The Junkluggers Franchise: Average Sales ($586K) vs. Cost ($98K-$359K)

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

Section I – Estimated initial investment (franchise costs) for The Junkluggers franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for The Junkluggers franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned The Junkluggers outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on The Junkluggers franchise opportunity

Section V – Presentation and analysis of The Junkluggers’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2020, 2021, and 2022 total system-wide revenues from all junk removal and moving services for all franchised and affiliate-owned The Junkluggers units that operated for any period during the applicable calendar year

• 2020, 2021, and 2022 average job size for the franchised The Junkluggers units that operated for any period during the applicable calendar year

• 2022 average, median, highest, and lowest gross revenue by territory for the (a) 48 franchised The Junkluggers territories whose first full calendar year of operations was the 2022 calendar year; (b) 39 franchised The Junkluggers territories that were open and in operation for at least two full calendar years; and (c) all 87 of these franchised The Junkluggers territories combined

• 2022 average, median, highest, and lowest gross revenue by franchisee for the (a) 38 franchised The Junkluggers units whose first full calendar year of operations was the 2022 calendar year; (b) 32 franchised The Junkluggers units that were open and in operation for at least two full calendar years; and (c) all 70 of these franchised The Junkluggers units combined

• 2022 average, median, highest, and lowest commercial revenue as a percentage of gross revenue for the 87 franchised The Junkluggers territories that were open and in operation for the full 2022 calendar year

• 2022 Remix Market gross revenue, expenses, and net income for the 2 franchised The Junkluggers units that operated Remix Market Centers during the entire 2022 calendar year and provided The Junkluggers with financial statements identifying the total revenue from all junk removal and Remix Market services

• 2022 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 revenue, for the 19 franchised The Junkluggers units (representing 31 territories) that were open for at least two full calendar years as of December 31, 2022, and reported the expense information to The Junkluggers through its electronic reporting system

Section VI – Key ratios, comparables, computations, and analyses for The Junkluggers franchise opportunity (exclusive content for Platinum subscribers)

Section I – The Junkluggers Franchise Costs

• The Junkluggers franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $50,000
• Initial Training Fee:  $5,000
• Service Vehicle (Including Signage):  $4,600 to $68,500
• Real Estate/Rent:  $0 to $23,000
• Leasehold Improvements:  $0 to $10,000
• Supplies, Equipment, and Hand Tools:  $1,500 to $3,600
• Insurance:  $2,750 to $53,730
• Training and Living Expenses While Training:  $500 to $4,000
• Computer System:  $400 to $5,200
• Pre-Opening and Grand Opening Marketing:  $6,000 to $14,000
• Permits and Licenses:  $110 to $7,225
• Professional Fees:  $1,500 to $10,635
• General and Administrative Costs:  $750 to $4,400
• Additional Funds for 6 Months:  $25,000 to $100,000
• Total Estimated The Junkluggers Franchise Costs:  $98,110 to $359,290

Section II – The Junkluggers’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• The Junkluggers’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $50,000
• Royalty Fee:  7% of Gross Revenue from Junk Removal Services or the Annual Minimum Royalty Fee, whichever is greater; April 1, 2023 to December 31, 2023: 3% of Remix Services Gross Revenue; January 1, 2024 to December 31, 2024: 5% of Remix Services Gross Revenue; January 1, 2025 to Expiration Date: 7% of Remix Services Gross Revenue
• Brand Fund Fee:  currently, 2% of Gross Sales from Junk Removal Services; currently, 2% of Gross Sales from Remix Services
• Local Marketing (“LM”) and/or Cooperative:  $6,000 for the first 3 months after the Original Opening Date, and then $4,000 per month on average for the remainder of the calendar year. Thereafter, $48,000 each calendar year (an average of $4,000 per month). Notwithstanding the above, as of the date of the 2023 disclosure document, the LM requirement is temporarily $2,000 per month. The LM requirement will increase to the amount above sometime in quarter 3 or quarter 4 of the 2023 calendar year.

Section III – Number of Franchised and Company-Owned The Junkluggers Outlets

Franchised

2020

• Outlets at the Start of the Year:  23
• Outlets at the End of the Year:  40
• Net Change:  +17

2021

• Outlets at the Start of the Year:  40
• Outlets at the End of the Year:  95
• Net Change:  +55

2022

• Outlets at the Start of the Year:  95
• Outlets at the End of the Year:  113
• Net Change:  +18

Company-Owned

2020

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2022

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  4
• Net Change:  +3

Section IV – News Updates on The Junkluggers Franchise

• Authority Brands Acquires The Junkluggers

• Boxwood Partners Advises The Junkluggers on Sale to Authority Brands

• Authority Brands Expands Portfolio of Home Service Companies and Looks Ahead to a Successful 2023 

• The Junkluggers Is Revolutionizing the Industry This New Year

• Junkluggers Emphasizes Reuse, Recycling

• The Junkluggers Ranked No. 282 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for The Junkluggers Franchise (Item 19, 2023 FDD)

• As of December 31, 2022, there were 113 Franchised Businesses in operation (the “Franchised Units”) and 4 affiliate-owned business in operation (the “Affiliate Units”). As explained in more detail below, this historical financial performance representation includes certain performance information reported to The Junkluggers by certain of the Franchised Units.

