A single-territory owner-operator may generate roughly $13,000 to $114,000 in estimated pre-tax owner-operator benefit, with a $58,000 base scenario. This range uses the 2026 First Choice Business Brokers FDD's 2025 Commission medians and an official IRS sole-proprietor margin proxy. It is not passive business profit: the result includes the economic value of work performed by the owner.
This is an independent analytical scenario, not an Item 19 financial performance representation by First Choice Business Brokers, Inc. It combines identified facts from the 2026 Franchise Disclosure Document with separately identified IRS margin and BLS wage assumptions. Actual results can differ materially because of territory demand, closed transactions, commission size, listing conversion, office format, Associates, labor, occupancy, financing, owner involvement, and execution.
Legal franchisor: First Choice Business Brokers, Inc. FDD: issued March 12, 2026. Item 19 status: reports 2025 Commissions and transaction statistics, but no operating profit, net income, Owner Compensation, EBITDA, or cash flow. Populations: single-territory and multi-territory franchises are separated. Benchmarks: 2023 IRS Schedule C statistics and May 2023 BLS occupational wages. Checked: July 19, 2026. No matching official public FDD link was located, so FDD references are given in plain text by Item and printed page.
Pre-tax estimate before financing principal and personal income taxes.
2025 total-table median; revenue, not owner earnings.
Subject to a $300 monthly minimum and the FDD's threshold terms.
Brand Fund, base Technology Fee, and lowest Administrative Support tier.
The Item 19 narrative instead says 58; written substantiation should reconcile it.
How much may a single-territory owner earn annually?
The defensible scenario range is approximately $13,000 to $114,000 in annual pre-tax owner-operator benefit, with a $58,000 base case. These are estimates for a single franchised territory using 2025 Commission medians from Item 19. They are not official profit figures, and they should not be read as expected outcomes or after-tax take-home pay.
| Scenario | FDD Commission anchor | All-in margin assumption | Estimated owner-operator benefit |
|---|---|---|---|
|
Conservative Bottom-third median |
$41,000 | 32% | $13,000 |
|
Base Total and middle-third median |
$166,660 | 35% | $58,000 |
|
Upside Top-third median |
$300,925 | 38% | $114,000 |
Calculation: Commission anchor × scenario margin, using full-precision values and rounding the published result to the nearest $1,000. FDD anchors: 2026 First Choice Business Brokers FDD, Item 19, pp. 41–43. Margin benchmark: IRS, 2023 Nonfarm Sole Proprietorship Statistics, Table 1, “Offices of real estate agents, brokers, property managers, and appraisers.”
Item 19 calls the reported measure Commissions. It includes commission and referral-fee Gross Revenue but excludes other revenue streams such as management services and consulting fees. It does not subtract royalties, technology costs, advertising, office costs, Associate compensation, insurance, licensing, travel, or other operating expenses.
What does the official financial performance disclosure actually measure?
Item 19 measures 2025 Commissions and transaction activity, not owner income. For single-territory franchises, the table reports average, median, high, and low Commissions by thirds. The three tier medians are $41,000, $166,660, and $300,925.
The tiers describe observed 2025 groups; they are not probabilities or profit bands.
Interpretation: closed-transaction volume and commission size create substantial revenue dispersion before expenses. Source: 2026 First Choice Business Brokers FDD, Item 19, Table 2, p. 42.
Which outlets were included and excluded?
The disclosed single-territory table is a selected operating cohort, not the full 128-territory system. Item 19 excludes territories opened during 2025 and operating less than 12 months, certain older territories with no completed transactions, territories that reported no listings, and six territories that ceased operations during 2025.
The FDD states that 128 Franchised Territories operated through 105 franchises at December 31, 2025. It also reports that 87 territories in 66 franchises produced the 306 sold listings used in the transaction table. The median time from listing to sale was 204 days, while the median time from training completion to the first listing was 65 days. These timing measures show why a new owner's first-year cash flow may differ from a mature annual result.
