1-800-GOT-JUNK? LLC



300-1523 West 3rd Avenue
Vancouver, British Columbia V6J 1J8
Canada
Telephone: (800) 710-5865
Toll Free: (800) 468-5865
Web site: http://www.1800gotjunk.com

Private Company
Incorporated:
1989 as The Rubbish Boys
Employees: 1,000 (est.)
Sales: $75 million (2005 est.)
NAIC: 562119 Other Waste Collection

1-800-GOT-JUNK? LLC bills itself as "North America's largest junk removal service" with more than 150 franchised locations in the United States and Canada. The firm's blue, green, and white trucks pick up items that are too big for curbside garbage collection, but not large enough to merit a heavy-duty waste hauling service. Fees are based on the volume of truck space filled, with a typical job running about $290. The firm's clientele includes homeowners, property management companies, construction firms, and corporations. The company is owned by founder and CEO Brian Scudamore.

Beginnings

The company known as 1-800-GOT-JUNK? was founded as The Rubbish Boys in 1989 by Brian Scudamore in Vancouver, British Columbia, Canada. Born in San Francisco, Scudamore had moved with his parents to Vancouver at eight and had shown an entrepreneurial spirit from a young age, delivering papers at nine, washing cars for money at 11, and selling candy and snacks to his classmates at 14.

Scudamore's studies sometimes took a back seat to his side activities, and he dropped out of high school one class shy of graduation, though he managed to secure admission to a community college for the fall of 1989. He began to look for summer work to pay for his tuition, but the job market was tight, and he could not find employment. One day, while sitting in the drive-through lane of a local McDonald's, the 19-year-old found himself staring idly at a truck full of junk in front of him. For Scudamore, it was a "Eureka" moment—he decided then and there to begin hauling trash.

The next day he withdrew $700 from the bank to buy an old Ford pickup truck, and made preparations to get business cards and flyers printed. Seeking to give his one-man junk-hauling operation the illusion of size, he dubbed it The Rubbish Boys, adding the slogan, "We'll Stash Your Trash in a Flash!" He painted his new business phone number, 738-JUNK, on the plywood sides he had attached to the back of the truck, and waited for the phone to ring.

Work soon began trickling in, and by summer's end Scudamore had made a profit of $1,700. After his first year in college he revived the trash hauling business for another summer, but in the fall he began taking business management classes at the distant University of Montreal. He decided to transfer to the University of British Columbia in Vancouver after a year, however, so he could run his trash hauling business year-round.

In 1993, with the successful business demanding more and more of his attention, Scudamore decided to quit school to pick up junk full time. Although his surgeon father was appalled, in the newly incorporated firm's first year of full-time operation, revenues hit $100,000.

In 1994 Scudamore opened a small office in Vancouver to serve as a dispatch center for the three trucks he now owned, and the following year he began developing custom computer software to use for scheduling, marketing, and accounting. In 1995 a branch operation was launched in Victoria, British Columbia, with a partner, and in 1996 The Rubbish Boys recorded $1 million in revenues for the first time.

The year 1997 saw the company hire Paul Guy, who had been the general manager of College Pro Painters in British Columbia, to help develop a franchise plan. That same year, the firm's first American location was set up in Seattle, Washington.

Name Change to 1-800-GOT-JUNK? in 1998

In 1998 Scudamore made the decision to change both the company's name and its phone number to 1-800-GOT-JUNK to provide more marketing punch. The number already belonged to a state agency in Idaho, and it took him several weeks to convince the official in charge to give it up. The company subsequently painted the number in large type on the sides of its trucks, enabling them to double as mobile billboards. 1-800-GOT-JUNK? staff also had begun using several "guerrilla marketing" tactics to promote the firm, including putting signs on telephone poles, placing company flyers on homeowners' doorknobs between deliveries, and parking trucks near stores like Home Depot where potential clients might lurk. Later, the firm's employees would don blue wigs and stand at intersections to wave signs advertising the company.

Scudamore's years of experience as a junk hauler had given him ample time to hone his own approach to the business. Declaring his goal to be "the Federal Express of junk removal," he focused on earning a reputation for service, reliability, and professionalism, projecting expansion to a total of 30 locations by 2003. He was the sole owner of the firm, having shed an early partner, and its growth had been financed entirely through internally generated funds or loans that had been quickly repaid.