Part 1 – System Revenue for Junk Removal and Moving Services for the 2020, 2021, and 2022 Calendar Years

• Part 1 discloses the total system-wide revenues from all junk removal and moving services for the 2020, 2021, and 2022 Calendar Years, rounded to the nearest thousand, as reported to the franchisor’s predecessor by the Franchised Units and the Affiliate Units through the predecessor’s electronic reporting system.

2020

• Franchised Units Revenue:  $15,940,208
• Affiliate Units Revenue:  $3,642,259
• Total:  $19,582,467
• Growth %:  N/A

2021

• Franchised Units Revenue:  $35,580,517
• Affiliate Units Revenue:  $4,981,919
• Total:  $40,562,436
• Growth %:  107%

2022

• Franchised Units Revenue:  $54,707,566
• Affiliate Units Revenue:  $4,724,288
• Total:  $59,431,854
• Growth %:  47%

Part 2 – Average Job Size for the 2020, 2021, and 2022 Calendar Years

• Part 2 discloses the Average Job Size for the Franchised Units for each of the three Calendar Years: 2020, 2021 and 2022, as reported to the franchisor’s predecessor through the predecessor’s electronic reporting system.

• The Average Job Size for each of the calendar years was calculated by adding together the Gross Revenue of all jobs performed by all Franchised Units that operated for any period during the year, and dividing that number by the total number of jobs performed during that calendar year.

Average Job Size

• 2020 (23 Units):  $498
• 2021 (35 Units):  $520
• 2022 (81 Units):  $568

Part 3 – Average Gross Revenue by Territory, by Years in Operation, for the 2022 Calendar Year

• Parts 3 and 4 include data for the 2022 calendar year for 70 Franchised Units operating in 87 territories who have been in operation for at least 1 full calendar year during the 2022 Calendar Year.

• Gross Revenue is defined as all amounts generated from the operation of the Franchised Business, excluding any sales tax collected, as reported to The Junkluggers through its electronic reporting system.

• “Gross Revenue” for purposes of this Item 19 means all amounts generated from the operation of the Franchised Business, excluding any sales tax collected, as reported to The Junkluggers through its electronic reporting system.

First Full Calendar Year

• Number of Territories:  48
• Average Gross Revenue:  $390,910
• Number and Percentage of Territories That Attained or Surpassed the Average:  26 / 54%
• Median Gross Revenue:  $402,490
• Highest Gross Revenue:  $916,360
• Lowest Gross Revenue:  $90,624

At Least Two Full Calendar Years

• Number of Territories:  39
• Average Gross Revenue:  $826,860
• Number and Percentage of Territories That Attained or Surpassed the Average:  12 / 31%
• Median Gross Revenue:  $585,310
• Highest Gross Revenue:  $4,623,736
• Lowest Gross Revenue:  $109,212

Combined

• Number of Territories:  87
• Average Gross Revenue:  $586,336
• Number and Percentage of Territories That Attained or Surpassed the Average:  25 / 29%
• Median Gross Revenue:  $456,041
• Highest Gross Revenue:  $4,623,736
• Lowest Gross Revenue:  $90,624

Part 4 – Average Gross Revenue by Franchisee, by Years in Operation, for the 2022 Calendar Year

First Full Calendar Year

• Number of Franchisees:  38
• Average Gross Revenue:  $471,606
• Number and Percentage of Franchisees That Attained or Surpassed the Average:  18 / 47%
• Median Gross Revenue:  $459,774
• Highest Gross Revenue:  $916,360
• Lowest Gross Revenue:  $94,137

At Least Two Full Calendar Years

• Number of Franchisees:  32
• Average Gross Revenue:  $1,057,741
• Number and Percentage of Franchisees That Attained or Surpassed the Average:  9 / 28%
• Median Gross Revenue:  $699,568
• Highest Gross Revenue:  $6,762,505
• Lowest Gross Revenue:  $184,060

Combined

• Number of Franchisees:  70
• Average Gross Revenue:  $739,553
• Number and Percentage of Franchisees That Attained or Surpassed the Average:  17 / 24%
• Median Gross Revenue:  $514,851
• Highest Gross Revenue:  $6,762,505
• Lowest Gross Revenue:  $94,137

Part 5 – Commercial Revenue for the 2022 Calendar Year

• The table below reflects the percentage of Gross Revenue for the Part 5 Units for the 2022 Calendar Year that was attributable to “Commercial Revenue,” defined as the Gross Revenue derived from commercial (i.e., non-residential) jobs in the 2022 Calendar Year.

