Annual owner-earnings answer
This is a limited-confidence estimate of annual pre-tax owner-operator benefit for a mature, one-territory U.S. Mad Science business. The base analytical scenario is about $128,000. The 2025 Franchise Disclosure Document reports Gross Revenues—not business profit, owner salary, distributions, or after-tax take-home pay—so no official owner-earnings figure exists.
This range is an independent analytical scenario, not an Item 19 financial performance representation by Mad Science Group Inc. It combines identified 2025 FDD facts with an IRS Educational Services sole-proprietor margin benchmark and an explicit ±3-percentage-point sensitivity. Actual results can differ materially by territory, program mix, sales, instructor labor, occupancy, financing, owner involvement, local pricing, and execution.
Legal franchisor: Mad Science Group Inc.
FDD: 2025 U.S. Franchise Disclosure Document, issued July 11, 2025
Item 19 status: Gross Revenues only; no expense or profit disclosure
Applicable cohort: 24 full-year franchisees operating one territory
External benchmark: IRS 2023 nonfarm sole proprietorship data for Educational Services
Date checked: July 14, 2026
One-territory median Gross Revenues
Fiscal year ended March 31, 2025; 24 full-year one-territory franchisees.
Base owner-operator benefit
Rounded estimate before personal income taxes and financing principal.
IRS aggregate net-income margin
2023 Educational Services sole proprietorships, including businesses with losses.
One-territory reporting owners
The closest Item 19 population to a single-territory buyer.
Current royalty plus national fund
8% royalty plus a currently 2% National Marketing Fund contribution.
Item 19 evidence
What does the Mad Science FDD actually measure?
Item 19 officially measures Gross Revenues, not owner earnings, and the one-territory franchisee table is its cleanest single-territory comparison. For the fiscal year ended March 31, 2025, 57 full-year franchised territories were held by 37 franchisee owners: 24 had one territory, seven had two, five had three, and one had four. The franchisor expressly states that multi-territory franchisees did not report Gross Revenues on a per-territory basis.
The broad Item 19 definition includes revenue and income from programs, parties, merchandise, grants, sponsorships, trade transactions, and other sources associated with the business. It excludes specified pass-through taxes and similar items. The figures are unaudited. The FDD also presents an overall table labeled as 57 franchisees with a $388,000 average and $323,000 median, even though the disclosed ownership count is 37 and per-territory reporting was unavailable. Because that observation basis is not sufficiently clear, this article does not use the overall figures in the earnings model. Multi-territory cohort results are treated as owner-portfolio revenue, not per-territory performance.
| Item 19 cohort | Owners | Average Gross Revenues | Median Gross Revenues |
|---|---|---|---|
| One territory | 24 | $454,000 | $436,000 |
| Two territories | 7 | $667,000 | $694,000 |
| Three territories | 5 | $1,046,000 | $712,000 |
| Four territories | 1 | $1,294,000 | Not meaningful |
Source: 2025 Mad Science FDD, Item 19, pages 60–64. One-territory results are directly comparable to one owner with one territory. Multi-territory rows are owner portfolios because the FDD states that those franchisees did not report revenue by territory.
A one-territory median of $436,000 means half of the disclosed one-territory franchisees had higher Gross Revenues and half had lower Gross Revenues. It does not show what remained after instructors, payroll burden, rent, insurance, supplies, royalties, advertising, technology, vehicles, administration, depreciation, interest, or the owner’s labor.
Scenario model
How is the $48,000 to $239,000 earnings range calculated?
The range multiplies official one-territory Item 19 revenue observations by a broad official-government operating benchmark. Conservative revenue uses the fourth-quartile median of $182,000, the base uses the overall one-territory median of $436,000, and upside revenue uses the first-quartile median of $736,000. These are disclosed cohort observations, not probability labels or promised outcomes.
