How Much Does a Kitchen Tune-Up Franchise Owner Make?

Item 19 officially reports Gross Sales and Gross Profit, not owner earnings. For 75 single-territory franchisees open throughout 2025, average Gross Sales were $521,522 and median Gross Sales were $361,644. Only 35% met or exceeded the average, while 51% met or exceeded the median, so the median is the more decision-useful central anchor.

The same disclosure reports a 25th-percentile sales figure of $203,005 and a 75th-percentile figure of $733,643 for one-territory franchisees. These are historical distribution points, not probabilities or promises. The lowest reported one-territory sales were $26,404 and the highest were $2,173,879.

The estimate multiplies the official one-territory sales distribution by an independently derived operating-cash margin. The base margin is 7.09%, calculated from the IRS 2022 “Construction of buildings” corporate-return table as net income less deficit plus interest paid plus depreciation, divided by total receipts. Interest and depreciation are added back so the result is before financing interest and noncash depreciation; financing principal, personal income taxes and capital expenditures remain outside the estimate.

The conservative and upside margins are an explicit sensitivity band of three percentage points below and above the 7.09% benchmark. The resulting 4.09%, 7.09% and 10.09% margins are analytical assumptions, not Kitchen Tune-Up results.

What does “estimated residual operating earnings” include?

It is a pre-tax business-earnings proxy after normal operating expenses, but before personal taxes, financing interest, financing principal and capital expenditures. Depreciation is added back as a noncash expense. The IRS corporate benchmark includes compensation of officers and employee wages, but it does not identify which businesses are owner-managed, manager-run or franchised; that staffing ambiguity is a material limitation.

• Included by proxy: direct costs, normal payroll, occupancy, insurance, advertising, administration and other operating deductions reflected in the broad IRS industry aggregate.
• Franchise charges: the FDD royalty, National Advertising Fund payment, Technology Fee and convention fee are analyzed separately; they are not subtracted again from the all-in margin proxy because that could double count operating deductions.
• Excluded: personal income tax, financing principal, capital replacements and owner-specific distributions or draws.
• Uncertain: the IRS benchmark may not fully reflect Kitchen Tune-Up’s franchise-fee burden, service mix, subcontracting model or owner compensation structure.

Active involvement can materially increase owner benefit because the FDD requires a full-time manager when the owner does not operate the business. Item 15 says HFC KTU LLC prefers active participation and does not want merely passive investors. If the owner is not the operator, a full-time trained manager must devote normal business hours to the management, operation and development of the business.

For an analytical labor-value bridge, the BLS May 2023 median wage for First-Line Supervisors of Construction Trades and Extraction Workers in Residential Building Construction was $34.56 per hour. Annualized at 2,080 hours, that is $71,885. Adding this labor value to residual operating earnings produces an estimated owner-operator benefit—not pure business profit.

The quantified recurring charges are meaningful, especially at lower sales. For a first territory after the first year, Item 6 requires a royalty equal to the greater of the percentage calculation or $1,500 per month, a National Advertising Fund payment equal to the greater of 1% of Gross Revenue or $500 per month, a $500 monthly Technology Fee, and a current $899 convention fee. Local advertising, convention travel and other operating costs are additional or uncertain.

Calculations assume a first territory, post-first-year minimums, the current $899 convention fee and an even annual sales pattern below the monthly royalty breakpoint. The table excludes local advertising, travel, insurance, vehicle expense and other operating costs. These charges are shown for transparency but are not subtracted again from the all-in IRS margin proxy.

Which operating variable matters most?

Sales volume and service mix are the two largest disclosed drivers. Item 19’s average Gross Profit by service line ranges from 44.0% for countertops to 68.6% for Tune-Up work. Full custom kitchens were 55.4%, painting or recoloring 55.6%, refacing 59.2% and redooring 61.5%. A territory with the same Gross Sales can therefore produce a different gross-profit pool depending on its project mix, pricing, direct labor and product costs.

The confidence rating is LIMITED because profit is modeled from an external industry benchmark rather than disclosed by the franchisor. The sales evidence is comparatively strong: Item 19 covers 229 territories, or 91% of territories open for all of 2025, and it provides median and percentile values. The weakness is the conversion from Gross Sales to owner earnings.

The IRS “Construction of buildings” category is broader than Kitchen Tune-Up. The Census definition of Residential Remodelers is operationally relevant, but the IRS table publishes a broader minor-industry total. The benchmark also blends business sizes, capital structures, owner-compensation practices and nonfranchised companies.

Can multi-territory sales be converted into owner income?

No reliable per-owner profit can be inferred from the multi-territory disclosure. Item 19 reports median 2025 Gross Sales of $805,441 for 60 reporting franchisees operating 154 territories, but the figure is total sales per franchisee portfolio, not average sales per territory. The owners held different territory counts, and some additional territories did not have a full year of sales. Multiplying the one-territory earnings estimate would ignore shared overhead, manager structure, ramp-up and territory maturity.

What does Item 20 add to the risk picture?

Item 20 shows a changing population that is not fully represented by the full-year Item 19 cohort. The system ended 2025 with 250 franchised outlets and no company-owned outlets. During 2025, 16 outlets opened, 13 were terminated, 3 were not renewed and 10 ceased operations for other reasons; 11 outlets transferred. Item 19 excluded 22 year-end territories because they were new or transferred and lacked a full 12-month reporting period.

A buyer should replace broad assumptions with territory-specific evidence before making an investment decision. The FTC advises prospects to study the source, sample, assumptions and limitations of Item 19 and to request written substantiation for any financial performance representation.

• Request the written substantiation supporting the 2025 Item 19 sales, Gross Profit, service-line margins and closing-rate calculations.
• Ask current one-territory franchisees for normalized profit-and-loss statements that separately show owner salary, manager pay, subcontractor labor, local advertising, vehicle, occupancy, insurance, technology and franchise fees.
• Compare home-based and retail-location overhead; the official Kitchen Tune-Up franchise FAQs state that owners use both formats.
• Ask how many hours active owners work in sales, estimating, project management, hiring, collections and quality control before treating owner-operator benefit as income.
• Interview former and transferred franchisees listed in Item 20 about ramp-up, closures, manager affordability and local advertising requirements.
• Model financing interest, principal payments and capital replacement separately; none of those should be confused with pre-tax operating earnings.