Annual owner earnings answer
The 2026 Car-X, LLC Franchise Disclosure Document reports this range as pro forma Net Income across the lower-sales, middle-sales, and higher-sales thirds of 46 mature franchised Car-X Centers for calendar 2025. The middle tercile shows $82,597. This is an official Item 19 financial performance representation, but it is not verified owner take-home pay.
Owner-operator figures in this article are independent analytical derivations. They are not a separate Item 19 financial performance representation by Car-X, LLC. They combine the FDD’s pro forma Net Income and Management Salary lines to estimate the benefit when a working owner replaces a paid manager. Actual results can differ materially because of location, sales mix, labor, occupancy, financing, owner involvement, warranty expense, capital spending, and execution.
Data basis
The legal franchisor is Car-X, LLC, a Delaware limited liability company and subsidiary of Monro, Inc. The FDD was issued May 28, 2026. Item 19 uses average 2025 Gross Sales for all 46 franchised Centers operating at least two full calendar years, divided into three equal sales groups. Most operating-expense ratios come from 51 company-operated Car-X Centers operating at least 12 months. Sources were checked July 21, 2026.
FDD citations: Car-X, LLC 2026 FDD, Item 19, pp. 41–44; Item 15, pp. 33–34; Item 20, pp. 44–48.
Evidence status
Sales cover the full mature franchised population, but the “Net Income” calculation uses company-operated expense proxies rather than actual franchisee expense records.
Middle-tercile Gross Sales
Average annual revenue for the middle third of mature franchised Centers.
Middle-tercile Net Income
Item 19’s pro forma residual after the listed operating-cost lines.
Middle-tercile margin
$82,597 divided by $758,563; calculated before rounding.
Franchised Centers
The 2025 sales population represented in the Item 19 terciles.
Middle Management Salary
The company-operated management-salary assumption used in Item 19.
Blended royalty assumption
Item 19’s blend for tire, battery, and service sales.
Item 19 evidence
What does Car-X Item 19 actually report?
It reports a pro forma profit-and-loss model by sales tercile, not audited franchisee profit statements. Gross Sales come from the 46 mature franchised Centers. Cost of Sales, labor, payroll taxes, rent, and utilities or other costs are generally calculated from same-brand company-operated Centers; advertising comes from franchisees; royalty uses a 4.2% blended rate; and the point-of-sale charge is a fixed amount.
- Gross Sales
- Annual revenue before operating expenses. It is not owner income, salary, cash flow, or take-home pay.
- Item 19 “Net Income”
- The residual after the expense categories shown in the FDD table. The FDD warns that other fixed and variable costs are not reflected.
- Owner-operator benefit
- A derived figure equal to Item 19 Net Income plus the disclosed Management Salary proxy when the owner performs that work.
For owner-role modeling, this article uses the lower-sales tercile as the Conservative anchor, the middle-sales tercile as the Base anchor, and the higher-sales tercile as the Upside anchor. These are analytical scenario labels, not FDD labels or probabilities.
| Analytical scenario anchor | Average Gross Sales | Item 19 Net Income | Derived owner-operator benefit |
|---|---|---|---|
| Conservative — lower-sales tercile | $500,630 | −$47,375 | $25,384 |
| Base — middle-sales tercile | $758,563 | $82,597 | $161,164 |
| Upside — higher-sales tercile | $1,170,635 | $234,799 | $343,468 |
Source: Car-X, LLC 2026 FDD, Item 19, pp. 41–44. Owner-operator benefit equals disclosed Net Income plus disclosed Management Salary. Values are per Center and annual. The higher-sales table components differ from the disclosed Net Income by $1 when summed because the published inputs are rounded; the disclosed Net Income controls.
The analytical labels map directly to the official lower-, middle-, and higher-sales terciles.
Interpretation: sales level is the dominant disclosed driver. Conservative, Base, and Upside are analytical labels anchored to observed terciles; they do not state the probability of any result, and Base is not a “most likely” forecast.
Source: Car-X, LLC 2026 FDD, Item 19, pp. 42–43. Values are the FDD’s pro forma Net Income, not actual franchisee distributions or after-tax income.
The higher-sales tercile generated average Gross Sales of $1,170,635, but the disclosed pro forma Net Income was $234,799. The $935,836 difference represents the listed operating-cost structure, subject to rounding and the FDD’s warning that additional costs may exist.
Owner role
How does active owner involvement change the economics?
An active owner may capture more total economic benefit than a manager-run owner because the owner can perform the management work represented by the FDD’s Management Salary line. Item 15 requires an individual owner to devote full time and effort to management and operation; an entity owner must have at least one qualifying principal involved, while an approved manager may carry out on-site management responsibilities. Using a manager does not establish passive ownership.
The gap is the FDD’s disclosed Management Salary proxy for each sales tercile.
