Owner earnings answer
This is the 2026 Piggly Wiggly Midwest, LLC Item 19 “Pretax Earnings (Loss)” range across Years 1 through 5 of its generalized projection for a 35,000-square-foot supermarket. It is an official financial performance representation, but it is a projection—not the average, median, or actual take-home pay of existing owners.
Data basis
Legal franchisor: Piggly Wiggly Midwest, LLC.
Item 19 status: Generalized five-year projection, not actual outlet results.
Population basis: Blended results from several franchised stores, modified for the projection; exact sample size is not disclosed.
System context: 74 franchised and 13 corporate stores at fiscal year-end 2025.
Supplemental sources: Federal Trade Commission guidance and U.S. Bureau of Labor Statistics wage data.
Date checked: July 19, 2026.
FDD basis: 2026 Piggly Wiggly Midwest, LLC Franchise Disclosure Document, cover; Items 15, 19, and 20; Exhibit E. The official Piggly Wiggly Midwest website and its company background page identify the operating brand and its relationship with C&S Wholesale Grocers.
Item 19 evidence
What does the 2026 Item 19 actually disclose?
Officially, Item 19 discloses a five-year store projection, not a survey of what current franchise owners earned. The model applies to a 35,000-square-foot supermarket and projects annual sales from $13.0 million in Year 1 to about $14.07 million in Year 5, with “Pretax Earnings (Loss)” increasing from $34,867 to $167,095.
The franchisor says its generalized projection was developed from blended results of several franchised stores and then modified. The underlying franchisee data were not audited, reviewed, or compiled by a certified public accountant. Item 19 also states that competitive pricing and labor or staffing problems have caused some stores to perform substantially below the projection.
Evidence status
MODERATE
Reason: the same-brand 2026 FDD directly reports a defined earnings measure, but only as an illustrative projection. It does not disclose the number of stores used, the reporting percentage, a median, quartiles, a range of actual results, or the percentage of outlets that achieved the projection.
Source: 2026 Piggly Wiggly Midwest, LLC FDD, Item 19, pp. 27–31; Exhibit E, pp. 1–5. The FTC consumer guide to franchise buying explains why Item 19 source data, assumptions, limitations, and written substantiation matter.
Year 1 sales
OFFICIAL projection revenue. Gross sales are not owner earnings.
Gross profit rate
OFFICIAL Exhibit E assumption before payroll and operating expenses.
Payroll budget
OFFICIAL projection line, including regular payroll and specified paid-time categories.
Contribution margin
OFFICIAL amount left after the projection’s gross profit and variable expenses, before fixed costs.
Modeled license fee
OFFICIAL Exhibit E rate at $13.0 million of annual sales; Item 6 uses a stepped formula.
Franchised / corporate stores
OFFICIAL Item 20 count at the end of fiscal 2025; not the Item 19 reporting sample.
Revenue is not earnings
The Year 1 model converts $13.0 million of sales into only $34,867 of pretax earnings, a margin of about 0.27%. By Year 5, the projected pretax margin reaches about 1.19%. Small changes in gross margin, shrink, labor, or occupancy can therefore move owner economics by more than the headline earnings figure.
Five-year projection
How do the official earnings figures change over time?
The official projection rises from $34,867 in Year 1 to $167,095 in Year 5 for the same 35,000-square-foot format. The increase is driven by projected sales growth of 2% per year, relatively stable expense ratios, declining interest expense, and modest changes in fixed costs—not by a disclosed record of mature-store performance.
Conservative
Planning anchor: FDD Year 1
Official pretax earnings on $13.0 million of projected annual sales.
Base
Planning anchor: FDD Year 3
Official pretax earnings on $13.525 million of projected annual sales.
Upside
Planning anchor: FDD Year 5
Official pretax earnings on $14.072 million of projected annual sales.
These labels are analytical planning anchors mapped to the FDD’s Years 1, 3, and 5. They are not probabilities, historical quartiles, or claims that Year 3 is the most likely outcome.