The margin anchor is calculated from the IRS 2023 Table 1 totals for nonfarm sole proprietorships in Educational Services: approximately $4.943 billion of net income less deficit divided by approximately $16.808 billion of business receipts, or 29.4%. The conservative and upside margins apply an editorial sensitivity of three percentage points below and above that benchmark.
| Scenario | Revenue anchor | Margin assumption | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | $182,000 | 26.4% | $48,000 |
| Base | $436,000 | 29.4% | $128,000 |
| Upside | $736,000 | 32.4% | $239,000 |
Estimated annual owner-operator benefit by scenario
One-territory revenue anchors from Item 19, combined with the IRS margin benchmark and ±3-percentage-point sensitivity.
Interpretation: Revenue dispersion drives most of the modeled earnings spread. A three-percentage-point margin change matters, but moving between the disclosed lower, central, and upper one-territory revenue observations has the larger dollar effect.
Sources: 2025 Mad Science FDD, Item 19, pages 61–63; IRS nonfarm sole proprietorship statistics and IRS 2023 Table 1 data. Calculations use full-precision inputs and are rounded to the nearest $1,000.
- All-in benchmark treatment: The IRS net-income ratio is used as an all-in operating proxy. FDD royalty, marketing, technology, occupancy, and labor costs are not subtracted again because that would risk double counting.
- Owner labor: A Schedule C sole proprietor does not deduct a separate wage paid to the owner. The result therefore combines residual business economics with compensation for the owner’s work.
- Interest and depreciation: Schedule C net income can reflect deductible business interest and depreciation. Financing principal, personal income taxes, and the cash timing of capital expenditures are not modeled.
- Compatibility limitation: IRS Educational Services is a broad national category containing many businesses unlike a staffed, warehouse-based Mad Science operation. This is the main reason confidence is limited.
Owner role
How does active ownership change the result?
Mad Science is structured around active owner supervision, so the scenario range is best read as owner-operator benefit—not passive profit. Item 15 requires the owner or an active managing owner to be primarily devoted to management and operation. A trained, competent full-time manager may be employed with franchisor approval, but the owner remains responsible and must continue supervising as agreed.
To show the economic effect of replacing owner labor, the chart subtracts the May 2024 BLS median wage of $102,950 for general and operations managers. This is a stress test, not a prediction: the BLS figure is national and cross-industry, excludes self-employed workers, and does not include employer payroll taxes or benefits.
Owner-operator benefit versus manager-run residual
Illustrative subtraction of a $102,950 general-and-operations-manager wage from each owner-operator scenario.
Interpretation: The $102,950 gap is the modeled value of management labor. It is not eliminated economic value; it shifts from compensation for the working owner to payroll expense. A fully loaded manager cost would normally be higher than wage alone.
Sources: 2025 Mad Science FDD, Item 15, pages 43–44; BLS Occupational Outlook Handbook for general and operations managers, May 2024 wage data. Manager-run figures are independent calculations rounded to the nearest $1,000.
The base scenario’s $128,000 should not be interpreted as passive distributable profit. Roughly $102,950 of the modeled difference between an active-owner case and a manager-wage stress test represents management labor at the national median wage proxy. The remaining $25,000 base residual is still before financing principal and personal taxes.
Recurring obligations
Which FDD fees place the clearest pressure on earnings?
The clearest disclosed variable burden is 13% of Gross Revenues in a mature year before fixed technology and access fees: 8% royalty, currently 2% National Marketing Fund, and currently 3% local advertising. At the $436,000 one-territory median, those three obligations total $56,680. Technology and marketing-access fees add another $3,924 to $7,200 annually, before any approved separate-webpage fee or conference expense.
