What was the amount of sales center fees for 1-800-GOT-JUNK? for the period ended May 31, 2025?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
May 31 May 31
Sales Centre $ 13,515,783 $ 10,244,752 Licensing fees 10,400,913 8,365,599 Management and administration fees 6,039,630 5,687,420 Ad Fund 4,504,472 3,440,748 Interest on outstanding balance due to RBDS 303,956 176,377
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the company's revenue from sales center fees for the period ended May 31, 2025, was $13,515,783. In comparison, for the same period in 2024, the sales center fees amounted to $10,244,752. This indicates an increase in sales center fees revenue from 2024 to 2025.
For a prospective 1-800-GOT-JUNK? franchisee, the sales center plays a crucial role in scheduling sales opportunities. Franchisees are required to pay 7% of their sales to the Sales Centre, which covers the costs associated with maintaining and developing the Sales Centre and its related software. The fees are recorded as revenue when earned and receivable from franchisees, assuming collection is reasonably assured.
The financial statement also indicates that 1-800-GOT-JUNK? charges royalty fees, ad fund fees, and sales center fees for services provided based on franchise agreements with related parties, such as various Flywheel Accelerator franchises and 604816 LLC franchises. For the period ended May 31, 2025, the fees charged to Various 604816 LLC franchises amounted to $1,417,156.
It's important to note that the amounts charged to 1-800-GOT-JUNK? by RBDS (Rubbish Boys Disposal Service Inc.) are determined by a transfer pricing agreement. This agreement uses formulas and calculation methodologies that management believes approximate fees that third-party service providers or licensors would charge in similar situations. This suggests that the sales center fees are determined based on market rates and are intended to cover the costs of the services provided.