Smash My Trash Franchise Rapidly Expanding in 2024
Smash My Trash franchise offers franchisees the opportunity to start their own franchised waste compaction service.
Smash My Trash Franchise Leadership
Brian Reeve, CPA
Brian Reeve is Chief Financial Officer for Smash Franchise Partners. He joined the company in June 2021 and leads the finance and technology teams. Prior to Smash Franchise Partners, Mr. Reeve served as CFO for Hotel Capital, LLC, a private equity hospital investment bank. He has also held leading financial roles for HDG Mansur, Citimark, Lauth Property Group, and The Pritsker Corporation. Mr. Reeve has a BA from the Kelley School of Business at Indiana University.
Chuck Sullivan
Chuck Sullivan is Chief Marketing Officer for Smash Franchise Partners. He joined the company in September 2020 and leads the marketing team. Prior to Smash My Trash franchise, Mr. Sullivan was CMO for Senior Helpers. He has also held marketing leadership roles at K12, Hilton Worldwide, Fiat Chrysler, and Ford Motor Company. Mr. Sullivan has an MBA from the Wharton School of the University of Pennsylvania and a BA from Michigan State University.
Jer Dunlap
Jer Dunlap is Chief Political Affairs & Communications Officer for Smash Franchise Partners. He joined the company in May 2021 and leads the Public Relations, Learning & Development, and Field Support teams. Prior to Smash Franchise Partners, Mr. Dunlap was President of Whole Training Solutions. He also served as lead trainer for Baker Communications Institute. Mr. Dunlap has a BS from Cedarville University.
Mike Watorski
Mike Watorski is Vice President of Franchise Engagement for Smash Franchise Partners. He joined the company as a Regional Sales Manager in early 2021, and was promoted to VP of Franchise Operations in September 2021. He leads the field-based team of Franchise Business Consultants. Prior to Smash My Trash franchise, Mr. Watorski held franchise development leadership positions with several major franchise operations.
Tim Hazzard
Tim Hazzard is Field Team Director for Smash Franchise Partners. He joined the company in July 2020 as a Franchise Business Consultant (FBC) and leads the FBC team. Prior to Smash Franchise Partners, Mr. Hazzard served as FBC for Tire Pros. Mr. Hazzard has more than 25 years of experience in franchising, sales, and operations.
How Much Is a Smash My Trash Franchise?
The initial Smash My Trash Franchise Fee is $49,500. You have to pay this upfront fee when opening a Smash My Trash franchise.
Smash My Trash Franchise Cost
The estimated total investment necessary to begin the operation of a Smash My Trash franchise ranges from $339,850 – $400,500. The following costs are part of the upfront costs included in the initial investment for a Smash My Trash. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Smash My Trash franchise in 2022.
Estimated Initial Investment
| Type of expediture | Amount | To Whom Payment Is To Be Made | |
|---|---|---|---|
| Low | High | ||
| Initial Franchise Fee | $49,500 | $49,500 | Us |
| Rent, Utilities and Leasehold Improvements | $500 | $2,500 | Warehouse owner, utility company, contractor |
| Market Introduction Program | $2,500 | $7,500 | Vendors and suppliers |
| Furniture, Fixtures, and Equipment | $500 | $2,000 | Vendors and suppliers |
| Computer Systems | $400 | $1,500 | Vendors and suppliers |
| Insurance | $2,000 | $4,500 | Insurance company |
| Smash Trucks | $247,000 (currently, excluding sales tax) | $270,000 (currently, excluding sales tax) | Us and/or Affiliates and Vendors and suppliers who will remit certain amounts to Us and/or Affiliates |
| Licenses and Permits | $500 | $1,000 | Goverment |
| Software Subscription – first 3 months | $2,100 | $3,000 | Us |
| Dues and Subscriptions | $350 | $1,000 | Vendors, trade organizations |
| Professional Fees (lawyer, accountant, etc.) | $2,500 | $5,000 | Professional service firms |
| Travel, lodging and meals por initial training | $2,000 | $3,000 | Airlines, hotels, and restaurants |
| Additional funds (for first 3 months) | $30,000 | $50,000 | Employees, suppliers |
| TOTAL | $339,850 | $400,500 | |
Owning a Smash My Trash Franchise Requires Ongoing Fees
Royalty:
- Smash Revenue: 8% of Gross Sales, subject to monthly minimums. Beginning in the third month after you open for business, there is a minimum monthly Royalty Fee based on the number of Territories you purchase.
- Ancillary Services (Non-Smash) Revenue: 8% of Gross Profit
- The Gross Sales you derive from offering trash compaction services are called “Smash Revenue” and are subject to an 8% Royalty Fee and monthly minimums
Brand Fund Contribution: 1% of Gross Sales
National Account Fee: 10% of Gross Sales from trash compaction services performed for national accounts
Market Cooperative Contribution: As determined by the co-op. Currently, none. However, once a co-op is formed, not less than 1% of Gross Sales
Software Subscription: Currently, $700 – $2,000 per month
How Much Do Smash My Trash Franchise Owners Make?
