How does the franchisor's assistance with opening a 1-800-GOT-JUNK? franchise in Item 11 relate to the initial franchise fee in Item 5?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
If a current 1-800-GOT-JUNK? franchisee refers a prospective franchisee to either WOW 1 DAY PAINTING LLC or Shack Shine Home Services LLC and that referral results in the launch of either a WOW 1 DAY PAINTING or Shack Shine franchise, the referring 1-800-GOT-JUNK? franchisee may receive a referral bonus of up to $5,000, in addition to having their annual conference fee paid. The referred franchisee may also receive a discount on their initial franchise fees. Additional terms and conditions of the referral program are in our Operations Manual. This referral program may change or cease at any time in our sole discretion. This is a referral program only. The existing franchisee does not represent us and is not authorized to make any sales or representations on our behalf.
You will also pay an Initial Marketing Expense of $25,000 when you sign the Franchise Agreement. We will use this money to market and promote your Franchised Business prior to and during the first six months of operation. The timing, type and amount of marketing made with the Initial Marketing Expenses are at our sole discretion, but the monies will be spent in your local area (as we define it). The Initial Marketing Expense is non-refundable, unless we do not approve your application.
Unless otherwise disclosed above in this Item 5, fees are uniformly imposed and collected. 4899-8658-3815.1
ITEM 6. Other Fees
Name of Fee Amount Due Date Remarks Royalty 8% of Gross Revenue. See Note 1. Semi-monthly within three business days of the 15th day and the last day of each month Paid by electronic transfer. Minimum Royalty Depending upon your year of operation, the Minimum Royalty will range from $1,200, pro-rated as necessary to account for operations for a partial calendar year in the first year of operation, to $4,000 for each Subterritory per calendar year. The amount payable is the amount the Minimum Royalty exceeds the amount of Royalties actually paid by you in any year of operations in the specific Subterritory being measured. See Note 2. On or before March 31st each year This is payable only if the Royalties actually paid by you in a year of operations for each Subterritory are less than the total Minimum Royalty. The Minimum Royalty is evaluated for each Subterritory independent of the Royalties paid with respect to other Subterritories. The Minimum Royalty will increase no less than 10% if the Franchise Agreement is renewed. Sales, Marketing and Technology Fee 8% of Gross Revenue. Same as Royalty We currently use and expend these amounts to cover costs associated with the Sales Center and CRM System and related current or new technology and systems; advertising and promotion and related activities, public relations, website and social media brand account message management; loyalty programs; gift card programs; marketing, recruiting and managing National Account Customers and local commercial services; and administrative costs related to these expenditures 4899-8658-3815.1
Name of Fee Amount Due Date Remarks Branding Cooperative Up to 5% of Gross Revenue in aggregate As determined by us Only imposed if we authorize franchisees in a particular area to establish a branding cooperative and 65% of the involved franchisees (calculated on a gross revenue basis) subject to the branding cooperative consent to paying fees. See Section 10.5 of the Franchise Agreement. This is paid as directed by the Franchisor. These amounts may be credited towards Local Marketing obligations. Any franchisor-owned outlets in an area subject to a branding cooperative will pay into and vote in the same manner as franchised outlets. You will not be required to contribute more than 5% of your Gross Revenue in the aggregate for all branding cooperatives to which you belong. Optional Local Marketing Services and Assistance To be agreed upon by you and us As agreed between you and us We may charge a fee if we provide local marketing services or assistance to you. You and we must agree upon the amount of the fee in writing before we provide such local marketing services or assistance to you. Additional Training and Retraining Payment for additional training or retraining at our then-current training fee (currently up to $100 per person per day), plus our related out-of-pocket costs including all transportation and lodging expenses incurred by our personnel.
What This Means (2025 FDD)
According to the 2025 FDD, Item 11 outlines the assistance 1-800-GOT-JUNK? provides to franchisees before opening their business, and it references Item 5 regarding fees. Specifically, before a franchisee opens, 1-800-GOT-JUNK? will designate a protected territory. Item 11 also references compliance with standards and policies/operating manual, trademarks and proprietary information, and territorial development and sales quotas.
Item 5 details the initial fees required to be paid to 1-800-GOT-JUNK?. It states that the franchisee will pay an Initial Marketing Expense of $25,000 when signing the Franchise Agreement, which 1-800-GOT-JUNK? will use to market and promote the franchise during its first six months of operation. This Initial Marketing Expense is non-refundable unless the application is not approved. Item 5 also mentions that a referring 1-800-GOT-JUNK? franchisee may receive a referral bonus of up to $5,000 if they refer a prospective franchisee to WOW 1 DAY PAINTING LLC or Shack Shine Home Services LLC, and that referral results in the launch of either a WOW 1 DAY PAINTING or Shack Shine franchise. The referred franchisee may also receive a discount on their initial franchise fees.
Item 10 of the 1-800-GOT-JUNK? 2025 FDD indicates that the franchisor may allow the initial franchise fee for some subterritories to be paid in equal monthly installments without interest if payments are timely made. These arrangements will be described in Schedule B of the Franchise Agreement, and outstanding amounts may be prepaid without penalty. Late payments will incur interest at a rate of 24% per annum or the maximum rate permitted by law. All owners of an entity franchisee must personally guarantee payment of initial franchise fees made through installment arrangements. 1-800-GOT-JUNK? may allow franchisees to operate in subterritories for which they are paying the initial fee in installments, as long as payments are timely made, but reserves the right to not allow operation until the initial fees are paid in full.
Item 7 notes that 1-800-GOT-JUNK? will only refund the initial franchise fee and Initial Marketing Expense (without interest) if they do not approve the application. Otherwise, all fees payable are nonrefundable. However, 1-800-GOT-JUNK? may permit up to half of the initial franchise fee for multiple subterritories to be paid in equal monthly installments for up to 24 months, with no down payment (except the portion of the initial franchise fee not financed), and without interest if payments are made timely. For example, if a franchisee purchases 8 subterritories and finances the initial franchise fee for 4 subterritories for 24 months, the monthly installments would be $1,354.17 [4 x $8,125 = $32,500 รท 24 = $1,354.17].