A typical service-business franchise takes 7–11% of gross revenue every month, in perpetuity. On a 25–30% margin business, that quietly becomes nearly half of pre-tax profit. This site is a documentary analysis of what franchisors actually disclose — in their own publicly filed Franchise Disclosure Documents — about what they take, what they provide, and what they reserve the right to take in the future. Every number on this site can be verified against the original document.
The pitch sells the royalty as small — single digits, almost a rounding error. It is not. Royalties are charged on gross revenue, before any of the operator's expenses. Once cost of goods, labor, fuel, insurance, and overhead are deducted, that single-digit royalty consumes a large fraction of what's left. Here is how the dollars actually move on a typical service-business job.
of pre-royalty profit goes to the franchisor every month, on every job, for the entire term of the agreement. On a $750,000-revenue territory, that is approximately $82,500 per year redirected from operator profit to franchisor revenue. Over a ten-year term: $825,000.
of one franchisor's total revenue in fiscal 2024 came directly from required purchases by their own franchisees. That figure is not interpretation. It is a direct quote from page 23 of the FDD that franchisor is legally required to deliver to every prospective franchisee 14 days before signing.
Almost every service-business franchisor has a script for the supplier question. They tell prospective franchisees the buying program saves them money. They cite group-rate negotiating power. They sometimes explicitly state they don't profit from supplier arrangements. Then their Franchise Disclosure Document — filed under penalty of perjury with state regulators — discloses something different. Below: what the FDDs actually say, in their own words.
Every quote and figure in this section comes directly from a publicly filed Franchise Disclosure Document. This is reading the page, not interpreting it. Item numbers and issue dates accompany each citation. All FDDs cited are available, free, through state franchise registries — Wisconsin, Minnesota, Maryland, California, and others publish their full FDD libraries online.
The case here isn't that one franchisor is uniquely problematic. The case is that the model itself produces these outcomes — by design. Compare three FDDs from different industries side by side and a structure emerges: high upfront fees, perpetual royalties on gross sales, mandatory marketing, mandatory technology fees, vendor markups, tightly limited operational support. Different services. Same arithmetic.
| Disclosed Term | Cool Binz (portable storage) | Pirtek (industrial hose) | Venture X (coworking) |
|---|---|---|---|
| Initial fee | $59,900 | ~$76K – 192K | $49,500 |
| Royalty (gross) | 9% (8% over $500K) | 4% | 6% |
| Marketing fee | 2% brand fund | 1.5–3% + 0.4–0.75% | 1% or $500/mo min |
| Tech / software fee | $600/mo | $660 – $2,550/mo | $250/mo |
| Required equipment from franchisor or affiliate | Sole supplier | Sole inventory supplier | $374,995 affiliate package |
| Franchisor revenue from supplier sales to franchisees | 91.85% | 84% | Not separately disclosed |
| Term length | 10 yr | 10 yr | 10 yr |
| Non-compete after exit | 2 yr | 2 yr | 2 yr |
Item 11 of every FDD lists what the franchisor is contractually obligated to provide. Most prospective franchisees never read it; they listen to the sales pitch instead. The pitch and the document say very different things. Below — on the left, an aggregated picture of what FDDs in the dumpster and portable-container category typically obligate franchisors to deliver, paraphrased and quoted from the documents themselves. On the right, what the same things cost as off-the-shelf software and services in 2026.
Adjust the inputs below to model any service-business franchise. The calculator compares total ten-year cash outflow against operating the same business independently with modern off-the-shelf tools. Defaults are set to industry averages for a dumpster or container service business.
The franchise model was built for an era when brand recognition, operational training, supplier relationships, and back-office software were genuinely scarce. None of those are scarce anymore. Below: the modern stack that replaces every category of franchisor service — at a fraction of the cost, with zero royalty.
Field-service platforms — Jobber, Housecall Pro, ServiceTitan, Workiz — handle scheduling, route optimization, customer communications, and invoicing in one stack. $50–$300/mo.
A focused brand, a fast website (Webflow, Framer, or a $40 WordPress install), and a Google Business Profile rank locally within 6–12 months when paired with reviews.
Local Service Ads, geo-targeted Meta and Google campaigns, and direct mail produce trackable cost-per-lead far below the implicit cost of royalties on a "branded" lead.
SOPs, training videos, onboarding checklists — built in Notion, Trainual, or Loom in days. Trade-association resources for the waste and dumpster industries are widely available.
