That is the independent scenario range for pre-tax residual owner earnings from one full-year U.S. barre3 studio with an operations manager in the cost structure. Because the 2026 Franchise Disclosure Document reports Gross Revenue rather than profit, this is not an official barre3 earnings figure. Estimated owner-operator benefit: about $84,000-$140,000, including the market value of the owner's management labor.
This earnings range is an independent analytical scenario, not an Item 19 financial performance representation by B3 Franchising LLC. It combines identified facts from the 2026 FDD with a separately identified government margin proxy, a Bureau of Labor Statistics wage benchmark, and explicit sensitivity assumptions. Actual results can differ materially by location, studio format, sales, labor, occupancy, financing, owner involvement, class utilization and execution.
Legal franchisor: B3 Franchising LLC. FDD: issued April 3, 2026. Item 19 status: official Gross Revenue data, but no operating profit, EBITDA, Net Income, cash flow or Owner Compensation disclosure. Applicable population: 145 franchisee-owned U.S. Reporting Units open for all 12 months, comprising 137 one-room studios and 8 two-room studios. Benchmarks: 2022 IRS corporation statistics and May 2023 BLS wages. Checked: July 19, 2026. The official U.S. barre3 franchise overview and official barre3 financial overview provide current public brand context; FDD citations below are stated by Item and page because no matching public 2026 FDD was verified on a franchisor-controlled domain.
Selected mode: FDD-anchored scenario estimate. Item 19 supplies a strong same-brand sales distribution, including medians and quartiles, but does not reveal studio expenses or owner earnings. The official revenue evidence therefore anchors the model, while the profit conversion remains estimated.
The largest gap is the absence of same-brand operating-expense and profit data for franchised studios.
All 145 full-year franchisee-owned Reporting Units; revenue, not owner earnings.
The average was 9% above the previous 12-month average.
About 88% of the 165 franchisee outlets open during some or all of the period.
IRS aggregate net income less deficit divided by receipts for a broad recreation industry.
6% royalty plus 2% Marketing Fund fee; the royalty also has an $850 monthly minimum.
May 2023 annual mean wage for General and Operations Managers in NAICS 713940.
What does the 2026 barre3 FDD actually report?
It reports Gross Revenue, not owner earnings. For February 1, 2025 through January 31, 2026, the combined 145-unit franchisee cohort produced average Gross Revenue of $432,575 and median Gross Revenue of $393,080. Those are official FDD results for full-year Reporting Units; they do not deduct payroll, rent, royalty, marketing, software, insurance, interest or other operating expenses.
The Federal Trade Commission cautions that gross sales do not reveal actual costs or profits. A studio can post substantial sales and still produce little or negative owner income if labor, occupancy and other overhead are high. See the FTC's guide to evaluating franchise earnings claims.
| FDD revenue cohort | Studios | Average Gross Revenue | Median Gross Revenue | Disclosed range |
|---|---|---|---|---|
| 1st quartile (highest revenue) | 36 | $723,143 | $657,724 | $559,011-$1,056,022 |
| 2nd quartile | 36 | $461,737 | $447,452 | $395,641-$548,542 |
| 3rd quartile | 37 | $356,883 | $351,163 | $312,684-$393,080 |
| 4th quartile (lowest revenue) | 36 | $235,063 | $206,847 | $56,396-$309,744 |
| All franchisee-owned Reporting Units | 145 | $432,575 | $393,080 | $56,396-$1,056,022 |
Source: 2026 B3 Franchising LLC FDD, Item 19, Chart 1d, p. 52. Quartiles describe observed revenue groups, not probabilities for a new studio. The FDD also reports that franchisee revenue was 70% recurring service revenue, 25% non-recurring service revenue and 5% retail revenue.
How representative is the Item 19 population?
The official sales cohort is broad but excludes partial-year operators. There were 165 franchisee-owned U.S. outlets open during some or all of the Reporting Period, while the main charts used 145 outlets open all 12 months. The excluded 20 studios had operated for less than 12 months because they opened, temporarily closed or permanently closed during the period. Six franchisee-owned outlets closed during the Reporting Period.
The 145-unit combined cohort also merges 137 one-room studios and only 8 two-room studios. One-room studios averaged $416,019; two-room studios averaged $716,108, but the two-room sample is small and the FDD notes that many were not operating the second classroom during the period. A buyer should not assume the pooled quartile distribution automatically fits a proposed one-room or two-room location. Sources: 2026 FDD, Item 19, pp. 48-52; Item 20, pp. 53-61.
