Estimated pre-tax manager-run owner earnings for a Pigtails & Crewcuts strip-center salon. An active owner who replaces the required Operating Manager may instead realize about $58,000–$105,000 in estimated owner-operator benefit, but that higher figure includes the market value of the owner’s labor rather than passive business profit alone.
This range is an independent analytical scenario, not an Item 19 financial performance representation by Pigtails & Crewcuts Franchise, LLC. It combines identified facts from the 2026 Franchise Disclosure Document with a broad Internal Revenue Service margin benchmark, a Bureau of Labor Statistics wage benchmark, and clearly labeled sensitivity assumptions. Actual results can differ materially by location, sales, labor, occupancy, financing, owner involvement, pricing, and execution. A salon can also lose money.
Data basis
Legal franchisor: Pigtails & Crewcuts Franchise, LLC. Item 19 evidence: 2025 Gross Sales for 77 franchised salons that operated throughout 2025; every reported salon was in a strip center. Owner-earnings evidence: Item 19 does not disclose operating profit, EBITDA, net income, owner compensation, or cash flow. External benchmarks: 2022 IRS corporation data for the broad Personal and laundry services sector and May 2023 BLS wages for First-Line Supervisors of Personal Service Workers in Personal Care Services. Date checked: July 17, 2026.
Central sales result for the 77 full-year franchised salons in Item 19.
Only 32 of 77 salons, or 42%, attained or exceeded this average.
The cohort excluded seven salons that first opened during 2025.
Seven percent of $304,170: a 5% Royalty Fee plus 2% Advertising Fund Fee.
Derived from 2022 IRS receipts and deductions for Personal and laundry services corporations.
May 2023 BLS mean annual wage for a relevant supervisor occupation in Personal Care Services.
What does the 2026 Item 19 actually report?
Officially, Item 19 reports Gross Sales—not owner earnings. For 77 franchised strip-center salons operating throughout 2025, median Gross Sales were $304,170 and average Gross Sales were $328,250. Gross Sales are revenue before labor, rent, supplies, debt service, professional fees, and other operating costs.
The median is the more defensible central revenue anchor because only 42% of the reporting salons reached or exceeded the average. The disclosed system range was also wide: $116,358 to $688,504, showing that location-level revenue variation is substantial.
| 2025 Item 19 cohort | Salons | Median Gross Sales | Reported range |
|---|---|---|---|
| All full-year franchised salons | 77 | $304,170 | $116,358–$688,504 |
| Gross Sales above $500,000 | 13 | $526,094 | $502,792–$688,504 |
| Gross Sales of $350,001–$500,000 | 14 | $417,824 | $358,255–$468,633 |
| Gross Sales of $275,001–$350,000 | 22 | $305,181 | $276,571–$341,964 |
| Gross Sales of $225,000–$275,000 | 7 | $251,087 | $232,645–$262,747 |
| Gross Sales below $225,000 | 21 | $180,819 | $116,358–$224,960 |
Source: 2026 Franchise Disclosure Document, Item 19, pp. 43–45. The table includes 77 salons open throughout 2025, excludes seven salons that first opened in 2025, includes two salons reopened under new ownership, and excludes one terminated salon that closed during 2025. Item 20 reports 84 franchised salons at year-end 2025.
At the Item 19 median, the disclosed 5% Royalty Fee and 2% Advertising Fund Fee alone equal approximately $21,292 annually. Labor, occupancy, products, supplies, insurance, professional services, and financing costs must still be paid. The $304,170 median therefore cannot be interpreted as owner income.
How does the model convert salon sales into owner earnings?
The result is estimated by applying a transparent pre-tax margin sensitivity to three actual Item 19 revenue cohorts. The model uses $180,819, $304,170, and $526,094 as Conservative, Base, and Upside revenue anchors, then applies margins of 4.614%, 7.614%, and 10.614%, respectively.
- Revenue anchors are official: $180,819 is the median for the below-$225,000 cohort, $304,170 is the median for all 77 salons, and $526,094 is the median for the above-$500,000 cohort. These are performance bands, not probabilities or quartiles.
- The Base margin is a benchmark: 2022 IRS corporation data show $129.267 billion of total receipts and $119.425 billion of total deductions for Personal and laundry services, implying a 7.614% receipts-less-deductions margin.
- The margin spread is editorial: Conservative and Upside use the Base margin minus or plus 3 percentage points. The franchisor did not report these margins.
- Recurring fees are not double-counted: the IRS margin is treated as an all-in deduction benchmark. The model does not subtract the 5% Royalty Fee and 2% Advertising Fund Fee a second time.
- Definition: the output is a pre-tax residual after a broad set of operating deductions, including wages, officer compensation, rent, interest, and depreciation in the IRS dataset. It excludes personal income taxes and financing principal payments; capital expenditures are not modeled directly.
| Scenario | FDD revenue anchor | Applied margin | Manager-run earnings |
|---|---|---|---|
| Conservative | $180,819 | 4.614% | $8,300 |
| Base | $304,170 | 7.614% | $23,200 |
| Upside | $526,094 | 10.614% | $55,800 |
Estimated manager-run owner earnings by scenario
Annual pre-tax residual per salon, rounded to the nearest $100.