| Recurring obligation | 2025 FDD term | Illustration at $436,000 |
|---|---|---|
| Royalty Fee | 8% of Gross Revenues | $34,880 |
| National Marketing Fund | Greater of $2,000 or currently 2%; may rise to 3% | $8,720 |
| Local Advertising, year three onward | Greater of $3,000 or currently 3% of prior-year Gross Revenues | $13,080 |
| Technology Access Fee | Currently $227–$500 per month | $2,724–$6,000 |
| Marketing Access Fee | Currently $100 per month | $1,200 |
| Separate Web Page Service Fee | Currently $150 per month if applicable | $1,800 |
Source: 2025 Mad Science FDD, Item 6, pages 13–19, and Item 7, pages 19–23. The illustration assumes a mature-year local advertising requirement and does not include ordinary operating costs, optional-program economics, conference travel, late fees, unusual audit costs, or debt service.
These obligations explain where earnings pressure can arise, but they are not subtracted again in the scenario formula because the IRS benchmark is an all-in net-income ratio. A buyer should replace the broad ratio with actual territory-level payroll, occupancy, supply, vehicle, insurance, advertising, and fee data before relying on any forecast.
Uncertainty and verification
What could move actual owner earnings outside this range?
The largest unresolved uncertainty is the absence of same-brand operating-expense data. Item 19 supplies a useful revenue distribution, but it does not disclose instructor payroll, direct program materials, occupancy, vehicle cost, insurance, administrative staffing, owner hours, or profit. The IRS benchmark is official and reproducible, yet it is too broad to establish a Mad Science margin with precision.
What is included in the published estimate?
The model treats the IRS Schedule C net-income ratio as an all-in operating proxy. The result is before personal income taxes and financing principal. It may reflect deductible business interest and depreciation in the IRS population, but it does not model cash capital expenditures or working-capital swings separately.
What is not established by the FDD?
The FDD does not establish a typical profit margin, owner salary, owner draw, distribution, EBITDA, cash flow, or after-tax take-home amount. It also does not show how much of a multi-territory owner’s revenue or overhead belongs to each territory.
What should a buyer verify before using the range?
A buyer should rebuild the model from written substantiation and franchisee-level operating statements. Item 19 states that written substantiation for its Gross Revenue figures will be provided on reasonable request, and Item 20 identifies current and former franchisees who can explain actual cost structure and owner workload.
- Request Item 19 substantiation: Confirm whether the one-territory cohort includes owner-operated and manager-run businesses, and obtain the precise reporting methodology.
- Interview comparable owners: Ask one-territory franchisees about instructor payroll, administrative staffing, rent, storage, vehicles, insurance, consumables, refunds, seasonality, and owner hours.
- Separate owner labor from residual profit: Identify what salary would be required to replace the owner’s sales, scheduling, hiring, quality control, school relationships, and day-to-day supervision.
- Reconcile every FDD fee: Confirm the current National Marketing Fund percentage, local advertising requirement, Technology Access Fee, Marketing Access Fee, web fee, and any optional-program costs.
- Model debt separately: Use the buyer’s actual financed amount, interest rate, term, and payment schedule. Financing principal reduces owner cash but is not an operating expense in this article’s definition.
- Test local economics: Obtain realistic wage rates, warehouse rent, travel radius, school-calendar demand, customer pricing, and program-mix assumptions for the proposed territory.
Decision synthesis
What is the strongest defensible earnings takeaway?
The strongest defensible answer is a scenario-based annual pre-tax owner-operator benefit of roughly $48,000 to $239,000, with a $128,000 base calculation for a mature one-territory business. It is not an official Mad Science profit disclosure. The most important driver is one-territory Gross Revenues, which show wide dispersion in Item 19. The largest uncertainty is the missing same-brand expense and owner-labor data.
A buyer should treat the range as a due-diligence framework rather than a forecast: verify the Item 19 substantiation, obtain comparable franchisee income statements, separate owner labor from residual business profit, and replace the IRS margin proxy with territory-specific payroll, occupancy, supply, fee, and financing assumptions. Personal taxes must remain outside the model because they depend on entity structure, jurisdiction, deductions, and the owner’s circumstances.