How Much Does an Adam & Eve Franchise Owner Make?

Officially, Item 19 discloses sales and gross margin—not owner earnings. For calendar 2024, AEFC, Inc. reported $82,373,343 in combined Net Sales for 101 franchised outlets that had been open for the full year. The median was $720,910 per store, and the disclosed average monthly sales of $67,964 annualizes to $815,568.

The 101-store sample represented 94.4% of the 107 U.S. franchised stores at year end. Six outlets that opened during 2024 were excluded because they lacked 12 complete months. Item 20 separately shows the U.S. system grew from 101 to 107 franchised outlets during 2024, with six openings and no reported terminations, non-renewals, franchisor reacquisitions, or other closures that year. AEFC, Inc. reported no company-operated stores, so the Item 19 sales population is not mixed with company-owned economics.

Source: 2025 Adam & Eve FDD, Item 19, pp. 44–46; Item 20, pp. 46–50. The Item 19 information was not audited, and written substantiation is available to a prospective franchisee on reasonable request. The FTC consumer guide to evaluating FDD earnings claims explains why buyers should examine population coverage, assumptions, and written substantiation.

The modeled manager-run range is approximately $105,000 to $298,000 per year, before personal income taxes and financing principal. The base scenario is about $198,000. These are independent estimates for a full-year start-up store, not the FDD’s reported results and not a claim that any outcome is typical or expected.

• Revenue spreadThe 80%, 100%, and 120% revenue anchors around the $720,910 FDD median are editorial assumptions. Item 19 does not label these levels as probabilities or quartiles.
• Gross-margin anchors58.1%, 67.3%, and 74.3% are the disclosed low, average, and high gross-margin observations for the 100-store reporting population.
• Operating-expense proxy28.35% of revenue is derived from IRS 2022 corporation data for “sporting goods, hobby, book, music and miscellaneous retailers,” excluding cost of goods sold, advertising, officer compensation, interest, depreciation, amortization, charitable contributions, and noncapital losses.
• Recurring franchise obligationsThe model includes the start-up royalty, required local marketing, and the listed Brand Fund contribution. It does not use the lower 3% conversion-franchise royalty or any multi-unit royalty discount.

In the base scenario, implied direct/product cost consumes about $235,738, the external cash operating-expense proxy consumes about $204,406, and disclosed recurring franchise and marketing obligations consume about $82,905. The modeled residual is $197,861, rounded to $198,000.

For an annual, full-year start-up-store scenario, the estimate is intended to represent cash available after normal unit-level operating costs and the listed recurring franchise fees, but before personal income tax and financing principal. Manager payroll is included indirectly in the IRS salaries-and-wages component. Owner salary, owner draw, distributions, and retained earnings are not separately modeled because the FDD does not disclose them.

• IncludedImplied direct/product cost; employee salaries and wages; rent; repairs; business taxes and licenses; employee benefits; other ordinary deductions; start-up royalty; local marketing; and the listed Brand Fund contribution.
• ExcludedPersonal income taxes, financing principal, interest, depreciation, amortization, capital expenditures, owner compensation, and unusual penalties or default-related fees.
• Not the same as take-home payAn owner may choose salary, draws, distributions, or retained cash depending on entity structure and operating needs. Those choices do not change the underlying store-level operating result.

For a full-year start-up store, an owner who personally replaces a full-time general manager may realize an estimated owner-operator benefit of about $151,000 to $344,000. That range adds a $46,000 BLS median manager-wage proxy to the manager-run residual. The added amount is compensation for labor performed by the owner, not passive business profit.

Item 15 permits two structures: the franchisee can personally supervise and manage day-to-day operations, or hire a qualified full-time general manager. A non-owner general manager requires AEFC, Inc. approval and must complete required training. This makes owner involvement an explicit operating-model choice, not merely an informal staffing preference.

For the 2024 Item 19 cohort of 101 full-year sales outlets and 100 gross-margin reporters, gross margin, sales volume, and the fit of the external operating-expense proxy are the largest uncertainties. The FDD provides unusually useful gross-margin data, but it does not show payroll, occupancy, utilities, insurance, merchant fees, shrink, professional fees, or store-level profit for the same outlet cohort.

The estimate applies the 5% start-up royalty to sales and margin data that Item 19 does not separate by start-up versus conversion format. Conversion stores pay a 3% royalty. At $720,910 of sales, that two-percentage-point difference equals $14,418, but it should not be treated as a conversion-store earnings advantage because conversion stores may also differ in rent, inventory, age, staffing, and sales mix.

The FDD also lists a 1.5% Brand Fund contribution while stating that no Brand Fund had been established as of June 24, 2025 and reserving the right to increase the contribution to 2%. The model includes 1.5% to avoid overstating cash flow. A buyer should confirm in writing whether the fund is currently active, the rate actually collected, and whether any cooperative advertising cost is additional.

The 28.35% operating-expense ratio is a benchmark, not an Adam & Eve result. It comes from 2022 corporation returns for a combined category covering sporting goods, hobby, book, music, and miscellaneous retailers. The category is directionally relevant to specialty retail but contains businesses with different store sizes, inventory turns, labor models, and occupancy economics.

The calculation intentionally excludes IRS advertising because the model separately uses the FDD’s 5% local marketing and 1.5% Brand Fund amounts. It also excludes officer compensation to avoid treating owner pay as an operating cost. “Other deductions,” however, is aggregated and may contain expenses that are not perfectly comparable. That is the main reason the confidence rating remains Limited.

For the 2025 FDD’s 2024 franchised-store population, a buyer should replace every broad assumption with location-specific evidence and actual franchisee records where possible. Item 19 substantiation and current franchisee interviews are the most direct tests of whether the modeled expense structure resembles real Adam & Eve stores.

• Request the written Item 19 substantiationConfirm how Net Sales and gross margin were calculated, whether returns and discounts were handled consistently, and what explains the 58.1% to 74.3% margin spread.
• Ask for store-level operating detailRequest anonymized or franchisee-provided payroll, manager compensation, rent, common-area maintenance, utilities, insurance, merchant fees, shrink, inventory write-downs, and professional fees.
• Match the correct store cohortCompare start-up with start-up, conversion with conversion, similar operating age with similar operating age, and comparable geography and square footage. The FDD describes a typical location of roughly 2,500 to 3,500 square feet.
• Confirm current recurring chargesVerify the royalty rate, Brand Fund status and rate, local marketing compliance, advertising cooperative obligations, technology charges, and required proprietary purchases.
• Test the owner-role planDetermine whether the proposed owner will work full time, what duties a general manager would perform, the local market wage, and the franchisor’s approval requirements for a non-owner manager.
• Separate financing and taxesModel interest and principal using the buyer’s actual loan terms, and obtain tax advice for the intended entity and jurisdiction rather than applying a generic tax rate.
• Interview current and former franchiseesUse the Item 20 and Exhibit F contact lists to ask about sales ramp, gross margin, staffing, occupancy, cash retained for inventory, remodels, and owner distributions.