Official Item 19 pretax earnings by projection year
The model shows a narrow earnings margin despite more than $13 million of annual sales.
Interpretation: earnings rise each year in the model, but Item 19 does not show whether existing stores follow this path or what percentage of stores attain these amounts.
Source: 2026 Piggly Wiggly Midwest, LLC FDD, Item 19 and Exhibit E, pp. 1–5. Values are official projection figures.
Profit versus owner cash
What is the difference between pretax earnings and cash available?
Derived cash before loan principal is materially higher than the official pretax earnings figure because the projection includes $200,000 of annual depreciation, a noncash expense. After adding back depreciation and subtracting the FDD’s $10,000 annual capital-expenditure allowance, pre-principal cash ranges from about $224,867 in Year 1 to $357,095 in Year 5. This derived measure includes interest expense but excludes principal payments and personal income taxes.
- Official pretax earnings
- Revenue less the projection’s operating expenses, depreciation, and interest, before income taxes. Range: $34,867–$167,095.
- Derived pre-principal owner cash
- Official pretax earnings + $200,000 depreciation − $10,000 capital expenditures. Range: $224,867–$357,095.
- Derived cash after principal and capex
- FDD pretax cash flow − $10,000 capital expenditures. Range: $38,263–$115,254 before personal taxes.
- Personal take-home pay
- Not disclosed. It depends on owner compensation, distributions, debt structure, retained cash, entity type, and taxes.
How financing changes owner cash
Derived cash after the $10,000 capital-expenditure allowance, shown before and after the FDD’s loan principal payments.
Interpretation: the FDD’s illustrative financing consumes roughly $186,603–$241,842 of annual principal, so business earnings and spendable owner cash are not interchangeable.
Source and formula: 2026 FDD Exhibit E. Before principal = pretax earnings + $200,000 depreciation − $10,000 capital expenditures. After principal = FDD pretax cash flow − $10,000 capital expenditures. Personal income taxes are excluded.
Owner role
How does owner involvement change the result?
Owner involvement can shift compensation from payroll to the owner, but the FDD does not quantify that shift. Item 15 says the Franchise Agreement does not require personal participation in direct store operations, while also stating that the franchisor typically does not grant franchises to passive franchisees. The projection budgets payroll at 10.8% of sales but does not state whether an owner salary, general manager salary, or both are included.
| Operating model | Residual business measure | Owner labor value | Interpretation |
|---|---|---|---|
| Manager-run | $34,867–$167,095 | $0 added | Use the official pretax earnings range as the residual measure, assuming normal management payroll is already captured. |
| Owner-operator scenario | $34,867–$167,095 | Up to $80,720 | Estimated owner-operator benefit may include the market value of a manager role the owner actually performs. It is not passive profit and should not be added unless the paid position is genuinely eliminated. |
The $80,720 figure is the May 2023 U.S. Bureau of Labor Statistics annual mean wage for General and Operations Managers in NAICS 4450A1, Food and Beverage Retailers. It is a national wage benchmark, not Piggly Wiggly compensation and not total employer cost. See the BLS food-and-beverage retailer wage table. A buyer should obtain a store-specific staffing plan before treating any manager wage as owner benefit.
Owner-operator effect
An active owner may capture both residual business profit and compensation for labor performed. That combined amount should be labeled estimated owner-operator benefit, not owner profit. If the projection already embeds an owner wage in payroll, adding a full manager benchmark would double count compensation.
Recurring obligations
Which recurring fees materially affect earnings?
