Does the FTC's Franchise Rule permit 1-800-GOT-JUNK? to provide information about potential financial performance?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.
HISTORICAL FINANCIAL PERFORMANCE INFORMATION
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.
Source: Item 19 — Financial Performance Representations (FDD pages 42–48)
What This Means (2025 FDD)
According to the 2025 FDD, the FTC's Franchise Rule does permit 1-800-GOT-JUNK? to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets. However, there are some stipulations.
The financial performance information must have a reasonable basis and be included in the disclosure document. If 1-800-GOT-JUNK? provides financial performance information that differs from what is included in Item 19 of the FDD, it can only do so under specific conditions. These conditions are that 1-800-GOT-JUNK? provides the actual records of an existing outlet the franchisee is considering buying, or supplements the information in Item 19 with details about possible performance at a specific location or under particular circumstances.
The 1-800-GOT-JUNK? FDD specifies that other than the financial performance representations included in Item 19, 1-800-GOT-JUNK? does not make any other financial performance representations, nor do they authorize employees or representatives to make such representations, either orally or in writing. The document advises prospective franchisees to report any unauthorized financial performance information or projections to the franchisor's management, the Federal Trade Commission, and the appropriate state regulatory agencies.