This is the strongest official annual earnings evidence for a U.S. Pizza Ranch owner: 2025 EBITDA for 94 franchised Restaurants with a FunZone. It is a store-level operating measure, not the owner's salary or after-tax take-home pay. It is after reported rent, General Manager wages and bonuses, and recurring franchise and advertising expenses, but before interest, income taxes, depreciation, amortization, financing principal, and capital expenditures.
Confidence is high because the current Item 19 directly reports average and median EBITDA for a broad, clearly defined franchised-unit population.
Legal franchisor: Pizza Ranch, Inc. FDD: issued April 3, 2026. Item 19 status: official historic Gross Sales, EBITDA and EBITDAR disclosures for franchised outlets. Primary cohort: 94 franchised Restaurants with a FunZone, including 10 Restaurants opened during 2025 whose results were annualized; two FunZone Restaurants open fewer than three full months were excluded. Benchmark used: May 2025 U.S. Bureau of Labor Statistics Food Service Managers wage data for the owner-operator labor-value illustration. Checked: July 20, 2026.
FDD citations are provided in plain text because no matching 2026 FDD was verified on a franchisor-controlled public webpage.
What does Pizza Ranch Item 19 actually measure?
Item 19 officially reports EBITDA, not owner compensation. For the 94 franchised Restaurants with a FunZone, average EBITDA was $278,845, or 13.11% of average Gross Sales; median EBITDA was $246,539, or 12.09% of median Gross Sales. The applicable period is calendar year 2025. Source: 2026 Pizza Ranch, Inc. FDD, Item 19, Table 3, pp. 39–40.
The FDD defines EBITDA as Unit Controllable Profit minus Non-Controllable Expenses. Employee Labor excludes one General Manager's wages, while Non-Controllable Expenses include General Manager wages and bonus, management fees, franchise expense, advertising fees, insurance, taxes, permits, leased equipment, and other listed expenses. Rent is included in EBITDA because the FDD adds rent back to calculate EBITDAR. Amortization, interest, and depreciation are excluded.
12.09% of median 2025 Gross Sales for the 94-unit FunZone cohort.
13.11% of average 2025 Gross Sales; 44 of 94 units were at or above that percentage.
Revenue, not earnings, for the same FunZone cohort.
97.9% coverage; two units open fewer than three full months were excluded.
3.5% royalty, 0.5% service fee, and 3.0% current required marketing spend.
May 2025 BLS median wage of $33.36 per hour multiplied by 2,080 hours.
The official 2025 average income statement for 94 franchised Restaurants with a FunZone.
Interpretation: The official average EBITDA margin is 13.11%. Royalty, service, advertising, General Manager wages, and rent should not be subtracted again from this EBITDA figure because the FDD's reported expense categories already include them.
Source: 2026 Pizza Ranch, Inc. FDD, Item 19, Table 3 and notes, pp. 39–40. Values are FDD-reported averages; components reconcile after rounding.
What annual earnings range is reasonable for underwriting?
A transparent analytical sensitivity is approximately $148,000 to $369,000 of annual EBITDA per franchised FunZone Restaurant. This range is estimated, not official. The base case reproduces the FDD median; the outer cases apply an analytical 80%/120% revenue spread and a margin sensitivity of three percentage points below/above the disclosed median margin. These cases are not probabilities and should not be read as a forecast.
| Scenario | Gross Sales anchor | EBITDA margin | Estimated EBITDA |
|---|---|---|---|
|
Conservative Analytical sensitivity |
$1,631,352 | 9.09% | $148,290 |
|
Base FDD median anchor |
$2,039,190 | 12.09% | $246,539 |
|
Upside Analytical sensitivity |
$2,447,028 | 15.09% | $369,257 |
The base reproduces the official median; the outer columns are independent assumptions.
Interpretation: Revenue and margin interact. A three-point margin movement on a roughly $2 million Restaurant changes annual EBITDA by about $61,000 before any revenue change.
Sources: 2026 Pizza Ranch, Inc. FDD, Item 19, Table 3, pp. 39–40; outer revenue and margin spreads are editorial scenario assumptions. Calculations use full precision and are rounded to the nearest dollar.
How does owner involvement change the economic result?
An owner who personally serves as General Manager may capture an estimated additional $69,389 of annual labor value, increasing median owner-operator benefit to about $315,928 and average owner-operator benefit to about $348,234. These figures are derived estimates for the 2025 FunZone cohort, not official owner-compensation disclosures. The labor component compensates the owner for full-time work and is not passive business profit.
The 2026 FDD requires a Principal owner to serve as General Manager or hire and oversee one, and it requires at least one full-time General Manager. The Principal may fill that role. The official EBITDA figures already include one General Manager's wages and bonus in Non-Controllable Expenses. The owner-operator illustration therefore adds back a market labor-value benchmark rather than subtracting manager compensation a second time. Source: 2026 Pizza Ranch, Inc. FDD, Item 15, pp. 31–32, and Item 19, pp. 39–40.
Owner-operator benefit combines store EBITDA with the market value of General Manager labor performed by the owner.
Interpretation: The $69,389 gap is compensation for operating labor, not a free margin increase. It assumes the owner fully replaces the General Manager role without adding equivalent management payroll elsewhere.
Sources: 2026 Pizza Ranch, Inc. FDD, Items 15 and 19; BLS May 2025 national wage data for Food Service Managers. The BLS median hourly wage of $33.36 is annualized at 2,080 hours; the estimate excludes bonus, employer payroll taxes, benefits, and opportunity cost.
