A manager-run, traditional Cousins Subs Shop may produce a pre-tax owner result ranging from an approximately $58,000 operating loss to about $135,400 of annual owner earnings, with a base scenario of about $50,100. This is a 2025, per-unit scenario for the traditional 2,000-2,400-square-foot format. Gross receipts are not owner income, and the 2026 Franchise Disclosure Document does not report profit for franchised Shops. The estimate is before interest, financing principal, personal income taxes, depreciation, amortization, and replacement capital beyond the required renovation reserve.
- Legal franchisor
- Cousins Subs Systems, Inc., a Wisconsin corporation; affiliate-owned Shops are operated by Cousins Submarines, Inc.
- Disclosure document
- 2026 U.S. Franchise Disclosure Document, issued March 20, 2026. Item 19 appears on FDD pages 45-52.
- Item 19 status
- Official franchised-Shop gross receipts plus official affiliate-owned revenue, expense, and Shop EBITDA data; no direct franchised-owner profit disclosure.
- Applicable population
- 29 traditional franchised Shops open for the full 2025 fiscal year. Four non-traditional franchised Shops are disclosed separately and are not blended into this estimate.
- Supplemental benchmark
- U.S. Bureau of Labor Statistics 2024 median wage for food service managers in food services and drinking places, used only for the owner-operator labor-value scenario.
- Date checked
- July 15, 2026.
Pre-tax store-level owner earnings before interest, financing principal, personal income taxes, and additional replacement capital.
2025 system-wide median for the 29 reporting traditional franchised Shops.
Derived from the exact 2025 affiliate-owned averages in the $700,000-$999,999 revenue band.
Ten high-third, ten middle-third, and nine low-third Shops open for the full fiscal year.
6% Continuing Service Fee, 2% fund contribution, and 3% local advertising requirement.
What does the 2026 Cousins Subs Item 19 actually measure?
Item 19 measures gross receipts for franchised Shops and Shop EBITDA for affiliate-owned Shops; it does not state what a franchise owner earned. The 2025 traditional franchised cohort officially reports an $865,432 average and an $831,786 median in Gross Receipts. Separately, 56 affiliate-owned Shops are grouped by revenue band and report average revenue, expenses, and Shop EBITDA.
“Gross Receipts” is the FDD's revenue measure after customer refunds and excluding collected sales taxes, but it includes specified gift-card redemptions, business-interruption proceeds, and barter value. “Shop EBITDA” means earnings before interest, taxes, depreciation, and amortization. The affiliate figures are unaudited, exclude corporate overhead for services such as accounting, legal, and human resources, and do not represent franchised outlets.
| Official population or measure | Sample | Revenue / margin | How it is used |
|---|---|---|---|
| Traditional franchised Shops, system-wide median Gross Receipts | 29 | $831,786 | Base revenue anchor |
| Traditional franchised Shops, low-third median Gross Receipts | 9 | $547,632 | Conservative revenue anchor |
| Traditional franchised Shops, high-third median Gross Receipts | 10 | $1,038,323 | Upside revenue anchor |
| Affiliate-owned Shops with revenue below $700,000 | 10 | −10.15% EBITDA | Conservative margin proxy |
| Affiliate-owned Shops with $700,000-$999,999 revenue | 25 | 6.32% EBITDA | Base margin proxy |
| Affiliate-owned Shops with revenue above $1,000,000 | 21 | 13.28% EBITDA | Upside margin proxy |
How is the annual owner-earnings range calculated?
For one mature traditional Shop, the independent estimate matches each 2025 franchised-Shop revenue anchor to the corresponding 2025 affiliate-owned Shop EBITDA band, then subtracts the $2,400 annual renovation reserve. It uses full-dollar FDD averages before rounding; the published EBITDA percentages are rounded displays.
| Scenario | Revenue anchor | Matched EBITDA proxy | Estimated owner earnings |
|---|---|---|---|
| Conservative | $547,632 | −10.16% | −$58,000 |
| Base | $831,786 | 6.31% | $50,100 |
| Upside | $1,038,323 | 13.27% | $135,400 |
Estimated pre-tax owner earnings after modeled store expenses and the $2,400 renovation reserve, but before interest, financing principal, personal taxes, and additional replacement capital.
