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FDD Talk 2016: The Junk King Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on September 22, 2016

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

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Junk King

In this FDD Talk 2016 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 2016 FDD
  • Section III – Presentation and analysis of Junk King’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2015 gross hauling revenue (lowest, second lowest, first quartile, median, third quartile, second highest, and maximum) for year 1, year 2, year 3, and year 4 Junk King franchised outlets
  • actual 2005 to 2015 annual gross sales for an affiliate-owned Junk King business operating in San Mateo county, California since 2005
  • 2015 income and costs per job (specifically, average revenue per job, gross profit margin, gas, labor, dump fees, royalty, call center expenses, overhead for a single truck operation, rent, truck, auto insurance, liability insurance, and advertising) that a franchisee can expect to obtain, based on actual system wide data

Section I – Background Information

Two longtime friends, Michael Andreacchi and Brian Reardon, had an idea in 2005: Start a junk removal service that does better than the competition in two key aspects – superior customer service and a higher percentage of recycling efforts.

They started their operation out of a garage in San Carlos, CA. Now the chain boasts more than 65 locations in more than 22 states and Canada, and is considered the fastest-growing junk removal service in North America.

Here’s how Junk King gets rid of the stuff people and businesses don’t want:

Focusing on Customer Service

Junk King offers fair up-front pricing based on the amount and type of junk to be removed, calls 15-30 minutes before the two-hour slot of the customer’s choice, and cleans up after the job is done, always treating your property with care and respect.

Customers can also schedule an appointment to get a free, no-obligation on-site quote. If you like the price, the two-man crew will do the job then and there. Customers pay when the job is done and receive a receipt by email.

Wide Range of Services

Whatever your situation, whether it’s spring cleaning, post-remodel debris removal, getting rid of appliances and e-waste (electronics), or even yard waste, Junk King will take just about anything except for hazardous waste. The company also offers dumpster rentals where you only pay for the actual space used in the dumpster (less than half, half, or full).

Beefy Trucks

Junk King trucks are 20% bigger than those of its nearest competitors, which creates a competitive advantage. Bigger trucks means more jobs per day, faster response times, happier customers, more money in tips and bonuses for employees, and more savings on fuel and dumping costs.

A Greener Junk Removal Service

One of Junk King’s unique value propositions is its intense focus on diverting as much junk away from landfills and into recycling operations as possible. Junk King also knows where lots of your junk can be donated so that your trash can become someone else’s treasure.

Junk King pioneered this recycling-based approach to junk removal. They take your junk to their recycling warehouses and sort it into metals, e-waste, paper, household goods, textiles, furniture, and appliances, figuring out what can been re-used and what can be recycled. As much as 60% of the junk that Junk King hauls away ends up being re-used and recycled.

The recycling part of the operation becomes its own revenue stream for the franchisee.

In addition, many of its trucks run on biodiesel fuel made from non-petroleum renewable resources.

A White-Collar Approach to a Blue-Collar Business

Junk King’s professional junk removal service features a national call center, a proprietary Junk Netware software program, a state-of-the-art review and referral platform that measures 10 customer service metrics for each and every job, mobile invoicing, a turnkey marketing program, and personalized support in operations, finance, and business development.

Section II – Estimated Costs

  • Please click here for detailed estimates of Junk King franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis

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