What were the licensing fees for 1-800-GOT-JUNK? for the period ended May 31, 2025?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
May 31 May 31
Sales Centre $ 13,515,783 $ 10,244,752 Licensing fees 10,400,913 8,365,599 Management and administration fees 6,039,630 5,687,420 Ad Fund 4,504,472 3,440,748 Interest on outstanding balance due to RBDS 303,956 176,377
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, licensing fees for the period ended May 31, 2025, were $10,400,913. For comparison, the licensing fees for the same period in 2024 were $8,365,599. These fees were charged to 1-800-GOT-JUNK? by RBDS Rubbish Boys Disposal Service Inc., a related party.
Under a license agreement between 1-800-GOT-JUNK? and RBDS, 1-800-GOT-JUNK? has the exclusive U.S. license to grant sublicenses to third parties via franchise agreements and to use certain RBDS intellectual property. The fees charged are determined by a transfer pricing agreement that aims to approximate fees that would be charged by third-party service providers or licensors in similar situations.
Prospective franchisees should understand that these licensing fees are a significant expense for 1-800-GOT-JUNK? and are ultimately related to the rights and intellectual property that franchisees utilize. While the fees are not directly paid by franchisees, they affect the overall financial structure of the 1-800-GOT-JUNK? business. Franchisees may want to inquire about how these fees are negotiated and managed, as they can impact the financial health and stability of the franchise system.