Interpretation: Sales volume and the operating leverage associated with the FDD's revenue bands dominate the result. Source: 2026 Cousins Subs FDD, Item 19, pages 46 and 49-52; Item 6, page 9. Calculations use exact disclosed dollar averages and are rounded to the nearest $100.
What is included in the base manager-run estimate?
For the 2025 mature traditional-Shop scenario, the base estimate includes ordinary management and hourly wages, food and paper cost, occupancy, utilities, advertising, employee benefits, other operating expenses, and the 6% Continuing Service Fee proxy. It then subtracts the $2,400 annual renovation-fund contribution to move from Shop EBITDA toward cash available to the owner.
| Bridge item | Modeled amount | Evidence treatment |
|---|---|---|
| Traditional franchised Gross Receipts | $831,786 | Official 2025 median |
| Cost of goods sold | −$220,554 | Scaled affiliate-owned average |
| Wages | −$264,297 | Includes management and hourly payroll plus taxes |
| Occupancy, utilities, advertising, benefits, and other operating costs | −$244,529 | Scaled affiliate-owned averages |
| Continuing Service Fee proxy | −$49,907 | 6% imputed in Item 19 Part 2 |
| Shop EBITDA proxy | $52,500 | Before interest, taxes, depreciation, and amortization |
| Renovation and Maintenance Fund | −$2,400 | Required after the Shop's first 12 months, until the fund reaches $25,000 |
| Estimated pre-tax owner earnings | $50,100 | Before interest, financing principal, and personal taxes |
How does active owner involvement change the result?
For the same 2025 traditional-Shop scenarios, an active owner who replaces a paid food service manager could add approximately $63,040 of labor value to the manager-run result, producing an estimated owner-operator benefit of about $5,000 to $198,400. This is not passive business profit: the added amount compensates the owner for performing management work.
The 2026 FDD does not require personal supervision, but Item 15 says the business must be supervised by the owner or by two full-time Designated Managers. The official Cousins Subs costs and criteria page similarly asks whether a candidate wants to be involved or has a strong general manager in mind. The labor-value assumption uses the BLS food service manager wage data: a $63,040 median annual wage in food services and drinking places for May 2024.
The distance between each pair of points is the $63,040 market value assigned to management labor performed by the owner.
Interpretation: Owner involvement changes how the economic benefit is split between business profit and compensation for labor; it does not automatically improve the underlying Shop EBITDA. Sources: 2026 Cousins Subs FDD, Item 15, page 35; BLS Occupational Outlook Handbook, May 2024 wage data.
Which franchise fees are included, and which remain uncertain?
Under the 2026 FDD, the 6% Continuing Service Fee and roughly 5% advertising burden are already embedded in the affiliate-owned Shop EBITDA proxy, so they are not subtracted a second time. Item 19 expressly imputes the 6% fee to affiliate-owned Shops, while its advertising line includes the Advertising and Development Fund, cooperative advertising, and other promotional expense.
- Continuing Service Fee: 6% of Gross Receipts. Item 19 Part 2 includes a 6% “Franchise Fees” line as though the affiliate-owned Shops were franchised.
- Advertising: Item 6 requires 2% to the Advertising and Development Fund and 3% in local advertising; the fund can rise to 3%. Cooperative contributions of up to 3% generally credit the local advertising obligation.
- Technology Fund: $300-$800 per month, or $3,600-$9,600 annually. Item 19's Other Operating Expenses include POS software, but the FDD does not prove that this amount exactly matches the franchisee Technology Fund Contribution. The model does not subtract it again to avoid double counting.
- Renovation and Maintenance Fund: $200 per month beginning 12 months after opening, capped at $25,000. The model subtracts $2,400 annually because this cash is restricted from owner distribution while the contribution is required.
- Startup investment: The $464,700-$1,164,500 Item 7 range is not an annual operating expense and is not subtracted from one year of sales.
Why is the evidence confidence limited?