Interpretation: replacing a paid manager adds $72,759 to $108,669 of labor value, depending on the sales tercile. In the lower-sales tercile, the business remains a modeled loss on a manager-run basis even though the combined owner labor plus residual becomes positive.
Source: Car-X, LLC 2026 FDD, Item 19, pp. 42–43; Item 15, pp. 33–34. The derivation does not adjust payroll taxes, benefits, bonuses, contests, or spiffs. The FDD states that Management Salary excludes those items.
The derived range of $25,384 to $343,468 is the better measure of total owner economic benefit only when the owner actually performs the management role. An owner using an approved manager should focus on the official Net Income range of −$47,375 to $234,799. The official Car-X owner profile also describes the model as hands-on and requiring active, full-time involvement.
Expense bridge
Which costs are included, and which can still reduce owner earnings?
The Item 19 Net Income includes the disclosed Cost of Sales, Direct Labor, Management Salary, Payroll Taxes, royalty, advertising, cash rent, point-of-sale system cost, and utilities or other costs. It does not establish that every real franchisee expense has been captured.
Included in the Item 19 model
- Cost of Sales at approximately 31% of Gross Sales.
- Direct Labor, Management Salary, and Payroll Taxes.
- Royalty at a 4.2% blended rate in the FPR.
- Franchisee advertising averages of roughly 3%, 4%, and 5% by tercile.
- Cash rent, point-of-sale expense, and utilities or other costs.
Not fully captured or not separately identified
- Actual franchisee cost records; Car-X states it does not collect them.
- Management benefits, bonuses, contests, and spiffs.
- Warranty expense and bad debts excluded from utilities or other costs.
- Insurance, optional or required accounting service, and other unlisted operating costs.
- Capital expenditures, depreciation, financing interest and principal, owner draws, and personal income taxes.
Item 6 generally sets royalty at 5% of Gross Sales after a new Center’s first 180 days, with reduced treatment for tire and battery sales; the Item 19 blended assumption is 4.2%. Advertising can vary by market and policy. The FDD permits advertising charges up to 10% of weekly Gross Sales, while the 2025 Item 19 table uses each tercile’s average franchisee advertising expense. The model therefore should not be rebuilt by subtracting a second royalty or advertising charge.
Debt principal is not an operating expense in the Item 19 table, and the FDD does not provide one standard financing structure for a newly developed Center. A buyer should subtract the actual annual principal and interest schedule separately from operating earnings rather than treating the published Net Income as spendable cash.
Uncertainty
How much confidence should a buyer place in the range?
Moderate confidence is appropriate. The revenue evidence is unusually broad because it covers all 46 mature franchised Centers operating at year-end 2025, but the earnings model is not based on those franchisees’ actual expense statements.
The largest limitation is the mixed population: franchised-center sales are paired with company-operated expense ratios. Company stores can differ in purchasing, staffing, occupancy, benefits, accounting, and capital allocation. The FTC specifically advises buyers to examine whether company-operated data are comparable and to request written substantiation for Item 19 claims through its consumer guide to evaluating franchise earnings.
Item 20 adds another caution. Car-X ended 2025 with 46 franchised Centers and 51 company-operated Centers. One franchised outlet ceased operations during 2025, while 20 company-operated outlets closed. The expense proxy therefore represents company-operated Centers still open at year-end, not the outlets that closed during the year. That is a survivorship limitation when using the proxy to estimate a new owner’s downside.
What should a buyer verify before relying on the numbers?
The buyer should reconcile the official Item 19 model to actual franchisee profit-and-loss statements for comparable markets, shop sizes, and sales levels. The FDD states that written substantiation is available on request.
- Request Item 19 written substantiation and ask how each company-operated expense ratio was calculated.
- Ask current and former franchisees for actual 2025 labor, rent, insurance, warranty, bad-debt, technology, accounting, and capital-spending figures.
- Separate owner salary for work performed from distributions and retained business profit.
- Compare the proposed site’s occupancy and technician wages with the applicable sales tercile rather than the system average.
- Model the actual loan structure, equipment replacement plan, and working-capital needs outside the Item 19 Net Income figure.
- Confirm whether the Center will be owner-operated or managed by an approved employee and price that labor consistently.
Decision synthesis
What is the strongest defensible Car-X owner-earnings range?
The strongest official annual range is −$47,375 to $234,799 of pro forma Net Income per mature Car-X Center, with $82,597 in the middle-sales tercile. For a full-time owner who replaces the paid management role, the independently derived owner-operator benefit is $25,384 to $343,468, including both residual profit and labor compensation.
The most important earnings driver is sales volume relative to the store’s labor and occupancy structure. The largest unresolved uncertainty is that Car-X does not collect actual franchisee expense data for the Item 19 profit model and instead uses company-operated proxies. A buyer should verify the written Item 19 substantiation, actual franchisee P&Ls, owner compensation treatment, and location-specific debt service before treating any point in these ranges as available cash.