Which franchise fees affect owner earnings?
The current percentage-based burden disclosed in Item 6 totals 7.0% of Gross Revenues before variable promotions and other contingent charges. This is official 2026 FDD information for the current U.S. offer. It consists of a 3.5% royalty, 0.5% service fee, and current required marketing spend of 3.0%—2.25% to the Marketing and Production Fund plus the current local/regional difference.
- Royalty: greater of $500 or 3.5% of Gross Revenues per month.
- Service Fee: 0.5% of Gross Revenues.
- Marketing and Production Fund: up to 5%; current contribution is 2.25%.
- Local and Regional Advertising: currently brings total required marketing spend to 3.0% of Gross Revenues.
- Other recurring or contingent costs: promotions of $50 to $500 per month, training materials of about $200 per year, insurance of $8,000 to $25,000 per year, and other event-driven fees.
Source: 2026 Pizza Ranch, Inc. FDD, Item 6, pp. 8–11. The Item 19 EBITDA model already includes “Franchise Expense” and “Advertising Fees” within Non-Controllable Expenses, so this article does not deduct the 7.0% again.
Why can actual Pizza Ranch owner earnings differ so much?
Location-driven sales variation and undisclosed EBITDA distribution are the largest uncertainties. Item 19 provides average and median EBITDA for the FunZone cohort, but it does not provide EBITDA quartiles, a full EBITDA range, or owner-level distributions. It also annualizes 10 units opened during 2025, which makes the cohort broader than a mature-store-only population.
Item 19 separately reports Gross Sales for 211 franchised Restaurants grouped by population within a three-mile radius. That broader sales cohort is not directly interchangeable with the 94-unit FunZone profit cohort, but it shows why local demand matters.
| Population within 3 miles | Restaurants | Average Gross Sales | Median Gross Sales |
|---|---|---|---|
| 15,000 or less | 96 | $1,177,407 | $1,099,142 |
| 15,001 to 30,000 | 54 | $1,937,561 | $1,977,406 |
| 30,001 to 50,000 | 32 | $2,060,766 | $1,975,491 |
| More than 50,001 | 29 | $2,352,609 | $2,130,493 |
Source: 2026 Pizza Ranch, Inc. FDD, Item 19, Table 1, pp. 37–38. The table includes franchised Restaurants open at least three full months; five newly opened Restaurants were annualized. Gross Sales are revenue, not earnings.
- Sales uncertainty: the FunZone cohort's 2025 Gross Sales ranged from $855,056 to $5,546,288, while its EBITDA range was not disclosed.
- New-unit treatment: 10 of the 94 FunZone Restaurants opened in 2025 and were annualized rather than observed for a full operating year.
- FunZone heterogeneity: FunZones ranged from approximately 600 to 6,000 square feet and 12 to 58 games; Restaurants ranged from 5,600 to 7,600 square feet excluding the FunZone.
- Financing uncertainty: Pizza Ranch, Inc. does not offer or guarantee financing. EBITDA excludes interest, and financing principal is also outside the operating measure.
- Capital expenditure uncertainty: depreciation and amortization are excluded, but required maintenance, equipment replacement, remodels, and arcade reinvestment can reduce cash available to distribute.
- Personal-tax uncertainty: entity structure, state, deductions, owner salary, and distributions determine taxes; no after-tax estimate is appropriate.
What should a buyer verify before relying on these numbers?
A buyer should verify the actual unit-level P&L structure, debt load, capital needs, and owner workload for comparable Restaurants. The official 2025 EBITDA for franchised FunZone Restaurants is the best evidence available, but it is a cohort statistic rather than a promise about a specific site.
- Request the written substantiation for Item 19 and reconcile Table 3 definitions to a current Restaurant P&L.
- Ask existing franchisees for Gross Sales, EBITDA, rent, General Manager compensation, maintenance capital expenditures, and debt service for Restaurants with a similar FunZone size and market population.
- Separate manager-run residual profit from owner salary, draw, distributions, retained cash, and owner-operated labor value.
- Confirm whether the candidate site resembles the 94-unit FunZone cohort in building size, arcade size, age, traffic, wage market, occupancy cost, and competitive set.
- Model interest and principal separately using the buyer's actual proposed financing; Item 10 states that the franchisor does not offer or guarantee financing.
- Ask how much annual cash is typically reserved for game replacement, restaurant equipment, technology, repairs, and remodel obligations.
- Contact current and former franchisees listed under Item 20 and the FDD exhibits, including operators whose units opened, transferred, or terminated recently.
The Federal Trade Commission's guidance on evaluating franchise financial performance representations emphasizes checking the source, assumptions, limitations, and written substantiation behind Item 19 claims.
What earnings figure should a prospective owner use?
The strongest defensible central band is $246,539 to $278,845 of annual EBITDA per franchised Restaurant with a FunZone, using the 2025 median and average as two central statistics—not as lower and upper performance limits. This is an official Item 19 operating measure with high evidence confidence, but it is not personal take-home pay.
For a full-time owner who genuinely replaces the General Manager, the estimated owner-operator benefit rises to approximately $315,928 to $348,234 because it includes about $69,389 of labor value. The most important earnings driver is Gross Sales relative to labor, food, and occupancy costs. The largest unresolved uncertainty is the missing EBITDA distribution by location, maturity, FunZone size, and owner role. A buyer should therefore verify Item 19 substantiation, comparable-unit P&Ls, capital spending, financing, and actual owner workload through written records and franchisee interviews.