For a U.S. PatchMaster owner operating one Licensed Service Area, the strongest defensible estimate is an owner-operator benefit of about $19,000 to $42,000 annually, with a modeled base of roughly $29,000. This is not an official PatchMaster profit figure. It is a 2025-revenue, pre-tax analytical scenario that includes the value of the owner’s labor and excludes financing principal and personal income taxes.
2025 result for 17 one-LSA reporting franchisees; revenue is not owner earnings.
Reported by revenue tertile for a 35-franchisee subset; it excludes major operating expenses.
2023 specialty trade contractors, including businesses with profits and losses.
Gross Revenue data represented 119 of 180 operating franchised LSAs at year-end 2025.
Tiered royalty, 1% Brand Fund, required local advertising, and Technology Fee at base revenue.
May 2025 national annual mean; employer payroll taxes and benefits are additional.
What does PatchMaster Item 19 actually measure?
Officially, Item 19 measures Gross Revenue and Gross Profit—not annual owner earnings. For calendar 2025, the one-LSA cohort contained 17 reporting franchisees. Their average Gross Revenue was $227,992, their median was $186,561, and the disclosed range was $99,605 to $484,432. Five of the 17 reached or exceeded the average. These are per-franchisee figures because each business in that subset held one LSA. Source: 2026 FDD, Item 19, Table 3, pp. 40–41.
The broader Gross Revenue disclosure covered 51 franchisees operating 119 LSAs. The FDD excluded 59 LSAs opened by new franchisees during 2025, two LSAs with incomplete reporting, and 14 LSAs that ceased operation during 2025. Six newly opened LSAs were included under the FDD’s stated full-year or existing-owner conditions. Item 20 showed 180 franchised outlets operating at December 31, 2025. These exclusions matter because the published cohort is not the same as every outlet that existed during the year. Source: 2026 FDD, Items 19 and 20, pp. 37–48.
The FDD defines Gross Profit as Gross Revenue minus technician or contractor labor and materials. It specifically says Gross Profit does not deduct royalties, minimum royalties, Brand Fund contributions, Technology Fees, vehicle expenses, other marketing, office supplies, professional fees, owner compensation, payroll taxes, or employee benefits. A 55%–59% Gross Profit margin therefore cannot be presented as an owner-income margin.
How broad is the Gross Profit sample?
The official Gross Profit evidence is narrower than the revenue evidence. Table 5 covers 35 franchisees operating 77 LSAs that operated for all of 2025 and submitted timely financial reports. Average Gross Profit was 59% in the first revenue tertile, 55% in the second, and 56% in the third. Because these groups contain mixed LSA counts and because the measure stops before major overhead, the percentages are useful operating evidence but not a direct one-LSA owner-earnings result. Source: 2026 FDD, Item 19, Table 5, pp. 42–43.
How is the $19,000–$42,000 owner-operator range calculated?
The range is estimated, not official. The model anchors central revenue to the official one-LSA median of $186,561, applies an analytical revenue spread of 80%, 100%, and 120%, and then applies a 2023 IRS all-return net-income margin for specialty trade contractors with a ±3 percentage-point sensitivity band.
| Scenario | Revenue anchor | Margin assumption | Owner-operator benefit |
|---|---|---|---|
|
Conservative 80% of FDD median; benchmark minus 3 points |
$149,249 | 12.7% | $18,963 |
|
Base FDD median; IRS all-return benchmark |
$186,561 | 15.7% | $29,301 |
|
Upside 120% of FDD median; benchmark plus 3 points |
$223,873 | 18.7% | $41,877 |
The IRS 2023 income statement reports $257.750 billion of business receipts and $40.481 billion of net income less deficit for specialty trade contractor sole proprietorships, producing a 15.7% all-return margin. The model uses the all-return figure rather than the higher profit-only subset to avoid conditioning the estimate only on businesses that reported positive income. See the IRS 2023 sole-proprietorship income statement, Table 2. The industry category is broader than drywall repair and is not franchise-specific, which is the principal reason for the Limited confidence rating.
Estimated annual owner-operator benefit by scenario
Pre-tax analytical result for one LSA; rounded chart labels use the full-precision calculations above.
Interpretation: Revenue and operating margin both move the result. The chart is a sensitivity range, not a probability forecast and not a claim that the base case is most likely.
Sources: 2026 FDD, Item 19, Table 3, pp. 40–41; IRS Statistics of Income, Nonfarm Sole Proprietorships, tax year 2023, Table 2. Formula: scenario revenue × scenario margin. Rounded to the nearest $1,000 in the plot.
What is included in “owner-operator benefit”?
The estimate combines residual business income with the value of work performed by the owner. It is not passive profit. The IRS sole-proprietorship benchmark does not deduct a wage for the proprietor, so the modeled amount can compensate the owner for management, sales, estimating, scheduling, quality control, and administration as well as provide business residual.
- Interest
- The IRS net-income benchmark includes ordinary deductible business interest reported by the industry sample. No separate PatchMaster startup-loan interest assumption is added.
- Depreciation
- Included in the IRS net-income benchmark. Cash capital expenditures and vehicle replacement are not separately modeled.
- Owner compensation
- Not deducted as an expense; the result therefore includes owner labor value.
- General Manager compensation
- Excluded from the owner-operator scenarios and examined separately below.
- Debt and taxes
- Financing principal and personal income taxes are excluded. No after-tax take-home estimate is presented.
How much of revenue can disclosed fees and required marketing consume?
At the base revenue scenario, the disclosed recurring royalty, Brand Fund, local advertising, and Technology Fee total about $46,073, or 24.7% of revenue. This is a derived FDD calculation for a one-LSA business in its first 24 months. It is shown as a separate burden analysis and is not subtracted again from the IRS all-in margin model.
The 2026 FDD charges a tiered Royalty Fee starting at 9% of the first $150,000 of annual Gross Revenue and 8.5% from $150,001 through $250,000. It also discloses a 1% Brand Fund Contribution, a $2,000 monthly Local Advertising Expenditure for one or two LSAs during the first 24 months, and a $300 monthly Technology Fee. The Brand Fund can increase to 3%, local advertising requirements can be modified, and the Technology Fee may increase under the agreement. Source: 2026 FDD, Item 6, pp. 5–10.
Disclosed recurring burden falls as a percentage when revenue rises
One-LSA first-24-month calculation: tiered royalty + 1% Brand Fund + $24,000 local advertising + $3,600 Technology Fee.
Interpretation: The dollar burden rises with sales, but the percentage burden declines because the $24,000 local advertising requirement and $3,600 Technology Fee are fixed in this calculation and the Royalty Fee steps down incrementally.
Source: 2026 FDD, Item 6, pp. 5–10. Calculation assumes one LSA in the first 24 months, current 1% Brand Fund rate, and no fee increases. It excludes vehicle, insurance, payroll burden, professional fees, office costs, optional programs, financing, and other operating expenses.
At conservative revenue, the four disclosed obligations equal about 28.5% of revenue before technician labor, materials, vehicle costs, insurance, payroll burden, office costs, and professional services. That fixed-cost concentration is one reason the earnings range is highly sensitive to sales volume.
How does owner involvement change PatchMaster earnings?
Active owner involvement is structurally important, and the FDD does not describe a passive model. Item 15 requires the owner to remain active in overseeing the business on a full-time basis. The owner may appoint an approved General Manager to help supervise day-to-day affairs, but the owner or General Manager must supervise operations full-time. Source: 2026 FDD, Item 15, pp. 29–30.
The owner-operator scenarios treat the owner as supplying management labor without a separate wage expense. For a manager-assisted sensitivity, the closest national BLS occupation is First-Line Supervisors of Construction Trades and Extraction Workers, with a May 2025 annual mean wage of $86,450. Employer payroll taxes, workers’ compensation, health benefits, bonuses, recruiting, and local wage variation would add to that amount.
Subtracting a full $86,450 manager wage from the $29,301 base owner-operator benefit produces an illustrative residual of about negative $57,000 before employer payroll burden. This does not prove that every manager-assisted unit loses money. It shows that a one-LSA business at the official median revenue would not support a national-average full-time construction supervisor under this simplified model. Higher sales, multiple LSAs, shared management, a different role definition, or lower local compensation could change the result.
