An actively working owner could instead see an estimated owner-operator benefit of $111,000–$166,000. That higher figure combines residual business income with the market value of work the owner performs; it is not passive profit. Both ranges are pre-tax, before financing principal and major capital expenditures.
Legal franchisor: HB Franchises, LLC. FDD: issued January 14, 2026. Item 19 status: no sales, profit, owner compensation, EBITDA, net income, or other financial performance representation. Applicable format: a carpet, flooring, and upholstery cleaning and restoration business, typically operated from home, within a current standard territory of approximately 150,000 to 200,000 people. Population context: Item 20 reports 430 franchised territories at September 30, 2025. Sources: 2026 Heaven’s Best FDD, Items 1, 6, 7, 15, 19, and 20; the official Heaven’s Best U.S. website; and the government datasets linked below.
What does Heaven’s Best Item 19 actually disclose?
Official answer: Item 19 discloses no franchisee financial performance data. The 2026 FDD says the franchisor does not make representations about future franchisee performance or the past performance of franchised or company-owned outlets. It therefore provides no same-brand average sales, median sales, gross profit, operating profit, net income, owner compensation, or percentage of outlets achieving a result. Source: 2026 Heaven’s Best FDD, Item 19, p. 45.
The absence of an Item 19 claim is not proof of weak or strong economics. It means the owner-earnings question cannot be answered with an official Heaven’s Best figure. The Federal Trade Commission’s franchise guide explains that Item 19 is where a franchisor must place sales or earnings claims it chooses to make and that gross sales alone would not establish profit.
The $654,000 central figure used below is a derived industry revenue proxy, not owner income and not a Heaven’s Best Average Unit Volume. Owner earnings emerge only after normal operating expenses. The model also distinguishes business residual from the value of the owner’s labor.
After a $48,970 manager-wage proxy; before employer payroll burden, debt principal, and personal taxes.
Includes the economic value of the owner’s work because Schedule C does not deduct owner salary.
2023 Census employer revenue divided by 2023 employer establishments for NAICS 561740.
IRS 2023 net income less deficit divided by receipts for Administrative and Support Services sole proprietorships.
Current royalty and software minimum through the disclosed upper fee configuration, excluding variable purchases.
Item 20 also reports 16 openings, two terminations, one reacquisition, and two other cessations in fiscal 2025.
How is the annual earnings range estimated?
The estimate uses one narrow industry revenue proxy, one broad owner-operated net-income ratio, and a manager-wage adjustment. Because the FDD gives no sales distribution, the Conservative, Base, and Upside revenue anchors are explicit analytical assumptions at 80%, 100%, and 120% of the central Census proxy. They are not probabilities, Item 19 quartiles, or franchisor forecasts.
What is the revenue anchor?
The 2023 Annual Integrated Economic Survey reports $4.363555 billion of employer revenue for Carpet and Upholstery Cleaning Services. The 2023 County Business Patterns profile reports 6,673 employer establishments for NAICS 561740. Dividing the two produces a derived $653,912 per-establishment proxy, rounded to $654,000.
Compatibility limitation: this is a cross-program calculation using a national employer-industry numerator and establishment denominator. It can include operations larger, older, or structurally different from one Heaven’s Best territory. The AIES revenue estimate has a reported 4.5% coefficient of variation. The Census NAICS definition covers establishments primarily engaged in cleaning and dyeing used rugs, carpets, and upholstery.
What margin is applied?
The IRS 2023 nonfarm sole-proprietorship table reports $114.423419 billion of business receipts and $24.229473 billion of net income less deficit for the broader Administrative and Support Services sector. The derived ratio is 21.175%, rounded to 21.2%.
This is an owner-operator benefit proxy, not a franchised-unit operating margin. Schedule C net income is after reported business deductions, including depreciation and business interest, but a sole proprietor does not deduct a salary paid to the owner. The ratio therefore combines residual profit and compensation for owner labor. It also covers a much broader sector than carpet cleaning and includes profitable and loss-making returns.
Manager-run residual = owner-operator benefit − $48,970 BLS supervisor wage proxy
How is the manager-run result calculated?
