This is a derived annual EBITDA proxy, not reported owner take-home pay. Using the compatible 2025 Gross Sales and EBITDA medians in AlphaGraphics, Inc.'s 2026 Franchise Disclosure Document, the lower-25% cohort implies about $46,262, the all-center cohort implies about $181,173, and the top-25% cohort implies about $579,527 per U.S. AlphaGraphics Business Center. The official Item 19 result is the EBITDA percentage; the dollar figures are calculations.
Item 19 directly reports median EBITDA percentages for 159 U.S. franchised Business Centers. It does not directly report annual owner compensation, distributions, after-tax income, or free cash flow.
The inputs come from one current same-brand FDD table, but multiplying separate medians does not produce an observed median dollar EBITDA, and owner salary treatment is not uniform.
What does AlphaGraphics Item 19 actually report?
Officially, the 2026 FDD reports a 13.6% median EBITDA margin and $1,332,157 median Gross Sales for the 159-center expense-reporting population in calendar 2025. The same table reports 7.8% median EBITDA for the Lowest 25% cohort and 17.6% for the Top 25% cohort. These are U.S. franchised Business Centers, not company-operated units. AlphaGraphics, Inc. had no company-owned U.S. outlets in 2023, 2024, or 2025. (2026 FDD, Item 19, pp. 72–76; Item 20, pp. 76–83.)
Median for the 159 Business Centers with complete expense data in Table 19-3.
Earnings before interest, taxes, depreciation, and amortization.
$1,332,157 × 13.6%; not a franchisor-reported dollar result.
About 74% of the 215 centers that met the sales Reporting Criteria.
Payroll includes direct and indirect labor and may include owner salary in many cases.
Historical 2025 ratio in the 159-center table, already reflected in EBITDA.
Table 19-2's broader 215-center population had median annual Gross Sales of $1,092,445 and average annual Gross Sales of $1,523,124. Those figures are revenue. They are not used in the EBITDA-dollar calculation because the compatible EBITDA percentage comes from the narrower 159-center Table 19-3 population. Mixing the 215-center revenue median with the 159-center EBITDA margin would blend different cohorts.
- Gross Sales: revenue from products and services under the FDD definition, net of specified taxes and customer discounts; it is not owner income.
- Gross Margin: Gross Sales less cost of goods sold, including material, equipment, and outsourced vendor-service costs; the FDD says labor and rent are not included in this measure.
- EBITDA: earnings before interest, taxes, depreciation, and amortization. The FDD says it generally does not include owner's salary.
- Estimated pre-tax owner earnings proxy: the derived EBITDA dollars used here, before personal income taxes, financing interest, debt principal, depreciation, amortization, capital expenditures, and generally owner compensation.
What annual earnings range follows from the compatible FDD figures?
The derived range is approximately $46,262 to $579,527 per year, with a central calculation of $181,173. These are analytical Conservative, Base, and Upside scenarios built from the FDD's Lowest 25%, All, and Top 25% cohort medians for the same 159-center expense population. They are not probability forecasts and do not mean that a new center is expected to land in any specific cohort.
| Scenario | FDD cohort anchor | Median Gross Sales | Median EBITDA | Implied EBITDA dollars |
|---|---|---|---|---|
| Conservative | Lowest 25% (40 centers) | $593,097 | 7.8% | $46,262 |
| Base | All expense reporters (159 centers) | $1,332,157 | 13.6% | $181,173 |
| Upside | Top 25% (39 centers) | $3,292,767 | 17.6% | $579,527 |
Implied annual EBITDA dollars from the three compatible Table 19-3 cohort medians.
Interpretation: Revenue scale and margin move together across the disclosed cohorts, producing a much wider EBITDA-dollar spread than the percentage margins alone suggest.
Source: AlphaGraphics, Inc. 2026 FDD, Item 19, Table 19-3, pp. 74–76. Dollar values are derived calculations rounded only after multiplication.
