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Business Description

1-800-GOT-JUNK? was formed on October 1, 1998 under the laws of the state of Delaware. Our principal business address is 301 – 887 Great Northern Way, Vancouver, BC, Canada, V5T 4T5 and we franchise under the name 1-800-GOT-JUNK?. We do not operate any business of the type being franchised. We are a subsidiary of Rubbish Boys, which was incorporated on March 18, 1993 whose principal place of business is 301 – 887 Great Northern Way, Vancouver, BC, Canada, V5T 4T5. Rubbish Boys owns the System and related marks, including “1-800-GOT-JUNK,” and licenses them to us for our exclusive use and sublicensing in the United States. The Scudamore Family Trust, of which our CEO, Brian Scudamore, is the sole trustee, holds the controlling interest in Rubbish Boys. The address for Brian Scudamore and the Scudamore Family Trust is also 301 – 887 Great Northern Way, Vancouver, BC, V5T 4T5. Our principal address, which is the same as that of Rubbish Boys, is 301 – 887 Great Northern Way, Vancouver, BC, Canada, V5T 4T5.

Prior Experience

We own a subsidiary called 1-800-GOT-JUNK? Commercial Services (USA) LLC (“Commercial Services USA”) which was formed under the laws of Delaware on September 17, 2004. It operates as a general contractor or agent for national accounts in the United States in the same business as the type being franchised. Commercial Services USA has never operated a business similar to a 1-800-GOT-JUNK? business nor franchised any business. Commercial Services USA has a principal business address of 301 - -887 Great Northern Way, Vancouver, BC, Canada, V5T 4T5. O2E Brands Inc. (“O2E Brands”) is a British Columbia, Canada company incorporated on April 15, 2014 with a principal place of business at 301 – 887 Great Northern Way, Vancouver, BC, Canada, V5T 4T5. O2E Brands provides shared franchise services, such as marketing, human resources, business technology, legal and finance to all franchised brands founded by the founder of 1-800-GOT-JUNK?, Brian Scudamore, including to the 1-800-GOT-JUNK? system. Flywheel Accelerator Inc. (“Flywheel”) is a British Columbia, Canada company incorporated on June 21, 2017 with a principal place of business at 301 – 887 Great Northern Way, Vancouver, BC, Canada, V5T 4T5. Flywheel was created to help facilitate the transition of certain existing long-term franchise partners to exit the system smoothly. By creating Flywheel to re-purchase certain franchised businesses, it will prevent a gap in operations while allowing time to find the best new franchise partners to join the 1800-GOT-JUNK? system.

Business Offered

We grant franchises to qualified candidates in the United States for the operation of retail junk removal businesses (“Franchised Businesses”) using the System and identified by the name 1-800-GOT-JUNK? and have offered these franchises since November 1999. We have no other business activities and have not operated businesses of the type being franchised; however, our parent company, Rubbish Boys, has been in operation in Canada for over 18 years and has offered franchises in Canada since December 1998. We have not offered franchises in any other line of business. Other than as stated above, we have no predecessors or affiliates offering franchises in any line of business, or providing products or services to our franchisees.

Initial Fees

The initial franchise fee for a Franchised Business whose territory consists of one subterritory is $25,000 and is payable to us in a lump sum when you sign the Franchise Agreement. The initial franchise fee for a Franchised Business whose territory consists of more than one subterritory is $25,000 for the first subterritory (payable to us when you sign the Franchise Agreement), plus $15,000 for each additional subterritory to be developed (payable to us on the due date mutually agreed upon and included in the Franchise Agreement). A typical new franchise territory contains ten subterritories. We will only refund the entire initial franchise fee paid to date (without interest) if we do not approve your application. Except as described in this disclosure document, each portion of the initial franchise fee is fully earned upon receipt. The initial franchise fees paid by 1-800-GOT-JUNK? franchisees in the year ending December 31, 2018 was $128,000. We reserve the right to charge higher or lower initial fees than those disclosed above for a particular territory. Some of the factors that may lead us to charge more are if a subterritory had been previously serviced and has a developed market, or if the demographics of the particular subterritory are such that it would be particularly suited for a 1-800-GOT-JUNK? franchise. Some of the factors that may lead us to charge less are if a subterritory has been difficult to develop in the past or as an incentive to encourage a franchisee to purchase additional subterritories. If you are granted multiple subterritories within which to operate the Franchised Business, we may (in our sole discretion) allow you to pay the initial franchise fee with respect to some of the subterritories in equal monthly installments for a specified period. If we do, we may also allow you to operate or service customers in subterritories for which you are paying the initial fee in installments. However, we may not allow you to operate or service customers in any subterritories until you pay the initial fees for those subterritories in full. You will also pay an Initial Marketing Expense of $12,000 when you sign the Franchise Agreement. We will use this money to market and promote your Franchised Business prior to and during the first six months of operation. The timing, type and amount of marketing made with the Initial Marketing Expenses are at our sole discretion, but the monies will be spent in your local area (as we define it). The Initial Marketing Expense is non-refundable, unless we do not approve your application.

Financing

We do not generally offer financing. However, we may, in our sole discretion, allow the initial franchise fee with respect to some of the subterritories to be made in equal monthly installments without interest if payments are timely made. Installment arrangements will be described in Schedule B of the Franchise Agreement. Outstanding amounts may be pre-paid at any time without penalty. Late payments will incur interest from and after their respective due dates until paid in full at the rate of 24% per annum or at such other rate as we may specify in writing from time to time or the maximum rate permitted by law if lower. Owners of an entity franchisee must personally guarantee payment of initial franchise fees. We may allow you to operate or service customers in subterritories for which you are paying the initial fee in installments, as long as payments are timely made. However, we reserve the right to not allow you to operate or service customers in any subterritories until you pay the initial fees for those subterritories in full. Upon material default of installment payments we may, at our option and in our sole discretion, revise your Territory to remove any subterritories for which installment payments are in default, or terminate the Franchise Agreement. Your potential liabilities upon default also include acceleration of amounts due, and payment of collection costs. You are not required to waive defenses or other legal rights, and are not barred from asserting any defenses. We do not intend to sell, assign, or discount to a third party all or any part of the financial arrangement. We do not guarantee any debts, leases or other obligations for you. While not obligated to do so, we may, in our discretion, introduce you to third party financing sources that may, if you meet their qualifications, supply financing options for items required as part of the initial investment.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances