Payroll Vault’s 2026 Franchise Disclosure Document reports median 2025 “EBIDTA” of $87,188.50 and average “EBIDTA” of $86,150.18 across 50 franchised businesses that submitted a full year of reports. This is a business-level earnings measure before interest, depreciation, tax, and amortization—not owner salary, distributions, debt service, or after-tax take-home pay.
What does Payroll Vault’s earnings disclosure actually measure?
It measures franchised-business EBIDTA, not an owner’s personal income. The official population consists of 50 businesses owned and operated by franchisees that were operating on December 31, 2025 and submitted reports for every month of 2025. Twelve locations that did not operate for the full year were excluded.
The FDD defines “Total COGS” to include direct labor and payroll-software charges, and defines “Total Franchisee, Operating & Sales Expenses” to include royalty fees, digital marketing, managed social media, technology, CRM, email, accounting, fixed operating expenses, and marketing and sales expenses. Average EBIDTA therefore reflects many normal unit-level costs and recurring franchise fees, but the disclosure does not state whether owner compensation is consistently recorded within those categories.
The official average Total Income was $300,072.43, while average EBIDTA was $86,150.18. Calling the revenue figure an owner salary would overstate the disclosed earnings measure by about $213,922.
Source: Payroll Vault Franchising, LLC, 2026 Franchise Disclosure Document, Item 19, pp. 42–45. The FTC’s consumer guide to buying a franchise explains why Item 19 definitions, samples, and exclusions matter.
Does working full time in the business produce higher owner earnings?
Not in a simple, causal way in this 2025 sample. Full-time owner operations reported lower average EBIDTA than part-time owner operations, but their medians were nearly identical. The most plausible reading is that several larger part-time businesses pulled that cohort’s average upward; the FDD does not prove that fewer owner hours cause higher earnings.
| 2025 cohort | Businesses | Average Total Income | Average EBIDTA | Median EBIDTA |
|---|---|---|---|---|
| All reporting franchised businesses | 50 | $300,072.43 | $86,150.18 | $87,188.50 |
| Full-time owner operations | 34 | $224,634.65 | $75,816.82 | $87,188.50 |
| Part-time owner operators | 16 | $441,623.19 | $102,724.19 | $84,591.50 |
Source: Payroll Vault Franchising, LLC, 2026 FDD, Item 19, Tables 1 and 2, pp. 43–44. “Full-time” means the operator or operators averaged 40 or more hours per week in 2025.
Item 15 requires each business to be under the direct, full-time, day-to-day supervision of either the owner or a trained Principal Operator. A part-time owner can therefore rely on a Principal Operator, but the business itself still requires full-time supervision. The Item 19 cohort does not disclose the Principal Operator’s compensation separately.
Source: Payroll Vault Franchising, LLC, 2026 FDD, Item 15, p. 39. The official Payroll Vault franchisee resources page describes owner and team training but does not replace the FDD’s operating requirement.
How much of average revenue remained as EBIDTA?
About 29% remained as average EBIDTA in the official 2025 sample. Average Total Income was $300,072.43, average Gross Profit was $165,677.57 after Total COGS, and average EBIDTA was $86,150.18 after Total Franchisee, Operating & Sales Expenses.
Source: Payroll Vault Franchising, LLC, 2026 FDD, Item 19, Table 1, p. 43. Values are rounded for display; the official average figures are $300,072.43, $165,677.57, and $86,150.18.
Which franchise fees are already reflected in the official earnings result?
Item 19 says the combined operating-and-sales expense line includes recurring franchise fees. That means an analyst should not subtract the royalty, marketing, technology, CRM, email, or accounting fees a second time from the reported EBIDTA.
- Royalty
- The greater of 6% of Gross Revenue or $400 per month for a standard territory, beginning with the third full month.
- Variable software costs
- $2.25 per employee per month and $12 per client per month, in addition to the payroll software license.
- Core monthly platform fees
- Payroll software $325, national advertising $300, digital marketing $105, CRM $215, Mineral HR $150, technology maintenance $175, and financial/KPI management $35, subject to the FDD’s stated timing and increase provisions.
- Other operating costs
- The Item 19 expense definition also includes fixed operating expenses and marketing and sales expenses. Optional, temporary, usage-based, and exception fees may vary by business.
The official Payroll Vault investment and fee overview publicly confirms the 6% royalty structure and territory-based minimums. The controlling details remain the 2026 FDD, Item 6, pp. 11–18.
How wide is the reasonable earnings range?
The strongest central evidence is the official average-to-median band of $86,150.18 to $87,188.50, but the actual results were far more dispersed. The reported EBIDTA column ranged from a loss of $57,136 to positive EBIDTA of $526,191. The central figures therefore describe the sample’s middle, not a dependable forecast for a new buyer.
The full-time cohort reinforces that uncertainty: its lower half had median EBIDTA of $3,726, while its upper half had median EBIDTA of $130,498. For part-time owner operators, the lower-half median was $17,914 and the upper-half median was $139,089. These are official cohort statistics, not probabilities or guaranteed low and high cases.
Item 19 does not show business age, owner compensation policy, Principal Operator pay, debt service, capital spending, or a maturity-adjusted distribution. It also excludes 12 businesses that did not operate for every month of 2025. Those gaps prevent a reliable estimate of personal take-home pay and make a new-unit forecast less certain than the High confidence rating for the historical EBIDTA data itself.
Item 20 shows 62 franchised outlets at the end of 2025, up from 61 at the start, with 10 openings, three terminations, and six businesses recorded as ceasing operations for other reasons during the year. Its footnote explains that book-of-business sales are reflected as a new opening and an exiting business ceasing operation rather than as a transfer. These system movements matter when interpreting a full-year reporting sample.
Sources: Payroll Vault Franchising, LLC, 2026 FDD, Item 19, Tables 1 and 2, pp. 43–44; Item 20, pp. 45–50.
What should a buyer verify before relying on $87,188?
Verify the accounting treatment and the comparable franchisee cohort before treating the median as spendable cash. The FTC states that a buyer may request written substantiation for an Item 19 financial performance representation, and Payroll Vault’s Item 19 says substantiation will be made available upon reasonable request.
- Owner compensation: ask whether owner salary, draws, distributions, or guaranteed payments were included in COGS or operating expenses for each reporting business.
- Principal Operator cost: determine whether part-time owners employed a full-time Principal Operator and where that compensation appears in the reported statements.
- Business maturity: request results by years in operation, client count, employees serviced, territory size, and acquired versus organically built client books.
- Debt and capital needs: model interest and principal payments separately, plus replacement technology, insurance changes, and other capital spending not visible in EBIDTA.
- Franchisee interviews: compare the Item 19 accounting definitions with actual owner salary, distributions, reinvestment, and workload reported by current and former franchisees listed in Item 20 and its exhibits.
The FTC’s FDD review guidance and Item 19 evaluation guidance explain why written substantiation and franchisee validation are central to earnings due diligence.
What is the defensible annual owner-earnings answer?
The best-supported answer is approximately $86,000 to $87,000 of annual pre-tax business EBIDTA for a reporting Payroll Vault franchised business in 2025. That is an official average-to-median band, not an estimate of owner salary or after-tax take-home pay. The most important earnings driver was the size and economics of the client book, as shown by large differences in Total Income across the sample. The largest unresolved uncertainty is how owner and Principal Operator labor were compensated and recorded. A buyer should obtain Item 19 substantiation, isolate results for comparable mature businesses, and verify owner salary, distributions, debt service, and weekly workload in franchisee interviews before using the $87,188.50 median in a personal income plan.