When is the Minimum Royalty fee due for a 1-800-GOT-JUNK? franchise?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 6 — Other Fees (FDD pages 11–17)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the Minimum Royalty fee is due on or before March 31st each year. This payment is only required if the royalties actually paid by the franchisee in a year of operations for each subterritory are less than the total Minimum Royalty amount. The Minimum Royalty is assessed independently for each subterritory.
The Minimum Royalty varies depending on the year of operation, ranging from $1,200 in the first calendar year (pro-rated for partial years) to $4,000 in the fifth calendar year for each subterritory. If the Franchise Agreement is renewed, the Minimum Royalty will increase by no less than 10%. It's important to note that the minimum royalty must be achieved in each subterritory, regardless of the performance in other subterritories.
Prospective 1-800-GOT-JUNK? franchisees should understand that this Minimum Royalty ensures a baseline payment to the franchisor, regardless of actual revenue. Franchisees need to carefully project their potential earnings in each subterritory to ensure they can meet or exceed this minimum threshold. If actual royalties fall short, they will be required to make an additional payment by March 31st. This could impact the franchisee's profitability, especially in the early years of operation or in underperforming territories.
It is also important to note that these specified dollar amounts are subject to an inflation adjustment annually in proportion to the change in the Consumer Price Index, U.S. Average, all items, maintained by the U.S. Department of Labor (or any replacement index selected by us).