Costs of Operating a Franchise in 2026

The costs associated with operating a franchise fall into two streams. The first goes to the franchisor as a percentage of gross sales, typically a royalty, a brand fund and a technology fee. The second is every cost the business would carry on its own anyway, including labor, vehicles, insurance, rent, fuel and local marketing.

The franchisor fees are the smaller of the two and the easier one to forecast. At College Hunks Hauling Junk® and College Hunks Moving®, the franchisor side runs 7% of gross sales in royalty, 2% into brand development, and 1% for technology. The structural difference from a single-service brand is that both concepts run in one territory on one technology stack, so a single territory carries two revenue lines on one office, one back office and one franchise agreement.

What are the costs associated with operating a franchise?

A franchise owner pays recurring fees to the franchisor calculated on gross sales, plus the normal operating costs of running a service business in their market. Fees owed to the franchisor are disclosed in Item 6 of the Franchise Disclosure Document, the document required under the FTC Franchise Rule (16 CFR Part 436), so they are known before anyone signs. Operating costs vary by market and are the owner’s to manage.

Here is how the recurring cost structure breaks down at College HUNKS, with the franchisor fees separated from the costs any operator in this industry would carry.

The upfront side of the investment is a different question with a different answer. If that is what you are pricing out, College HUNKS franchise cost covers the one-time costs, and how much it costs to buy a franchise walks through how those numbers are structured across the industry.

How is a franchise royalty calculated, and what does it pay for?

A royalty is calculated on gross sales, not on profit, which means it is owed on every dollar that comes through the door regardless of how the month ends. At College HUNKS that rate is 7%. It funds the trademark license and the support infrastructure behind it, which at this brand means a dedicated Marketing Coach and a Franchise Business Coach assigned to every owner.

Calculating on gross sales rather than profit is standard across franchising. A franchisor charging on profit would be underwriting each owner’s spending decisions. Charging on sales keeps the fee predictable for both sides, and it means an owner who controls costs well keeps the benefit of doing so. What franchise royalties pay for goes deeper on where that money lands.

What is the difference between a brand development fee and local advertising?

The brand development fee funds system-wide brand building, while local advertising is spend an owner directs inside their own territory. They are two different line items with two different jobs, and most candidates evaluating a franchise only budget for one of them.

At College HUNKS the brand development fee is 2% of gross sales. National media exposure runs around $30M annually, built over years of national television placements, and no single owner could buy that reach independently. Local advertising is separate, and it is money the owner directs inside their own territory. Item 11 of the FDD also states that the franchisor is not required to spend advertising dollars in any particular territory, so the local budget is the owner’s lever for local demand.

Local advertising minimums and Sales & Loyalty Center appointment fees are set out in Items 6 and 11 of the FDD, and the franchise development team walks through each one line by line on a call. Demand generation that stops during a slow month tends to make the next month slower, so local marketing belongs in the budget as a steady monthly line rather than something trimmed when revenue dips.

What does the technology fee cover?

The technology fee covers the systems that book, route, and track the work, which at College HUNKS is 1% of gross sales. That stack runs both concepts, so an owner operating junk removal and moving is not paying for and reconciling two separate platforms.

Paired with it is the Sales & Loyalty Center, the national center that takes orders, schedules appointments and routes inquiries by zip code on an owner’s behalf. Its appointment fees are set out in Item 6 of the FDD. An independent operator either answers those calls personally or hires someone to, and both of those are real costs that rarely make it into a startup spreadsheet.

What costs does the franchisor not charge you for?

Labor, fleet, fuel, insurance, and rent are the owner’s costs entirely, and across a full year they are considerably larger than everything paid to the franchisor. A College HUNKS zone runs a team of 8 to 10 people serving a population of roughly 300,000 to 400,000, and the trucks, coverage, and physical base sit on the owner’s books.

This is where the role of the owner gets decided. The job is building and leading a team of 8 to 10 rather than driving a truck, and adding capacity as booked work justifies it. How the franchise model works covers how the two concepts run inside one territory.

Are franchise fees negotiable?

Generally no. Fees are set out in Items 5 and 6 of the FDD. Published programs, such as the veteran and first responder discount, are the exception, and the veteran franchise discount sets out the terms.

The practical takeaway for anyone in diligence is to spend your energy elsewhere. Choosing the right territory and arriving well capitalized will shape the outcome far more than the fee schedule ever could. The Franchise Disclosure Document is where all of it is written down.

What are the risks of owning a franchise?

The most common risk is undercapitalization, and it shows up in the ongoing costs rather than the upfront ones. An owner who budgets precisely enough to open has no room for the months when local marketing and payroll still come due and revenue has not caught up. Arriving with operating capital beyond the minimum is one of the best protections an owner has.

The second risk is misreading the role. This is an owner-operator model, and it asks for someone who will build a team and run a market rather than fund one from a distance. Being clear-eyed about that before signing saves a great deal on both sides.

How do these costs compare with running the same business independently?

An independent operator skips the royalty, the brand fee, and the technology fee, and then pays for the same functions separately at a smaller scale. Booking gets handled by the owner or a hire, marketing gets built from nothing, and the software gets assembled from several subscriptions that do not talk to each other.

Ask the franchise development team what the Sales & Loyalty Center books in a market like yours.

Neither path is automatically the right one, and the comparison that matters is your own. Buying a franchise versus starting a business lays the two side by side, and what makes College HUNKS different covers the support side of that trade in more detail. As for what any of it produces, that question belongs with the disclosed figures rather than an estimate, and the Item 19 revenue picture is where those live.

Where to go from here

If you are weighing whether a College Hunks Hauling Junk® franchise fits your goals, talk to the franchise development team and see if your market is still open. We read every inquiry and there’s no pressure, just answers.

Disclosures

Financial information shared in this content is drawn from Item 19 of the 2026 CHHJ Franchising, L.L.C. Franchise Disclosure Document (Issuance Date: April 30, 2026, as amended August 26, 2026). See Item 19 for material assumptions, the underlying data set, and full required disclosures. Past performance does not guarantee future results. New franchisees may earn less.

This information is not an offer to sell or solicitation to buy a franchise. A franchise offering can only be made through the delivery of a Franchise Disclosure Document. Certain states regulate the offer and sale of franchises; if you are a resident of one of these states, we will not offer you a franchise unless we have complied with applicable pre-sale registration and disclosure requirements in your state.

College Hunks Hauling Junk®, College Hunks Moving®, and the H.U.N.K.S logo are registered trademarks of CHHJ Franchising, L.L.C. © 2026 CHHJ Franchising, L.L.C. All rights reserved.