Interpretation: sales level and realized operating margin compound each other. The Base scenario is a calculation anchored to the all-salon median, not a forecast of the result a buyer is most likely to achieve.
Sources: 2026 Franchise Disclosure Document, Item 19, pp. 43–45; IRS Statistics of Income, 2022 Corporation Income Tax Returns, Table 5.1; independent calculations.
How much does owner involvement change the result?
Owner involvement can add roughly $49,580 of labor value to the modeled residual, but it does not create the same amount of passive profit. Under Item 15, each salon must be directly supervised on premises by an owner with the required ownership interest or by a designated Operating Manager. The owner-operator scenario assumes the owner replaces that paid role.
Manager-run residual versus owner-operator benefit
The owner-operator value adds a $49,580 BLS wage proxy for work performed.
Interpretation: the gap is compensation for substantial on-premises management work. It should not be presented as a passive return or as incremental salon profit.
Sources: 2026 Franchise Disclosure Document, Item 15, p. 37; BLS May 2023 Occupational Employment and Wage Statistics for NAICS 812100 Personal Care Services; independent calculations.
The Base scenario separates approximately $23,200 of manager-run residual from approximately $49,580 of labor value, producing a combined owner-operator benefit of about $72,700. That combined figure compensates the owner both for capital at risk and for managing the salon.
Which assumptions can move actual earnings outside the range?
The largest uncertainty is the operating margin, because the current Item 19 supplies no same-brand expense or profit data. The IRS proxy is broad, older than the 2025 salon results, and based on corporations across Personal and laundry services rather than only franchised children’s salons.
- Sales mix and throughput
- Haircut volume, service pricing, stylist productivity, retail products, parties, discounts, and operating hours determine how much of the Item 19 revenue range a salon reaches.
- Labor structure
- Stylist wages, payroll taxes, benefits, scheduling efficiency, turnover, and whether the owner fills the Operating Manager role can materially change cash available to the owner.
- Occupancy
- Rent, common-area charges, utilities, and local lease terms vary by market. Item 19 includes strip-center salons but does not disclose their occupancy ratios.
- Franchise obligations
- The 5% Royalty Fee and 2% Advertising Fund Fee are defined in Item 6. Required products, suppliers, training, technology changes, and meetings can add costs not separately quantified in Item 19.
- Financing and capital needs
- The model excludes loan principal and personal income taxes. Interest and depreciation are embedded in the broad IRS benchmark, but actual debt terms, equipment replacement, and remodel spending can change owner distributions.
- Cohort selection
- The Item 19 table excludes new salons and one terminated salon that closed in 2025. It includes two salons reopened under new ownership. Those rules matter when comparing a new buyer’s ramp-up with mature-unit results.
Item 20 shows nine franchised openings, three terminations, and seven transfers during 2025. Those system movements do not prove profitability or distress, but they reinforce why a buyer should examine unit-level financial statements and the Item 19 substantiation rather than rely on the all-salon average.
What should a buyer verify before relying on this earnings range?
The range should be tested against current franchisee profit-and-loss statements and the written substantiation behind Item 19. The franchisor states that substantiation is available on reasonable request, while the Federal Trade Commission advises buyers to distinguish gross sales from net profit and to question how averages are constructed.
- Request the written substantiation for the 2025 Item 19 table and confirm the source records, adjustments, and treatment of reopened and closed salons.
- Ask franchisees in each disclosed sales band for labor, occupancy, supply, insurance, professional-fee, royalty, advertising, technology, and maintenance ratios.
- Separate owner salary, owner draw, distributions, retained earnings, and business profit. Ask whether the owner or a paid Operating Manager performs day-to-day supervision.
- Build a local staffing model using expected stylist wages, payroll burden, hours, turnover, and manager coverage rather than relying only on the national wage proxy.
- Model the proposed lease, common-area charges, utilities, local service pricing, customer volume, and product mix for the specific trade area.
- Keep debt principal, personal taxes, equipment replacement, and remodel reserves separate from operating earnings, then test whether cash distributions remain adequate.
- Interview current and former franchisees listed in the FDD, including owners of low-, middle-, and high-sales salons and owners who use different management structures.
- For a resale, obtain the actual outlet records permitted by Item 19 and reconcile them to tax returns, bank deposits, payroll reports, and lease obligations.
What is the most defensible earnings takeaway?
The strongest defensible range is approximately $8,000–$56,000 in estimated annual pre-tax manager-run owner earnings per salon, or approximately $58,000–$105,000 in estimated owner-operator benefit when the owner replaces the Operating Manager. These are scenario-based figures, not official earnings disclosures. The Base cases are about $23,200 manager-run and $72,700 owner-operated.
The most important driver is sales relative to the Item 19 distribution, followed closely by labor and occupancy efficiency. The largest unresolved uncertainty is the absence of same-brand expense and profit data. Before making a decision, a buyer should verify the 2025 Item 19 substantiation, compare current franchisee financial statements across sales cohorts, and determine whether the intended ownership model requires a paid Operating Manager or substantial owner labor.