A reasonable manager-run, pre-tax scenario range is approximately $0 to $215,000 a year, with a modeled base case near $91,000. This is not a franchisor-reported franchisee profit figure. It is an independent estimate anchored to 2025 franchised-territory Gross Revenue and a same-brand, company-owned Net Ordinary Income proxy.
OFFICIAL. Median for 217 full-year franchised Territories in fiscal 2025; revenue, not owner earnings.
OFFICIAL. Average for the same 217-Territory population; materially above the median.
OFFICIAL. Item 19 excluded territories opened or closed during 2025 and newly added territories.
OFFICIAL COMPANY-OWNED PROXY. Combined result for 15 territories, not franchised-unit owner income.
OFFICIAL. Applied progressively to annual Gross Revenue, subject to the applicable minimum royalty.
OFFICIAL. Standard Territory minimum in the ninth 12-month period through expiration: $3,000 monthly.
What does the 2026 FDD actually disclose about earnings?
The FDD does not report profit, owner compensation, or cash flow for franchised Mosquito Squad Territories. It reports franchised-territory Gross Revenue and, separately, Net Ordinary Income for a combined company-owned operation. The company-owned result is useful as a same-brand operating proxy, but it cannot be treated as the annual earnings of a typical franchise owner. The 15 company territories were generally equivalent in population to Standard Territories and were each governed by a franchise agreement, improving brand comparability but not removing the ownership and scale mismatch.
| FDD measure | 2025 result | Population and meaning | Use in this article |
|---|---|---|---|
| Median Territory Gross Revenue | $330,985 | 217 full-year franchised Territories | Base revenue anchor |
| Average Territory Gross Revenue | $493,200 | Same franchised population | Context; not used as owner income |
| Gross Revenue range | $19,138-$2,929,941 | Same franchised population | Shows unusually wide dispersion |
| Net Ordinary Income | $7,170,219 | 15 Company-Owned Territories combined | Margin proxy only |
| Net Ordinary Income margin | 31.6% | $7,170,219 divided by $22,673,978 Gross Revenue | Upper bound for modeled margins |
The 2025 franchised-territory average of $493,200 is Gross Revenue before technician payroll, marketing, chemicals and equipment, vehicles, royalty, call-center costs, administration, facilities, insurance, professional fees, debt service, capital spending, and personal taxes. Calling that figure an owner's salary or income would be incorrect.
Official average Gross Revenue by Item 19 quartile; quartiles describe the historical distribution, not future probabilities.
Interpretation: the top-quartile average was more than eleven times the bottom-quartile average. Item 19, Table 1, page 66. Two published quartile-median cells exceed their own stated group maximums, so this analysis does not use those two cells.
How is the $0 to $215,000 owner-earnings range calculated?
The range applies progressively more demanding revenue and margin assumptions to a manager-run Standard Territory. Conservative revenue uses the official bottom-quartile average; the base case uses the official system median; and the upside case uses the official revenue threshold at the bottom of the top quartile. The margins are deliberately capped at the 31.6% company-owned Net Ordinary Income margin.
The result is before personal income taxes and financing principal. Item 19 does not clearly state the treatment of interest, depreciation, capital expenditures, or vehicle replacement, so those items are not deducted here.
| Scenario | Revenue anchor | Modeled margin | Minimum-royalty adjustment | Estimated earnings |
|---|---|---|---|---|
|
Conservative Bottom-quartile average; mature Standard Territory |
$101,689 | 25.6% | -$25,831 | About $0 |
|
Base Overall median; mature Standard Territory |
$330,985 | 28.6% | -$3,711 | $90,950 |
|
Upside Lowest revenue in top quartile |
$679,499 | 31.6% | $0 | $214,722 |
- Margin sensitivity: 25.6%, 28.6%, and 31.6% are six, three, and zero percentage points below the company-owned proxy. The lower haircuts recognize that the proxy combines 15 territories and may benefit from scale and shared overhead.
- Minimum royalty: the conservative and base cases assume a Standard Territory in the ninth 12-month period or later, when the minimum is $3,000 a month. The model deducts only the difference between that $36,000 annual floor and the percentage royalty.
- No double charge: Item 19 states that company-owned Program Costs include royalty payments, vehicle-related costs, and call-center fees. Royalty and marketing expenses are therefore not subtracted a second time from the proxy margin.
- Rounding: calculations use full-precision inputs; displayed results are rounded to the nearest dollar, except the conservative answer, which is shown as approximately $0 because the calculation is $201.
Independent estimates before personal taxes and financing principal; not franchisor projections.
Interpretation: revenue performance is the dominant driver, but the minimum royalty becomes especially important at low sales. Source basis: 2026 FDD Item 6, pages 13-16, and Item 19, pages 66-72; calculations are independent.
How does owner involvement change the result?
Owner involvement changes how the economic benefit is split between business profit and compensation for work. Item 15 normally requires an Owner to serve as the Key Person and work at the business office. A non-owner General Manager may serve as Key Person only if the franchisor approves the arrangement.
- Manager-run owner earnings
- The scenario range treats normal management payroll as an operating expense because the company-owned P&L includes administrative payroll for team managers, accounting, and sales. Residual Net Ordinary Income is the closest available proxy for pre-tax business profit.
- Owner-operator benefit
- If an active Owner replaces a paid General Manager, cash retained by the owner may rise by the avoided market compensation. That increment is payment for labor performed, not passive profit. The correct amount depends on location, workload, span of control, and payroll burden.
- Absentee ownership
- The FDD does not establish passive ownership. A General Manager requires approval, must complete training, and must work on premises. The owner still bears financial and contractual risk.