Direct accounts with truck dealers, dumpster manufacturers, uniform suppliers, and disposal facilities are available to anyone with a tax ID. The franchise's "buying power" rarely beats what a competent operator can negotiate by year two.
QuickBooks Online, Xero, and a $300/mo bookkeeper handle the entire back office. Add Gusto for payroll. Total monthly cost is less than a single hour of franchise royalty on a healthy week.
The most useful information a prospective franchisee can read is from existing and former franchisees — not the franchisor's testimonials. Submit a story below. All submissions are anonymized by default. Together, the picture the marketing brochure left out comes into focus.
"The math was the easy part to miss. I focused on the royalty number because it sounded small. By month eighteen I figured out the royalty plus the required marketing plus the software fees plus the vendor markups was eating roughly half my profit. I had built a six-figure business and was bringing home what a senior tech makes — with no equity in anything."
"When I went to sell, I learned the franchisor had a right of first refusal at whatever price the buyer offered. They didn't take it. They just used the clause to slow the deal until my buyer walked. I sold for less, six months later, to someone they preferred."
"I asked the discovery-day rep, twice, if they made money on equipment sales. Twice he said no, it's at cost. I read Item 8 of the FDD a week after signing. Item 8 says the opposite, in writing. I should have read it before."
"The brand fund collected from us for two years. I asked, in writing, what was spent in my market. The answer was 'national initiatives.' My grand opening came and went without a single piece of brand-funded marketing in my city."
A free 8-page guide on how to read a Franchise Disclosure Document like a forensic accountant — what to look for in Items 5, 6, 7, 8, 11, 17, 19, and 20, and the questions to ask your attorney before signing. New analyses, calculator updates, and franchisee stories arrive about once a week. Unsubscribe with one click.
The pitch for franchising is built on three promises: a recognized brand, a proven system, and a support network. In 1985, those were genuinely scarce resources. A small operator in a mid-sized market could not access national brand awareness, professional training materials, or supplier relationships at a reasonable cost. Franchising solved a real coordination problem.
Three things, mostly. First, software. The tools that run the back office of a modern service business — dispatch, CRM, payments, marketing automation, accounting — are commodity infrastructure now. They cost a few hundred dollars a month and they are, in most categories, better than what franchisors build internally.
Second, local search. Google Business Profile, reviews, and Local Service Ads have flattened the brand-recognition advantage in any business where customers find a service provider online. A new independent operator with fifty five-star reviews outranks a regional franchise location with twelve. The "brand" being paid for in perpetual royalties is, in many local markets, worth less than a quarter's worth of paid advertising.
Third, knowledge. SOPs, training videos, hiring playbooks, pricing models — these are no longer trade secrets. They are blog posts, YouTube channels, paid communities, and consultants who will hand a complete operations manual customized to a market for a flat fee.
What is actually being purchased when someone signs a franchise agreement, in 2026, is a long-term financing arrangement with extraordinarily unfavorable terms. The franchisee pays an initial fee for a starter kit. They then pay a percentage of every dollar that comes in the door, regardless of profitability, for the entire term. They agree to buy supplies from approved vendors at marked-up prices. They accept territorial restrictions that cap growth. They forfeit the right to sell the business without the franchisor's approval. They sign a non-compete that follows them for two years after exit.
Sometimes it does. If the operator is entering an industry they know nothing about and the franchise provides genuinely uncommon expertise — a regulated process, a hard-won supplier relationship, real category-defining brand recognition — the math can work. If the operator simply does not want to learn marketing, hiring, or systems-building and treats the royalty as the price of a managed business, that is a legitimate choice.
But for most service businesses — the kind that fill the franchise listings: dumpster service, lawn care, junk removal, mobile storage, pet services, mobile repair — none of those conditions hold anymore. The expertise is widely available. The brands are not category-defining. The customer does not care.
Read the FDD. Not the marketing brochure — the Franchise Disclosure Document, specifically Items 5, 6, 7, 8, 11, 17, 19, and 20. Build a ten-year cash flow model. Compare it honestly against the cost of building the same business independently with the tools listed above. Talk to current and former franchisees, especially the ones who left. Hire a franchise attorney for two hours of their time before hiring one for forty.
And before signing anything, ask the question this site is built around: what is being purchased that could not be purchased, built, or learned for less?