Detailed Estimates of College Hunks Hauling Junk Franchise Costs Based on Item 7 (Estimated Initial Investment) of College Hunks Hauling Junk’s 2013 Franchise Disclosure Document
1. Initial Franchise Fee: $40,000 to $50,000
- If you are purchasing a standard Zone (300,000 to 400,000 in population), the initial franchise fee is $40,000 to $50,000. This does not reflect the potential investment for a small market fee which is less than the standard Zone fee.
- If you are purchasing a small market franchise, the initial franchise fee will be calculated at 10 cents per person in the Zone you are purchasing and the initial franchise fee will range from $500 to $29,999.90.
- The initial franchise fee is $50,000 if you choose to offer both junk removal services and moving services in a standard Zone and you purchase both of these businesses at the same time.
- If you are purchasing a conversion franchise, you will pay the franchisor an initial franchise fee that is equal to the then-current initial franchise fee reduced by an amount equal to 10% of the total sales for the previous year for your existing business, but in no event will you pay less than $5,000.
- You will need an office space of approximately 200 to 300 square feet for the Franchised Business. The costs for your rental and security deposits will depend on, among other things, the size of the space you choose to rent and your creditworthiness.
- The franchisor does not permit that you operate the Franchised Business from your home. However, you may operate from your home while you are searching for an office but you must be operating your franchise from an office within 90 days of opening.
- If you purchase a conversion franchise and your existing office is from your home, you must operate your franchise from an office.
3. Lease, Utility, and Security Deposits: $100 to $700
4. Paint and Signage (Vehicle): $3,500 to $5,500
- Your truck will need to be painted the color that the franchisor specifies. You will also need to letter your vehicles in accordance with local ordinances, the franchisor’s guidelines, and the Operations Manual.
- The estimate represents the painting and signage costs for one truck. If you purchase both concepts (College Hunks Hauling Junk and College Hunks Moving), you will need painting and signage for at least two trucks.
- If you are a conversion franchisee, you must paint your existing trucks to the franchisor’s specifications.
5. Service Vehicle – Deposit on Lease or Finance: $8,000 to $22,000
- The estimate represents the down payment on a service vehicle. If you purchase your truck outright instead of leasing or financing it, you will pay between $45,000 and $63,000.
- The truck you must use in the College Hunks Hauling Junk concept must have the company’s custom designed dump bed. The estimated cost of the dump body is approximately $15,000 to $18,000 and for the truck is between $30,000 and $45,000.
- The estimated lease amount for the first 3 months of operation is between $2,400 and $3,000.
- If you wish to purchase a used truck for your Franchised Business, the truck must be approved by the franchisor before you may purchase it.
- If you purchase a conversion franchise, you may still be required to purchase new vehicles or truck equipment to match the company’s current specifications.
- If you purchase the College Hunks Moving concept, you will need a different style truck. If you will offer moving services, you will incur an additional $5,000 to $40,000 for a used truck, depending on the age and condition of the truck, or from $45,000 to $80,000 for a new truck.
- Any moving truck you purchase or lease must meet the company’s specifications for appearance. If you wish to purchase a used moving truck, the truck must be approved by the franchisor before you may purchase it.
- These estimates are based on the assumption that these vehicles are financed. If you purchase the vehicles for cash, your initial investment costs would be higher.
6. Equipment and Hand Tools: $2,000 to $6,000
- The required tools include hand tools, global positioning system (GPS) for navigation purposes, credit card processor, cleaning tools, and other materials. The cost of uniforms is also included in the estimate.
- If you purchase the College Hunks Moving concept, you must also purchase appliance dollies, 4-wheel dollies, piano boards, rubber bands, moving pads (72″ x 80″), and other miscellaneous inventory such as marketing inventory, wall map, packing supplies, and boxes. The franchisor estimates that the initial cost of these items will be between $2,000 and $5,000.
7. Office Equipment and Supplies: $4,000 to $6,000
- The office equipment you must purchase and maintain includes a computer, printer/fax/copier, initial marketing materials, truck supplies, and miscellaneous office supplies, and may include office furniture.
8. Business Licenses and Permits: $500 to $3,000
- The costs estimated above include an estimate for the required dump permits, in addition to other business licenses and permits you may be required by your local government to have.
- If you purchase the College Hunks Moving concept, you will have separate licenses and permit requirements.
- If you purchase a conversion franchise, you will not incur this additional expense unless you add the College Hunks Moving concept.
- Moving license requirements vary significantly state by state with some states having very rigorous and expensive licensing requirements. You are encouraged to investigate your state’s moving license requirements.
9. Professional Fees: $1,000 to $2,500
- You will need to have an attorney and an accountant and possibly other professionals.
10. Insurance Deposit: $500 to $5,000
- The figures in the chart are your monthly premiums. The low-end of the estimate assumes that you are purchasing one concept and your Franchised Business will have one truck; the high-end of the estimate assumes that you are purchasing both concepts and your Franchised Business will have two trucks and the additional insurance required to provide moving services, such as cargo insurance and employee dishonesty insurance.
- In rare cases, you will have to pay the entire annual premium in a lump sum, or you may pay your premiums quarterly or semi-annually.
11. Training Expenses: $1,500 to $5,000
- The figures in the chart are your expenses during initial training. You will have salary, training, and lodging expenses.
- For the training program, the franchisor provides instructors and instructional materials, but you will need to arrange for transportation, lodging, and food for yourself and one other trainee.
- The cost will depend on the distance you must travel and the type of accommodations you choose.
12. Grand Opening Advertising: $10,000 to $20,000
- You must conduct a grand opening advertising campaign to promote your Franchised Business within the first 60 days, and the advertising you need may include media buys and promotional items including point-of-sale items and merchandise.
- The required amount you must spend includes all Zones you purchase. This grand opening expenditure is $10,000 per service (i.e. $10,000 for moving and $10,000 for junk removal) and this will include all Zones you purchase.
13. Additional Funds (6 months): $30,000 to $80,000
- You will need capital to support ongoing expenses, such as payroll, utilities, vehicle fuel and maintenance, and local advertising if these costs are not covered by sales revenue during the start-up phase, which the company estimates to be 6 months.
- This is only an estimate and there is no guarantee that additional working capital will not be necessary during the start-up phase or after.
14. Total Estimated Initial Investment: $101,400 to $207,950
- The estimates provided above assume that you will have one Service Vehicle and own one Zone. If you choose to purchase multiple Zones, your initial investment will be significantly higher.
- The high-end of the estimated initial investment assumes that you are purchasing both College Hunks Hauling Junk and College Hunks Moving concepts.
- The franchisor relied on its principals’ and affiliates’ experience in providing junk removal since 2005 and moving services since 2011 when preparing these figures.