1-800-GOT-JUNK? Franchise in 2024: Costs, Fee & FDD

Looking to invest in a proven franchise? Discover why 1-800-GOT-JUNK? stands above the rest in the lucrative junk removal industry with strong brand recognition, high revenue potential, and comprehensive support. Explore key insights and investment details in our latest analysis!

Last updated 2 Oct 2024 Time 12 min read
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1-800-GOT-JUNK? is a standout in the junk removal industry, founded in 1989 by Brian Scudamore in Vancouver, Canada. What started as a small operation with a single truck has grown into a widely recognized brand that redefined junk removal. Scudamore’s vision was to create a professional, customer-focused service that turned an otherwise unglamorous job into a thriving business. Today, 1-800-GOT-JUNK? is a leader in the industry, known for its catchy name, clean trucks, and friendly, uniformed team members who prioritize exceptional customer service.

At its core, 1-800-GOT-JUNK? specializes in full-service junk removal for both residential and commercial clients. The company offers a hassle-free solution to clear out unwanted items, whether it’s an old sofa, a garage full of clutter, or even construction debris. The service includes everything from the lifting and loading to the disposal or donation of items. Ancillary services like recycling and eco-friendly disposal practices are also key components, catering to environmentally conscious customers. The primary customer base consists of homeowners, renters, and businesses looking for quick and efficient ways to declutter.

The franchise’s scale and scope are impressive. 1-800-GOT-JUNK? operates in more than 150 locations across the U.S., Canada, and Australia, making it a truly international brand. The company serves hundreds of thousands of customers each year, with an average of over 100 pickups per franchise daily. This extensive reach ensures a broad market appeal, making it a lucrative opportunity for potential franchisees.

Franchisees of 1-800-GOT-JUNK? benefit from a robust support system, which includes comprehensive training programs that cover everything from operations and customer service to marketing and financial management. The company also offers ongoing support through field-based business consultants and a network of peers. Additional highlights include a strong brand reputation, national marketing campaigns, and a proven business model that has led to the success of many franchisees worldwide.

1-800-GOT-JUNK? Franchise Insights

  1. Investment Range: The investment range to start a 1-800-GOT-JUNK? franchise is between $169K and $258K, making it a significant but accessible investment for aspiring entrepreneurs.
  2. Global Presence: The franchise has expanded to 149 locations in the U.S., with 133 franchised units and 16 corporate units, demonstrating its scalability and widespread market reach.
  3. Growth Stability: The franchise’s growth rate over the past three years is 4%, with a 0% failure rate, reflecting stability in its franchise system despite industry challenges.

1-800-GOT-JUNK? Franchise Key indicators

Growth YOY (%)

0%

vs industry 4%


Total U.S. Franchised Units

133


Failure Rate

0%

vs industry 5%


Sales-to-Investment ratio

12.5:1

How much does it cost to open a 1-800-GOT-JUNK? franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a 1-800-GOT-JUNK? franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a 1-800-GOT-JUNK? franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a 1-800-GOT-JUNK? below from the most recent Item 7 below:

Type of Expenditure  Minimum Investment  Maximum Investment 
Initial Franchise Fee  $65,000  $97,500 
Initial Marketing Expense  $25,000  $25,000 
Computer Hardware and Software  $1,500  $4,000 
Miscellaneous Opening Costs  $5,000  $15,000 
Equipment (Vehicle Lease with Dump Body)  $0  $10,000 
Real Estate/Rent  $1,200  $5,000 
Local Marketing – 3 months  $3,600  $5,000 
Insurance  $7,000  $17,500 
Training Expenses  $1,500  $4,150 
Additional Funds – 6 months  $59,000  $75,000 
Total Estimated Initial Investment  $168,800  $258,150 

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

To open a 1-800-GOT-JUNK? franchise, the required capital involves both the initial investment costs and a net worth requirement set by 1-800-GOT-JUNK?. Let’s take a closer look below:

  • Initial Investment As shown above, the total estimated initial investment ranges from $169K and $258K. This includes all the startup costs such as the franchise fee, real estate, marketing expenses, equipment, and additional funds for initial operating expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
  • Liquid Assets Typically, franchises like 1-800-GOT-JUNK? require potential franchisees to have a minimum of $229,365 in liquid assets. This ensures you have enough cash on hand to cover the initial investment and operating expenses as your business gets off the ground.
  • Net Worth While specific net worth requirements for 1-800-GOT-JUNK? aren’t listed in the data, it’s common in the industry for franchises of this scale to require a minimum net worth of around $500,000 to $1 million. This is an estimate based on industry standards, as net worth requirements can vary depending on the franchisor’s criteria and the market you’re entering.

