Estimated manager-run, pre-tax owner earnings span approximately $14,400 in the Conservative scenario to $140,200 in the Upside scenario, with a $59,200 Base scenario. The model uses Moe’s Southwest Grill’s fiscal 2025 Net Sales disclosures, then applies explicit residual operating-margin assumptions after normal restaurant expenses and recurring franchise fees.
Fiscal 2025 average for the 463 eligible traditional franchises in Item 19.
Systemwide median for the same 52-week traditional-franchise cohort.
The table covers 97.7% of year-end traditional franchises, subject to exclusions.
5% royalty + 3% Advertising Contribution + at least 1% local marketing.
May 2024 median wage for food service managers in food services and drinking places.
What does Moe’s Southwest Grill Item 19 actually measure?
Officially, Item 19 measures fiscal 2025 Net Sales—not owner earnings—for eligible traditional franchised restaurants. The relevant population is 463 restaurants in traditional locations that reported sales for all 52 weeks. Net Sales is revenue after specified exclusions such as sales taxes, tips, refunds, and gift-card loading; it is not the amount available to an owner.
The official Moe’s Southwest Grill franchise page repeats the $1,184,316 average and identifies the same 463-restaurant cohort. The 2026 FDD, Item 19, pages 74–75, provides the fuller quartile distribution and cautions that food cost, payroll, rent, franchise fees, and other expenses must still be deducted.
| Fiscal 2025 cohort | Average Net Sales | Median Net Sales | Disclosed range |
|---|---|---|---|
| Top quartile | $1,753,026 | $1,686,299 | $1,400,345–$3,033,274 |
| Second quartile | $1,254,386 | $1,246,534 | $1,138,698–$1,398,048 |
| Third quartile | $1,005,591 | $1,002,810 | $879,161–$1,136,444 |
| Bottom quartile | $720,261 | $741,524 | $456,437–$877,146 |
| All represented restaurants | $1,184,316 | $1,138,698 | $456,437–$3,033,274 |
Source: 2026 Moe’s Southwest Grill Franchise Disclosure Document, Item 19, pages 74–75. Quartiles describe observed sales groups; they are not probabilities for a new restaurant.
What annual owner earnings does the evidence-led model produce?
The independent manager-run scenarios produce approximately $14,400, $59,200, and $140,200 in annual pre-tax owner earnings. These estimates apply 2%, 5%, and 8% residual operating margins to three disclosed Net Sales anchors for traditional franchised restaurants in fiscal 2025. Moe’s does not report these margins or owner-profit figures.
How is estimated pre-tax owner earnings defined here?
The estimate is cash operating profit available to the owner after normal unit-level expenses, including manager compensation and the disclosed recurring franchise obligations, but before personal income taxes and before financing costs.
- Included: food and paper, hourly labor, payroll burden, normal manager compensation, occupancy, utilities, repairs, insurance, merchant and delivery costs, the 5% royalty, the current 3% Advertising Contribution, at least 1% local marketing, and ordinary recurring technology/program charges.
- Excluded: owner salary or draw, personal income taxes, loan interest, financing principal, depreciation and amortization, major replacement capital expenditures, and one-time opening costs.
- Margin assumptions: 2%, 5%, and 8% are editorial sensitivity assumptions, not franchisor-reported margins and not predictions.
- Revenue anchors: bottom-quartile average, all-cohort average, and top-quartile average Net Sales. They are observed sales groups, not “worst,” “expected,” or “best” cases.
| Scenario | Net Sales anchor | Residual margin | Manager-run owner earnings |
|---|---|---|---|
| Conservative | $720,261 | 2% | $14,405 |
| Base | $1,184,316 | 5% | $59,216 |
| Upside | $1,753,026 | 8% | $140,242 |
Formula: fiscal 2025 Net Sales anchor × scenario residual margin. Figures are calculated at full precision and rounded to the nearest dollar in the table; prose rounds to the nearest $100.
Manager-run pre-tax owner earnings per traditional restaurant, before debt service and personal taxes
Interpretation: small changes in the residual margin create large changes in owner earnings because the restaurant must absorb a high volume of operating costs before a residual reaches the owner.
Source: 2026 FDD Item 19 Net Sales anchors; 2%/5%/8% margins are independent scenario assumptions.
How does owner involvement change the result?
An active owner who replaces one paid manager could have an estimated owner-operator benefit of approximately $77,400–$203,300, rather than manager-run residual profit of $14,400–$140,200. This is an estimated labor-plus-profit measure for the same traditional-restaurant scenarios, not passive income and not a franchisor disclosure.
The 2026 FDD, Item 15, pages 66–67, says owners are not required to work in the restaurant, but may serve as the Primary Contact or a Manager with consent. Each restaurant must have two dedicated Managers, and Moe’s states that it does not recommend the investment for an absentee-management investor. Accordingly, the owner-operator model assumes the owner replaces one manager, not the entire management structure.
