For one post-first-year U.S. Pet Supplies Plus store, this independent model estimates approximately $16,000 to $140,000 in annual pre-tax owner earnings, with a base scenario near $78,000. An active owner who replaces a paid store manager may realize approximately $111,000 to $235,000 in owner-operator benefit, but about $94,670 of that comparison represents the market value of management labor rather than passive business profit.
Data basis. The legal franchisor is PSP Franchise Operations SPV, LLC. The Franchise Disclosure Document was issued April 20, 2026. Item 19 reports 2025 Gross Sales, Gross Margin, rent, and labor for 385 Reporting Franchised Stores; it does not report Operating Profit, EBITDA, Net Income, Cash Flow, or Owner Compensation. The current FDD is cited by year, Item, and page because no matching official public 2026 copy was verified.
Benchmarks used. The owner-operator comparison uses the U.S. Bureau of Labor Statistics May 2023 Retail Trade annual mean wage of $94,670 for General and Operations Managers. The base margin is cross-checked against 2023 IRS Statistics of Income data for domestic retail-trade LLCs. Sources and availability were checked July 17, 2026.
What does Pet Supplies Plus Item 19 actually measure?
Officially, Item 19 measures store revenue and selected operating-cost ratios—not owner earnings. For January 1 through December 31, 2025, it covers 385 franchised stores that operated for the full year under the same owner and submitted complete, timely data.
Same-brand revenue, Gross Margin, rent, labor, royalty, advertising, and technology obligations anchor the model. Missing overhead requires explicit assumptions.
Item 19 is detailed and current, but it omits several operating expenses and every direct owner-profit measure.
All 385 Reporting Franchised Stores in calendar 2025.
Lower than the average, indicating some high-volume stores lift the mean.
Gross Profit after Cost of Sales, not operating profit.
Includes base rent, landlord taxes, building insurance, and common-area maintenance.
Includes manager wages, payroll taxes, benefits, and supervisory personnel.
Equivalent to 76.7% of the 502 franchised stores open at the start of 2025.
The FDD defines Gross Sales as total store revenue. It defines Gross Profit as Gross Sales minus Cost of Sales. Neither figure deducts rent, labor, royalty, advertising, technology, insurance, utilities, repairs, card fees, professional services, debt service, taxes, or owner compensation.
| 2025 reporting cohort | Store count | Average annual Gross Sales | Average Gross Margin |
|---|---|---|---|
| Open 1 year | 18 | $1,609,336 | 41.9% |
| Open 2 years | 37 | $1,898,015 | 40.0% |
| Open 3 years | 39 | $2,277,552 | 40.2% |
| Open 4+ years | 291 | $2,823,225 | 36.9% |
| All reporting stores | 385 | $2,622,279 | 37.8% |
Official source: 2026 Pet Supplies Plus Franchise Disclosure Document, Item 19, pp. 54–59. Gross Margin is a merchandise margin; it is not an owner-income margin.
How is the annual owner-earnings range calculated?
The model converts the Item 19 revenue and operating ratios into a post-first-year store-level cash estimate. It uses the all-store average Gross Sales as the base, an analytical 80% and 120% revenue spread, the FDD’s 37.8% Gross Margin, 7.0% rent ratio, 14.4% labor ratio, and current recurring fees.
What is included in estimated pre-tax owner earnings?
The estimate includes normal modeled unit-level operating expenses and disclosed recurring franchise fees. It excludes owner personal income taxes, financing interest and principal, depreciation and amortization, capital expenditures, and owner distributions. It is therefore not after-tax take-home pay.
- Gross ProfitScenario Gross Sales multiplied by the FDD’s 37.8% average Gross Margin.
- Occupancy and laborScenario Gross Sales multiplied by the FDD’s 7.0% rent ratio and 14.4% labor ratio.
- Recurring franchise fees3.0% royalty after month 12; advertising at the lesser of 3.5% of Gross Sales or $100,000 annually; up to $18,000 technology; $4,356 midpoint POS lease; and $1,620 grooming scheduling software.
- Omitted operating overheadAn explicit 8.0%, 6.0%, or 5.0% assumption for utilities, insurance outside rent, repairs, maintenance, merchant fees, shrink, store supplies, professional fees, delivery variability, and other expenses not reported in Item 19.
| Scenario | Annual Gross Sales anchor | Omitted overhead assumption | Manager-run owner earnings |
|---|---|---|---|
| Conservative | $2,097,823 | 8.0% of sales | $15,883 |
| Base | $2,622,279 | 6.0% of sales | $78,293 |
| Upside | $3,146,735 | 5.0% of sales | $140,350 |
Manager-run, one-store annual estimate before debt service, personal taxes, depreciation, and capital expenditures.
Interpretation: Revenue growth helps, but the result is highly sensitive to unreported operating overhead. The scenarios are analytical cases, not probabilities or franchisor forecasts.
Sources: 2026 Pet Supplies Plus FDD, Items 6 and 19, pp. 7–16 and 54–59; omitted-overhead percentages are editorial scenario assumptions.
A reconciled 100% revenue bridge using FDD ratios, recurring fees, and the 6.0% base overhead assumption.
