How Much Does a Capriotti's Sandwich Shop Franchise Owner Make?

Officially, Item 19 reports Gross Sales for franchised shops and adjusted EBITDA only for affiliate-owned shops; it does not report franchisee owner income. The relevant period is calendar 2024, and the comparable format is a traditional U.S. restaurant open for the entire year. The distinction matters because Gross Sales are revenue before food, labor, rent, franchise fees, and other expenses.

The estimate multiplies three official franchised-shop revenue anchors by three derived operating-margin observations from the 10 affiliate-owned shops. This produces a reproducible manager-run scenario, but it is not an observed franchisee profit distribution because the revenue and cost data come from different Item 19 populations.

For each of the 10 affiliate-owned restaurants, the margin calculation is Item 19 adjusted EBITDA at a 7% royalty ÷ Total Sales. The resulting shop-level margins range from 4.0% to 23.3%. Using a standard linear percentile calculation gives a 25th percentile of 8.34%, a median of 12.53%, and a 75th percentile of 15.12%.

The Conservative revenue anchor is the official bottom-quartile average; the Base anchor is the official all-shop median; and the Upside anchor is the official top-quartile average. Calculations use full precision and are rounded to the nearest $1,000 only after multiplication. These labels are analytical scenarios, not probabilities and not promises.

Manager-run earnings

Residual store-level adjusted EBITDA after the disclosed operating costs and manager compensation reflected in the affiliate-owned statements, but before interest, depreciation, amortization, personal income tax, financing principal, capital expenditures, and owner-specific overhead.

Owner salary or draw

Not separately disclosed for franchisees. A draw or distribution changes how cash reaches the owner; it does not create additional store profit.

After-tax take-home

Not estimated. Federal, state, and local taxes depend on entity structure, jurisdiction, deductions, and the owner's broader tax position.

An owner who personally performs the general manager role may add about $59,069 of labor value to the manager-run residual. Item 19 reports an average General Manager salary of $56,649 and an average manager bonus of $2,420 at the 10 affiliate-owned shops. Item 15 permits the Managing Owner to be the restaurant manager or to designate another manager, while requiring the Managing Owner and managerial employees to devote full-time energy to operating the restaurant.

The affiliate-owned adjusted EBITDA proxy already includes royalty, national marketing, cooperative marketing, rent, utilities, payroll, food cost, and operating expenses reflected in the 2024 statements. Item 19 specifically recalculates the affiliate results at the 7% royalty applicable to a franchisee operating one or two shops, so the scenario does not subtract that royalty a second time.

Royalty Fee

7% of monthly Gross Sales for individual Franchise Agreements covering one or two restaurants; 6% under a Development Rights Agreement for three or more restaurants, subject to the agreement's conditions. FDD Item 6, pages 6 and 11.

Marketing Fund

Currently 2% of monthly Gross Sales, with the contractual right to charge up to 4%.

Cooperative advertising

Currently 2% of monthly Gross Sales; a majority of cooperative members may vote for a higher contribution.

Local marketing

At least 1.5% of monthly Gross Sales after the New Shop Opening Plan ends; the FDD recommends up to 4%. The affiliate Total Operating Expense definition includes marketing and advertising, but it does not isolate the local-marketing amount.

Technology Fee

0.65% of Gross Sales is authorized but was not currently charged in the 2025 FDD. If activated without an offsetting benefit, it would reduce annual earnings by about $3,400, $5,200, or $8,300 at the three scenario revenue levels.

Service Management Group

Currently $25 per month for the customer-service analytics platform.

The model does not treat the $594,700-$935,000 Item 7 traditional-shop initial investment as an annual operating expense. Startup investment, depreciation, replacement capital, remodels, and financing principal are separate from annual store-level earnings.

The largest unresolved uncertainty is whether the cost structure of 10 Nevada affiliate-owned shops transfers to a franchised restaurant in the buyer's market. The model is same-brand and FDD-based, which is stronger than a generic restaurant margin, but company or affiliate operations can differ from franchisee purchasing, overhead, lease terms, staffing, and local execution.

• Population mismatch: the revenue anchors come from 120 franchised restaurants, while the operating-margin proxy comes from 10 affiliate-owned restaurants. The FDD does not publish franchised-shop EBITDA or owner compensation.
• Geographic concentration: all 10 operating statements are for Nevada restaurants. Labor, occupancy, insurance, utilities, delivery economics, and food distribution can be materially different elsewhere.
• Survivorship and maturity: Item 19 excludes 16 franchised restaurants that permanently closed during 2024, 14 franchised and two affiliate-owned restaurants that opened during the year, three nontraditional restaurants, and four reduced-hours restaurants.
• Item 20 system movement: during 2024, 14 franchised outlets opened, three were reacquired by the franchisor, and 16 ceased operations for other reasons; franchised outlets declined from 143 to 138 while company-owned outlets increased from 10 to 15.
• Format limitation: the earnings range applies only to traditional shops. The 2025 FDD offers a separate Virtual Kitchen format, but Item 19 does not provide a compatible Virtual Kitchen earnings population.
• Financing and capital: Item 10 states that the franchisor offers no direct or indirect financing and does not guarantee obligations. Interest, loan principal, personal taxes, capital expenditures, and owner-specific overhead are outside the range.

A buyer should rebuild the model with target-market evidence and actual franchisee operating statements before treating any scenario as a budget. The FTC emphasizes that Item 19 claims must be evaluated for population, assumptions, geography, and whether reported figures are Gross Sales or profit.

• Request the franchisor's written substantiation for every Item 19 table, including the 10 affiliate-owned operating statements and the adjusted 7% royalty calculation.
• Ask current and former franchisees for full-year profit-and-loss statements, owner hours, manager compensation, delivery commissions, food cost, payroll burden, rent, repairs, insurance, and required local marketing.
• Separate mature-shop results from opening-year ramp-up, and ask specifically about the 2024 closures, reacquisitions, transfers, and reduced-hours exclusions disclosed in Items 19 and 20.
• Confirm whether the target shop will be traditional, nontraditional, or Virtual Kitchen; do not apply the traditional-shop range to a different format.
• Build a separate debt schedule using the actual financed amount, rate, term, fees, and required reserves. Do not subtract a generic loan payment from EBITDA.
• Confirm whether the Managing Owner will operate the shop full time or hire a general manager, and define salary, draw, distributions, retained cash, and owner benefits separately.

Useful evaluation guidance is available in the FTC's Consumer's Guide to Buying a Franchise and its Franchise Disclosure Document review guidance.

The strongest defensible planning range is approximately $44,000-$192,000 in manager-run, pre-tax owner earnings per full-year traditional restaurant, with a Base scenario near $101,000. This is a Mode C scenario estimate, not an official franchisee earnings disclosure. An owner who replaces the general manager may receive approximately $103,000-$251,000 of owner-operator benefit, but the additional amount is compensation for work performed.

The most important earnings driver is the combination of Gross Sales and store-level operating margin. The largest uncertainty is the transferability of the 10 Nevada affiliate-owned shops' cost structure to a franchised location, particularly because Item 19 excludes 2024 closures and opening-year shops. Before signing, a buyer should verify the Item 19 substantiation, obtain franchisee profit-and-loss evidence, and reconcile owner hours, manager pay, rent, labor, food cost, delivery expense, local marketing, debt service, and capital reserves.

A disciplined underwriting process should replace broad assumptions with local written evidence and preserve a practical cash buffer for operating surprises.