How does the initial franchise fee for 1-800-GOT-JUNK? in Item 5 compare to the restrictions on sources of products and services in Item 8?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
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
Financial stability; and
The negotiation of a mutually satisfactory license to protect our intellectual property.
We will advise you within a reasonable time (no more than 30 days) whether the proposed items and supplier(s) meet our specifications, and our approval will not be unreasonably withheld. You will be notified in writing of our approval or disapproval and of revocation of approved suppliers. Suppliers must maintain our standards in accordance with written specifications and any modifications. Failure to correct a deviation from the System’s specifications will result in the termination of status as an approved supplier. If our evaluation of your proposed supplier would require us to incur any non- trivial costs (such as purchase of sample products), we will ask you to pay such costs.
In our fiscal year ended December 31, 2024, we received no revenue from our franchisees for required purchases and leases. In the fiscal year ended December 31, 2024, our parent, Rubbish Boys, received revenues of approximately $30,576,356 from fees paid by our franchisees for required purchases and leases.
Occasionally franchisees are required to purchase certain items from us for use in the Franchised Business. We charge franchisees for such items at our cost and at times with a markup. We have in the past been an approved supplier for some items, but we are not currently an approved supplier of any items for use in the Franchised Business, and except for the Sales Center and CRM System neither are our affiliates. Our CEO, Brian Scudamore, owns an interest in our parent, Rubbish Boys, but otherwise, none of our officers own an interest in any of our suppliers.
We currently negotiate purchase arrangements with some suppliers for the benefit of our franchisees. We may receive rebates, promotional allowances, discounts or other payments or benefits from designated suppliers as a result of the purchases made by 1-800-GOT-JUNK? franchisees. Currently, the amount of payments are determined at the discretion of the suppliers, and are made in sponsorship of our annual conference. In our fiscal year ended December 31, 2024, certain suppliers made payments to us in the amount of $130,692 for such sponsorships.
What This Means (2025 FDD)
According to the 2025 1-800-GOT-JUNK? Franchise Disclosure Document, franchisees must pay an initial franchise fee and also adhere to restrictions on where they source products and services. Item 5 states that franchisees also pay an Initial Marketing Expense of $25,000 when signing the Franchise Agreement. This expense is used for marketing and promoting the franchise for the first six months of operation in the franchisee's local area, as defined by 1-800-GOT-JUNK?. Both the initial franchise fee and the Initial Marketing Expense are non-refundable, unless the application is not approved.
Item 8 outlines the restrictions on sources of products and services. 1-800-GOT-JUNK? may specify suppliers from whom franchisees must purchase certain items. The franchisor will advise the franchisee within 30 days whether the proposed items and suppliers meet their specifications, and approval will not be unreasonably withheld. Suppliers must maintain 1-800-GOT-JUNK?'s standards, and failure to correct deviations may result in termination of approved supplier status. If evaluating a proposed supplier incurs non-trivial costs for 1-800-GOT-JUNK?, the franchisee may be asked to cover those costs.
In the fiscal year ended December 31, 2024, 1-800-GOT-JUNK? received no revenue from franchisees for required purchases and leases. However, its parent company, Rubbish Boys, received approximately $30,576,356 from fees paid by franchisees for required purchases and leases. Franchisees are occasionally required to purchase certain items from 1-800-GOT-JUNK?, charged at cost or with a markup. While 1-800-GOT-JUNK? has been an approved supplier in the past, it is not currently an approved supplier of any items for use in the Franchised Business, except for the Sales Center and CRM System, and neither are its affiliates. The CEO of 1-800-GOT-JUNK?, Brian Scudamore, has an interest in Rubbish Boys, but otherwise, none of the officers own an interest in any of the suppliers. 1-800-GOT-JUNK? negotiates purchase arrangements with some suppliers for the benefit of franchisees and may receive payments from these suppliers, such as sponsorships for their annual conference. In the fiscal year ended December 31, 2024, certain suppliers made payments of $130,692 for such sponsorships.