College Hunks Hauling Junk
Date Incorporation: 2005
Franchising Since: 2007
Headquarters: Kensington, Maryland
Business Description: The College Hunks Hauling Junk system includes a method of providing junk removal services for residential or commercial clients; color scheme and custom lettered vehicles; materials and supplies; using the designated Client Loyalty Center; proprietary software; methods, specifications and procedures for operations; procedures for management control; training and assistance; and merchandising, advertising and promotional programs, and client service procedures, all of which may be changed, improved and further developed.
Franchise Offer: The franchisor, CHHJ Franchising L.L.C., offers the right to establish and operate a franchise for a mutually agreed upon area, that provides junk removal services, including picking up unwanted items from residential or commercial clients and taking it to the appropriate landfill or transfer station for appropriate disposal or recycling, plus other related services. The Franchise Agreement gives the franchisee the right to use the Proprietary Marks and the System solely with the operation of the Franchised Business. The services offered by a Franchised Business do not include regular trash routes or hauling of liquids, gases, or flammable or hazardous waste.
Financial Assistance: The franchisor does not offer direct or indirect financing nor does the franchisor guarantee the franchisee’s note, lease or any other obligation.
Training and Assistance: Before the Franchised Business's opening and within 30 days of signing the Franchise Agreement, the franchisor will provide a mandatory training program in the operation of the Franchised Business to the franchisee and one additional person (for a maximum of two people) at their Junk University. Approximately five days of training will be conducted at the franchisor’s headquarters in Kensington, Maryland. The cost of the training program is included in the initial franchise fee and will be provided to the franchisee and one additional person. All attendees are required to complete the training program to the franchisor’s satisfaction. However, the franchisee will be responsible for all costs of travel, food, lodging, wages and other incidental expenses incurred by the franchisee and employee in attending the training program. In addition, the franchisor may elect to provide up to three days of additional on-site training during the first three months of operations of the Franchised Business, and from time to time as deemed necessary.
Territory: The franchisor will grant the franchisee a Designated Territory within which to operate the Franchised Business, which will be the first (or only) Zone purchased. The franchisor will establish the Designated Territory and each additional Zone the franchisee may purchase based on population, as determined by the most recently published data from the U.S. Census Bureau (or such other source as the franchisor decides to use). It is anticipated that each Zone will have between 65,000 to 85,000 qualified households (a qualified household has an annual income of greater than $50,000) and a population of approximately between 275,000 and 400,000 people. During the term of the Franchised Business, when the franchisor refers to the franchisee’s "Designated Territory", it will include all contiguous Zones purchased.
Term of Agreement and Renewal: The length of the franchise term is five years. Three renewal terms of five years each, subject to performance of contractual requirements, are available.
Obligations and Restrictions: During the term of the Franchise Agreement, and at the franchisor’s discretion, the franchisee must attend and complete our initial training program and the franchisee (or, if the franchisee is a corporation, limited liability company or partnership, a principal or general partner of the corporation, limited liability company or partnership owning at least a 75% interest) must devote full time and best efforts to the management and operation of the Franchised Business. The Franchised Business must have constant supervision by the franchisee or by a designated and approved manager who has satisfactorily completed the training program. The franchisee must also maintain a competent, conscientious, trained staff, including a fully trained manager (which should be the franchisee). If the franchisee is an individual, the franchisor recommends that the franchisee be the fully trained manager described above. The franchisor imposes no limitations as to who the franchisee may hire as the manager, except that the franchisee must comply with all applicable laws and that the franchisee must not harm the goodwill associated with the System and the Proprietary Marks.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Lease, Utility and Security Deposits | $0 | $0 |
| Signage (Vehicle) | $900 | $1,500 |
| Service Vehicle-Deposit on Lease or Finance | $4,500 | $12,000 |
| Equipment and Hand Tools | $1,200 | $5,000 |
| Office Equipment and Supplies | $1,400 | $5,000 |
| Business Licenses & Permits | $1,000 | $3,000 |
| Professional Fees | $1,500 | $3,500 |
| Insurance Deposit | $900 | $1,600 |
| Training Expenses | $2,200 | $4,000 |
| Grand Opening Advertising | $12,000 | $15,000 |
| Additional Funds (for initial period of operations) | $25,000 | $45,000 |
| Total Estimated Initial Investment | $75,600 | $120,600 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Continuing Royalty fee | 6% of gross sales or minimum, whichever is higher. After the first 26 weeks of operation, the minimum biweekly fee will be $300 for the first zone. If the franchisee owns 2 or more Zones, the first Zone fee will apply and after the first year of operation, the minimum biweekly fee will be $300 for each Zone. |
| Client Loyalty Center Administration Fee |
6% of Gross Sales |
| Advertising (Regional and Local) ("RAF") | 1% of Gross Sales |
| Local Advertising | 6% of Gross Sales |
| Transfer | 75% of the Initial Franchise Fee payable under the then current Franchise Agreement for the entire Designated Territory |
| Renewal | $2,500 |
| Non-Compliance Fee | Infraction fee between $25 and $250 |
| Initial Training and Additional Personnel Training | No fee for the first two people who attend training, except for their travel, meals, lodging and wages. A per person fee will be determined by franchisor for Additional Personnel Training and depends on the instructor's fee, travel, lodging, food and materials associated with the training topic. |
| Refresher Training Program/ Continuing Education | Out of pocket expenses only, which will depend on the location of the program and the level of experience of our representative |
| Audit | (a) the amount of the deficiency; (b) if audit is due to non-reporting or understatement, then the cost of inspection is also the franchisee’s responsibility |
| Costs and Attorneys' Fees | Will vary under circumstances |
| Indemnification | Will vary under circumstances |
| Annual Franchisee Convention (if held) | $300 per person, excluding cost of transportation and lodging |
| Liquidated Damages | The franchisee must pay liquidated damages equal to the present value (using the then-current 30-Year Treasury Bond rate) of the Continuing Royalty Fees that would have paid on the product of (a) the Franchised Business' average monthly Gross Sales during its most recent 12 months of operation before the termination or $1,000, whichever is greater, multiplied by (b) the number of months remaining in the Franchise Agreement had it not been terminated. |
| Supplier Testing | Franchisor’s costs to evaluate the proposed supplier |
| Service Vehicle Replacement | As incurred |
Date of FDD: 2008
The above information has been compiled from the FDD of College Hunks Hauling Junk along with online sources.
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