Official 2025 FDD earnings evidence
A practical owner-supervised reference is the space between the official 2024 median EBITDA of $110,239 and the official average EBITDA of $167,319 for 112 surveyed franchised 1-800-RADIATOR & A/C Warehouses. This is a decision band formed from two official center measures, not a probability range reported by the franchisor. Because owner salary or draw, debt service, and certain owner-performed administrative work are excluded, the figures are closer to an owner-operator benefit reference than passive take-home pay.
Legal franchisor: 1-800-RADIATOR FRANCHISOR SPV LLC. Document: 2025 Franchise Disclosure Document, issued July 3, 2025 and amended December 29, 2025. Item 19 status: direct disclosure of Sales + DW Income, operating expenses, EBITDA dollars, and EBITDA percentage for a survey cohort of franchised warehouses. Population: 112 warehouses operated by 56 franchisees, with an average operating age of 11 years and 7 months. The FDD does not separately report Item 19 results for start-up versus resale acquisitions. External role benchmark: U.S. Bureau of Labor Statistics wage data for transportation, storage, and distribution managers. Date checked: July 16, 2026.
Item 19 evidence
What does the official earnings disclosure actually measure?
Officially, Item 19 measures warehouse-level EBITDA—not owner salary, distributions, or after-tax income. The 2025 FDD says EBITDA is the amount remaining after the listed operating expenses are deducted from Sales + DW Income. It excludes depreciation, amortization, and debt service. The Labor line includes employee and contractor labor but expressly excludes any franchisee salary or draw.
The disclosure also says it does not include a general administrative allowance for bookkeeping, accounting, collections, and maintenance because franchisees generally perform those duties personally. That omission matters: an active owner may receive the economic benefit of the EBITDA and also perform work that a less-involved owner would need to pay someone else to do.
Official
Median EBITDA
The middle reported warehouse result in the 112-unit expense survey.
Official
Average EBITDA
The arithmetic mean; 46 of 112 warehouses, or 41%, were above it.
Official
Median Sales + DW Income
Revenue measure, not owner earnings; the official average was $2.15 million.
Official
Average EBITDA margin
EBITDA divided by Sales + DW Income for the surveyed cohort.
Derived
Part II outlet coverage
112 survey warehouses divided by 193 franchised outlets open at 2024 year-end.
Derived from official fees
Base sales-linked fees
8% ongoing fee + 0.5% local marketing + 1.5% system marketing.
- Sales + DW Income
- Total Metro and Non-Metro sales plus income from marking up inventory sold to neighboring warehouses. Item 19 says DW Income averaged 0.9% of this measure.
- EBITDA
- The FDD’s earnings measure after its listed operating expenses, but before depreciation, amortization, and debt service. It is not personal after-tax income.
- Owner-operator benefit
- A decision-useful interpretation of EBITDA when the owner supervises the warehouse and performs administrative work. It includes both business residual and the value of owner labor.
- Manager-run residual
- An independent estimate after subtracting a market manager salary proxy from official EBITDA. Actual employer payroll taxes, benefits, and outsourced administration would reduce it further.
How wide was the official EBITDA dispersion?
The median and average sit well inside a much wider reported low-to-high span.
Interpretation: the low and high prove that annual EBITDA varied materially; they do not define a likely outcome for a new warehouse. The median is the better central statistic for a skewed population, while the average captures the influence of larger results.
Source: 2025 Franchise Disclosure Document, Item 19, Part II, pp. 72–75. Figures are unaudited and relate to 2024 results for 112 surveyed franchised warehouses.
Owner role
How does owner involvement change the earnings interpretation?
Active owner supervision is the default operating model, so the official EBITDA is not evidence of passive income. Item 15 requires the franchisee, or an approved owner representative, to supervise the Warehouse full time unless the franchisor gives prior written consent. The owner or field sales representative also must complete specified customer visits.
For an owner-operator, the $110,239 median and $167,319 average are useful pre-tax benefit references before debt service because the owner’s salary or draw is not charged in Labor. For a manager-run structure, a buyer must subtract a qualified manager’s full employer cost and the cost of administrative duties the FDD assumes the franchisee performs.
