FDD Talk 2021: The Junkluggers Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

In this FDD Talk post, you’ll learn the following:

• Section I – Background information on The Junkluggers franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for The Junkluggers franchise, based on Item 7 of the company’s 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for The Junkluggers franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned The Junkluggers outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of The Junkluggers’ financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 actual and average revenue, year-over-year revenue, and average job revenue for the 17 franchised The Junkluggers units that were in operation for the entire 2019 and 2020 calendar years

• average monthly gross revenues during the 1st month of operation, 6th month of operation, and 10th month of operation for the 24 franchised The Junkluggers units that first commenced operation after January 1, 2020

• 2020 junk removal and moving services annual revenue and Remix Market annual revenue for the one affiliate-owned The Junkluggers unit, which operates in a territory located within the State of Connecticut and within Westchester, New York

• 2020 truck labor costs, net disposal costs, vehicle costs, direct operating costs, insurance costs, operating registrations and taxes, payment processing fees, marketing and advertising costs, professional service fees, general and administrative costs, royalty, call center, brand fund and technology fees, and total costs, as a percentage of annual gross revenues, for the 10 franchised The Junkluggers units that were in operation for the entire 2019 and 2020 calendar years and provided complete, properly categorized responses to the franchisor’s survey requesting specific expense information for the 2020 calendar year

Section I – Background Information

15 Things You Need to Know About The Junkluggers Franchise

Makes World Clean Up Day a Month Long Event

1.  In late August 2021, The Junkluggers announced that it was celebrating World Clean Up Day during the entire month of September – World Clean Up Day was on September 18. The Junkluggers was ready to showcase its mission of keeping reusable items out of landfills in order to maintain a sustainable environment from September 1 through September 30.

2.  During World Clean Up Month, The Junkluggers encouraged everyone to participate in local eco-friendly focused community events or even create their own. The junk removal brand challenged people to live a little greener and show the planet some extra love during the whole month of September.

3.  To kick-off World Clean Up Month, The Junkluggers encouraged everyone to look for local e-waste events to help limit the 75-80% of e-waste that ends up in landfills every year. Another way to get involved in the month-long event was to help with community cleanup events in local areas and bring some friends along. The Junkluggers invited people to try out eco-friendly initiatives that can become a lifelong practice, such as limiting household waste, donating reusable items, and purchasing eco-friendly products.

4.  Josh Cohen, founder and CEO of The Junkluggers, said, “Our mission runs for 365 days a year, but we would love for our communities to devote a whole month to reducing our waste in landfills. We are excited to roll out World Clean Up Month and together we can all make a big impact on our environment.”

5.  Cohen always wanted to find new ways to donate items and reuse products which would have otherwise been thrown in landfills. Since its humble beginnings in 2004, The Junkluggers has donated over one million dollars’ worth of items on behalf of its customers – that means it has been able to keep over 50 million pounds out of landfills and benefited over 100,000 people.

6.  The Junkluggers was the first junk removal company to issue donation receipts to customers because it always donates first. As The Junkluggers continues to grow, it continues to paint the world green. This year alone, the brand has generated over 80% more donation receipts than the same period last year.

7.  As part of The Junkluggers’ ongoing mission, Cohen believes in incorporating eco-friendly practices into his everyday life. He recently introduced a compost to his household that will help eliminate close to everything that goes into their trash, as the rest is thrown into the recycling bin. Part of his ongoing household practice is purchasing items that can be recycled therefore staying eco-friendly both inside and outside of the home. Whether it’s across the nation, in the community or at home, Cohen strives to carry out his mission by keeping items out of landfills.

8.  Kristy Ferguson, chief marketing officer for The Junkluggers, added, “We are always looking for new ways that our local communities can make an impact on the environment that supports our mission to keep items out of landfills. The Junkluggers hope that World Clean Up Month is celebrated and practiced nationwide in the years to come.”

Hauls Away a Wide Array of Items

9.  The Junkluggers offers complete, eco-friendly junk removal for your home or business – including offices, retail locations, construction sites, and more. Aside from certain hazardous materials, Junkluggers says that it can haul away just about anything. Common household items that Junkluggers will take include furniture, appliances, refrigerators, freezers, carpets/rugs, TVs, lawnmower/riding lawnmower, bikes, water heaters/furnaces, tires, rubbish, mattresses, leaf and yard debris, pianos, hot tubs, swingset/playset, basketball hoops, and sheds/pergolas.

10.  The Junkluggers will happily haul off the following office items: countertops, desks, monitor screens, computers, printers, fax machines, shelves and storage, office chairs, fixtures, and office cubicles. Lastly, The Junkluggers will take the following construction materials: masonry products, sinks, concrete, large tree stumps, bricks, logs, fences, ladders, soil/dirt, shingles/tiles, bathtubs, gravel, insulation, pallets, and paint cans.

11.  The Junkluggers will recycle, donate, and upcycle as much of the items as possible. If a customer is unsure if Junkluggers will take a specific item, they can ask any of the company’s junk removal experts as The Junkluggers offers free on-site estimates at no obligation.

Company History

12.  The Junkluggers was founded in 2004 by Josh Cohen in Connecticut. The idea for Junkluggers came to Cohen while he was studying abroad in Australia. One of his friends mentioned that they had made $100 for lugging away a neighbor’s fridge. Cohen felt that he could do this when he returned home to earn some money.

13.  Once Cohen, who was just 21 years old at the time, came home to Connecticut, he began handing out homemade fliers informing his neighbors that he was a professional, responsible college student who was able and willing to donate or recycle as many of their items as he could. Cohen quickly began receiving phone calls requesting his service and he realized that there was a demand for reliable, professional, and environmentally-focused junk removal services.

14.  Cohen began hauling junk with his mom’s SUV and once he had earned enough money, he bought an old dump truck. Demand for Cohen’s junk hauling services grew and he began expanding. Franchising started in 2012. Today, there are The Junkluggers franchises in more than 27 states.

Entrepreneur’s Franchise 500

15.  The Junkluggers did not rank on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of The Junkluggers franchise costs, based on Item 7 of the company’s 2021 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on The Junkluggers’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  18
• Outlets at the End of the Year:  26
• Net Change:  +8

2019

• Outlets at the Start of the Year:  26
• Outlets at the End of the Year:  24
• Net Change:  -2

2020

• Outlets at the Start of the Year:  24
• Outlets at the End of the Year:  43
• Net Change:  +19

Company-Owned

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• As of December 31, 2020, there were 43 franchised businesses in operation (the “Franchised Units”) and 1 affiliate-owned business in operation (the “Affiliate Unit”).

Part 1 – Annual Gross Revenue, Percentage Increase in Gross Revenues Over the Prior Year (“YOY Revenue”), Average Revenue Per Job as of December 31, 2020

• Part 1 shows certain results for the 17 Franchised Units that were in operation for the entire 2019 and 2020 calendar years (the “Part 1 Units”). Specifically, Part 1 shows Annual Gross Revenue for the 2020 calendar year, Annual Revenue Growth (from calendar year 2019 to calendar year 2020), and Average Revenue Per Job for the Part 1 Units for the 2020 calendar year.

Franchise Unit 1