Multi-LSA evidence must remain per owner, not be multiplied mechanically. In 2025, franchisees with three or more LSAs reported a median Gross Revenue of $432,684 per franchisee while averaging 4.1 LSAs; their median Gross Revenue per LSA was $105,740. That portfolio result may support shared overhead, but the FDD does not disclose multi-unit owner earnings, ramp-up schedules, manager structures, or portfolio-level Net Income. Source: 2026 FDD, Item 19, Table 3, pp. 40–41.
Why is the evidence confidence Limited?
Confidence is Limited because PatchMaster discloses revenue and Gross Profit but not final owner earnings. The scenario depends materially on a broad IRS specialty-trade benchmark, a sole-proprietorship business form, and editorial revenue and margin sensitivities. Those inputs are authoritative, but they are not same-brand franchised-unit Net Income data.
- Industry mismatch: IRS specialty trade contractors include many trades and operating models beyond small drywall repair, and the all-in sector margin may not reflect PatchMaster’s specific royalty and required-marketing burden.
- Business-form mismatch: sole-proprietorship net income includes proprietor labor and may not match an LLC taxed as an S corporation, partnership, or C corporation.
- Sample selection: Item 19 excludes partial-year new LSAs, incomplete reporters, and LSAs that ceased operation, while the Gross Profit subset is smaller than the revenue cohort.
- Cost variability: vehicle utilization, insurance, payroll burden, subcontractor mix, local advertising, customer acquisition, and rework can move earnings materially.
- Contract variability: Brand Fund, Technology Fee, minimum royalty, local advertising, approved-supplier costs, and other obligations can change under the agreement.
- Financing variability: debt principal, interest rate, loan term, and financed amount are buyer-specific; personal taxes vary by entity, jurisdiction, and owner circumstances.
The FTC’s franchise buyer guidance warns that gross sales do not reveal actual profit and recommends checking the source, sample, limitations, assumptions, and written substantiation behind Item 19. The U.S. Census NAICS definition for Drywall and Insulation Contractors confirms that drywall repair sits within specialty building-finishing work, but no government category perfectly isolates PatchMaster’s small-repair franchise model.
What should a buyer verify before relying on an earnings range?
A buyer should verify actual one-LSA profit-and-loss statements, owner hours, manager costs, and the Item 19 substantiation before treating any scenario as decision-ready. The FDD states that written substantiation for its financial performance representation is available on reasonable request.
- Request the current Item 19 written substantiation and reconcile the 17 one-LSA franchisees to the broader 51-franchisee Gross Revenue cohort.
- Ask one-LSA franchisees for 2025 revenue, technician labor, materials, payroll taxes, insurance, vehicle costs, local advertising, royalties, Brand Fund, Technology Fee, professional fees, and owner compensation.
- Separate hours spent selling, estimating, scheduling, managing technicians, performing field work, and handling administration; owner labor is part of the modeled benefit.
- Ask manager-assisted owners for the General Manager’s base wage, bonus, payroll burden, benefits, span of control, and whether management is shared across LSAs.
- Interview franchisees below, near, and above the one-LSA median; do not rely only on high-revenue operators.
- Ask about the 2025 closed, transferred, and newly opened LSAs in Item 20 and whether their economics differ from the reporting cohort.
- Model debt principal and interest separately using the buyer’s actual loan amount and terms; do not convert operating benefit into after-tax take-home pay.
What is the strongest defensible PatchMaster owner-earnings takeaway?
The most defensible annual range is approximately $19,000 to $42,000 of estimated pre-tax owner-operator benefit for one LSA, with a modeled base near $29,000. It is scenario-based, not an official PatchMaster earnings disclosure. The largest earnings driver is revenue relative to fixed local advertising, technology, vehicle, and management costs. The largest unresolved uncertainty is the absence of same-brand Operating Profit or Net Income after all unit-level expenses.
A buyer should treat the official $186,561 one-LSA median as revenue evidence, not salary; preserve the FDD’s narrower Gross Profit definition; request Item 19 substantiation; and test the model against actual franchisee P&Ls and owner-hours evidence. A manager-assisted structure requires particular scrutiny because the FDD still requires active full-time oversight and a market-rate full-time supervisor can exceed the modeled one-LSA owner benefit.