This is an independent manager-run estimate of annual pre-tax owner earnings, not an Orange Leaf Item 19 profit figure. For an owner who personally performs the full-time store-management role, the modeled owner-operator benefit is about $77,100–$130,900, but roughly $69,400 of that difference represents the market value of the owner’s labor rather than passive business profit.
The earnings figures on this page are independent analytical scenarios. They are not a financial performance representation made by Orange Leaf FC, LLC in Item 19. The model combines identified 2026 FDD sales and fee facts with an official IRS industry-margin benchmark, a BLS manager-wage benchmark, and clearly identified scenario assumptions. Actual results can differ materially because of location, store format, sales volume, labor, occupancy, financing, owner involvement, weather, seasonality, local competition, and execution.
Legal franchisor: Orange Leaf FC, LLC, a wholly owned subsidiary of Orange Leaf, LLC; Orange Leaf, LLC is owned through BRIX Holdings, LLC, whose equity was acquired by Legacy Brands International LLC in July 2025. FDD basis: 2026 FDD, issuance date April 8, 2026; Item 19, pp. 52–53; Item 20, pp. 53–58; Items 5–7; and Item 15. Item 19 status: sales-only disclosure for 58 eligible franchised stores, with no operating-cost, profit, EBITDA, net-income, cash-flow, or owner-compensation result. External basis: IRS 2022 corporate data for Food Services and Drinking Places and BLS May 2025 Food Service Manager wages. Checked July 20, 2026. A matching public FDD was not verified on a franchisor-controlled website, so FDD references are provided as plain-text item and page citations.
Orange Leaf Item 19 supplies useful same-brand sales distribution data, but it expressly excludes costs and expenses. The annual earnings range therefore depends materially on a broad official industry proxy and analytical margin sensitivity rather than same-brand profit records.
2025 sales for 15 of the 58 eligible franchised stores.
2025 sales for 14 of the 58 eligible franchised stores.
95.1% operated for at least 11 of the 12 accounting periods.
The standard continuing royalty is paid weekly.
Traditional / Non-Traditional; optional local spending may add another 1%.
Derived from the May 2025 BLS median hourly wage of $33.36.
What does Orange Leaf Item 19 actually report?
Officially, Item 19 reports unit sales—not owner earnings. It covers the 2025 accounting year from December 30, 2024 through December 28, 2025 and includes 58 franchised stores that operated for at least 11 of the 12 accounting periods. The cohort combines Traditional Stores and Non-Traditional Stores, so the figures are per store, not per owner, portfolio, territory, or format.
The strongest same-brand evidence is the disclosed separation between the top and bottom quartiles. The top 25% consisted of 14 stores; the bottom 25% consisted of 15 stores. Orange Leaf did not disclose the middle 50% as a separate group and did not provide an all-store average or median.
| 2025 Item 19 cohort | Lowest unit volume | Median unit volume | Highest unit volume |
|---|---|---|---|
| Bottom 25% — 15 stores | $49,883 | $253,017 | $326,832 |
| Top 25% — 14 stores | $600,990 | $681,274 | $1,123,745 |
Ranges show lowest to highest 2025 unit volume; diamonds mark the disclosed median.
Interpretation: Location-level sales dispersion is large. The highest top-quartile store generated more than 22 times the sales of the lowest bottom-quartile store, making site quality and local demand more consequential than a single systemwide headline.
Source: Orange Leaf FC, LLC 2026 FDD, Item 19, pp. 52–53. The FDD states that these are unaudited franchisee-reported sales and that Orange Leaf did not independently verify them.
Item 19 says the figures exclude cost of sales, payroll, rent, utilities, royalty, marketing, technology, and every other operating expense. It specifically warns that no profitability inference can be drawn. The FTC’s guidance on franchise earnings claims makes the same distinction: gross sales can look strong while overhead leaves little or no profit.
Which stores are missing or mixed together?
The official result is broad but not format-specific. Three stores were excluded because they did not operate for at least 11 accounting periods. Item 19 combines Traditional Stores, typically 1,000 to 1,300 square feet, with Non-Traditional Stores, typically 350 to 900 square feet. Both Non-Traditional Stores in the cohort fell in the bottom quartile, but a sample of two is too small to support a separate Non-Traditional earnings estimate.
Item 20 reports 61 franchised outlets at both the beginning and end of 2025, with three openings, one termination, and two stores ceasing operations for other reasons. Five stores transferred to new owners during 2025. There were no company-owned outlets in 2025, so there is no same-brand company-operated profit proxy to use.