Interpretation: A 37.8% Gross Margin leaves 37.8 cents of each sales dollar before rent, labor, fees, and overhead. In the base case, only about 3.0 cents remains as manager-run pre-tax owner earnings.
Sources: 2026 Pet Supplies Plus FDD, Item 19 pp. 54–59 and Item 6 pp. 7–16. “Other” is the 6.0% editorial assumption; fixed costs are technology, midpoint POS leasing, and grooming software.
IRS Statistics of Income Table 6 for tax year 2023 reports $710.35 billion of total income and $19.39 billion of ordinary business income for domestic retail-trade LLCs, a derived 2.7% ratio. The base scenario’s 3.0% store-level margin is close to that broad benchmark, but the IRS population includes many retail formats and tax treatments and is not evidence of Pet Supplies Plus performance.
How does owner involvement change the earnings result?
Active operation can materially increase total owner benefit because Item 19 labor already includes a paid store manager. Item 15 permits the owner to manage full time or delegate daily operations to a trained Key Manager. The comparison below adds the BLS Retail Trade annual mean wage of $94,670 for General and Operations Managers to the manager-run residual.
The owner-operator point includes approximately $94,670 of labor value for replacing a paid manager.
Interpretation: The gap is compensation for work, not free incremental profit. A full-time owner may not capture the entire wage proxy if assistant-management coverage or additional labor remains necessary.
Sources: 2026 Pet Supplies Plus FDD, Item 15 pp. 42–43 and Item 19 pp. 54–59; BLS May 2023 Retail Trade wage estimates.
“Owner-operator benefit” combines residual operating profit and the value of management labor performed by the owner. It should not be described as passive income, a distribution, or pure business profit.
What could move actual earnings outside this range?
The largest unresolved variable is the operating-expense total that Item 19 does not disclose. A few percentage points of sales can move annual owner earnings by tens of thousands of dollars because a typical store operates on a much thinner margin than its 37.8% Gross Margin suggests.
- Store ramp-up: The 18 one-year stores averaged $1.61 million of Gross Sales, 9.9% rent, and 22.0% labor. Applying the conservative 8.0% omitted-overhead assumption to that cohort produces an illustrative loss of about $76,000 before debt service and personal taxes.
- Population exclusions: Item 19 excludes transfers, reacquisitions, closures, new openings, late or incomplete reporters, and five stores with materially inconsistent self-reported sales. Excluding disrupted outlets may make the reported cohort stronger than the full system.
- Average-versus-median effect: Average annual Gross Sales were $2.62 million, while the median was $2.49 million; only 43.6% of reporting stores exceeded the average.
- Ratio construction: Item 19 averages store-level Gross Margin percentages but calculates rent and labor ratios from aggregate dollars. Combining those measures is an analytical approximation, not a franchisor-reported composite profit-and-loss statement.
- Fee normalization: The all-store population includes 18 one-year stores, while the main model standardizes every scenario to the post-first-year 3.0% royalty and variable advertising formula.
- Location and mix: Rent, manager pay, grooming penetration, delivery usage, inventory shrink, freight, card fees, and local competition can change the residual materially.
- Debt and capital spending: The model excludes financing interest and principal, depreciation, remodels, equipment replacement, and working-capital increases. Those cash demands can reduce owner distributions below operating earnings.
Item 20 shows 498 franchised stores at year-end 2025, down four net during the year. It also reports 23 transfers and 22 terminations, non-renewals, reacquisitions, or other closures. Those events are not proof of unprofitability, but they reinforce why a buyer should investigate excluded and former outlets rather than relying only on the reporting cohort.
What should a buyer verify before relying on the estimate?
Verify the missing expense lines and owner-role economics with written records and comparable franchisees. The Federal Trade Commission’s franchise buyer guidance advises buyers to evaluate Item 19 source data, assumptions, geographic relevance, and written substantiation rather than treating Gross Sales as earnings.
- Request the Item 19 written substantiation and confirm how Gross Sales, Gross Margin, rent, and labor were validated.
- Ask franchisees for trailing-12-month profit-and-loss statements showing utilities, insurance, merchant fees, shrink, repairs, delivery, professional fees, and other overhead.
- Separate manager-run business profit from owner salary, draws, distributions, retained earnings, and uncompensated owner labor.
- Compare stores of similar age, square footage, market rent, grooming mix, and sales volume—not just the system average.
- Interview transferred, closed, reacquired, and former franchisees listed in Item 20 about sales ramp, staffing, inventory, cash needs, and reasons for exit.
- Model financing interest and principal separately using the buyer’s actual loan amount, rate, term, and collateral structure.
What is the strongest defensible earnings takeaway?
The strongest defensible range is approximately $16,000 to $140,000 of annual manager-run pre-tax owner earnings for a post-first-year store, with a base scenario near $78,000. This is scenario-based, not an official Item 19 profit disclosure. The most important driver is the spread between Gross Margin and the combined burden of labor, occupancy, franchise fees, and omitted overhead. The largest unresolved uncertainty is the full operating-expense schedule that the 2026 FDD does not report.
An active owner may reach approximately $111,000 to $235,000 of owner-operator benefit, but the added amount compensates management work. Before making a decision, a buyer should reconcile Item 19 substantiation to actual franchisee profit-and-loss statements, test financing separately, and interview comparable current, transferred, closed, and former franchisees.