Franchised Business for which a refund of the whole or part of the purchase price is made or for which a credit is given as long as such refund or credit is given in 4899-8658-3815.1
accordance with Franchisor’s policies and procedures in relation to refunds set out in the Operations Manual; (c) amounts for uncollected or uncollectable credit accounts as long as such credit accounts are deemed uncollected or uncollectable in accordance with Franchisor’s policies and procedures in relation to uncollected or uncollectable credit accounts set out in the Operations Manual; and (d) amounts uncollected for a customer of the Franchised Business due to discount coupons that were approved for use in advance by Franchisor. Where the operation of the Franchised Business has been interrupted, all sales assumed to have been lost by Franchisee by virtue of such interruption, being the basis upon which an insurer has paid business interruption insurance, shall also be included in the calculation of Gross Revenue.”
Source: Item 6 — Other Fees (FDD pages 11–17)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, Gross Revenue is defined as the total income from the operation of the franchised business. This includes all sales, whether paid in cash, credit, or other forms of payment at fair market value, for any services or products connected to the 1-800-GOT-JUNK? business.
However, 1-800-GOT-JUNK? does allow for some deductions from Gross Revenue. These deductions include sales taxes or goods and services taxes collected for a governmental authority, refunds or credits given to customers according to 1-800-GOT-JUNK?'s policies, uncollected credit accounts deemed uncollectible per 1-800-GOT-JUNK?'s procedures, and amounts uncollected due to franchisor-approved discount coupons. Business interruption insurance payments are also included in Gross Revenue calculations.
Understanding what constitutes Gross Revenue is critical for a prospective 1-800-GOT-JUNK? franchisee because several fees, including the royalty fee (8% of Gross Revenue) and the Sales, Marketing and Technology Fee (8% of Gross Revenue), are calculated as a percentage of this amount. Therefore, accurately tracking and reporting Gross Revenue is essential for compliance with the Franchise Agreement and for managing the financial performance of the franchise.