Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Considering a Junk King Franchise? Don’t Overlook These 12 Important Franchise Fees

by Franchise Chatter on June 29, 2017

in Franchise Fees, Hauling Franchise



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If you are considering a Junk King franchise, don’t get blindsided by these 12 important franchise fees (from the initial franchise fee, to the royalty fee, to 10 other fees found in Items 5 and 6 of Junk King’s 2017 FDD).

1.  Initial Franchise Fee:  10 cents for each person living in your territory



  • Your initial franchise fee for a Franchised Business depends on the number of persons that live in your territory based on the most recently published data from the U.S. Census Bureau or such other source as Junk King may indicate.
  • The initial franchise fee is 10 cents for each person living in your territory. Therefore, for territories of up to and including 300,000 people, the initial franchise fee would be $30,000, and if the territory consists of 500,000 people, the initial franchise fee would be $50,000, and if the territory consists of 1,000,000 people, then the initial franchise fee would be $100,000.
  • The initial franchise fee is due upon signing of the Franchise Agreement and is non-refundable.

2.  Royalty:  8% of Gross Revenue

  • Due Date:  Monthly reports and invoices due on the 4th. Payments due between the 8th and 10th of the month. Interest and administrative fee accrue after the 10th.
  • Gross Revenue is defined as the entire sales price less sales tax and refunds.
  • Paid by electronic transfer.
  • Interest rate is 10% per annum.
  • Administrative fee is $150.

3.  Customer Care Center Fund:  4% of Gross Revenue

  • Due Date:  Same as Royalty.
  • This money is used to pay the operating expenses of the Customer Care Center.
  • Paid by electronic transfer.

4.  Interest and Administrative Fee on Overdue Invoices and Payments:  10% per annum; Administrative Fee is $150 per event

  • Due Date:  On date of payment of overdue amount.
  • If you do not pay your royalties, Customer Care Center fees, or other amounts owed to Junk King on time and in the amount due, Junk King may require you to pay interest on the overdue amounts.

5.  Local Advertising – Franchisor Controlled Advertising Fund:  up to 40% of the required local advertising budget

  • Due Date:  To be determined.
  • Currently, you are required to contribute $325 per month towards the Franchisor Controlled Advertising Fund. This amount is credited towards the minimum monthly marketing spend.
  • Junk King reserves the right, however, to require you to contribute up to 40% of your required monthly local advertising expenditures to the Franchisor Controlled Advertising Fund in the future.
  • For the first three years after the Opening Date of your Franchise, Franchisee shall expend monthly on local (in the vicinity of the Franchised Location) advertising and promotions a minimum of 10% of the average Gross Revenue per month during the immediately preceding calendar quarter, but not less than $2,500 per month.
  • To date, Junk King has contributed directly to regional advertising but has not required franchisees to participate.

6.  Alternative Supplier Fee:  Junk King’s actual costs to evaluate the alternative supplier

  • Due Date:  At the time Junk King incurs the costs.
  • Junk King reserves the right to require you to reimburse it for reasonable expenses it incurs in approving new items or suppliers.
  • To purchase from an alternative supplier, you are required to submit the request to Junk King in writing.

7.  Payments to Suppliers:  cost of supplies



  • Due Date:  Invoiced upon failure of payment to a supplier.
  • If you fail to pay a supplier, Junk King may, but is not obligated to, step in and pay all or any portion of the payment. Then Junk King will invoice you for reimbursement.

8.  Cost of Audit:  if any audit reveals an underreporting of Gross Revenue by 2% or more, or if there are other material deficiencies

  • Junk King has the right to audit at any time without notice.
  • You will only be charged if the audit reveals underreporting of 2% or more.

9.  Renewal Fee:  $5,000

  • Due Date:  30 days before expiration of current term.

10.  Transfer:  $7,500

  • Due Date:  You are required to pay $2,500 upon announcing your intention to sell, and the balance upon transfer.
  • No charge if transferred to an entity you control.

11.  Costs and Attorneys’ Fees:  will vary under circumstances

  • Due Date:  Upon request.
  • If Junk King is the substantially prevailing party as to any claims, you agree to reimburse Junk King’s costs and attorneys’ fees incurred in pursuing or defending the claims.

12.  Indemnification:  will vary under circumstances

  • Due Date:  Upon request.
  • You must reimburse Junk King for the costs it incurs if it is sued or held liable for claims that arise from your operation of the Franchised Business.

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