How is the estimated owner-earnings range calculated?
The model applies a transparent 3.03%–9.03% margin sensitivity to Item 19-derived sales anchors. The base margin is the 6.03% ratio of IRS 2022 corporate Net Income (Less Deficit) to Business Receipts for the broad Food Services and Drinking Places industry. Conservative and Upside margins are the benchmark minus and plus three percentage points. This is a scenario band, not a forecast of probability.
- Conservative revenue: $253,017, the official bottom-quartile median unit volume.
- Base revenue: $467,146, the arithmetic midpoint between the disclosed bottom- and top-quartile medians. This is an editorial interpolation, not the system median or average.
- Upside revenue: $681,274, the official top-quartile median unit volume.
- Margin benchmark: 6.03%, derived from IRS 2022 Food Services and Drinking Places corporate data; 3.03% and 9.03% are explicit sensitivity assumptions.
- Fee treatment: the IRS net-income measure is an all-in industry proxy, so the model does not subtract Orange Leaf fees a second time. The mismatch between generic industry expenses and Orange Leaf-specific obligations is a major confidence limitation.
- Included or excluded: the IRS proxy includes salaries, officer compensation, interest, and depreciation at the industry aggregate. Financing principal, capital expenditures, owner distributions, and personal income taxes are excluded from the scenario result.
| Scenario | Revenue anchor | Margin | Manager-run owner earnings |
|---|---|---|---|
| Conservative | $253,017 | 3.03% | $7,700 |
| Base | $467,146 | 6.03% | $28,200 |
| Upside | $681,274 | 9.03% | $61,500 |
The base case is not presented as the expected or most likely outcome. Because Orange Leaf does not disclose sales for the middle half of eligible stores, the midpoint only creates a transparent calculation point between two official quartile medians. A real underwriting model should replace it with the target store’s trailing-12-month sales, monthly seasonality, lease, payroll schedule, product cost, delivery mix, and required-fee detail. Store-specific evidence can move the result far more than rounding.
Annual pre-tax residual per store, rounded to the nearest $100.
Interpretation: Revenue and margin move together in this model. A store near the bottom-quartile median with a compressed margin leaves very little residual profit, while a top-quartile-median store with stronger cost control can produce materially more.
Sources and calculation: Orange Leaf 2026 FDD, Item 19, pp. 52–53; IRS Corporation Income Tax Returns, 2022 Table 5.1. IRS Food Services and Drinking Places Business Receipts were $585.275 billion and Net Income (Less Deficit) was $35.281 billion, producing a 6.03% proxy margin. Scenario margins are benchmark ±3 percentage points.
The IRS category is broader than frozen-yogurt retail and includes many food-service concepts with different product costs, service models, hours, rent profiles, and franchise-fee structures. The U.S. Census Bureau’s NAICS 722515 definition confirms that frozen-yogurt shops sit inside Snack and Nonalcoholic Beverage Bars, but the latest usable IRS profitability table is aggregated at the broader Food Services and Drinking Places level. That comparability gap is the main reason confidence is Limited.
How does active owner operation change the result?
Active operation can increase owner benefit by the value of a replaced full-time manager, but it does not create the same amount of passive profit. Item 15 requires a single-store business to be supervised on-premises by a Managing Owner who normally devotes full-time effort. If the Managing Owner will not work full time, or if the franchisee operates multiple stores, a full-time Key Person must control day-to-day store management.
The May 2025 BLS national median hourly wage for Food Service Managers was $33.36. Annualized at 2,080 hours, that equals about $69,390. The model adds that wage value to manager-run residual profit to show estimated owner-operator benefit. It does not add employer payroll taxes, benefits, overtime, or a local wage premium, and it should not be described as passive income.
The connecting line is the modeled $69,390 value of full-time management labor.
Interpretation: The labor component is larger than residual profit in all three scenarios. That makes owner involvement a central earnings decision: a hands-on owner may receive more total economic benefit, but also assumes a full-time operating job.
Sources: Orange Leaf 2026 FDD, Item 15, pp. 42–43; BLS May 2025 national occupation wage table, Food Service Managers, median hourly wage $33.36. Annual value derived as $33.36 × 2,080 hours = $69,388.80, rounded to $69,390.
Which Orange Leaf fees can materially change owner earnings?