The FDD reports medians for each line item, not matched center-level records. Therefore, $1,332,157 × 13.6% is a useful same-table proxy, but it is not the median EBITDA dollars actually earned by the 159 centers. The same limitation applies to the lower and top cohort calculations.
How does owner involvement change the result?
AlphaGraphics is not structured as automatically passive ownership. Under Item 15, a Managing Owner generally must work full time unless AlphaGraphics approves a trained Certified Manager. The Managing Owner or Certified Manager must either manage daily operations while the center employs a person for at least 40 hours per week of outside sales, or personally spend at least 40 hours per week on outside sales while an approved production manager handles operations. This applies to the U.S. Business Center operating model offered in the 2026 FDD. (2026 FDD, Item 15, pp. 66–67.)
The official AlphaGraphics U.S. franchise website similarly describes owners as leading a small team, overseeing production, meeting clients, and developing marketing solutions. Its ownership-pathways page identifies new-center, transfer, acquire-and-convert, and conversion routes. Item 19 does not segment EBITDA by those pathways or by owner-operated versus Certified Manager-run centers.
What does a manager-run sensitivity imply?
As an estimated sensitivity, assigning $102,950 of the $181,173 Base EBITDA proxy to management labor leaves about $78,223 of residual pre-tax business earnings. The $102,950 input is the May 2024 U.S. median annual wage for general and operations managers reported by the Bureau of Labor Statistics. It is a broad national benchmark, not an AlphaGraphics-specific wage and not a prediction for any location.
Illustrative decomposition of $181,173; the components are not separately reported in Item 19.
Interpretation: Active ownership does not create an extra $102,950 on top of the $181,173 Base proxy. This chart separates part of the same economic benefit into compensation for work performed and residual business earnings.
Sources: AlphaGraphics, Inc. 2026 FDD, Item 19, pp. 74–76; BLS general and operations manager wage data, May 2024. The decomposition is an editorial sensitivity.
The FDD's payroll ratio may include owner salary in many cases, while its EBITDA definition says owner salary is generally not included. Because the 159-center population is not segmented by owner role, the chart above should be used only to test labor economics. It cannot establish the actual passive residual of a Certified Manager-run center.
Which franchise fees are already inside the EBITDA result?
The 2025 Item 19 EBITDA percentages already reflect the reporting centers' royalties, advertising and marketing, payroll, rent, and other operating overhead, so those costs should not be subtracted a second time. The current 2026 Item 6 fee schedule still matters for a buyer-specific pro forma because the historical median ratios may not match a new center's pathway, sales tier, incentive period, or local cost structure.
| Recurring obligation | 2026 FDD term | How it is treated here |
|---|---|---|
| Royalties | Generally 7% down to 3% of Gross Sales as sales thresholds are reached, subject to annual minimums. | Already reflected in Table 19-3's 5.8% median royalty ratio and EBITDA; not subtracted again. |
| Brand Fund | 2.5% of Gross Sales, with current caps and annual minimums described in Item 6. | Contained within Item 19's 3.0% median Advertising & Marketing ratio. |
| Local advertising | $850 per month beginning six months after opening, subject to the stated adjustment rule. | Item 19 defines Advertising & Marketing to include advertising, promotion, Brand Fund fees, and other marketing expenses. |
| Managed Services Program | Mandatory monthly fee currently ranging from $1,025.75 to $1,839.66, plus optional services. | Item 19's All Other Overhead definition includes Managed Service Fees; no second deduction is made. |
The official AlphaGraphics investment page and official support and training page describe the current franchise program at a high level. For earnings analysis, the controlling fee definitions are in the 2026 FDD, Item 6, pp. 17–28.
Why can actual owner earnings differ materially from this range?
The largest uncertainty is that Item 19 does not report owner compensation or matched center-level EBITDA dollars, and only 159 of 215 eligible centers supplied complete expense data. The range is therefore same-brand and evidence-led, but it cannot show what a particular new, transferred, converted, owner-operated, or manager-run center will earn.