| Franchisees open 16 months or more as of 12/31/2021 | ||||||
|---|---|---|---|---|---|---|
| Gross Sales | Fuel Costs | Maintenance/Repair Costs | Payroll Costs | Adjusted EBITDA | Profit Margin | |
| Count | 28 | 27 | 28 | 28 | 28 | 28 |
| Average | $566,730 | $24,687 | $13,154 | $170,768 | $196,989 | 30.43% |
| Median | $468,367 | $22,447 | $9,338 | $149,521 | $134,009 | 29.44% |
| High | $2,076,596 | $59,060 | $46,002 | $482,715 | $798,310 | 103.98% |
| Low | $165,092 | $7,858 | $2,808 | $24,287 | -$13,246 | -7.57% |
| % that met or exceeded average | 28.6% | 40.7% | 39.3% | 39.3% | 28.6% | 50.0% |
| Count that met or exceeded average | 8 | 11 | 11 | 11 | 8 | 14 |
2021 Smash My Trash Median Franchise Sales: $468,367
| Initial investment (midpoint) | %Profit margin of median franchise sales | Estimated Profits | Time to recoup investments |
|---|---|---|---|
| $370,175 | 25% | $117,092 | 4.5 years |
| 30% | $140,510 | 4.25 years | |
| 35% | $163,928 | 4 years |
Based on the median sales provided by Smash My Trash’s franchise locations, at an average of a 30% profit margin it will take around 4.25 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 30% profit margin, which would elongate getting a return on your investment.
Many factors affect the sales, costs, and expenses of your Franchised Store, such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace; the presence of other Recycling and Waste Management businesses; and the extent of market penetration and brand awareness that Smash My Trash franchise stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
Is the Smash My Trash Franchise Profit Worth the Franchise Cost?
To assign a valuation multiple for Smash My Trash franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.
Under $5 Million Net Sales
- Estimated Selling Price = Net Sales * 0.76
When you go to sell a Smash My Trash franchise based on the median multiple of .76 and net sales in 2021 of $468,367, it would sell for $355,958. This is slightly lower than the midpoint investment of $370,175.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.
Smash My Trash (Franchisor) Income Statement Key Insights
Smash My Trash ran a loss of $2,081,454 in 2021. This is in stark contrast to a surplus income of $3,568,767 in 2020. Looking at financials, the company is still finding its footing.
How Many Smash My Trash Units Have Opened and Closed?
How many [brand] units have opened and closed?
| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 0 | 2 | +2 |
| 2020 | 2 | 67 | +65 | |
| 2021 | 67 | 113 | +46 | |
| Company-Owned* | 2019 | 4 | 4 | 0 |
| 2020 | 4 | 0 | -4 | |
| 2021 | 0 | 2 | +2 | |
| Total Outlets (United States) | 2019 | 4 | 6 | +2 |
| 2020 | 6 | 67 | +65 | |
| 2021 | 67 | 115 | +48 |
*Company-owned locations are owned and operated by affiliated entities.
Over the last three years, the company has been in rapid expansion. From 0 units at the start of 2019 to 113 units at the end of 2021, Smash My Trash franchise is expanding. Over the last three years, franchises have opened at a rate of around 38 units a year.
Smash My Trash Litigation
The plaintiffs are all entrepreneurs and pillars of their communities, from managing a farm as a family business to launching a software firm to running an independent deli distribution service.
On April 27, 2020, the Plaintiffs entered into a franchise agreement with Smash My Trash. According to the Franchise Agreement, the Plaintiffs purchased eleven (11) franchise territories in Arizona for an initial fee of $304,500. This substantial investment was necessary to facilitate their business dreams.
The lawsuit, filed in October 2020, accused Smash My Trash of violating the Franchise Protection Act, the Consumer Protection Act, and the Lanham Act. Plaintiffs seek a declaration that the Franchise Agreement was obtained through misrepresentation, and/or is otherwise unenforceable as a matter of statute and/or public policy.
For this, they “pray” —as the proper legal term states— for the following relief:
- Rescission of the Franchise Agreement;
- Judgment absolving Plaintiffs of any obligations to Smash My Trash;
- Awarding Plaintiffs a money judgment, including but not limited to compensatory and statutory damages as permitted by law against SMT in an amount exceeding $450,000, the precise amount to be proven at trial;
- Awarding Plaintiffs their costs, disbursements, and reasonable attorneys’ fees in the action, as permitted by statute and as stipulated to in the Franchise Agreement;
Learn from example
It is essential to your success that you enlist the services of a franchise and/or corporate attorney to give all of your investment documents like leases, franchise agreements, management contracts, and operating arrangements an in-depth review. It’s important to remember that this attorney should have no conflicts of interest – they must only be looking out for YOUR best interests!
Avoid falling prey to franchise fraud. Even franchisors with exemplary track records are still susceptible to making bad decisions, such as committing fraud. Therefore, it is essential that you stay vigilant and have the proper counsel on your side at all times.
Conclusion
Smash My Trash is a new offering on the market and burned through a lot of money in 2021. It remains to be seen whether the concept proves itself and continues its rapid expansion. We recommend talking to at least 3 – 5 franchisees before starting a Smash My Trash franchise business.
Overall, it is important for anyone considering purchasing a franchise to carefully research the costs and potential profitability of the franchise, as well as the track record and financial stability of the franchisor. It may be helpful to speak with current franchise owners and seek the advice of a financial advisor or franchise attorney before making a decision. Make sure to check Vetted Biz website to find out more franchise opportunities in the United States!