• Average Commercial Revenue as a Percentage of Gross Revenue:  23%
• Number and Percentage of Franchised Units That Attained or Surpassed the Average:  28 / 32%
• Highest Percentage:  52%
• Lowest Percentage:  7%
• Median Percentage:  22%

Part 6 – Remix Market Gross Revenue, Expenses, and Net Income for the 2022 Calendar Year

• Three Franchised Units operated Remix Market Centers during the entire 2022 Calendar Year. Two of these three Franchised Units provided the franchisor’s predecessor, through the electronic reporting system, with financial statements identifying the total revenue from all Junk Removal and Remix Services (the “Revenue”).

• Part 6 excludes the Franchised Unit that did not provide the same data.

Franchise Unit 1

• Remix Revenue:  $1,144,858
• Remix Expenses:  $699,853
• Total Remix Net Income:  $445,005

Franchise Unit 2

• Remix Revenue:  $370,190
• Remix Expenses:  $252,011
• Total Remix Net Income:  $118,180

Average

• Remix Revenue:  $757,524 (100.0%)
• Remix Expenses:  $475,932 (62.8%)
• Total Remix Net Income:  $281,592 (37.2%)

Part 7 – Average Expenses of Franchised Units as a Percentage of Gross Revenue for the 2022 Calendar Year

• Part 7 is based on annual expense information for the 2022 Calendar Year as reported by the 19 Franchised Units (representing 31 Territories) that: (a) were open for at least two full Calendar Years as of December 31, 2022, and (b) reported the expense information to the franchisor’s predecessor through its electronic reporting system (the “Part 7 Units”).

Average Expenses of Franchised Units as a Percentage of Annual Gross Revenue

• Truck Labor Costs:  26%
• Net Disposal Costs:  6%
• Vehicle Costs:  7%
• Direct Operating Costs:  3%
• Insurance Costs:  6%
• Operating Registrations and Taxes:  0%
• Payment Processing Fees:  2%
• Marketing and Advertising Costs:  21%
• Professional Service Fees:  2%
• General and Administrative Costs:  3%
• Royalty, Call Center, Brand Fund, and Technology Fees:  14%
• Total of Above Costs:  89%

• Truck Labor Costs include hourly wages (regular and overtime), performance incentives and bonuses, but does not include payroll taxes or other benefits.

• Net Disposal Costs include dump fees less recycling revenue.

• Vehicle Costs include amounts expended on GPS, tolls, parking, fines and violations, fuel, repairs and maintenance for the vehicles used in connection with the operation of the franchised business.

• Direct Operating Costs include amounts expended on supplies and equipment, wireless plan and devices, uniforms, truck parking, medical expenses, and claims in connection with the operation of the Part 7 Units.

• Insurance Costs include amounts expended on commercial automobile, general liability, workers’ compensation, cargo, umbrella, and other insurance coverage expenses.

• Operating Registration and Taxes Costs include amounts expended on supplemental, industry-specific business registration expenses, and commercial motor vehicle taxes in connection with the operation of the Part 7 Units.

• Payment Processing Fees include amounts expended on processing payments, including credit cards, for the business accepted by the Part 7 Units.

• Marketing and Advertising Costs include amounts expended on marketing and advertising by the Part 7 Units.

• Professional Service Fees include amounts expended on payroll and accounting service providers by the Part 7 Units.

• General and Administrative Costs include expenses for human resources, professional and development dues, printing and postage, office supplies and equipment, travel, meals and entertainment, clothing and apparel, software, licenses, permits and fees, service charges, gifts, and bad debt expenses, as reported to have been expended by the Part 7 Units.

• Royalty, Call Center, Brand Fund, and Technology Fees include amounts paid for royalty fees, call center fees, advertising fund contributions, and technology fees, all of which were uniformly imposed as to the Part 7 Units.

• Total of Above Costs is the sum of the average totals.

• Please note that Part 7 does not include all expenses you may incur as a new franchisee, including, but not limited to, debt service, office wages (for operations and/or administrative personnel), office rent and utilities, and other fees paid to The Junkluggers or its affiliate(s).

Section VI – The Junkluggers Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️