Source: 2025 Franchise Disclosure Document, Item 15, pp. 59–60; Item 19, pp. 72–75.
Independent estimate: the manager-run figures below are analytical scenarios, not an Item 19 financial performance representation by 1-800-RADIATOR & A/C. They combine the official 2024 median EBITDA with separately identified Bureau of Labor Statistics wage anchors. Actual results can differ materially by location, warehouse scale, sales, gross margin, labor, occupancy, financing, owner involvement, and execution. The wage anchors are salary only; employer payroll taxes, benefits, recruiting, and outsourced administration are excluded.
What may remain after hiring a full-time manager?
Salary-only sensitivity using the official $110,239 median EBITDA as the starting point.
Interpretation: median warehouse EBITDA leaves little room for a fully delegated model after a market manager salary, and the true residual would be lower once employer burden and outsourced owner duties are included. Prior written consent is also required for an owner who will not supervise full time.
Sources: 2025 Franchise Disclosure Document, Item 19, median EBITDA of $110,239; BLS transportation, storage, and distribution manager wage profile, using the 2024 wholesale-trade median and national lower/upper wage thresholds. Formula: official median EBITDA minus salary anchor.
| Owner model | Starting evidence | Annual reference | What the number includes or omits |
|---|---|---|---|
| Owner-supervised median | Official Item 19 median EBITDA | $110,239 | Before franchisee salary/draw, debt service, depreciation, amortization, personal taxes, and a separate admin allowance. |
| Owner-supervised average | Official Item 19 average EBITDA | $167,319 | Same exclusions; the mean is pulled upward by larger results and was exceeded by 41% of respondents. |
| Manager-run base sensitivity | Median EBITDA less $95,340 BLS wholesale-trade manager salary | $14,899 | Independent salary-only residual; excludes payroll burden, benefits, outsourced administration, and financing. |
| Manager-run on average EBITDA | Average EBITDA less $95,340 BLS wholesale-trade manager salary | $71,979 | Independent sensitivity, not an official FDD result; actual manager cost would normally be higher than salary alone. |
Revenue and fees
Why is revenue much higher than owner earnings?
Because the warehouse is an inventory-intensive distribution operation, most revenue is absorbed by product cost, labor, franchise-system charges, vehicles, occupancy, and other operating expenses. Item 19 reports average Sales + DW Income of $2,150,588, average COGS of $1,058,661, and average Gross Profit of $1,091,927. Revenue is therefore not comparable to an owner’s compensation.
The same table reports average Royalties & Fees of $206,715, equal to approximately 9.6% of average Sales + DW Income. This ratio uses a denominator that includes DW Income, while Item 19 says inventory-only DW revenue was not charged royalties and marketing fees. The Royalties & Fees row also includes call-center and payment-processing charges, so it is not identical to the standard contractual percentage.
| Recurring obligation | FDD amount | Earnings-model treatment |
|---|---|---|
| Ongoing Franchise Fee | 8% of Gross Sales | Core sales-linked operating charge. |
| Local Marketing Fee | 0.5% of Gross Sales | Required local marketing contribution. |
| System Marketing Fee | 1.5% of Gross Sales | Required system marketing contribution. |
| Technology Fee | $145–$165 per user/year | Typical warehouse has 2–15 user accounts; current fee is capped at $10,000 per year. |
| Variable operating charges | Usage-based | May include call center, credit-card processing, chain-account collection, mailers, phone-system, and marketplace charges. |
Sources: 2025 Franchise Disclosure Document, Item 6, pp. 20–31; Item 19, pp. 72–75. The 10% base fee total is a derived sum of the three disclosed Gross Sales percentages and excludes variable charges.
Uncertainty
How reliable is the $110,239–$167,319 decision band?