- Expense-reporting selection: 56 centers that met the sales Reporting Criteria were excluded from Table 19-3 because they did not provide complete expense data. The direction of any selection bias is unknown.
- Pathway mix: the FDD offers New Business Center, Acquire and Convert, Conversion, and transfer routes, but Item 19 does not separate their economics.
- Owner salary treatment: payroll may include owner salary in many cases, while EBITDA generally excludes owner salary. The FDD does not quantify how consistently centers applied that treatment.
- Capital and financing: EBITDA excludes interest, taxes, depreciation, and amortization. It also does not deduct debt principal, equipment replacement, expansion capital, or changes in working capital.
- Cohort medians: the median Gross Sales and median EBITDA percentage are separate statistics. Their product is not an observed center result.
- Center maturity: Table 19-3 includes centers meeting the Reporting Criteria, generally open for at least one year by December 31, 2025, but it does not provide a mature-center breakdown by years in operation.
Table 19-2 covered 215 of the 229 U.S. Business Centers open at year-end 2025 for sales reporting, while Table 19-3 covered 159 for expenses. The expense sample therefore represented about 74% of the eligible sales-reporting cohort and about 69% of all open U.S. centers.
The FTC Franchise Rule Compliance Guide explains the federal disclosure framework for financial performance representations. The FDD also states that written substantiation for Item 19 data will be made available on reasonable request.
What should a buyer verify before relying on the earnings range?
A buyer should verify the exact owner role, center pathway, normalized payroll, recurring fees, equipment obligations, and debt structure for the specific opportunity. The 2026 FDD provides the starting evidence for U.S. franchised Business Centers, but written substantiation and center-level interviews are needed to translate EBITDA into realistic owner compensation and cash flow.
- Request Item 19 substantiation: ask how the 159 expense-reporting centers classified owner salary, Certified Manager wages, related-party rent, discretionary expenses, and one-time income or costs.
- Match the pathway: compare a new center only with new-center economics where available; compare a transfer or conversion with centers having similar customer bases, equipment, age, and sales mix.
- Reconcile payroll: determine whether the proposed staffing plan includes a full-time outside salesperson, production manager, Certified Manager, owner salary, payroll taxes, and benefits.
- Normalize recurring fees: apply the actual royalty tier, minimum royalties, Brand Fund minimums and caps, local advertising, Managed Services Program level, and required technology services.
- Separate financing: model interest and principal payments outside EBITDA. Do not treat the Item 7 startup investment as an annual operating expense.
- Interview current and former franchisees: use Item 20 contacts to ask for recent annual sales, EBITDA, owner hours, owner salary, manager cost, maintenance capital, and cash retained after debt service.
- Do not estimate personal taxes from Item 19: entity type, state, deductions, compensation method, and household circumstances can materially change after-tax take-home pay.
What is the most defensible earnings answer?
The strongest defensible annual range is about $46,000 to $580,000 in derived EBITDA dollars per U.S. franchised Business Center, with about $181,000 as the compatible all-center calculation. It is scenario-based in dollars but anchored to an official 2026 Item 19 earnings measure: the 2025 median EBITDA percentages for 159 expense-reporting centers.
Primary driver: Gross Sales scale, followed by payroll and occupancy discipline, because the disclosed EBITDA margin rises from 7.8% in the Lowest 25% cohort to 17.6% in the Top 25% cohort.
Largest unresolved uncertainty: Item 19 does not separate owner salary, owner-operated centers, Certified Manager-run centers, or pathways, and 56 eligible centers lacked complete expense data.
Decision standard: treat $46,262, $181,173, and $579,527 as reproducible scenario markers—not promised income, not after-tax take-home pay, and not passive profit. Verify the Item 19 substantiation, normalize the specific center's owner labor and manager costs, and test the result with current and former franchisees before relying on it.