How are the payments from suppliers to 1-800-GOT-JUNK? determined?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 21–23)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the amount of payments from suppliers is determined at the discretion of the suppliers. These payments are made in sponsorship of 1-800-GOT-JUNK?'s annual conference. In the fiscal year ended December 31, 2024, certain suppliers made payments to 1-800-GOT-JUNK? in the amount of $130,692 for such sponsorships.
This means that 1-800-GOT-JUNK? franchisees do not directly determine the payments made by suppliers. Instead, suppliers decide how much they are willing to contribute to sponsor the annual conference. This revenue stream is separate from the fees franchisees pay to 1-800-GOT-JUNK? for required purchases and leases. For example, in the fiscal year ended December 31, 2024, Rubbish Boys, the parent company of 1-800-GOT-JUNK?, received approximately $30,576,356 from franchisees for required purchases and leases.
For a prospective franchisee, this indicates that supplier payments are not a guaranteed or predictable source of income. The amount can vary depending on the suppliers' willingness to sponsor the annual conference. While $130,692 was received in the fiscal year 2024, this amount could fluctuate in future years. Franchisees should not rely on these payments when projecting their potential earnings.
It's common in franchising for franchisors to receive benefits from suppliers, whether through rebates, discounts, or sponsorships. However, the specifics of these arrangements can vary widely. Some franchisors may share a portion of these benefits with their franchisees, while others may retain them entirely. In the case of 1-800-GOT-JUNK?, the FDD does not specify how these sponsorship funds are used, but it is implied that they benefit the overall system rather than individual franchisees directly.