How is the $8,000-$64,000 manager-staffed range calculated?
The model multiplies three official FDD revenue anchors by three explicit margin assumptions. The Conservative scenario uses the lowest-revenue quartile median; the Base scenario uses the full-cohort median; and the Upside scenario uses the highest-revenue quartile median. The margin center is a 6.7% government proxy, with a transparent sensitivity of minus or plus 3 percentage points.
- Revenue anchors are official: $206,847, $393,080 and $657,724 are Item 19 medians for the 4th quartile, all Reporting Units and the 1st quartile.
- The 6.7% center is a benchmark: it equals aggregate net income less deficit divided by total receipts for the IRS category “Amusement, gambling, and recreation industries” in Tax Year 2022: (10,426,735 - 3,474,164) / 103,655,213 = 6.7074%. IRS table amounts are reported in thousands of dollars.
- The margin band is editorial: the calculation rates are 3.7074%, 6.7074% and 9.7074%: the benchmark minus 3 percentage points, the benchmark itself and the benchmark plus 3 percentage points. The article rounds these to 3.7%, 6.7% and 9.7% in explanatory prose.
- Manager treatment is an assumption: the manager-staffed scenarios interpret normal management compensation as part of the all-in expense structure; the IRS source does not isolate a barre3 operations-manager cost.
- These are paired scenarios, not probabilities: the model deliberately combines lower revenue with a lower margin and higher revenue with a higher margin to show sensitivity.
Accounting-style annual residual before personal income taxes and buyer-specific financing principal.
Interpretation: the modeled residual is highly sensitive to both studio revenue and the conversion of sales into profit; the FDD does not establish any of these margins.
Sources: 2026 B3 Franchising LLC FDD, Item 19, p. 52; IRS 2022 Corporation Complete Report, Table 1. Figures are rounded only after calculation.
Why is the IRS margin only a proxy?
It is official but broader than a barre3 studio. The IRS category includes amusement, gambling and recreation corporations, not just boutique fitness facilities. The closest operating-industry classification is NAICS 713940, Fitness and Recreational Sports Centers, which includes aerobic dance or exercise centers but also gyms, swimming facilities and other sports centers.
The IRS ratio is an all-in corporation-return result, not store-level EBITDA or cash flow. It reflects the source population's reported wages, rent, interest, depreciation and other deductions. It also does not replicate barre3's franchise-fee structure. For that reason, the 6.7% figure is a central sensitivity input rather than a claim that a barre3 studio earns a 6.7% margin.
How does active owner involvement change the result?
Replacing a paid operations manager can raise the economic benefit available to an active owner, but the increase compensates the owner for labor. Adding the $75,860 BLS annual mean wage produces an estimated owner-operator benefit of about $83,529, $102,225 and $139,708 across the three scenarios. These totals are not pure passive profit.
The 2026 FDD requires the person responsible for day-to-day management to devote full-time efforts to the studio. Even when an approved operations manager is appointed, the owner or designated owner must personally participate, devote significant time and remain primarily responsible. Barre3's current official ownership guidance also states that the model is not a passive investment and expects a primary full-time operator, especially during the first 12-18 months.
Each line adds $75,860 of wage-only management labor value to the manager-staffed residual.
Interpretation: most of the modeled owner-operator benefit is compensation for performing management work, not an increase in the studio's underlying profit.
Sources: 2026 B3 Franchising LLC FDD, Item 15, p. 41; BLS May 2023 NAICS 713940 wage estimates. The $75,860 benchmark is wage-only, national and excludes self-employed workers; it is not a local total employer-cost estimate, and payroll taxes or benefits are not added.
- Manager-staffed residual owner earnings
- Estimated accounting-style residual after normal operating expenses. The model assumes manager compensation is embedded in the all-in margin proxy; it is not a cash-flow measure.
- Estimated owner-operator benefit
- Scenario residual plus the market wage value of management labor performed by the owner. It is not passive business profit or a cash-flow disclosure.
- Manager compensation
- Assumed to be included in normal operating expenses for the manager-staffed scenario. The proxy does not disclose a barre3-specific manager line item.
- Owner compensation
- No owner salary, draw or distribution is deducted from or added to residual earnings. The owner-operator scenario adds labor value separately.
- Interest and financing principal
- The IRS proxy reflects aggregate interest deductions in its source population, but no buyer-specific loan interest or principal payment is modeled.
- Depreciation and capital expenditures
- Depreciation is embedded in the IRS net-income proxy. Capital expenditures are not separately modeled, and depreciation is not a substitute for future replacement spending.
