Owner earnings answer
This is a reasonable annual range for estimated owner-operator benefit in a mature U.S. Mr. Rooter business under the scenarios below, with a base case of about $197,000. It is not passive business profit: the range combines residual operating income with the economic value of work performed by the owner. After a $124,600 wage-only allowance for a paid general and operations manager, the same scenarios produce estimated manager-run residuals of approximately a $49,000 loss, $73,000 profit, and $349,000 profit.
Independent estimate, not an Item 19 earnings claim. Mr. Rooter SPV LLC reports Gross Sales, not owner profit, in Item 19. The estimates combine 2025 same-brand revenue data and disclosed recurring obligations with a 2023 Internal Revenue Service industry margin benchmark, a 2023 Bureau of Labor Statistics manager-wage benchmark, and clearly identified scenario assumptions. Actual results can differ materially because of territory, service mix, sales volume, labor, materials, vehicles, occupancy, marketing, financing, owner involvement, and execution.
Legal franchisor: Mr. Rooter SPV LLC. Disclosure: 2026 Franchise Disclosure Document, issued April 2, 2026. Item 19 status: average and median 2025 Gross Sales for 193 U.S. franchised businesses open and reporting for all 52 weeks; no operating profit, EBITDA, net income, owner compensation, or cash-flow result. Benchmarks: IRS Statistics of Income for 2023 nonfarm sole proprietorships in Specialty Trade Contractors and BLS May 2023 data for General and Operations Managers in NAICS 238220. Checked: July 15, 2026. The current U.S. offer is described on the official Mr. Rooter Plumbing franchise website.
All 193 full-year reporting franchised businesses; revenue, not earnings.
About 81% of U.S. franchised businesses operating at year-end 2025.
IRS 2023 net income less deficit divided by receipts for Specialty Trade Contractors.
6% License Fee and 2% MAP Fee, before separate local-marketing requirements.
BLS 2023 annual mean wage for General and Operations Managers in NAICS 238220.
Item 19 evidence
What does the 2026 Mr. Rooter FDD actually report?
Officially, Item 19 reports Gross Sales only. For calendar 2025, the median was $1,257,146 and the average was $2,093,531 across 193 U.S. franchised businesses that operated and reported for all 52 weeks. The average is substantially above the median because a small number of very large businesses pull it upward.
Gross Sales means total business revenue and receipts, excluding sales taxes, authorized refunds, rebates or discounts, and approved Excluded Services. It does not deduct technician payroll, materials, vehicles, insurance, occupancy, the License Fee, the MAP Fee, local marketing, software, call-center charges, debt service, or owner compensation.
| Overlapping Item 19 group | Average Gross Sales | Median Gross Sales | Businesses |
|---|---|---|---|
| Top 10% | $8,162,009 | $6,087,233 | 19 |
| Top 25% | $5,243,078 | $4,121,620 | 48 |
| Top 50% | $3,557,458 | $2,530,999 | 97 |
| All reporting businesses | $2,093,531 | $1,257,146 | 193 |
| Bottom 50% | $614,354 | $593,671 | 96 |
| Bottom 25% | $288,402 | $294,005 | 48 |
| Bottom 10% | $147,745 | $149,691 | 19 |
Source: Mr. Rooter SPV LLC 2026 Franchise Disclosure Document, Item 19, pp. 82–84. The top and bottom groups overlap; they are ranking bands, not seven separate populations.
The 193-business table excludes 22 businesses opened during 2025, 14 transferred businesses without a full year of data, nine businesses reporting $0 for every week, and 13 businesses that closed during 2025. The observed range among included businesses was $633 to $20,262,638. Excluding closures, zero reporters, and partial-year businesses makes Item 19 useful for mature-unit revenue analysis but incomplete for downside-risk analysis.