In 1999 consultant Paul Guy quit to open a location of his own in Toronto, Ontario, kicking off the firm's new franchise program. The franchise fee was $20,000 plus a royalty of 8 percent of revenues, as well as 7 percent to fund the call center and 1 percent for national advertising. With truck and office rental and other initial expenses, the total start-up cost was in the neighborhood of $50,000. Many new franchises were started by people who had grown tired of their careers in the corporate world. The entry costs were relatively low, and after several years of hauling junk themselves while the business grew, they could hire college students or other young workers to do the bulk of the manual labor.

The company's Vancouver headquarters handled all incoming orders and scheduling of pickups, which helped standardize customer service systemwide, and also allowed individual operators to focus on doing field work, rather than dwelling on administrative tasks. Orders could be placed via the call center or the company's web site, and a completed order would be routed to the local franchise via the Internet and scheduled in a two-hour window. The franchisee called customers to confirm arrival time about a half hour ahead, and then made a follow-up call afterward to verify that they were satisfied.

The firm's typical pickup fee was $300 for a 15-cubic-yard load, which included two hours of labor. Additional labor was $22 per hour. Jobs were typically scheduled a day or two in advance, but same-day service was also available. A franchisee might expect to do as many as eight or more pickups in a day.

The company's staff wore uniforms and presented clients with a printed price list—a stark contrast to the stereotypically shabby appearance of the small-time trash hauler, whose fee might vary depending on the perceived size of a customer's wallet. The firm required that each truck be washed daily, and if they were not maintained well, the company could cancel the franchise.

1-800-GOT-JUNK? did not accept hazardous materials such as paint or chemicals, and attempted to recycle most of what was picked up. Drivers got first dibs on usable items, though most were taken to charitable organizations like Goodwill Industries. The firm's fees included the cost of dropoff at a local dump, which gave its employees an incentive to recycle, as it was usually free or even sometimes generated a small amount of revenue. As much as 60 percent of what was picked up was recycled. Approximately three-fourths of the firm's business took place between April and October, when moving or home renovation projects brought much work.

All of 1-800-GOT-JUNK?'s operations utilized the firm's own JunkNet software, an Internet-based application that each franchisee used to get daily scheduling information as well as to perform management, payroll, and accounting tasks. The software also could send text messages to drivers' cellular telephones.

Rapid Expansion Beginning in 2000

Franchising inquiries were beginning to pour in; during 2000 all available locations in Canada were snapped up, and franchises began to open around the United States in cities like Portland, San Francisco, Minneapolis, Chicago, and Buffalo, New York. The pace of growth increased even more rapidly in 2001, and by the end of that year the firm had 31 locations.

In 2002 1-800-GOT-JUNK? moved its headquarters into a 9,000-square-foot location in Vancouver that had been vacated by a bankrupt dot.com. Dubbed "The Junktion," the space was outfitted with office furniture that had been purchased for 10 cents on the dollar, along with items that had been salvaged from refuse pickups.

The firm's call center now employed 32 customer service representatives, who handled between 800 and 1,000 calls per day. Most were answered live, rather than by a computerized system, and virtually all calls were taken within 60 seconds. To serve all of North America, the center was open from 4:30 a.m. to 8:30 p.m. Pacific time. As with 1-800-GOT-JUNK?'s other employees, call center staff members were given incentives, which included commissions and preferred call routing for those who closed the highest percentage of sales. For 2002, the company, which now had 400 employees, took in revenues estimated at $7 million.

1-800-GOT-JUNK? was receiving media attention from the likes of CNN and Fortune magazine, and interested parties were flooding the firm with requests for new franchises. The company offered a money-back guarantee to the select few it chose if a franchise did not have revenues of more than $100,000 in its first year.

Company Perspectives:

The company's vision is to continue to be the largest provider of junk removal in North America. We set the standards in our industry and we are viewed as leaders in the service industry.

In October 2003 the firm unveiled a new online booking option that enabled clients to set up service without any human interaction. It was promoted with motorcades of 1-800-GOT-JUNK? trucks through the company's franchise markets. For 2003 systemwide revenues topped $12 million, with the Vancouver, Toronto, and San Francisco territories accounting for more than $1 million each. The company was now averaging $238 per pickup, which corresponded to half a truckload of trash.

100th Franchise in 2004

In July 2004 the firm celebrated the awarding of its 100th franchise. 1-800-GOT-JUNK? now served 46 metropolitan areas in the United States and Canada, with 90 percent of franchises located south of the border. Sales had increased more than 100 percent for the fourth consecutive year, with systemwide revenues hitting $38.6 million.