How much does a 1-800-GOT-JUNK? franchise owner make?

Calculating the salary of a 1-800-GOT-JUNK? franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a 1-800-GOT-JUNK? franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

1-800-GOT-JUNK? Revenue & Gross Sales

Based on most recent analysis, 1-800-GOT-JUNK? franchises have a median gross sales of $2,672,372.This is a very high level of gross sales relative to the initial investment amount. Potential franchisees need to focus on the right area and initial operations in order to achieve these high revenue results.

Which key factors impact the average revenue performance of 1-800-GOT-JUNK? franchisees?

The performance of U.S. franchisee median gross sales for 1-800-GOT-JUNK? likely reflects a combination of factors. One major factor could be the ongoing demand for junk removal services as more people continue to declutter and renovate their homes, especially after the pandemic. Additionally, the franchise’s strong brand recognition and effective marketing strategies may have driven customer acquisition and retention. However, economic fluctuations, such as inflation and rising costs of fuel and labor, could have impacted profit margins, leading to varying sales performance across different regions. Moreover, the relatively stable real estate market might have supported consistent business, as homeowners often seek junk removal services during moves or property sales.

1-800-GOT-JUNK? Franchise Operational Costs

When opening a 1-800-GOT-JUNK? franchise, several key ongoing operational costs should be top of mind:

  • Labor Costs Given that junk removal is a labor-intensive business, wages for your team will be a significant ongoing expense. This includes not just salaries, but also benefits, insurance, and any overtime pay.
  • Vehicle Maintenance and Fuel Since the business relies on a fleet of trucks, the costs associated with maintaining these vehicles—such as regular servicing, repairs, and fuel—will be substantial. The cost of fuel, in particular, can fluctuate and impact your overall expenses.
  • Disposal Fees The cost of disposing of the junk you collect, including fees for landfill usage, recycling, or special disposal requirements for hazardous materials, is another ongoing operational cost.
  • Marketing and Local Advertising While the franchise provides some marketing support, you’ll likely need to invest in additional local advertising and community outreach to attract customers in your specific market.
  • Technology and Software Operational management software, customer relationship management (CRM) systems, and other technology tools necessary to run the business efficiently also represent ongoing costs.

These costs are critical to consider as they will directly impact your profitability and the financial health of your franchise.

1-800-GOT-JUNK? Franchise Fees

When considering the ongoing fees associated with opening a 1-800-GOT-JUNK? franchise, it’s crucial to understand the financial commitments beyond the initial investment. These fees play a significant role in the ongoing support and success of your franchise, ensuring you benefit from the brand’s established reputation and marketing power.

  • Royalty Fees You will be required to pay an 8% royalty fee on your gross sales. This fee grants you continued access to the brand, its systems, and ongoing support.
  • Marketing Fees:An additional 8% of your gross sales will go toward sales, marketing, and technology fee. These funds help drive brand awareness and customer acquisition in your area, leveraging the power of 1-800-GOT-JUNK?’s well-known brand.
  • Additional Fees There are additional fees for training programs, local marketing, and other items provided by 1-800-GOT-JUNK? that may be applied

Understanding these fees is key to budgeting and forecasting the financial performance of your franchise. By accounting for these ongoing expenses, you can ensure your business remains profitable and well-supported throughout its operation.

1-800-GOT-JUNK? Franchise Earnings

The earnings of a 1-800-GOT-JUNK? franchise owner can vary significantly based on a variety of factors including location, sales volume, operational efficiency, and cost management.

With the most recent data, we can see that 1-800-GOT-JUNK? had a gross sales of $2,672,372, resulting in estimated earnings of $561,198. These earnings are quite substantial, highlighting the potential for a highly profitable operation, especially for actively involved owners.

Semi-absentee owners can still do well financially, though they need to focus on growing the business before hiring management support.