- Personal take-home pay
- Neither the FDD nor this model estimates after-tax take-home pay. Entity structure, state and local tax, deductions, distributions, retained earnings, and owner circumstances vary.
At the $90,950 base case, an owner who performs the General Manager role could retain more cash than a manager-run owner, but the increment should be booked conceptually as owner labor compensation. A buyer should price the role using local wage data from the BLS Occupational Employment and Wage Statistics tables, then add payroll taxes and benefits that would have applied to an employee.
Which recurring FDD fees matter most to annual earnings?
Royalty and required local marketing are the largest disclosed recurring obligations. The company-owned margin proxy already includes marketing costs and Program Costs that include royalty, vehicles, and call-center fees, so the scenario does not subtract those categories again. The fee schedule still matters because a low-revenue Territory can be constrained by minimum payments.
| Recurring obligation | 2026 FDD amount | Earnings-model treatment |
|---|---|---|
| Royalty Fee | 10% of first $250,000; 9% of $250,000-$500,000; 8% above $500,000, subject to minimums | Embedded in proxy; minimum-floor difference modeled separately |
| Brand Fund Contribution | $150-$450 monthly depending on operating year | Embedded in proxy marketing costs |
| Local Marketing | Greater of $35,000 or 10% of prior-year Gross Revenue, capped at $50,000 annually | Embedded in proxy marketing costs |
| Website Fee | $350 monthly, subject to permitted increases | Embedded or proxied within operating costs |
| Technology Fee | Currently $60 monthly; increase rights apply | Embedded or proxied within operating costs |
| Operational software | Item 7 cites $280 monthly plus $25 per user for ServiceMinder | Embedded or proxied within product/office costs |
For a later-term Standard Territory with $101,689 of annual Gross Revenue, the percentage royalty is about $10,169, but the ninth-year minimum is $36,000. That $25,831 difference is why the conservative scenario falls to approximately zero before debt service, taxes, and capital spending.
Why is the confidence rating limited?
The estimate relies on a company-operated proxy that may not scale down cleanly to one franchised Territory. The 15 company territories generated $22.7 million collectively, shared operating expenses, and were presented as one combined P&L. That structure can create purchasing, staffing, routing, administrative, and facility efficiencies unavailable to a single-territory owner.
- Ownership mismatch: franchised revenue is combined with company-owned expense ratios. Item 19 does not disclose franchised-unit profit.
- Scale mismatch: the company-owned group averaged about $1.51 million of revenue per territory and shared overhead across 15 territories.
- Accounting uncertainty: Net Ordinary Income is defined as Gross Profit minus listed operating expenses, but Item 19 does not clearly identify depreciation, interest, capital expenditures, or owner distributions.
- Population exclusions: Table 1 excludes five Territories opened during 2025, nine that ceased operation during 2025, and eight newly added Territories operated by existing franchisees.
- Data-quality issues: two quartile-median values in Table 1 exceed the stated highest revenue in their respective groups. Item 19 also states that 88 franchisees operated 230 Territories as of December 31, 2025, while Item 20 reports 232 franchised Territories at year-end. The model avoids the invalid median cells and a buyer should request reconciliation of the territory-count difference.
- Format limitation: the FDD describes Standard and Micro Territories, but Item 19 does not publish separate financial performance for Micro Territories.
Item 20 reports 232 franchised Territories and 15 Company-Owned Territories at year-end 2025. During 2025, franchised operations recorded 14 openings, one termination, four non-renewals, and three other cessations, ending with a net increase of six Territories. These system counts describe outlet movement, not profitability. FDD Item 20, pages 73-81.
What should a buyer verify before relying on this range?
A buyer should reproduce the model with the exact territory, owner role, unit age, staffing plan, and written Item 19 substantiation. The most important unresolved question is whether a single franchised Territory can achieve anything close to the combined company-owned expense structure.
- Request the written substantiation for Item 19 and reconcile the two internally inconsistent quartile-median cells in Table 1.
- Ask existing franchisees for full-year P&Ls, separating Gross Revenue, technician payroll, local marketing, royalty, Brand Fund, vehicles, chemicals, software, insurance, facilities, and manager compensation.
- Compare owner-operated and manager-run franchisees with similar territory age, climate, service mix, customer renewal rate, and number of technicians.
- Confirm which minimum royalty schedule applies to the proposed Territory and model the greater-of calculation month by month.
- Verify whether the opportunity is a Standard Territory or Micro Territory; do not apply Standard Territory performance assumptions to a different format without evidence.
- Separate operating earnings from loan interest, principal payments, equipment replacement, working-capital needs, owner draws, distributions, and personal taxes.
- Use Item 20 and Exhibits F and G to contact current and former franchisees, including owners who transferred, did not renew, or ceased operation.
The FTC consumer guide to buying a franchise explains why buyers should examine earnings claims, costs, and franchisee contacts. The FTC Franchise Rule is the governing federal disclosure framework. Mosquito-control services align most closely with NAICS 561710, Exterminating and Pest Control Services, which is useful when selecting external labor or industry comparisons.
What is the strongest defensible earnings takeaway?
For a manager-run Standard Territory, approximately $0 to $215,000 of annual pre-tax owner earnings is the strongest defensible scenario range from the available evidence, with a base calculation near $91,000. It is scenario-based, not an official franchised-unit earnings disclosure. Gross Revenue is the largest driver; owner operation can increase cash retained only by substituting the owner's labor for paid management. The largest unresolved uncertainty is whether a single franchised Territory can reproduce the 31.6% Net Ordinary Income economics of a 15-territory company-owned operation. Before proceeding, verify the Item 19 substantiation, the applicable minimum royalty, and comparable franchisee P&Ls through current and former franchisee interviews.