The 2026 FDD recommends owner participation but allows a trained manager to handle day-to-day operations. The model subtracts the May 2023 BLS annual mean wage of $48,970 for First-Line Supervisors of Housekeeping and Janitorial Workers in Services to Buildings and Dwellings. BLS excludes self-employed workers. The deduction covers wage only; employer payroll taxes, workers’ compensation, health benefits, bonuses, and recruiting costs would reduce the manager-run residual further.
| Scenario | Revenue anchor | Owner-operator benefit | Manager-run residual |
|---|---|---|---|
|
Conservative 80% of central revenue proxy |
$523,000 | $111,000 | $62,000 |
|
Base 100% of central revenue proxy |
$654,000 | $138,000 | $89,000 |
|
Upside 120% of central revenue proxy |
$785,000 | $166,000 | $117,000 |
How does manager-run earnings change with the revenue scenario?
Estimated annual residual after the $48,970 wage proxy, before payroll burden, debt principal, and personal taxes.
Interpretation: revenue is the dominant modeled driver because the same 21.175% benchmark ratio and $48,970 wage deduction are used in each scenario.
Sources: U.S. Census Bureau 2023 AIES and County Business Patterns; IRS Statistics of Income, Tax Year 2023; BLS OEWS, May 2023. Values are independent calculations rounded to the nearest $1,000.
How much does active owner involvement change the modeled result?
The gap is the $48,970 supervisor-wage proxy. The owner-operator endpoint includes labor value; the manager-run endpoint is the residual after paying that wage.
Interpretation: owner involvement changes the economic label, not merely the number. Approximately $49,000 of the owner-operator result represents labor that a manager would otherwise perform.
Source: independent calculation using IRS 2023 scenario results and the BLS May 2023 wage proxy. Employer payroll taxes and benefits are not included in the gap.
How do Heaven’s Best fees affect the estimate?
The FDD identifies a current fixed annual minimum of about $6,000 and a disclosed upper fixed-fee configuration of about $14,200 per territory. The lower amount combines the $300 monthly royalty and the low end of the $200–$700 monthly website/software fee. The upper configuration adds the high software rate, the maximum advertising fee, and the maximum regional fund contribution. These figures exclude local advertising, inventory and cleaning-product purchases, merchant fees, insurance, vehicle expenses, convention costs, and other variable operating costs.
| Item 6 obligation | Annualized amount | Status in the 2026 FDD | Model treatment |
|---|---|---|---|
| Royalty Fee | $3,600 | $300 monthly for a territory up to 200,000 people; increases for larger populations. | Shown as an official fixed obligation. |
| Website/Software Fee | $2,400–$8,400 | Current rate of $200–$700 monthly, payable to the franchisor or an approved vendor. | Shown in the fixed-fee sensitivity range. |
| Advertising Fee | $0 currently; up to $1,200 | Not currently collected; may be imposed on 30 days’ notice. | Zero at current minimum; included in the upper configuration. |
| Regional Advertising Fund | $0–$1,000 | Applies only if 75% of franchisees in a region vote to establish the fund. | Included only in the upper configuration. |
The 21.2% IRS benchmark is an all-in net-income ratio, so the model does not subtract the FDD fees again; doing so could double-count expenses already embedded in the broad industry data. The IRS table does not identify franchise fees separately. If its expense mix does not reflect an equivalent $6,000–$14,200 burden, reduce the modeled owner benefit by the uncovered amount. This unresolved classification is a material reason for the LIMITED confidence rating.
Item 8 adds another uncertainty: Heaven’s Best requires specified proprietary cleaning solutions, equipment, inventory, website services, and customer relationship management systems. The FDD estimates that 75% to 100% of operating purchases will be from the franchisor, an affiliate, or approved suppliers, but it does not disclose a representative annual franchisee purchase amount. Source: 2026 Heaven’s Best FDD, Item 8, pp. 19–23.
Is Heaven’s Best passive, manager-run, or owner-operated?
The FDD allows manager-run operation but recommends full owner participation. Item 15 says an owner is not contractually required to work in day-to-day operations and may designate a manager who completes initial training. The official Heaven’s Best owner-role description likewise discusses hands-on ownership, office and scheduling work, and hiring technicians. None of that establishes passive income.
- Manager-run residual
- Estimated business income after the broad operating-expense benchmark and a $48,970 manager-wage proxy, but before employer payroll burden, financing principal, personal income taxes, and cash capital expenditures.
