In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the College Hunks Hauling Junk & Moving franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a College Hunks Hauling Junk & Moving franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a College Hunks Hauling Junk & Moving franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned College Hunks Hauling Junk & Moving outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of College Hunks Hauling Junk & Moving’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average gross sales, royalty costs, disposal costs, truck labor costs, truck fuel costs, maintenance costs, credit card fees, moving supply cost, total cost of service, gross profit, marketing expense, office staff costs, rent and utilities expense, other expenses (insurance, etc.), total general and administrative expenses, and EBITDA for the 69 franchised and 2 affiliate-owned outlets that responded to a survey or are a part of the franchisor’s bookkeeping program, and were in operation for at least 12 full months as of December 31, 2018
- 2018 average gross revenues, junk revenues, moving revenues, other revenue (labor, scrap, supply, valuation), job size (junk removal, moving, and overall), number of completed jobs per day, number of unique leads per day, lead conversion to sale %, completion %, cost per lead, marketing expense, and number of leads for the 69 franchised outlets, 10 junk removal only franchised outlets, and 59 junk removal and moving franchised outlets that responded to a survey or are a part of the franchisor’s bookkeeping program, and were in operation for at least 12 full months as of December 31, 2018
- 2018 average gross sales for the 69 franchised and 2 affiliate-owned outlets that responded to a survey or are a part of the franchisor’s bookkeeping program, and were in operation for at least 12 full months as of December 31, 2018, based on the number of years in operation as of December 31, 2018 (1st full calendar year, 2nd full calendar year, 3rd full calendar year, 4th full calendar year, and >4th full calendar year)
- average and median monthly income of franchise locations in operation for less than 24 months as of December 31, 2018 (1st month, 6th month, 12th month, and 20th month)
Section I – Background Information
15 Things You Need to Know About the College Hunks Hauling Junk & Moving Franchise
Expands Growth Plans
1. In mid-December 2018, College Hunks Hauling Junk & Moving said that it was on its way toward closing out a strong year and was looking forward to the year ahead. At the time of announcement, College Hunks Hauling Junk & Moving said that it had plans to add at least 30 new franchises in 2019. Additionally, the company is looking at new initiatives to improve the bottom line and breaking out of its traditional territories to target growth in smaller markets.
2. College Hunks Hauling Junk & Moving said that it would end 2018 with 110 units and planned to be at 140 units by the end of 2019. Dana Hansen, director of franchise development for College Hunks Hauling Junk & Moving, said, “We’re super excited about this upcoming year . We just did an analysis of markets that we feel are going to be really prime for us.”
3. In the past, College Hunks Hauling Junk & Moving has performed well in larger metropolitan territories, but has also seen success in non-traditional markets that are smaller than its typical areas. Hansen added, “What’s unique about our brand is that we have opportunity to be successful in markets that are not necessarily huge markets. We have new owners that are in smaller markets that are doing very well. We’re doing really well in small markets like Fort Myers, FL, and Bloomington, NC, and we want to replicate that success across the country.”
4. College Hunks Hauling Junk & Moving also has several initiatives that are expected to both improve the customer experience and the bottom line of franchisees. One initiative involves an app that franchisees have already been using to help manage their teams and deploy resources to job sites.
5. The company added new functionality to the app, such as allowing customers to track the truck when it’s on the way to their house — part of the company’s ongoing mission to make moving and junk removal less stressful for customers. Improvements to the app should also reduce paperwork for franchisees and streamline some back-office functions, eliminating some labor hours, and freeing up more time for growing the business.
6. In addition to the improved app, College Hunks Hauling Junk & Moving is developing a national auto insurance program, which will allow the company to negotiate better premiums — again bending the cost curve in their franchisees’ favor. To maximize potential savings, College Hunks Hauling Junk & Moving is developing a safety and compliance program that should provide assurance to insurers — as well as customers.
Ranked No. 1 in Category for First Time on Entrepreneur Magazine’s Franchise 500 List
7. In January 2019, College Hunks Hauling Junk & Moving announced that it had been ranked as the No. 1 franchise opportunity in its category in Entrepreneur magazine’s Franchise 500 for the first time, above other recognizable national brands such as Two Men and a Truck and 1-800-Got-Junk.
8. Recognized as an invaluable resource for potential franchisees, the Franchise 500 ranks College H.U.N.K.S. as No. 143 – the only moving and junk removal franchise to crack the top 250. Entrepreneur Magazine ranks companies based on 150 data points including startup costs, system-wide growth, franchisee support, brand strength, and financial growth and stability.
9. College Hunks, which surpassed $100 million in annual sales in 2018, excels across the board:
- Startup costs range from $89,300 to $208,200 and candidates with as little as $50,000 in liquid assets may qualify to start the business.
- The system grew from 66 franchisees at the end of 2016 to 104 at the end of 2018.
- Average franchisee revenue climbed 113% from 2013 to 2017.
- Average franchisee revenue in 2017 was over $945,000.
- Support includes a national call center that actively books jobs for franchisees. The company’s 100+ member corporate support team also assists franchisees with marketing strategies, financing solutions, goal setting, business coaching, and more.
- College Hunks was recently named one of the best brands in America for veterans based on franchisee satisfaction, and is consistently a “best places to work” award recipient.