Item 20 provides additional system context: U.S. franchised outlets increased from 228 at the start of 2025 to 238 at year-end, while company-owned outlets declined from three to two. Those counts describe system movement, not owner profitability. Source: Mr. Rooter SPV LLC 2026 Franchise Disclosure Document, Item 20, pp. 84–93.
Scenario model
How is the annual owner-benefit range calculated?
The estimate applies three all-in margin assumptions to three official FDD median-revenue anchors. Conservative uses the Bottom 50% median, Base uses the systemwide median, and Upside uses the Top 50% median. These are analytical scenarios, not probabilities and not franchisor forecasts.
Estimated owner-operator benefit = Item 19 Gross Sales anchor × all-in post-expense scenario margin
| Scenario | FDD revenue anchor | All-in margin assumption | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | $593,671 | 12.7% | $75,430 |
| Base | $1,257,146 | 15.7% | $197,443 |
| Upside | $2,530,999 | 18.7% | $473,439 |
Annual pre-tax benefit, rounded to the nearest $1,000 for display
Interpretation: Revenue dispersion drives most of the range; the central margin assumption is important, but the difference between the Bottom 50%, overall, and Top 50% FDD medians is larger.
Sources and formula: Mr. Rooter SPV LLC 2026 FDD, Item 19, p. 83; IRS nonfarm sole-proprietorship statistics, 2023 Table 2. Calculations use full precision and are rounded only for display.
- Margin benchmark: IRS 2023 Specialty Trade Contractors reported $40.481 billion of net income less deficit on $257.750 billion of business receipts, a 15.7% ratio. This broad category is not Mr. Rooter-specific and is not limited to plumbing franchises.
- Sensitivity band: Conservative uses 12.7%, Base uses 15.7%, and Upside uses 18.7%—three percentage points below and above the central benchmark. The band is editorial, not FDD-reported.
- Fee treatment: Each margin is treated as an all-in margin after normal unit-level operating expenses and the recurring franchise fees applicable to the business. The IRS table does not isolate franchise fees, so the 6% License Fee and 2% MAP Fee are not subtracted a second time.
- Definition: The result is before personal income taxes and financing principal payments. IRS business deductions may include interest and depreciation to the extent reported; capital expenditures and replacement vehicles are not separately modeled.
Owner role
How much does owner involvement change the result?
Owner involvement can change the modeled annual benefit by at least the cost of a qualified operating manager. Item 15 generally requires an individual owner to directly perform or supervise the business unless Mr. Rooter SPV LLC consents otherwise; when consent is given, a trained bona fide manager must directly supervise it. A manager-run arrangement therefore is not the default equivalent of passive ownership.
The owner-operator scenarios above use a sole-proprietor margin proxy, so they are best read as a combined return to capital and owner labor. To estimate a manager-run residual, the model subtracts the BLS May 2023 annual mean wage of $124,600 for General and Operations Managers employed by Plumbing, Heating, and Air-Conditioning Contractors. The subtraction is wage-only and does not include employer payroll taxes, benefits, recruiting cost, or management incentives.
Annual pre-tax amount after subtracting a $124,600 manager-wage allowance
Interpretation: At the conservative revenue and margin assumptions, the modeled business does not cover the manager wage. At the base scenario, the paid-manager allowance reduces residual pre-tax profit from about $197,000 to about $73,000.
Sources: Mr. Rooter SPV LLC 2026 FDD, Item 15, pp. 72–73; BLS wage estimates for NAICS 238220, May 2023. Manager-run figures exclude employer payroll taxes and benefits.
A higher owner-operator figure does not mean the business itself is producing that amount as passive profit. Part of the difference compensates the owner for supervising dispatch, hiring, pricing, customer service, technician productivity, purchasing, and financial control. A buyer should price that labor separately before comparing the franchise with an employed salary or a manager-run investment.
Fees and uncertainty
Which obligations can move Mr. Rooter owner earnings most?
