Does 1-800-GOT-JUNK? audit the financial data submitted by its franchisees?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
The following financial performance information is presented in three parts, and contains historical information on the Gross Revenue results of specified 1-800-GOT-JUNK? franchisees (including our Flywheel affiliates that own and operate outlets under franchise agreements). The information is compiled from data supplied by 1-800-GOT-JUNK? franchisees, which we have not audited. Unless otherwise specified, “Gross Revenue” means the amount of actual gross sales to consumers for products and services less taxes collected and credits or refunds given in accordance with our refund policy. For some tables in this Item 19, we include franchised businesses in Canada and Australia because these Canadian and Australian franchisees operate businesses that are substantially similar to those in the U.S., with substantially similar performance results and no material differences between the data of the three groups other than the currency.
Source: Item 19 — Financial Performance Representations (FDD pages 42–48)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the financial performance information presented is compiled from data supplied by 1-800-GOT-JUNK? franchisees, which the franchisor has not audited. This information includes historical data on Gross Revenue results from franchisees, including Flywheel affiliates that own and operate outlets under franchise agreements. Gross Revenue is defined as actual gross sales to consumers for products and services, less taxes collected, and credits or refunds given according to their refund policy.
Since 1-800-GOT-JUNK? does not audit the data, prospective franchisees should be aware that the financial performance representations are based on unverified information provided by existing franchisees. While the FDD states that substantiation of the data used in preparing this financial performance information will be made available upon reasonable request, the lack of an audit means the franchisor has not independently verified the accuracy of the figures reported.
This is a notable point for potential franchisees as the reliability of the financial performance data depends on the accuracy of the franchisees' submissions. It is advisable for prospective franchisees to conduct their own due diligence, including consulting with current and former franchisees, and possibly engaging a financial professional to review the data and assess the reasonableness of the financial performance representations. They should also inquire about the process 1-800-GOT-JUNK? uses to collect and compile the data, and what measures, if any, are taken to ensure its accuracy.
In the absence of audited financial data, the onus is on the prospective franchisee to thoroughly investigate the potential financial performance of a 1-800-GOT-JUNK? franchise. By doing so, they can make a more informed decision about whether to invest in the franchise opportunity.