A franchise now cost $18,000 for an exclusive territory with a population of 125,000, plus another $6,000 for a marketing package. Additional territories were priced at $8,000 each. The firm continued to collect approximately 15 percent of gross revenues in royalties and to fund call center operations.

In May 2005 1-800-GOT-JUNK? announced that it would begin using MapPoint Location Server software on its Vancouver trucks as part of a Microsoft pilot project. Drivers would carry Web-enabled smart phones that could display work orders and maps, and the cell-phone locating capabilities of Sprint would pinpoint the closest truck to a pickup, which would reduce fuel costs and driving time.

The spring also saw the firm forge an alliance with Oakleaf Waste Management, which represented a network of 3,500 independent haulers. Oakleaf would refer business to 1-800-GOT-JUNK? in exchange for a 5 percent referral fee.

By the summer of 2005 the firm had awarded more than 150 franchises, including one that was set to open in Sydney, Australia. Systemwide revenues of $75 million were projected for the year.

A little more than 15 years after Brian Scudamore had started a summertime trash hauling service, 1-800-GOT-JUNK? LLC had grown into a 150-franchise chain with a presence in 48 of the top 50 markets in North America. The firm's high-tech approach to what had once been the province of small-time operators with rusty pickup trucks was one key to its success, as was a healthy dose of marketing flair. Under its young owner's continued guidance, the company's future appeared bright.

Key Dates:

1989:
Brian Scudamore founds The Rubbish Boys in Vancouver, British Columbia.
1994:
The firm, now with three trucks, opens an office in Vancouver.
1995:
A branch location opens in Victoria, British Columbia; development of JunkNet software begins.
1996:
Revenues top $1 million.
1997:
The first U.S. location opens in Seattle, Washington.
1998:
The company phone number and name is changed to 1-800-GOT-JUNK
1999:
A franchising program begins with a new location in Toronto.
2002:
The headquarters and call center are moved to a 9,000-square-foot space.
2005:
Locations top 150; the first overseas unit is added in Australia.

Principal Competitors

Allied Waste Industries, Inc.; Waste Management, Inc.; Republic Services, Inc.; Goodwill Industries International, Inc.; The Salvation Army National Corporation; Trashbusters Rubbish Company Ltd.

Further Reading

Armitage, Alix, "A Dirty, Rotten Success Story," Seattle Times, August 1, 2001, p. E3.

Couvillion, Ellyn, "Turning Clutter into Cash," Baton Rouge Advocate, September 21, 2003, p. 1I.

Green, Frank, "Trash-Hauling Chain's Business Is Picking Up," San Diego Union-Tribune, May 8, 2003, p. C1.

Higgins, Marguerite, "One Man's Junk Is Another's Business Success," Washington Post, August 18, 2003.

Hurley, Becky, "In the Spotlight—1-800-GOT-JUNK Franchisee Finds an Alternative to the 'Cubicle Life,' " Colorado Springs Business Journal, August 9, 2002, p. 2.

Ingram, Mathew, "Trash Removal Firm Dumps Paper Schedule for Smart Phone," Globe and Mail, June 16, 2005, p. B13.

Johnson, Jim, "Canadian Hauler Finds His Calling," Waste News, July 8, 2002, p. 15.

Martin, Justin, "Cash from Trash," Fortune Small Business, November 1, 2003, p. 53.

O'Herron, Jennifer, "Talking Trash: In an Industry Not Known for Customer Service, 1-800-GOT-JUNK's Call Center Is Out to Set the Standard," Call Center, September 1, 2002, p. 56.

Quinn, Shirley, "High-Tech Solutions for a Low-Tech Industry," Franchising World, May 1, 2000, p. 39.

Schultz, Beth, "Talkin' Trash: One Outfit's Story of E-Commerce," Network World, April 11, 2005, p. 1.

Stoller, Gary, "Rubbish Boy Turned Junk into His Career: Entrepreneurial Spirit Struck at Young Age," USA Today, June 13, 2005,p. B7.

Stueck, Wendy, "Firms Aim to Clean Up in Trash Business," Globe and Mail, June 16, 1999, p. B10.

Waisberg, Deena, "Humble King of the Junkyard," National Post, June 11, 2005, p. FW4.

—Frank Uhle



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