On what basis is the Sales, Marketing and Technology Fee calculated for a 1-800-GOT-JUNK? franchisee?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the value of a centralized call center, uniform order processing, customer relationship management software systems and uniform marketing and promotion to the goodwill and public image of the System, Franchisee shall contribute to Franchisor’s sales, marketing and technology fund (the “Sales, Marketing and Technology Fund”) an amount equal to 8% of its Gross Revenue (the “Sales, Marketing and Technology Fee”).
The Sales, Marketing and Technology Fee shall be calculated upon the same basis and paid to Franchisor at the same time as the Royalty is payable.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, franchisees must contribute to the Sales, Marketing and Technology Fund. This contribution, known as the Sales, Marketing and Technology Fee, is calculated as 8% of the franchisee's Gross Revenue.
The Sales, Marketing and Technology Fee is calculated and paid at the same time as the Royalty fee. 1-800-GOT-JUNK? uses this fund for various purposes, including covering costs related to technology, such as hardware, software, and the Sales Center. It also covers expenses related to advertising, marketing, and public relations.
The document specifies that 1-800-GOT-JUNK? has sole discretion over how the Sales, Marketing and Technology Fund is spent. While the fund is intended to benefit all franchisees by maximizing public recognition of the 1-800-GOT-JUNK? system, there's no guarantee that any specific franchisee will directly benefit from the fund's activities. Franchisees do not have the right to enforce contributions from other franchisees or direct the fund's administration.
1-800-GOT-JUNK? may spend more or less than the total contributions from franchisees in any given year and can borrow funds to cover deficits. Any surplus funds can be carried forward for use in future years or invested. An in-house statement of operations for the Sales, Marketing and Technology Fund is prepared annually and is available to franchisees upon request.