The standard continuing burden begins with a 5% royalty and a format-dependent marketing allocation. A Traditional Store pays 3% of Gross Revenue to the Brand Development Fund; a Non-Traditional Store pays 1%. Orange Leaf recommends, but does not currently require, an additional 1% of Gross Revenue for local marketing. The official Orange Leaf U.S. franchising page presents the same core format and fee distinction.
- Royalty Fee — 5% of Gross Revenue
- Paid weekly. A 2026 early-franchise incentive can reduce the royalty to 2.5% for the first 12 accounting periods if eligibility and opening deadlines are met; the mature-store model does not treat that temporary reduction as permanent.
- Marketing Allocation — 3% Traditional / 1% Non-Traditional
- Paid weekly. Orange Leaf currently directs the required amount to the Brand Development Fund. Recommended local marketing may add 1 percentage point.
- POS System Maintenance — approximately $250 per month
- Approximately $3,000 annually, paid under a maintenance agreement with the POS provider.
- Technology Fee — capped at $1,800 per calendar year
- The cap may increase by up to 10% over the prior-year cap.
- Loyalty and Online Ordering — $70 per month plus transaction charges
- The base fee is $840 annually, plus 4.5% per transaction and $0.50 per delivery-order dispatch transaction.
- Customer Feedback Tool — approximately $50 per month if implemented
- This is a potential additional $600 annual fixed charge before any other vendor costs.
At the modeled $467,146 base revenue, the disclosed 5% royalty alone equals approximately $23,357. Required marketing would equal approximately $14,014 for a Traditional Store or $4,671 for a Non-Traditional Store. These calculations show the scale of the obligations, but they are not subtracted again from the scenario margin because the IRS net-income benchmark is already an all-in measure. A buyer should replace the proxy with a store-specific profit-and-loss statement that separately identifies royalty, Brand Development Fund, local marketing, technology, delivery, merchant processing, rent, labor, and product cost.
What could move actual earnings outside the modeled range?
The largest unresolved variable is the true Orange Leaf store-level expense structure. Item 19 gives no cost-of-goods, labor, occupancy, operating-profit, EBITDA, net-income, or owner-compensation data. A 2-percentage-point margin change at the $467,146 base revenue changes annual owner earnings by about $9,343, before any difference in debt service.
- Request Item 19 written substantiation. Confirm the underlying sales records, accounting-period definitions, and whether any late, missing, transferred, remodeled, or temporarily closed stores affected the cohort.
- Interview both top- and bottom-quartile franchisees. Ask for actual 2025 and trailing-12-month profit-and-loss statements, not only revenue recollections.
- Separate Traditional from Non-Traditional economics. Verify revenue, rent, labor model, hours, product mix, and required marketing for the precise format under consideration.
- Identify owner labor correctly. Ask whether reported “income” includes unpaid owner hours, payroll paid to owners, distributions, retained earnings, or a full-time Key Person salary.
- Reconcile all recurring fees. Confirm royalty, Brand Development Fund, local advertising, POS, technology, loyalty, delivery, merchant processing, supplier rebates, and required promotions.
- Model debt separately. Obtain actual loan amount, interest rate, term, amortization, fees, and collateral requirements. Principal payments reduce cash to the owner even though they are not an operating expense.
- Test seasonality and weather exposure. Item 19 identifies climate, local demographics, visibility, access, parking, competition, brand awareness, marketing, weather events, and road construction as sales drivers.
- Review Item 20 contacts and turnover. Speak with current owners, 2025 transferees, and former franchisees who ceased operations to understand economics that a surviving-store sales table may not reveal.
The FTC advises prospects to obtain written substantiation for any financial performance claim and to compare the claim with current and former franchisee experience. Its Consumer’s Guide to Buying a Franchise also points buyers to Item 19 for performance evidence and Item 20 for system history and franchisee contacts.
What is the strongest defensible annual earnings range?
For one manager-run Orange Leaf store, the strongest defensible scenario range is approximately $7,700 to $61,500 in annual pre-tax owner earnings. It is scenario-based, not official, because the 2026 Item 19 disclosure measures sales only. For a full-time hands-on owner replacing the required management role, modeled owner-operator benefit rises to approximately $77,100 to $130,900, but the added amount is labor compensation, not passive residual profit.
The most important earnings driver is store-level sales volume combined with labor and occupancy control. The largest unresolved uncertainty is the absence of same-brand expense and profit data by format. Before relying on any range, a buyer should obtain Item 19 substantiation, reconstruct several current franchisee profit-and-loss statements, separate owner labor from business profit, and test the exact location’s debt, rent, labor, seasonality, and required-fee burden.
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