How to Open a 1-800-GOT-JUNK? Franchise

Becoming a 1-800-GOT-JUNK? franchisee is a rigorous process that involves financial scrutiny, extensive training, and thorough evaluation. However, it offers the potential for a lucrative business opportunity backed by a globally recognized brand and comprehensive support system.

The full process for how to open a 1-800-GOT-JUNK? franchise is outlined below:

  1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
  2. Initial Qualification After your inquiry, you’ll complete a preliminary qualification process where the franchisor assesses your financial capability, business experience, and overall fit for the brand. You may also have an initial conversation with a franchise representative to discuss your goals and expectations.
  3. Discovery Day You’ll be invited to a Discovery Day at the company’s headquarters, where you’ll meet the executive team, learn more about the business model, and get a deeper understanding of the support systems in place. This is also an opportunity to ask questions and ensure the franchise aligns with your business objectives.
  4. Final Approval After Discovery Day, if both parties are satisfied, you’ll submit a formal application for final approval. This includes a thorough review of your financial situation and background. If approved, you’ll sign the franchise agreement, officially making you a 1-800-GOT-JUNK? franchisee.
  5. Training Once the agreement is signed, you’ll participate in an extensive training program. This training covers all aspects of running your franchise, including operations, customer service, marketing, and financial management.
  6. Site Selection and Setup Depending on your location, you’ll work with the franchisor to select an appropriate territory and secure any necessary equipment, vehicles, and facilities. The franchisor will guide you through the setup process, including truck customization and local marketing strategies.
  7. Grand Opening and Operations After completing training and setting up your business, you’ll plan your grand opening. The franchisor typically provides support during this phase, ensuring you have a successful launch. Once your business is operational, you’ll continue to receive ongoing support from the franchisor, including field visits and additional training as needed.

Pros & Cons

Pros

Strong Brand Recognition: 1-800-GOT-JUNK? is a well-established brand with significant name recognition in the junk removal industry, which can help you attract customers from the start.

Proven Business Model: The franchise has a long history of success, offering a tried-and-tested business model that has been refined over decades.

Growing Demand: The junk removal industry continues to grow, driven by trends like decluttering, real estate transactions, and eco-conscious disposal practices. This positions the franchise well in a market with increasing demand.

High Revenue Potential: With median gross sales exceeding $2.6 million, the franchise offers substantial revenue potential, especially for owner-operators who are actively involved in the business.

Cons

High Initial Investment: The initial investment range of $169K to $258K, along with ongoing fees, may be a barrier for some potential franchisees, especially those with limited capital.

Intensive Labor Requirements: The business is labor-intensive, requiring a team to handle the physical demands of junk removal. Managing labor costs and staff retention can be challenging.

Competition: Despite the strong brand, the franchise operates in a competitive market with other national and local junk removal services, which can impact market share and pricing power.

Resale Rates: A relatively high percentage of franchises have been listed for resale in recent years, which could indicate turnover within the franchise network, potentially affecting long-term stability.

 

FAQs

Who owns 1-800-GOT-JUNK?

  • 1-800-GOT-JUNK? is owned by O2E Brands, a parent company founded by Brian Scudamore, who also founded the junk removal company in 1989. O2E Brands stands for "Ordinary to Exceptional," and it owns other service-oriented franchises like WOW 1 DAY PAINTING and Shack Shine. Scudamore remains actively involved in the company's leadership and continues to drive its growth and innovation.
  • Yes, 1-800-GOT-JUNK? is a franchise. It began franchising in 1999 and has since grown to include over 150 locations across the United States, Canada, and Australia. The franchise model allows entrepreneurs to leverage the brand’s established reputation, proven business systems, and comprehensive support to build their own successful junk removal businesses.
  • 1-800-GOT-JUNK? 's biggest competitor is College Hunks Hauling Junk, another prominent player in the junk removal industry. Alternatives to 1-800-GOT-JUNK? include franchises like Junk King and Got Junk USA, both of which offer similar services. These alternatives provide prospective franchisees with options to compare different business models, brand recognition, and support systems within the junk removal industry.
  • As of 2024, 1-800-GOT-JUNK? has 149 locations in the U.S., of which 133 are franchised locations and 16 are affiliate locations.
  • The most recent calculated 3-year failure rate of 1-800-GOT-JUNK? was 0% in the U.S.
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