The labor value added is $63,040, the May 2024 median annual wage for food service managers in the “food services and drinking places” industry reported by the U.S. Bureau of Labor Statistics. It is a wage benchmark, not a fully burdened employer-cost estimate, and local pay can differ.
The gap represents the $63,040 market wage value of one manager role performed by the owner
Interpretation: the $63,040 increase is compensation for owner labor. It should not be described as passive profit, and it assumes the owner is qualified, approved, full-time in the role, and actually displaces one paid manager.
Source: scenario residual profit plus the BLS May 2024 median wage for food service managers in food services and drinking places.
Which fees and operating obligations compress owner earnings?
The clearest recurring FDD burden is 9% of Net Sales before cooperative assessments and several transaction- or technology-related charges. This derived percentage applies to current traditional restaurant operations under the 2026 FDD: 5% royalty, 3% Advertising Contribution, and at least 1% local marketing.
- Royalty Fee
- 5% of Net Sales, paid weekly.
- Advertising Contribution
- Currently 3% of Net Sales; the FDD permits an increase to 4%.
- Local Marketing Obligation
- Currently at least 1% of Net Sales each calendar quarter.
- POS license or lease
- $159–$454 per month under the CapEx program or $332–$902 per month under the HaaS program.
- POS support
- $125–$250 per month.
- Digital programs
- Current fixed charges include a $66 monthly loyalty-app fee and $111 monthly online-ordering fee, plus transaction and service charges.
- Other variable costs
- Credit-card processing, delivery commissions, ordering support, gift-card administration, supply-chain charges, cooperative contributions, and future technology fees vary by usage and market.
Source: 2026 FDD, Item 6, pages 22–33. The $35,500 initial franchise fee and Item 7 startup investment are not annual operating expenses and are not subtracted from one year of sales.
How much confidence should a buyer place in the range?
Confidence is LIMITED because the same-brand disclosure supplies strong sales evidence but no unit-level profit or expense data. The range is most useful as a sensitivity framework for a traditional, full-year franchised restaurant—not as a forecast for a specific site.
Several limitations materially affect interpretation. The Item 19 reports were franchisee-submitted and not audited or independently verified. It excludes 11 traditional restaurants that did not report all 52 weeks, including five that opened during fiscal 2025. It also excludes 33 traditional franchises that permanently closed during fiscal 2025 even though each had been open at least 12 months. Nontraditional, co-branded, and affiliate-owned restaurants are outside the cohort.
Item 20 adds system context: franchised outlets declined from 591 at the start of 2025 to 563 at year-end, with 15 openings, 40 terminations, and three nonrenewals. That does not prove why any outlet left, but it makes closure economics and survivor selection important diligence topics. The FTC Franchise Rule and consumer guidance place emphasis on Item 19 substantiation and Item 20 franchisee contacts rather than unsupported sales presentations.
What should a buyer verify before relying on the model?
The most decision-relevant work is to replace the editorial margins with location-specific and franchisee-verified operating data.
- Request the written substantiation for the 2026 Item 19 and confirm how each quartile was assembled.
- Obtain anonymized restaurant P&Ls showing food and paper, hourly labor, manager payroll, occupancy, delivery commissions, repairs, insurance, and recurring technology charges.
- Ask current franchisees at similar sales levels what store-level cash operating profit remains before debt service and owner taxes.
- Interview former franchisees and operators of restaurants that closed, transferred, or terminated; ask whether sales, rent, labor, remodel requirements, or debt were decisive.
- Confirm whether the proposed site is traditional, nontraditional, co-branded, drive-thru, inline, endcap, or freestanding; do not apply the traditional cohort automatically to another format.
- Price two dedicated Managers unless the franchisor approves the owner to fill one role and the owner is prepared for full-time operating work.
- Model loan interest and principal separately. The earnings figures here are before debt service and before personal income taxes.
What is the most defensible earnings range for a Moe’s owner?
The strongest defensible planning range is approximately $14,400–$140,200 in annual manager-run pre-tax owner earnings per traditional restaurant, with a $59,200 Base scenario. It is a scenario-based estimate anchored to fiscal 2025 Item 19 Net Sales, not an official profit disclosure. An owner who performs one approved manager role may have an estimated owner-operator benefit of roughly $77,400–$203,300, but part of that amount compensates labor rather than capital.
The largest earnings driver is the combination of sales volume and the residual margin left after food, labor, occupancy, required franchise fees, digital-order costs, and local execution. The largest unresolved uncertainty is the absence of same-brand unit-level expense and profit data. A buyer should therefore verify the Item 19 substantiation, obtain comparable P&Ls, and use Item 20 contacts to interview current and former franchisees before treating any point in the range as applicable to a proposed restaurant.