- Personal taxes
- Excluded. Take-home pay depends on entity structure, jurisdiction, deductions and individual circumstances.
Which barre3 fees must the earnings model absorb?
A studio must absorb an 8% sales-based fee burden plus fixed and variable operating obligations. The 2026 FDD requires a royalty equal to the greater of 6% of Gross Revenues or $850 per month and a 2% Marketing Fund fee. Current software and music charges add at least $6,553 annually before possible increases, administration charges, training, summit travel and other required costs.
| Recurring obligation | Current FDD amount | Treatment in this estimate |
|---|---|---|
| Royalty Fee | Greater of 6% or $850/month | Assumed within the all-in margin proxy; not subtracted a second time. |
| Marketing Fund Fee | 2% of Gross Revenues | Assumed within the all-in margin proxy; not double-counted. |
| Software License Fee | $487/month | Current annual equivalent is $5,844; actual future charges may increase. |
| Music License Fee | $709/year | Current negotiated system charge; additional agency arrangements may apply. |
| Mandatory summit | $500-$1,500 registration | Travel of $1,000-$3,000 per person may also apply; not separately modeled. |
Source: 2026 B3 Franchising LLC FDD, Item 6, pp. 6-14. The model uses an all-in external margin, so subtracting the FDD fees again would create false precision and risk double counting. The practical due-diligence task is to replace the proxy with actual barre3 studio expense ratios.
At very low sales, the $850 monthly royalty minimum can exceed 6% of Gross Revenues. The break-even point between the minimum and percentage royalty is $170,000 in annual Gross Revenues. This matters most for a ramping or underperforming studio and is one reason the full-year Item 19 cohort should not be treated as a startup forecast.
What could move actual owner earnings outside the range?
The range can be too high or too low because the FDD does not disclose the expense structure behind its sales figures. The variables with the greatest likely effect are occupancy, staffing and instructor cost, membership retention, class schedule utilization, local pricing, owner hours, one-room versus two-room configuration and financing.
- Occupancy: rent, common-area charges and build-out obligations vary sharply by market and can consume the difference between a profitable and loss-making studio.
- Labor: instructor, front-desk, childcare, sales and management staffing can shift both margin and the value of active ownership.
- Class utilization: Item 19 shows revenue, but not attendance, capacity utilization, membership count, churn or revenue per class.
- Format: the two-room sample had higher sales, but it contained only eight Reporting Units and many second classrooms were not operating.
- Cohort selection: the principal Item 19 charts excluded 20 partial-year outlets, including studios affected by openings and closures.
- Benchmark mismatch: the IRS margin category is broader than NAICS 713940 and does not isolate franchised boutique fitness studios.
- Debt: financing can materially reduce owner cash flow even when the studio produces positive operating earnings.
What should a buyer verify before relying on any earnings estimate?
Replace the external proxy with same-brand evidence wherever possible. The FDD states that written substantiation for Item 19 is available upon reasonable request, and Item 20 supplies current and former franchisee contacts. The FTC recommends comparing the claim's population and assumptions and interviewing franchisees rather than relying on a sales presentation.
- Request the written Item 19 substantiation and reconcile the annual figures to the monthly source data.
- Ask for anonymized profit-and-loss structures from one-room and two-room studios at different sales levels.
- Interview owners in the 4th, middle and 1st revenue quartiles about payroll, rent, manager cost and owner hours.
- Ask how the 20 excluded partial-year studios performed during ramp-up, temporary closure or wind-down.
- Verify whether the proposed location requires an operations manager and quantify the owner's continuing workload under Item 15.
- Model the $850 monthly royalty minimum, local occupancy, required advertising, insurance, software, music, summit and training costs.
- Keep buyer-specific loan principal, interest and personal taxes separate from unit-level operating earnings.
Decision-useful earnings range
The strongest defensible estimate is about $8,000-$64,000 in annual pre-tax manager-staffed residual owner earnings per full-year studio scenario, or about $84,000-$140,000 in estimated owner-operator benefit when $75,860 of management labor value is added. Both ranges are scenario-based, not official barre3 profit disclosures. The most important driver is the combination of Gross Revenue and labor/occupancy efficiency. The largest unresolved uncertainty is the absence of same-brand franchised-studio operating expenses in Item 19. Before making a decision, a buyer should verify the FDD's written substantiation, obtain comparable studio expense structures and test the model through interviews with current and former franchisees across revenue quartiles.