The continuing Piggly Wiggly license fee is relatively small in the Exhibit E model, but the broader service and supply-related charges are more material. Item 6 uses a stepped license-fee schedule; at the model’s $1.0 million of sales per four-week period, the formula produces about $23,231 per year, or approximately 0.179% of $13.0 million in annual sales.
| Exhibit E service line | Percent of sales | Owner-earnings treatment |
|---|---|---|
| Continuing Piggly Wiggly fee | 0.179% | Included in projected variable expenses. |
| Warehouse fee | 1.400% | Included in the projection; purchasing mix and current schedules require verification. |
| Electronic funds transfer charges | 1.000% | Included in the projection’s service-cost assumptions. |
| Fuel surcharge, inspection, and check verification | 0.080% | Combined from three disclosed projection lines. |
| Total modeled service lines | 2.659% | DERIVED sum of the listed Exhibit E percentages; not a single contractual royalty rate. |
Item 6 also lists variable service charges, warehouse upcharges, engineering or construction-management fees when applicable, and potential additional rent under specified purchasing conditions. Those obligations should not be silently replaced by the 0.179% license-fee line. Source: 2026 FDD, Items 5–6, pp. 6–8; Exhibit E, p. 2.
Outlet population
What does Item 20 reveal about the evidence population?
Item 20 shows a system of 87 stores at fiscal year-end 2025—74 franchised and 13 corporate—but Item 19 does not say how many of the 74 franchised stores supplied the blended data. This is an official population count and a material evidence limitation for the projection covering the fiscal period from September 29, 2024 through September 27, 2025.
The total store count declined from 96 at year-end 2023 to 87 at year-end 2025, while the FDD projected two new franchised Wisconsin outlets for the following fiscal year. Openings, closures, transfers, and ownership changes matter because survivor and maturity effects can make a projection less representative of a new buyer’s first operating years.
Sample limitation
The largest unresolved uncertainty is not the arithmetic. It is the missing distribution: Item 19 provides no reporting-store count, median, quartiles, loss rate, geographic breakdown, mature-store filter, or percentage achieving the displayed earnings. The projection therefore cannot answer how typical $34,867, $99,450, or $167,095 would be across the franchise system.
Buyer verification
What should a buyer verify before relying on this range?
A buyer should treat the official range as a starting model and verify every store-specific assumption in writing. The applicable evidence is the 2026 Item 19 projection for a 35,000-square-foot supermarket, not an assurance for a different footprint, market, financing structure, or staffing model.
- Request the written Item 19 substantiation. Ask for the number and characteristics of stores used, the dates covered, and every modification made to the blended data.
- Obtain the Particularized Projection. Reconcile its gross sales, gross margins, payroll, rent, shrink, utilities, service charges, depreciation, interest, principal, and capital expenditures to the generalized projection.
- Clarify owner compensation. Determine whether owner salary, draw, distributions, or a general manager’s pay is included in the 10.8% payroll assumption.
- Interview existing and former franchisees. Compare actual gross margin, labor percentage, cash needs, debt payments, and owner hours with the projection’s assumptions.
- Stress-test the contribution margin. A one-percentage-point change on $13.0 million of sales equals $130,000 before fixed-cost effects—far more than the Year 1 projected pretax earnings.
- Separate debt from operations. Use the proposed loan’s actual rate, term, fees, covenants, and amortization rather than assuming every buyer will use the Exhibit E financing.
The FTC’s guidance on evaluating financial performance representations specifically recommends scrutinizing the data source, assumptions, limitations, written substantiation, and franchisee interviews. Current corporate context is available from C&S Wholesale Grocers’ official store portfolio page.
Decision synthesis
What is the strongest defensible annual owner-earnings range?
The strongest official range is $34,867–$167,095 in annual “Pretax Earnings (Loss)” across Years 1–5 of the 2026 FDD’s 35,000-square-foot generalized projection. A cash-oriented calculation from the same exhibit produces about $224,867–$357,095 before loan principal and personal taxes after a $10,000 annual capital-expenditure allowance; after the exhibit’s principal payments, only about $38,263–$115,254 remains before personal taxes.
The most important driver is the thin margin between a 25.114% gross profit rate and the store’s labor, service, occupancy, and other operating costs. The largest unresolved uncertainty is whether the blended, modified source stores—and their owner-compensation treatment—match the buyer’s proposed location and operating model. Before making a decision, verify the Item 19 substantiation, the store-specific Particularized Projection, actual franchisee economics, and whether active owner labor replaces a paid management role.