- College Hunks Hauling Junk & Moving has won numerous awards for its marketing strategies, which have earned the brand repeated national and local television exposure.
10. Nick Friedman, co-founder and president of College Hunks Hauling Junk & Moving, said, “We’re excited and humbled to be recognized as the top franchise in our category for the first time, as we are still just getting started. We are always working to improve the brand and make a bigger difference for our clients, franchise owners, and team members.”
11. College Hunks Hauling Junk was founded in 2003 by Omar Soliman and Nick Friedman in Washington, D.C. Soliman’s mother owned a furniture store in the D.C. suburbs and Soliman had noticed that customers would often ask if they could haul away the old furniture.
12. Recognizing a business opportunity to earn some cash during summer break, Soliman asked his mother if he could borrow her beat-up old cargo van and use it to offer junk hauling. Soliman asked his best friend, Friedman, to help him come up with a name and they settled on College Hunks Hauling Junk. To drum up business, Soliman created and posted fliers around his neighborhood. By the end of summer, Soliman and Friedman had earned $8,000.
13. In 2004, Soliman won $10,000 in the University of Miami’s annual Leigh Rothschild Business Plan Contest. After graduating from the University of Miami, Soliman and Friedman decided to pursue College Hunks Hauling Junk full-time and turn it into a full-scale business.
14. College Hunks Hauling Junk was an immediate success and in 2008, Soliman and Friedman moved the company’s headquarters from Washington, D.C. to Tampa, Florida. Soliman and Friedman started franchising the College Hunks Hauling Junk concept that same year. College Hunks eventually added moving to its menu of services. Today, there are College Hunks Hauling Junk & Moving franchises across the United States and Canada.
Entrepreneur’s Franchise 500
15. College Hunks Hauling Junk & Moving ranked No. 143 on Entrepreneur’s 2019 Franchise 500 list. The brand also ranked No. 1 in its category.
Section II – Estimated Costs
- Please click here for detailed estimates of College Hunks Hauling Junk & Moving franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on College Hunks Hauling Junk & Moving’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 63
- Outlets at the End of the Year: 82
- Net Change: +19
- Outlets at the Start of the Year: 82
- Outlets at the End of the Year: 97
- Net Change: +15
- Outlets at the Start of the Year: 97
- Outlets at the End of the Year: 102
- Net Change: +5
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 3
- Net Change: 0
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 2
- Net Change: -1
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 2
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- The following charts provide information regarding the annual gross sales, gross profit, profit margin, EBITDA, and certain expense and annual performance metrics for franchised outlets and outlets owned by the franchisor’s affiliates.
- These businesses (both franchised and affiliate-owned) provide substantially the same products and services as the Franchised Business offered in the Disclosure Document. Likewise, they receive substantially the same services as those the franchisor provides for the Franchised Business offered in the Disclosure Document, except the franchisor’s affiliates receive centralized accounting, financial, and management services.
- The charts below present information for only those outlets that responded to a survey or are a part of the franchisor’s bookkeeping program and were in operation for at least 12 full months as of the end of the applicable reporting period.
- This includes 69 franchised and 2 affiliate-owned outlets in 2018 (representing 68% (71/104) of all outlets in existence at the end of 2018). Note that 11 of these 104 locations were not surveyed because they were open less than 12 months in 2018. Therefore, the information includes 76% (71/93) of all outlets that were open a full 12 months in 2018.
- The franchisor’s affiliate CHHJ, LLC owns and operates the College Hunks Moving and College Hunks Hauling Junk business located in Rockville, Maryland (“DC Corporate Location”), which has been in operation since 2005 and currently provides junk removal and moving services in Washington, D.C. and Maryland (a total of 5 Zones).
- The franchisor’s affiliate Mansari, LLC owns and operates the College Hunks Moving and College Hunks Hauling Junk business located in Tampa, Florida (“Tampa Corporate Location”), which has been in operation since 2008 and provides junk removal and moving services in Tampa, Florida (a total of 2 Zones).
- These locations operate under a Franchise Agreement with College Hunks Hauling Junk and pay royalties, First Contact Sales & Loyalty Center fees, and Brand Development Fees on the same basis as franchisees.
- These operations are both “absentee owner” businesses, meaning they both have full-time general managers operating the business.
- Unless otherwise specified, “Gross Sales” or “Gross Revenue” means the actual gross revenues billed to clients or what would have been billed to clients if payment had been collected for products and services, plus any other revenue derived from the operation of the business.
- The Gross Sales/Gross Revenue information is based on the same Gross Sales used to calculate royalties and other fees under the Franchise Agreement.
- The franchised outlets and affiliate-owned outlets report gross receipts information to the franchisor based upon a uniform reporting system. However, none of the information supplied to the franchisor has been audited.
Part 1 – Annual Gross Sales, Gross Profit, and Gross Margin for Affiliate-Owned and Franchised Locations (2018)
- The DC Corporate Location provides both junk removal and moving services. It currently operates 5 Zones in Washington, D.C. and Maryland.
- The Tampa Corporate Location provides both junk removal and moving services. It currently operates 2 Zones in Tampa, Florida.
- The information presented for franchised locations is based on 69 franchised outlets in operation for a full 12 months as of December 31, 2018 and includes franchised outlets offering only junk removal and outlets offering junk removal and moving services.
DC Corporate Location (Actual)