For one U.S. Boulder Designs territory, the strongest defensible annual range is an independent 2026 scenario estimate, not a franchisor earnings claim. The manager-run range is estimated pre-tax owner earnings after modeled operating costs and a paid-management structure. The owner-operated range is estimated owner-operator benefit: business residual plus the market value of the full-time management work performed by the owner.
- Legal franchisor
- Boulder Designs Franchising, LLC, a Texas limited liability company.
- Current disclosure
- 2026 Boulder Designs Franchise Disclosure Document, issuance date March 27, 2026.
- Item 19 status
- No financial performance representation; no same-brand sales, profit, cash flow, or owner-compensation figure is disclosed.
- Outlet population
- 82 franchised outlets and no company-owned outlets at December 31, 2025, according to Item 20.
- External benchmark
- IRS Statistics of Income, 2022 active corporations in “Other miscellaneous manufacturing,” plus May 2025 BLS production-supervisor wages.
- Date checked
- July 18, 2026.
SCENARIO. Pre-tax residual after modeled operations, actual royalty mechanics, current technology fee, and annual meeting fee.
SCENARIO. Includes $76,600 of imputed full-time supervisory labor; it is not passive business profit.
OFFICIAL. The 2026 FDD does not report outlet sales or earnings.
OFFICIAL. The greater of 7% of Gross Revenues or the applicable monthly minimum.
OFFICIAL. U.S. system count at year-end 2025; no company-owned comparison group existed.
What does Boulder Designs Item 19 actually report?
Officially, Item 19 reports no financial performance representation for the franchised population. The 2026 FDD does not provide Gross Revenues, average unit volume, operating profit, EBITDA, Net Income, cash flow, owner compensation, or a percentage of outlets achieving a stated result. See 2026 Boulder Designs FDD, Item 19, page 39.
That absence is decisive. Revenue cannot be presented as owner earnings, and no website statement, testimonial, broker estimate, or generic franchise-income figure can replace Item 19. The Federal Trade Commission’s franchise-buying guidance explains that a franchisor is not required to make an earnings claim, but any authorized sales or earnings claim generally must appear in Item 19 and must have a reasonable basis.
Item 20 also offers no company-operated proxy: Boulder Designs reported zero company-owned outlets in 2023, 2024, and 2025. The system ended 2025 with 82 franchised outlets, after 17 openings, six terminations, and six outlets that ceased operations for other reasons during the year. Those counts describe system population and turnover; they do not measure owner income. See 2026 Boulder Designs FDD, Item 20, pages 39–45.
How was the annual earnings range calculated?
The estimate starts with a FDD-derived royalty breakpoint, applies a broad official manufacturing margin proxy, then adjusts for Boulder Designs royalty and advertising assumptions. The result is estimated pre-tax owner earnings before personal income taxes and before financing principal payments for one territory.
| Model component | Conservative | Base | Upside |
|---|---|---|---|
| Gross Revenues scenario | $205,700 | $257,100 | $308,600 |
| IRS pre-royalty margin proxy | 5.9% | 8.9% | 11.9% |
| Result before Boulder Designs-specific adjustments | $12,100 | $22,800 | $36,700 |
| Royalty under Item 6 | −$18,000 | −$18,000 | −$21,600 |
| Incremental local-advertising adjustment | −$17,000 | −$14,800 | −$10,000 |
| Current technology fee plus annual meeting fee | −$1,575 | −$1,575 | −$1,575 |
| Estimated manager-run pre-tax owner earnings | −$24,400 | −$11,500 | $3,500 |
| BLS owner labor value added | $76,600 | $76,600 | $76,600 |
| Estimated owner-operator benefit | $52,200 | $65,100 | $80,100 |
Estimated annual pre-tax residual after the modeled operating margin, royalty, local advertising, current technology fee, and annual meeting fee.
Interpretation: A paid-management structure does not produce a robust positive residual in this model. Even the upside case leaves only about $3,500 before personal taxes and financing principal.
Sources and method: 2026 Boulder Designs FDD, Items 6 and 19; IRS Statistics of Income 2022 Publication 16, Table 5.1; independent calculations rounded to the nearest $100.
- Revenue scale: Item 6 requires the greater of 7% of Gross Revenues or a monthly minimum. From Year 3 onward, the $1,500 monthly minimum equals 7% at approximately $257,143 of annual Gross Revenues. The model uses 80%, 100%, and 120% of that breakpoint. This is an analytical scale, not an FDD sales forecast.
- Margin proxy: IRS 2022 active corporations in “Other miscellaneous manufacturing” reported total receipts of $121.554 billion and total deductions of $110.761 billion, a compatible aggregate pre-tax residual margin of about 8.9%. The scenarios use that margin minus three percentage points, the reported margin, and the margin plus three percentage points.
- Advertising treatment: The IRS aggregate margin already includes reported advertising equal to about 1.8% of total receipts. Boulder Designs Item 6 highly recommends local advertising equal to 10% of annual Gross Revenues. The model therefore adds only the incremental amount above the IRS ratio, using 10%, 7.5%, and 5% total local-advertising assumptions across the three scenarios.