The Item 19 narrative says the single-territory table includes 58 territories operating in 58 franchises, but the table displays 11 franchises in each of three groups, or 33 total. This internal population discrepancy does not change the printed medians, but it weakens confidence in coverage. A buyer should request the written substantiation and a reconciliation before relying on the sample.
Multi-territory results must remain separate. The multi-territory table covers eight franchise portfolios operating 29 territories and reports a total median of $481,133 in Commissions. That is a per-franchise portfolio measure, not a per-territory or per-owner earnings figure. The sample is too small, and the FDD supplies no compatible shared-overhead or manager structure, to turn it into a defensible portfolio profit estimate.
How is the owner-earnings estimate calculated?
The estimate multiplies each official Commission median by an all-in owner-operator margin proxy. The benchmark is estimated, not same-brand evidence. IRS Statistics of Income data for 2023 show $66.261 billion of business receipts and $23.168 billion of net income less deficit for nonfarm sole proprietorships in the group “Offices of real estate agents, brokers, property managers, and appraisers,” an implied 34.96% margin.
The base case rounds the IRS ratio to 35%. The conservative and upside cases use 32% and 38%, a transparent sensitivity of three percentage points below and above the benchmark. The spread is analytical; it is not reported by the franchisor or the IRS.
- What the estimate includes
- An all-in Schedule C-style net-income proxy that can include the value of the proprietor's labor. IRS net income is after deductible operating costs reported by the benchmark businesses.
- What it excludes
- Personal income taxes and financing principal payments. Capital expenditures and working-capital timing are not modeled as a separate annual cash charge.
- Interest and depreciation
- The IRS net-income measure is after reported interest and depreciation deductions. The scenario does not add either item back.
- Owner compensation
- A sole proprietor does not deduct a wage paid to the proprietor. The result is therefore labeled owner-operator benefit, not passive operating profit or salary.
The IRS ratio is an all-in net-income margin. Its published definition does not identify whether any businesses in the broad group paid franchise fees. Subtracting the First Choice royalty and fixed fees again could double count costs. The headline calculation therefore does not make a second fee deduction; instead, the fee burden is shown separately as a comparability check. This unresolved treatment is a major reason for the Limited confidence rating.
How does owner involvement change the result?
Active owner operation materially changes the economics because the owner-operator benefit includes labor value. Item 15 encourages but does not require personal operation. If the owner is absent, an approved Key Person must oversee operations and recruiting, and that replacement labor must be paid.
Illustrative annual effect of subtracting the May 2023 BLS median wage of $84,570 for a First-Line Supervisor of Non-Retail Sales Workers.
Interpretation: under this wage sensitivity, the manager-run model reaches a positive residual only in the upside scenario. This is not a claim that manager-run franchises lose money; actual Key Person compensation, Associate structure, geography, and workload may differ. Sources: 2026 FDD, Item 15, p. 35; U.S. Bureau of Labor Statistics, May 2023 OEWS.
The $84,570 difference is labor compensation, not a change in the underlying franchise's sales. A manager-run owner may retain less residual profit but spend fewer working hours. Conversely, an active owner may receive more total economic benefit precisely because part of the figure compensates that owner's full-time management and sales work.
Which FDD fees can move annual owner earnings?
The royalty is the largest disclosed recurring fee at the scenario revenue levels. The 2026 FDD charges the greater of $300 per month or 10% of Gross Revenue up to the stated $850,000 threshold during the franchise term, then 8% thereafter under the disclosed conditions. Gross Revenue is broader than Item 19 Commissions because it can include valuations, consulting, management services, and other revenue streams.
| Disclosed obligation | Current amount | Annual interpretation used for the fee check |
|---|---|---|
| Royalty | 10% / 8% | 10% at all three scenario Commission anchors; minimum $300 monthly. |
| Brand Fund Contribution | $250 monthly | $3,000 per territory before permitted increases. |
| Base Technology Fee | $350 monthly | $4,200 with no Associates or additional office. |
| Administrative Support Fee | $250–$1,500 monthly | $3,000 at 0–15 Active Listings; rises to $18,000 at 101 or more. |
| Associate Technology Fee | $145 monthly each | Excluded from the no-Associate scenario; Associate commission compensation is also not disclosed. |
How large is the disclosed fee burden at the three revenue anchors?