For a mature traditional Shop modeled from 2025 results, the largest unresolved uncertainty is whether affiliate-owned Shop expense ratios are transferable to a particular franchised Shop. The same-brand data are materially better than a generic restaurant margin, but the populations differ in ownership, overhead allocation, purchasing arrangements, local labor markets, occupancy, and operating practices.
- Company-operated proxy: Cousins Submarines, Inc. owns or operates the EBITDA cohort. No corporate overhead for accounting, legal, and human resources is allocated to those Shops.
- Full-year survivors: Item 19 excludes Shops opened during the year, permanently closed during the year, special-event locations, and food trucks. Results therefore describe mature full-year operations, not ramp-up economics.
- Format separation: Four 2025 non-traditional franchised Shops had median Gross Receipts of $486,470. Their co-branded or convenience-store operating model is not combined with the traditional-Shop estimate.
- System movement: Item 20 shows franchised Shops declining from 48 at the start of 2023 to 34 at the end of 2025, with no franchised openings in those three fiscal years. Transfers, reacquisitions, terminations, and a relocation closure require outlet-level due diligence.
- Debt service: Item 10 says the franchisor offers no direct or indirect financing and does not guarantee obligations. Interest and principal can materially reduce owner cash flow, but no single debt structure is assumed here.
- Taxes and capital expenditure: Personal income taxes are excluded. Depreciation and amortization are excluded by EBITDA, and actual replacement capital can exceed the $2,400 reserve.
What should a buyer verify before relying on this earnings range?
A buyer assessing the 2025 traditional-Shop scenarios should test the model against written Item 19 substantiation and actual franchisee operating statements, not rely on the scenario midpoint. The FTC Franchise Rule Compliance Guide is a useful reference for understanding regulated franchise disclosures, while the FDD states that written substantiation for its Item 19 data is available on reasonable request.
- Request the Item 19 substantiation and confirm how affiliate-owned expense categories were compiled, especially Wages, Advertising, Other Operating Expenses, and Franchise Fees.
- Ask traditional-Shop franchisees for 2025 and trailing-12-month profit-and-loss statements, including owner salary, manager payroll, technology charges, repairs, delivery commissions, and local marketing.
- Separate mature Shops from openings, relocations, remodels, acquisitions, and units that operated less than a full fiscal year.
- Compare the proposed site's rent, common-area charges, wage rates, drive-through configuration, delivery mix, and expected sales to the FDD revenue band used in the scenario.
- Confirm whether an active owner would replace one manager, share duties with management, or merely provide oversight; value only the labor actually performed.
- Model the buyer's actual interest expense, principal payments, required working capital, and capital-replacement plan separately from store-level EBITDA.
- Use Item 20 and Exhibits H and I to interview current and former franchisees about closures, transfers, reacquisitions, manager turnover, and owner distributions.
What is the strongest defensible earnings conclusion?
For one mature, traditional Cousins Subs Shop, the strongest defensible manager-run range is approximately −$58,000 to $135,400 per year before debt service and personal taxes, with a base scenario near $50,100. It is a scenario-based estimate anchored to 2025 franchised Gross Receipts and same-brand affiliate-owned Shop EBITDA, not an official franchised-owner profit figure. An owner who genuinely replaces a paid manager may receive an estimated owner-operator benefit of about $5,000 to $198,400, but the added labor value is compensation for work rather than passive profit.
Sales volume is the most important earnings driver because the 2025 affiliate-owned EBITDA averages move from negative below $700,000 of revenue to 13.28% above $1 million. The largest unresolved uncertainty is the transferability of affiliate-owned cost ratios to a specific franchised location. Before proceeding, a buyer should verify the Item 19 substantiation, obtain outlet-level operating statements, and reconcile franchisee interviews to the proposed site's labor, rent, technology, financing, and owner-role plan.
FDD citations: 2026 Cousins Subs Franchise Disclosure Document, issued March 20, 2026; Items 6, 7, 10, 15, 19, and 20, cited by exact FDD page above. No public franchisor-hosted copy of the complete matching FDD was verified, so the FDD citations are intentionally unlinked.