- Included and excluded: The IRS proxy includes aggregate interest, depreciation, officer compensation, salaries, wages, rent, and advertising deductions. The model is before personal income taxes and financing principal. Capital expenditures, territory-specific vehicle costs, National Accounts economics, and personal tax outcomes are not separately modeled.
How does owner involvement change the result?
Owner involvement changes the economic result mainly because the owner may perform the required full-time Internal Manager role instead of paying another person. Item 15 requires direct supervision by a full-time Internal Manager, allows that manager to be a non-owner, and recommends—but does not require—equity-owner participation. See 2026 Boulder Designs FDD, Item 15, page 32.
The teal diamond includes $76,600 of imputed owner labor based on the May 2025 national mean wage for first-line supervisors of production and operating workers.
Interpretation: Most of the modeled owner-operated benefit is compensation for full-time labor, not passive return on capital. In the conservative and base cases, the business residual is negative even though the owner’s labor has economic value.
Wage source: BLS May 2025 national occupational wage table. OEWS excludes self-employed workers; the $76,600 value is a replacement-labor proxy, not a promised owner salary.
Which FDD fees can move annual owner earnings most?
The royalty floor and local advertising level are the largest modeled recurring pressures. Item 6 sets the royalty at the greater of 7% of Gross Revenues or a monthly minimum of $750 in Year 1, $950 in Year 2, and $1,500 from Year 3 through the remaining term.
| Royalty period | Annual minimum | Gross Revenues where 7% equals minimum | Earnings implication |
|---|---|---|---|
| Year 1 | $9,000 | $128,571 | Below the breakpoint, the effective royalty rate exceeds 7%. |
| Year 2 | $11,400 | $162,857 | The minimum rises even if sales do not. |
| Year 3+ | $18,000 | $257,143 | This mature-period breakpoint is the model’s structural revenue center. |
Other modeled fixed obligations are the current $65 monthly Technology Fee and the $795 annual national or regional meeting fee. The Marketing Fee is currently $0 per month, although Item 6 says a fee of no more than $200 per month is anticipated once implemented. The FDD’s 10% local-advertising figure is described as highly recommended rather than a required fund payment. See 2026 Boulder Designs FDD, Item 6, pages 5–10.
The initial investment of $147,565 to $173,130 for a single franchise is not an annual operating expense and is not subtracted from one year of sales. Item 7’s three-month Additional Funds estimate also excludes owner-operator salary, so it is not evidence of annual owner earnings. See 2026 Boulder Designs FDD, Item 7, pages 10–13.
What is the largest unresolved uncertainty?
The largest uncertainty is actual same-brand Gross Revenues and the corresponding unit-level expense structure. The FDD identifies a mobile production-and-installation business involving custom boulders and commercial signage, but Item 19 gives no revenue cohort, outlet-age filter, sales distribution, gross margin, labor ratio, occupancy ratio, or owner-compensation data.
The model uses “Other miscellaneous manufacturing” because Boulder Designs produces custom physical products, while the U.S. Census Bureau’s Sign Manufacturing definition confirms that sign manufacturing covers signs and related displays made from varied materials. Neither category perfectly matches a Boulder Designs territory, which also sells, delivers, installs, and may perform landscape-related work. The broad proxy is therefore used only as a sensitivity anchor.
- Sales distribution: Obtain written annual Gross Revenues for mature, single-territory franchisees, with median, range, outlet age, and the number reporting.
- Direct production costs: Verify sand, cementitious materials, paint, engraving supplies, waste, freight, fuel, equipment maintenance, and installation labor as percentages of Gross Revenues.
- Advertising effectiveness: Compare actual local advertising spend with leads, conversion rate, average ticket, repeat business, and commercial-signage mix.
- Internal Manager payroll: Obtain territory-specific wages, payroll taxes, benefits, and the duties expected of the full-time Internal Manager.
- National Accounts: Request written clarification of the applicable fee percentage, pricing authority, deposit treatment, and franchisee gross margin.
- Closures and transfers: Interview current and former franchisees listed in Item 20 about sales ramp, seasonality, owner hours, manager use, and reasons for exit.
What is the decision-useful Boulder Designs earnings range?
The strongest defensible range is approximately −$24,000 to $3,000 of manager-run pre-tax owner earnings, or approximately $52,000 to $80,000 of owner-operator benefit for one territory. Both are scenario-based, not official Item 19 results. The larger figure depends on the owner personally supplying full-time supervisory labor valued at $76,600; it should not be read as passive profit or after-tax take-home pay.
The most important earnings driver is the relationship between Gross Revenues and the combined burden of direct operating costs, local advertising, and the greater-of royalty. The largest unresolved uncertainty is the missing same-brand sales and unit-level expense distribution. Before relying on any number, a buyer should compare the 2026 Item 19 statement with written substantiation for any later earnings claim and test the assumptions through structured interviews with current and former franchisees.
Evidence confidence is LIMITED because the estimate depends materially on a broad government industry proxy, a FDD royalty breakpoint that is not a sales forecast, and explicit advertising and margin sensitivities.