Considering a Smash My Trash Franchise? Don’t Overlook These 28 Important Franchise Fees

If you are considering a Smash My Trash franchise, don’t get blindsided by these 28 important franchise fees (from the initial franchise fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of Smash My Trash’s 2020 FDD).

1.  Initial Franchise Fee:  $49,500

• When you sign your Franchise Agreement, you must pay Smash My Trash $49,500 as the Initial Franchise Fee. This fee is uniformly imposed among Smash My Trash franchisees. The Initial Franchise Fee includes a Territory with a population of 200,000 people. You may purchase additional Territories for an extra fee. Upon approval by Smash My Trash, you may also purchase additional population for $0.25 per person.

• If (1) you fail to complete the initial training program to Smash My Trash’s satisfaction, or (2) Smash My Trash concludes, no more than 10 days after you complete the initial training program, that you do not have the ability to satisfactorily operate your franchise, then it has the right to terminate your Franchise Agreement.

• If it does so, Smash My Trash will refund your franchise fee less any out-of-pocket costs it has incurred, subject to your signing a general release of its liability. Otherwise, the Initial Franchise Fee is not refundable.

• Smash My Truck offers a veteran discount to honorably discharged veterans of the United States armed forces and their spouses. Smash My Truck will discount the Initial Franchise Fee by 10% on the first Territory purchased by those veterans and/or their spouses who have received an honorable discharge from the military.

2.  Smash Truck:  $220,000 to $240,000

• When you purchase a Smash My Trash franchise with a single Territory, you will be required to purchase from Smash My Truck’s affiliate, Custom Hydraulics, LLC, one proprietary Smash Truck and related equipment which will be used to operate the franchised business. The total cost of the one Smash Truck will be between $220,000 and $240,000.

3.  Truck Chassis:  $72,000

• You will buy the truck chassis from Performance Truck, Smash My Truck’s required Kenworth dealer, for approximately $72,000.

4.  Smash Machine:  $153,300

• You will pay Smash My Truck’s affiliate approximately $153,300 for the Smash Machine, rigging and installation, customs, and shipping and delivery. These fees may vary based on Smash My Truck’s affiliate’s costs incurred, your location, and manufacturer price increases.

5.  Royalty:  8% of Gross Sales, subject to monthly minimums. Beginning in the sixth month after you open for business, there is a minimum monthly Royalty Fee of $2,600 for each territory operating.

• Due Date:  Monthly, on the 5th day of the following month.

6.  Brand Fund Contribution:  1% of Gross Sales

• Due Date:  Monthly, on the 5th day of the following month.

7.  Market Cooperative Contribution:  as determined by co-op. Currently, none. However, once co-op is formed, not less than 1% of Gross Sales.

• Due Date:  Monthly, on the 5th day of the following month.

• Smash My Trash has the right to establish local or regional advertising cooperatives. The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% of gross sales.

• If Smash My Trash’s own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees, and they will vote on the same basis as other members. If Smash My Trash’s outlets have controlling voting power, there is no maximum on fees that could be imposed.

8.  Pre-Opening Assistance:  $200 per day

• Due Date:  Prior to opening.

• At your request, Smash My Trash will support you virtually for up to 5 days to assist with the launch of your business for a cost of $200 per day.

• Subject to availability, you may request that Smash My Trash bring a Smash Truck to your territory for assistance with pre-selling. If Smash My Trash brings a Smash Truck to your territory, you will pay Smash My Trash $500/day including travel on top of the $200/day for its support representative.

9.  Replacement/Additional Training Fee:  currently, $500 per day

• Due Date:  Prior to attending training.

• If you send a manager or other employee to Smash My Trash’s training program after you open, Smash My Trash will charge its then-current training fee.

10.  Third-Party Vendors:  pass-through of costs, plus reasonable administrative charge

• Due Date:  Varies.

• Smash My Trash has the right to require franchisees to use third-party vendors and suppliers that it designates. Examples can include computer support vendors, email services, mystery shopping, and customer feedback systems.

• The vendors and suppliers may bill franchisees directly, or Smash My Trash has the right to collect payment for these vendors together with a reasonable markup or charge for administering the payment program.

11.  Software Subscription:  currently, $450 to $700 per month

• Due Date:  Monthly.

• Smash My Trash requires you to use certain software. You will pay subscription fees directly to Smash My Trash.

