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1-800-GOT-JUNK Review (2022)

Written by: Patrick Findaro
Last Updated: April 19, 2022
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This article is based on its 2021 FDD and the video above, from Vetted Biz Youtube Channel

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What is 1-800-GOT-JUNK?

 

1-800-GOT-JUNK? is a franchise for qualified candidates in the United States for the operation of retail junk removal in the Home Services industry. Brian Scudamore, the founder and CEO, developed a unique method for operating and franchising junk removal businesses (the “System”).  The System includes proprietary software, brand development, training, marketing programs and access to the exclusive service of the call center and online booking system.

Brian Scudamore founded the Rubbish Boys in 1993, which is a Canadian incorporated company. 1-800-GOT-JUNK? is a subsidiary company that offers franchise locations in the United States. Mr.  Scudamore formed 1-800-GOT-JUNK?  LLC in October 1998 and has been its Chief Executive Officer since formation.  Mr. Scudamore is also the Chief Executive Officer of O2E Brands which encompasses 1-800-GOT-JUNK? Shack Shine, and WOW 1 DAY PAINTING.

Brian Scudamore has successfully scaled this innovate junk removal services to currently 130 franchises across the United States.

Initial Franchise Fee

$160,000

This figure includes the Sub territory Initial Fee of $25,000 for the first Sub territory, plus $15,000 for each of the nine additional Sub territories. The normal size of a new franchise has 10 sub territories.

1 800 GOT JUNK? Cost

The total investment necessary to begin operation of a 1-800-GOT-JUNK? franchised business ranges from $241,800 – $289,680.

Additional Cost Breakdown:

Below is a list of the costs that factor into the range of startup costs from $241,800 – $289,680.

  • Initial Franchise Fee: $160,000
  • Initial Marketing Expense: $12,000
  • Computer Hardware and Software: $1,500 – $4,000
  • Miscellaneous Opening Costs: $5,000 – $15,000
  • Equipment (Vehicle Lease with dump body): $10,000
  • Real Estate / Rent: $1,200 – $5,000
  • Local Marketing: $3,600
  • Insurance: $800 – $5,000
  • Training Expense: $1,500 – $4,000
  • Additional Funds: $56,200 – $71,080

Ongoing Franchise Costs and Fees:

Royalty: 8% of Gross Revenues semi-monthly*

 *Minimum royalty of $1,050 – $2,800 per sub territory per calendar year depending on when the franchise was opened*

Sales Center, Marketing & Technology Fee: 8% of Gross revenue

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Local Advertising Payment

Franchisee will expend an amount that is equal to 8% of its Gross Revenue in each quarter of your fiscal year on local marketing and promotions within the Territory.

During the first-year franchisees need to spend no less than $3,600 per quarter on marketing.

 1-800-GOT-JUNK? Sales Figures:

Average Gross Sales of 1-800-GOT-JUNK? Franchises For The Twelve Months Ending December 31, 2019

US Franchisees of 1-800-GOT-JUNK? LLC Total Franchisees Average Gross Sales (US$) % of Franchisees at or above Average Median Gross Sales % of Franchisees at or above Median Highest/Lowest Gross Sales in Range
Franchisees operating for more than one day, but less than 12 months 0 $0 0/0% $0 0/0% $0
Franchisees operating for more than 12 months but less than 24 months 8 $2,025,461 4/50% $1,902,781 4/50% $4,183,498/$333,367
Franchisees operating for more than 24 months, but less than 36 months 6 $1,825,015 3/50% $1,958,019 4/50% $4,183,498/$991,083
Franchisees operating for more than 36 months, but less than 48 months 1 $1,217,332 1/100% $1,217,332 1/100% $1,217,332
Franchisees operating for more than 48 months, but less than 60 months 4 $1,646,543 2/50% $1,565,132 2/50% $2,307,585/$1,148,324
Franchisees operating for more than 60 months, but less than 72 months 1 $2,522,623 1/100% $2,522,623 1/100% $2,522,623
Franchisees operating for more than 72 months 109 $2,522,623 34/31% $1,776,811 55/50% $12,711,087/$214,559

Country United States (reported in USD)
Total # of Franchisees Reported 129
# and % Making Total Revenue Over $1,000,000 98/76%
# and % Making Total Revenue of $750,001 to $1,000,000 13/10%
# and % Making Total Revenue of $500,001 to $750,000 8/6%
# and % Making Total Revenue of $500,000 or Less 10/8%
1-800-got-junk

Key Highlights from Sales Figures:

 

Average Gross Revenue for companies after 1 year of business (8): $2,025,461

Average Gross Revenue for companies after 6 years of business (109): $2,562,510

This sales figures indicate steady revenue streams during the operation of the franchisee term agreement of 5 years and indicates a majority of franchisee’s renew their contract after it has terminated.

These numbers vary depending on location, expertise, marketing strategies, and other factors that may affect your overall revenue.

1-800-GOT-JUNK? Income Statement

Consolidated Statements of Net Income (Expressed in US dollars) — Years ended December 31, 2019 and 2018

Note 2019 2018
Revenue
Royalty fees $25,387,546 $20,686,407
Sales Centre fees $19,043,885 $—
Ad Fund fees $6,348,212 $—
Franchise fees $321,700 $408,000
Other $103,889 $59,541
Expenses
Sales Centre 6 $19,043,882 $—
Licensing fees 6 $12,725,973 $10,384,003
Management and administration fees 6 $11,256,266 $9,337,088
Ad fund 6 $6,348,212 $—
Field operatioins $1,383,470 $987,913
Interest 6 $150,117 $179,153
Accounting and legal $114,970 $153,815
State franchise tax $42,761 $42,763
Bad debt $23,655 $47,739
Bank charges $15,199 $12,565
$51,104,505 $21,145,039
Income before income taxes $100,724 $8,909
Income tax expense (Recovery) 5
Current $51,095 $(160,383)
Deferred 4 $(17,116) $(2,551)
$33,979 $(162,934)
Net income $66,745 $171,843

Income Statement Key Insights:

The company in 2019 posted a positive net income, which indicates the company is liquid and has a higher probability of paying off its debts, paying dividends to shareholders, and paying its operating expenses.

Competition:

1-800-GOT-JUNK? does not grant exclusive territory as you may face competition from other franchisees, from outlets that they own, or from other local or national junk removal services such as College Hunks Hauling Junk.

Conclusion:

1-800-GOT-JUNK? is a well-established that has been around since 1998 and has shown strong revenue figures from their franchisees. Brian Scudamore has run three successful franchise companies and 1-800-GOT-JUNK? is their premier national business!

While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in the home services industry.

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