Royalty plus the $10,200 minimum fixed-fee stack equals about 35% of bottom-tier median Commissions, 16% of the base median, and 13% of the top-tier median. This is a derived fee diagnostic, not an additional deduction from the all-in IRS margin scenario.
| Commission anchor | 10% royalty | Minimum fixed fees | Combined fee check |
|---|---|---|---|
| $41,000 | $4,100 | $10,200 | $14,300 / 34.9% |
| $166,660 | $16,666 | $10,200 | $26,866 / 16.1% |
| $300,925 | $30,093 | $10,200 | $40,293 / 13.4% |
Source and derivation: 2026 First Choice Business Brokers FDD, Item 6, pp. 11–15. The $10,200 figure annualizes the current Brand Fund Contribution, base Technology Fee, and lowest Administrative Support Fee. It excludes Associates, extra offices, credit-card charges, training events, late fees, and variable third-party operating costs.
What could make actual earnings materially different?
The largest uncertainty is the absence of same-brand expense and profit data. Item 19 provides useful revenue dispersion but no expense bridge, and the IRS proxy covers a broad group that includes real estate agents, property managers, and appraisers. Its business form is also sole proprietorship, while a franchise buyer may use another entity structure.
- Closed transactions: Item 19 reports a median per-listing Commission of $20,031 and a 204-day median listing-to-sale period. A few delayed or failed closings can shift annual revenue sharply.
- Other revenue streams: Item 19 Commissions exclude management and consulting revenue, while the royalty definition covers broader Gross Revenue.
- Associates: adding sales agents can expand capacity but introduces commission splits, $145 monthly Technology Fees per Associate, training fees, and supervision.
- Office format: the FDD allows a home-based office when there are no Associates, while a staffed office can add rent, equipment, insurance, and payroll.
- Cohort selection: newly opened, non-reporting, no-transaction, and ceased territories are excluded from the Item 19 performance tables.
- Debt and taxes: Item 10 provides no franchisor financing. Loan principal and personal tax outcomes are outside the estimate.
Item 20 provides useful system context but not profitability evidence. Franchised Territories increased from 109 at the start of 2025 to 128 at year-end, with 25 openings, five terminations, and one outlet ceasing operations for another reason. The system had no company-owned outlets in 2025, so there is no company-operated profit proxy to test against the scenario.
What should a buyer verify before relying on this range?
A buyer should treat $13,000 to $114,000 as a planning range to test, not a forecast. The most useful next evidence is the franchisor's written Item 19 substantiation and normalized profit-and-loss statements from franchisees with a comparable territory, owner role, office format, and operating age.
- Ask for the written substantiation supporting Item 19 and reconcile the narrative's 58 single-territory franchises with the table's 33.
- Confirm whether the target territory's economics resemble the bottom, middle, or top Item 19 Commission group and why.
- Request current franchisee P&Ls showing royalty, Brand Fund, Technology Fee, Administrative Support Fee, marketing, occupancy, insurance, licensing, travel, and professional fees.
- Separate owner sales and management hours from residual business profit; identify what a Key Person would actually cost in the target market.
- Verify Active Listing counts, Associate commission splits, Associate Technology Fees, and whether other revenue streams are material.
- Interview both current and former franchisees listed in Item 20, including operators with no completed transactions or discontinued operations where contact information is available.
- Model financing principal separately and review entity-specific tax consequences with qualified legal and tax advisers.
The strongest defensible annual range is approximately $13,000 to $114,000 in estimated pre-tax owner-operator benefit for a single territory, with a $58,000 base scenario. It is scenario-based, not an official owner-profit disclosure. Closed-transaction revenue and the owner's working role are the largest earnings drivers. The largest unresolved uncertainty is whether a broad IRS all-in margin is compatible with the franchise's actual fee and expense structure. Before making a decision, verify Item 19's population, obtain its written substantiation, and compare normalized franchisee financial statements across active owner-operated and Key Person-run offices.
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