12.  Accounting Software and Bookkeeping Fee:  $250 per month

• Due Date:  Monthly.

• This includes Smash My Trash’s mandated software and bookkeeping service.

13.  Payroll Service:  $33 per franchised business and $6 per employee

• Due Date:  Monthly.

• Smash My Trash requires that you use Gusto as a payroll provider.

14.  Non-Compliance Fee:  $500

• Due Date:  On demand.

• Smash My Trash may charge you $500 if your business is not in compliance with its system specifications or the Franchise Agreement and you fail to correct the non-compliance after 30 days’ notice. Thereafter, Smash My Trash may charge you $250 per week until you correct such noncompliance.

15.  Reimbursement:  amount that Smash My Trash spends on your behalf, plus 10%

• Due Date:  Within 15 days of invoice.

• If Smash My Trash pays any amount that you owe or are required to pay to a third party, you must reimburse Smash My Trash.

16.  Late Fee:  $100 plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law)

• Due Date:  On demand.

• Smash My Trash may charge a late fee if you fail to make a required payment when due.

17.  Insufficient Funds Fee:  $30 (or, if such amount exceeds the maximum allowed by law, then the maximum allowed by law)

• Due Date:  On demand.

• Smash My Trash may charge an insufficient funds fee if a payment made by you is returned because of insufficient funds in your account.

18.  Costs of Collection:  Smash My Trash’s actual costs

• Due Date:  As incurred.

• Payable if Smash My Trash incurs costs (including reasonable attorney fees) in attempting to collect amounts you owe to it.

19.  Breach of Territory Fee:  the greater of (i) $500 or (ii) 75% of the amount paid by the customer outside of your territory

• Due Date:  On demand.

• If you serve a customer outside of your territory without Smash My Trash’s prior written permission, Smash My Trash may impose this fee.

20.  Special Support Fee:  Smash My Trash’s then-current fee, plus its expenses. Currently, $500 per day.

• Due Date:  On demand.

• If Smash My Trash provides in-person support to you in response to your request, it may charge this fee plus any out-of-pocket expenses (such as travel, lodging, and meals for employees providing onsite support).

21.  Customer Complaint Resolution:  Smash My Trash’s expenses

• Smash My Trash may take any action it deems appropriate to resolve a customer complaint about your business. If Smash My Trash responds to a customer complaint, it may require you to reimburse it for its expenses.

22.  Records Audit:  Smash My Trash’s actual cost

• Due Date:  On demand.

• Payable only if (1) Smash My Trash audits you because you have failed to submit required reports or other noncompliance, or (2) the audit concludes that you underreported gross sales by more than 3% for any month.

23.  Special Evaluation Fee:  currently $600, plus Smash My Trash’s out-of-pocket costs

• Due Date:  On demand,

• Payable only if Smash My Trash conducts an in-person evaluation of your business because of a governmental report, customer complaint, or other customer feedback, or your default or noncompliance with any system specification.

24.  Non-Compliance Cure Costs and Fee:  Smash My Trash’s out-of-pocket costs and internal cost allocation, plus 10%

• Due Date:  When billed.

• Smash My Trash may cure your non-compliance on your behalf (for example, if you do not have required insurance, Smash My Trash may purchase insurance for you), and you will owe its costs plus a 10% administrative fee.

25.  Transfer Fee:  $10,000

• Due Date:  When transfer occurs.

• Payable if you sell your business.

26.  Renewal Fee:  $10,000

• Due Date:  Upon renewal of Franchise Agreement.

• Subject to approval by Smash My Trash and other requirements.

27.  Indemnity:  Smash My Trash’s costs and losses from any legal action related to the operation of your franchise

• Due Date:  On demand.

• You must indemnify and defend (with counsel reasonably acceptable to Smash My Trash) Smash My Trash and its affiliates against all losses in any action by or against it related to, or alleged to arise out of, the operation of your franchise (unless caused by Smash My Trash’s misconduct or negligence).

28.  Prevailing Party’s Legal Costs:  Smash My Trash’s attorney fees, court costs, and other expenses of a legal proceeding, if Smash My Trash is the prevailing party

• Due Date:  On demand.

• In any legal proceeding (including arbitration), the losing party must pay the prevailing party’s attorney fees, court costs, and other expenses.