What were the licensing fees for 1-800-GOT-JUNK? for the period ended May 31, 2024?

According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, licensing fees for the period ended May 31, 2024, were $8,365,599. These fees were charged to 1-800-GOT-JUNK? by RBDS (Rubbish Boys Disposal Service Inc.), a related party. This is an important expense for 1-800-GOT-JUNK?, and prospective franchisees should understand how these fees impact the overall financial performance of the franchise system.

The fees are part of related party transactions, which means they occur between 1-800-GOT-JUNK? and companies under common control. The amounts charged to 1-800-GOT-JUNK? by RBDS are determined by a transfer pricing agreement. This agreement uses formulas and calculation methods designed to approximate fees that would be charged by independent third parties in similar situations. This suggests that 1-800-GOT-JUNK? aims to maintain an arm's length approach in its dealings with related entities, even though the transactions are not with completely independent companies.

For a potential franchisee, understanding the nature of these licensing fees is crucial. Since RBDS grants 1-800-GOT-JUNK? an exclusive license to sublicense in the U.S. and use certain intellectual property, these fees likely cover the cost of accessing and utilizing the brand's systems, trademarks, and operational expertise. It is also important to note that these fees are a significant expense, as shown in the consolidated statements of net income and comprehensive income. Franchisees should inquire about the specifics of the transfer pricing agreement and how these fees are calculated to ensure transparency and fairness.

It is also worth noting that the Sales Centre fees, Ad Fund fees, and Management and administration fees are also charged by RBDS to 1-800-GOT-JUNK?. A prospective franchisee should consider all of these fees when evaluating the overall financial obligations and potential profitability of a 1-800-GOT-JUNK? franchise.