Labor productivity, local marketing, and sales volume are likely to move owner earnings more than small fixed fees. The 2026 FDD establishes a substantial percentage-based burden, but Item 19 does not disclose the remaining cost structure needed to calculate same-brand profit.
Standard rate of 6% of Gross Sales, subject to minimum weekly fees and special roll-in provisions.
Standard rate of 2% of Gross Sales, separate from local marketing spending.
$60,000 during months 1–12 and $75,000 during months 13–24. Later, the franchisor may require the greater of $50,000 or 8% of prior-year Gross Sales; qualifying Local Marketing Group spending counts toward that amount.
A $176.45 monthly technology package, separate ServiceTitan per-user charges, and a required rollover/out-of-hours call-center program currently priced at $349.99–$449.99 monthly plus $25 per booked appointment.
Source: Mr. Rooter SPV LLC 2026 Franchise Disclosure Document, Item 6, pp. 20–33. Fees may change and special rates or minimums can apply.
At the 2025 system median, the standard 6% License Fee and 2% MAP Fee alone equal approximately $100,572 annually before local marketing and fixed or usage-based charges. This is a compatible FDD calculation—$1,257,146 × 8%—but it is not a complete expense statement and is not subtracted again from the all-in scenario margin.
The largest unresolved uncertainties are specific rather than theoretical:
- No same-brand profit disclosure: Item 19 does not show technician labor, materials, fleet expense, insurance, occupancy, bad debt, office payroll, interest, depreciation, or owner compensation.
- Survivorship and reporting scope: closed businesses, all-zero reporters, transfers without a full year, and 2025 openings are excluded from the Item 19 revenue table.
- Per-business versus per-owner: Item 19 reports franchised-business results, not total income per franchisee. One owner may control more than one territory or operating business.
- Benchmark mismatch: IRS Specialty Trade Contractors include many non-franchised trades and operating models. BLS NAICS 238220 combines plumbing with heating and air-conditioning contractors.
- Financing and reinvestment: debt principal, personal income taxes, replacement vehicles, major equipment, and growth capital can materially reduce cash distributions even when operating profit is positive.
Buyer verification
What should a buyer verify before relying on this range?
Verify the owner role and a normalized unit-level profit-and-loss statement before treating any scenario as decision-ready. The Federal Trade Commission framework makes Item 19 and its written substantiation the relevant place for franchisor financial performance representations, but the FDD itself directs prospects to current and former franchisees for operating experience.
- Request the written substantiation for the 2025 Item 19 Gross Sales table and confirm how each “franchised business” maps to territories, locations, owners, and ServiceTitan reporting records.
- Ask franchisees in the Bottom 50%, near the system median, and in the Top 50% for normalized annual labor, materials, fleet, insurance, occupancy, marketing, software, call-center, and office-overhead percentages.
- Separate owner salary or market labor value from distributions and retained business profit. Record whether each interviewed owner works full time, supervises a manager, or has franchisor consent for manager-led operation.
- Test the required local-marketing amount, technician wage rates, manager total compensation, and booked-call fees using the buyer’s territory and expected staffing plan.
- Build debt service, replacement vehicles, capital expenditures, and personal taxes outside the operating-earnings model rather than presenting them as a universal take-home-pay adjustment.
- Interview former franchisees and operators of transferred or closed businesses so the downside case is not based only on the 193 full-year reporting businesses.
The strongest defensible annual range is approximately $75,000 to $473,000 of estimated owner-operator benefit, with a base scenario near $197,000. It is scenario-based, not an official Mr. Rooter earnings disclosure. The dominant driver is Gross Sales relative to technician and operating-cost discipline; the largest unresolved uncertainty is the absence of a same-brand profit-and-loss disclosure after recurring fees. A manager-run model can be materially lower, including a modeled loss at the conservative case. Before making a decision, verify Item 19 substantiation, obtain normalized financial statements from franchisees with comparable territories and owner roles, and include closed, transferred, and zero-reporting outcomes in the downside analysis.