- Owner-operator benefit
- Estimated Schedule C-style net income that includes the return on the owner’s labor. It may support an owner draw or compensation decision, but it is not pure business profit or passive income.
- Debt service
- Not deducted from operating earnings. Business interest is reflected in the IRS net-income concept, but loan principal is a financing cash flow and depends on each buyer’s financed amount and terms.
- Personal taxes
- Not estimated. Federal, state, local, self-employment, and entity-level tax effects depend on structure, jurisdiction, deductions, and the owner’s circumstances.
- Capital expenditures
- The IRS benchmark includes depreciation, not necessarily the cash timing of vehicle, equipment, or replacement purchases. Actual annual cash available can therefore differ from accounting net income.
What could move actual owner earnings outside the range?
The largest unresolved variable is the absence of same-brand unit revenue and expense data. The revenue proxy represents U.S. employer establishments in NAICS 561740, while Heaven’s Best describes a home-based territory that can begin as an owner-led operation. A new single-truck business, a mature multi-crew territory, and an older multi-territory operator are not economically interchangeable.
- Revenue spread: 80%, 100%, and 120% of the $653,912 central Census proxy. The spread is editorial, not FDD-reported.
- Operating margin: the 21.175% IRS ratio is broad and owner-operated; it is not specific to carpet cleaning, franchising, or Heaven’s Best.
- Manager cost: the $48,970 BLS amount is a 2023 mean wage, not a fully loaded compensation package and not a territory-specific quote.
- Unit maturity: the model does not establish how quickly a new territory reaches an employer-scale revenue level.
- Service mix: residential carpet cleaning, commercial work, upholstery, flooring, restoration, and add-on services can have different ticket sizes and labor intensity.
- Supplier and vehicle costs: proprietary-product purchases, fuel, repairs, commercial auto insurance, and equipment replacement are not separately observed for franchisees.
- Portfolio scale: results are per modeled territory. They should not be multiplied across territories without accounting for ramp-up, shared overhead, managers, and territory maturity.
Item 20 provides system structure rather than earnings. Franchised territories increased from 419 at the start of fiscal 2025 to 430 at year-end. The table reports 16 openings, two terminations, one reacquisition, two outlets ceasing for other reasons, and 40 transfers during 2025. Older agreements used a 50,000-household territory convention, while current counts are stated using an approximate 150,000-to-200,000-person standard; comparisons therefore require care. Source: 2026 Heaven’s Best FDD, Item 20, pp. 45–53.
What should a buyer verify before relying on an earnings estimate?
Ask for territory-level evidence that replaces each broad proxy with actual operating data. The FTC recommends reviewing written substantiation for any earnings claim and speaking with current and former franchisees. Since this Item 19 has no performance representation, buyer interviews and records from an existing business become especially important.
- Confirm whether the latest FDD or amendment still contains no Item 19 financial performance representation.
- Ask franchisees for trailing 12-month Gross Sales, job count, average ticket, repeat-customer rate, and commercial versus residential mix for one comparable territory.
- Request a normalized profit-and-loss statement showing product and chemical costs, technician labor, payroll taxes, vehicle expense, insurance, advertising, software, bad debt, and owner compensation separately.
- Separate owner hours spent cleaning, selling, scheduling, bookkeeping, and supervising from residual business profit.
- Compare new, mature, transferred, and multi-territory operations rather than combining them into one average.
- Verify the actual website/software package, regional advertising status, proprietary-product prices, and any territory population surcharge.
- Ask transferred and former franchisees listed in Item 20 about ramp-up time, manager turnover, equipment replacement, and why ownership changed.
- Model financing principal and local manager payroll burden separately; do not treat either as a universal system expense.
The strongest defensible annual range is approximately $62,000–$117,000 for a manager-run territory and $111,000–$166,000 in owner-operator benefit. These are limited-confidence, scenario-based estimates, not official Heaven’s Best results. Revenue production is the largest modeled earnings driver; the largest unresolved uncertainty is whether a particular home-based territory can match the national employer-establishment revenue proxy while carrying Heaven’s Best-specific supplier, software, advertising, vehicle, and staffing costs. Before making a decision, verify the current Item 19, request written substantiation for any sales or earnings statement, and replace the government proxies with comparable franchisee profit-and-loss records and owner-hour data.