The evidence is strong for what the surveyed mature warehouses reported, but less certain for a new buyer’s future result. Item 19 directly discloses a defined earnings measure, which supports a HIGH evidence-confidence label. The transfer from historical warehouse EBITDA to personal owner income still requires judgment because the cohort, owner labor, financing, and expense treatment may differ from the buyer’s situation.
- Survey participation: 112 of 193 franchised warehouses open at 2024 year-end are represented, a derived coverage rate of about 58%. The FDD does not show whether nonrespondents had systematically different expenses or EBITDA.
- Owner concentration: 56 franchisees operated the 112 survey warehouses. The results are per warehouse, not per owner, and multi-unit operators may influence the averages.
- Mature cohort: the surveyed warehouses had operated for an average of 11 years and 7 months. A start-up warehouse may have materially different sales, labor efficiency, inventory requirements, and fixed-cost absorption.
- Unaudited figures: the FDD states that no certified public accountant audited the Item 19 figures or expressed an opinion on them.
- Wide outcomes: official EBITDA ranged from a loss of $478,113 to positive $819,379. Location, Metro Shop potential, inventory availability, sales-call frequency, labor productivity, and occupancy can move results substantially.
- Taxes and financing: the article does not estimate personal income taxes. Debt principal and interest must be modeled separately using the buyer’s actual purchase price, equity, rate, term, and collateral structure.
Sources: 2025 Franchise Disclosure Document, Item 19, pp. 72–75; Item 20, pp. 75–83.
The published average line items do not reproduce the published average EBITDA when added exactly as displayed. Average Gross Profit of $1,091,927 minus the ten listed average operating-expense rows equals $140,675, versus reported average EBITDA of $167,319—a $26,644 difference. The FDD does not explain that difference in the accompanying footnotes.
This does not invalidate the disclosed EBITDA, but it prevents a fully reconciled revenue-to-earnings waterfall from being reproduced from the published averages. A buyer should request the written Item 19 substantiation and ask for a line-by-line reconciliation.
Buyer verification
What should a prospective owner verify before relying on the earnings figures?
Verify the owner-labor burden, local cost structure, and the precise bridge from sales to EBITDA for comparable warehouses. Item 19 is the starting point, not a substitute for warehouse-level due diligence and conversations with current and former franchisees listed in Item 20.
- Request the franchisor’s written substantiation for Item 19, including the survey instrument, calculation method, respondent treatment, and reconciliation of the average expense rows to average EBITDA.
- Ask for median or distribution data for Labor, Occupancy, Royalties & Fees, and EBITDA—not only averages—and separate single-unit from multi-unit operators where possible.
- Confirm whether the target warehouse’s Metro Shop count, sales per Metro Shop, out-of-stock rates, delivery density, and required field-sales workload resemble the Item 19 population.
- Interview active owner-operators about weekly hours, bookkeeping, collections, maintenance, staffing, and whether their personal work is included in or paid outside warehouse EBITDA.
- For delegated ownership, obtain written consent requirements under Item 15 and price the full loaded cost of a qualified manager plus any administrative support.
- Model debt service separately from EBITDA and test lower-sales and lower-gross-margin cases before estimating cash available for owner distributions.
- For a resale, review the specific warehouse’s tax returns, payroll reports, inventory aging, customer concentration, lease, vehicle costs, and normalized owner compensation rather than applying system averages mechanically.
Decision synthesis
The strongest defensible annual reference for an actively supervising U.S. 1-800-RADIATOR & A/C warehouse owner is $110,239 to $167,319 in EBITDA per warehouse, using the official 2024 median and average from the 2025 FDD. It is an official warehouse earnings measure, but not an after-tax salary or a passive-income promise. The most important earnings drivers are sales productivity, gross margin, and labor deployment; owner involvement changes the result because the FDD excludes franchisee salary or draw and assumes the franchisee performs administrative work. The largest unresolved uncertainties are the 58% survey coverage, the mature multi-unit-influenced cohort, and the unexplained $26,644 average-table reconciliation gap. Before underwriting a purchase, verify Item 19 substantiation, comparable warehouse economics, and the true cost of replacing owner labor through franchisee interviews and location-specific records.
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