Detailed Estimates of Junkluggers Franchise Costs Based on Item 7 (Estimated Initial Investment) of Junkluggers’ 2020 Franchise Disclosure Document
Junk Removal Services Only
- The Franchised Business you will operate is an “eco-friendly” junk removal business servicing homes and businesses under Junkluggers’ proprietary marks.
1. Initial Franchise Fee: $50,000
2. Initial Training Fee: $5,000
3. Service Vehicle (including signage): $4,200 to $25,300
- You must purchase or lease a truck that meets Junkluggers’ specifications for your Franchised Business. The truck must also be lettered and branded to Junkluggers’ specifications. Presently, you may choose from two approved styles of truck for junk removal services.
- Though Junkluggers does not offer any direct financing, you may be able to obtain financing from one of its approved suppliers.
- For junk removal services, under the terms of your Franchise Agreement (which licenses you the right to operate under one Territory), you are required to purchase one truck with a retail value of approximately $66,000 (fixed body) to $88,000 with one body (and an additional $9,000 per additional body), including signage and paint, but not including state license, taxes, fees, or shipping.
- The high and low estimates reflect the range of down payments, body, and shipping variances you may be required to pay for one truck. If you purchase a truck without financing, then your investment will be higher.
- Junkluggers’ estimates assume that you finance the purchase of your truck with a down payment/security deposit.
- If your number of jobs per truck equals or exceeds 75 per month for any three months out of any rolling six-month period, you must purchase another truck.
4. Real Estate/Rent: $0 to $8,400
- Junkluggers does not require you to purchase or lease real estate in connection with the operation of the Franchised Business, unless you elect to incorporate the Remix Center in connection with the operation of the Franchised Business.
- If you wish to open the Remix Center, you must wait until you have operated the Franchised Business for at least six months before opening the Remix Center.
- To operate the Remix Center, you will need approximately 1,500 to 3,000 square feet of light industrial/commercial space in a convenient and central location in your Territory.
- The range above accounts for an estimate for the first three months of rent. The range may also include the estimate for the first three months of rent for commercial office space, if you elect to lease office space in connection with the operation of the Franchised Business (which you are not required to do).
- This estimate includes three months’ rent, security deposit, and utilities.
5. Leasehold Improvements: $0 to $5,000
- If you purchase or lease office space, or if you elect to operate a Remix Center, you will need to comply with all leasehold improvement specifications required by Junkluggers.
- The range includes the build out of the storeroom and showroom for retailing second-hand refurbished items. The range may also include the build-out of office space, if you elect to lease office space in connection with the operation of the Franchised Business (which, as disclosed above, you are not required to do).
6. Supplies, Equipment, and Hand Tools: $1,350 to $2,000
- You will need basic hand tools, as well as material handling and hauling equipment. These items may include a hand truck, dolly, contractor bags, broom and dustpan, gloves, masks, reflective vests, hard hats, painter’s tape, moving blankets, tarps, bungee cords, and hand tools.
- If you already have the necessary equipment, your cost will be less.
- In addition, you must obtain a GPS tracking device and GPS tracking device services from Junkluggers’ designated vendor, as specified in Junkluggers’ Manual. You must provide Junkluggers with login access to your GPS service account to allow it independent access to the tracking information generated for your vehicles.
7. Insurance: $2,675 to $10,700
8. Training and Living Expenses While Training: $500 to $3,000
- The Initial Training Fee will cover the initial training for up to four people, but you must pay all costs associated with your trainees’ attendance at training. These amounts include estimated out-of-pocket costs for travel expenses, lodging, meals, and applicable wages.
- The low end of this amount reflects the estimated expenses for two trainees (your Operating Principal and Manager) to attend and complete Junkluggers’ initial training program, and the high end of this amount reflects the estimated expenses for four trainees (your Operating Principal and three other people) to attend and complete Junkluggers’ initial training program.
- Junkluggers’ on-site initial training program is approximately five days in duration.
- The low end of Junkluggers’ estimate assumes that your Operating Principal is within driving distance of Junkluggers’ training facility. Your cost may vary depending on the distance you must travel, the type of accommodations you choose, and whether you have additional Owners or employees trained.
9. Computer System: $0 to $3,500
- Junkluggers’ computer system estimate includes the cost of purchasing the computer system Junkluggers requires, including the handheld device to be used in your service vehicle.
- If you already own computer and communications equipment that meet Junkluggers’ specifications, your cost may be less.
- If you open a Remix Center, you may need to purchase or lease additional hardware and software, including certain software related to accounting and retail services, a credit card terminal, and a computer or tablet. The estimated additional costs associated with these expenses range between $1,890 and $4,902.
10. Initial Marketing Spend: $15,000 to $30,000
- You must conduct an initial marketing campaign to promote the opening of your Franchised Business. Junkluggers must approve of the initial marketing campaign before you conduct it, and you must carry out the approved campaign within three months after opening the Franchised Business (either before the grand opening, or within the allotted time thereafter).
11. Permits and Licenses: $60 to $6,425
- You must obtain the operational licenses and permits required by applicable federal, state, and local law. All required licenses and permits must be in place and in good standing at all times during the term of your Franchise Agreement.
- If you determine to open and operate a Remix Center, you may be required to obtain a professional fund raiser permit, at an estimated additional cost of $800.
12. Professional Fees: $1,000 to $7,435
- Junkluggers strongly advises you to consult with your own financial and legal advisors, and it anticipates that you will incur professional fees related to your evaluation of the Disclosure Document, including the Franchise Agreement.
- In addition, you must form an entity for your Franchised Business, which will incur legal fees and expenses.
- Local governments and agencies typically charge you fees for construction permits and operating licenses. Costs may vary based on the requirements of local government agencies. These fees are typically not refundable.
13. General and Administrative Costs: $750 to $4,000
- The estimates for general and administrative costs include estimates for uniforms, physicals that may be required by the department of transportation or other governing authority, and other general and administrative costs and expenses.
14. Additional Funds for 6 Months: $25,000 to $70,000
- This item estimates your initial startup expenses (other than the items identified separately in the table) for the initial period of operations of your Franchised Business, which Junkluggers anticipates will be six months. You will need additional capital to support ongoing expenses to the extent these costs are not covered by sales revenue.
- These expenses might include payroll costs if your start-up plan includes hiring support staff, or reasonable compensation for you based on your preferred lifestyle. These expenses also include monthly premium payments of the insurance coverage described in Item 8 or as modified by Junkluggers’ Manual.
15. Total: $105,535 to $230,760
- Junkluggers relied on its affiliates’ experience since 2004 and its franchisees’ experience since 2013 to compile these estimates.
Junk Removal Services with Remix Market Center Services
- Junkluggers also offers you the option to incorporate second-hand furniture procurement, restoration, and retail services under its proprietary marks (currently, “Remix Market Centers” or “Remix Centers”) after you commence operations of the Junkluggers business.
- Total: $107,985 to $240,760