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FDD Talk 2015: The Junk King Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on August 12, 2015

in FDD Talk 2017: Service Franchises, Franchise Earnings, Hauling Franchise

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Junk King

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Junk King franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Junk King franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Junk King’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • actual 2005 to 2014 annual gross sales for an affiliate-owned Junk King business operating in San Mateo county, California since 2005
  • actual 2011 to 2014 annual pre-tax net income for an affiliate-owned Junk King business operating in San Mateo county, California since 2005
  • projected monthly sales, payroll costs, fuel costs, other variable costs, recycling income, and gross profit per truck (based on actual system wide data) that a franchisee could expect to obtain if the franchisee has one junk removal truck and the truck performs three and a half jobs per day, operating eight hours per day, for six days per week

Section I – Background Information

Junk King Provides Green Way to Downsize

With an ever-increasing focus on green practices, environmentally-responsible methods of disposing of unwanted items continue to grow in popularity. Junk King helps individuals and businesses get rid of their cast-offs while knowing that an effort will be made to keep their junk out of landfills.

Junk King has larger trucks and puts franchisees in larger territories (the company calls them “king-sized” territories) than similar service providers. The trucks, the company says, are 20 percent larger than those of its nearest competitor, which means jobs can be more plentiful and take less time.

The privately-held junk removal and recycling company has more than 60 franchise territories in the U.S. and Canada.

Junk King has four revenue streams:

  • Consumer/residential. Business-to-consumer services to private individuals.
  • Commercial/industrial. Business-to-business services to companies such as real-estate agents, property managers, builders, contractors, etc.
  • Government contracts. Serving local, state and federal governments as well as local school districts, colleges and universities.
  • Recycling. Revenue comes from recycling vendors who remove and pay for recyclable content.

Not only does Junk King recycle as much as 60 percent of the debris it hauls, its corporate office has furniture and technology items salvaged and repurposed from businesses it has served, illustrating the value of reuse and the adage that one person’s trash can become another person’s treasure.

Environmentally-friendly practices are a priority at Junk King. The company sorts each job in its recycling warehouses, looking for recyclable materials and items that can be donated, repurposed or reused. The trucks run on biodiesel.

Childhood Friends Filled a Need

Junk King was founded in 2005 in a garage in San Carlos, California, by Mike Andreacchi and Brian Reardon, who had been friends since childhood. Andreacchi had previously worked for 1-800-GOT-JUNK?; he and Reardon subsequently started their own junk hauling business.

Franchising began in 2010. In 2012, the company began doing business in Canada under the brand of Junk Works.

Residential and Business Customers

The price of the job is based on how much junk is removed. The company accepts anything except hazardous wastes such as asbestos and biological waste. Junk King will haul away refrigerators, mattresses, televisions and even old hot tubs for private individuals.

Builders, as well as other companies that do renovation and remodeling work, can contract with Junk King for construction business junk removal services to have debris removed from the worksite. Other business clients include property management agencies, storage facilities, and real estate-related businesses such as agents and lenders.

Junk King is fully insured, so businesses are protected during service. Businesses can also sign up for the Junk King affiliate program through which they can earn money by referring sales to the company.

Section II – Estimated Costs

  • Please click here for detailed estimates of Junk King franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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