For one traditional U.S. Port of Subs restaurant, a defensible independent scenario range is about $3,210 to $54,871 in annual residual earnings under manager-run assumptions. An active owner who replaces one paid food-service-manager role may realize approximately $78,090 to $129,751 of estimated owner-operator benefit, but roughly $74,880 of that amount represents labor value for work performed rather than passive business profit.
- Legal franchisor
- POS Franchising, LLC, a Delaware limited liability company and wholly owned subsidiary of POS Holdings, LLC.
- Current disclosure
- 2026 Port of Subs Franchise Disclosure Document, issued May 28, 2026. Item 19 reports Gross Sales, not profit or owner compensation. A matching public FDD was not located on a franchisor-controlled website, so FDD references are identified by year, Item, and page rather than linked.
- Applicable population
- 87 traditional franchised Restaurants open and operating for all of calendar 2025; non-traditional Restaurants, partial-year units, and closed outlets are excluded from the Item 19 table.
- Scenario benchmark
- The National Restaurant Association reported median 2024 income before taxes of 4.0% of sales for limited-service respondents. The analysis applies a transparent 1%, 4%, and 7% sensitivity band.
- Date checked
- July 21, 2026.
The owner-earnings figures on this page are independent analytical scenarios, not an Item 19 financial performance representation by POS Franchising, LLC. They combine identified 2026 FDD facts with a separately identified limited-service restaurant benchmark and explicit sensitivity assumptions. Actual results can differ materially because of location, format, Gross Sales, food cost, labor, occupancy, financing, owner involvement, delivery mix, and execution.
What does the 2026 Port of Subs Item 19 actually measure?
Officially, Item 19 measures 2025 Gross Sales for traditional Restaurants; it does not report operating profit, EBITDA, Net Income, owner salary, distributions, or cash flow. The central franchised-unit figures are average Gross Sales of $540,305 and median Gross Sales of $524,823 for 87 traditional franchised Restaurants open throughout calendar 2025.
The FDD defines Gross Sales broadly as restaurant-related revenue, less specified refunds, discounts, taxes, and third-party delivery fees. That measure remains revenue. It cannot be presented as an owner's salary or take-home pay.
Median Gross Sales within each Item 19 quartile, plus the all-unit median; traditional franchised Restaurants only.
Interpretation: sales dispersion is substantial before any expense differences are considered. The quartile medians are descriptive observations, not probabilities or promised outcomes. Source: 2026 Port of Subs FDD, Item 19, pp. 54–56.
Item 19 excludes non-traditional Restaurants, units not open for all of 2025, and six franchised Restaurants that permanently closed during 2025. Five of those closures involved units open more than 12 months. The full-year cohort therefore does not capture the economics of every outlet that operated during the year.
Are the Item 19 footnotes internally consistent?
No; this is an official-document uncertainty that a buyer should resolve in written substantiation. On page 55, the overall franchised range lists a $1,144,540 maximum, while the First Quartile footnote lists a $1,155,540 maximum. The same page says one company-owned First Quartile Restaurant had 1% meeting or exceeding the median even though the count is one of one. The scenario model avoids these inconsistent maximum and percentage fields and uses the table's quartile medians instead.
What is a defensible annual owner-earnings range?
The estimated manager-run range is $3,210 to $54,871 per traditional Restaurant per year, with a central scenario of $20,993. These are independent estimates anchored to the 87 traditional franchised Restaurants open throughout 2025, not official Port of Subs profit figures and not a claim that any outcome is most likely.
The formula is straightforward: Item 19 revenue anchor × scenario pre-tax margin = estimated pre-tax owner earnings. Revenue anchors use the Fourth Quartile median, all-unit median, and First Quartile median. The margin anchor uses the National Restaurant Association's reported 4.0% median income-before-taxes ratio for limited-service respondents in 2024, with an explicit minus/plus 3 percentage-point sensitivity band.
| Scenario | Revenue anchor | Margin assumption | Estimated pre-tax owner earnings |
|---|---|---|---|
|
Conservative Fourth Quartile median Gross Sales |
$321,048 | 1.0% | $3,210 |
|
Base All-unit median Gross Sales |
$524,823 | 4.0% | $20,993 |
|
Upside First Quartile median Gross Sales |
$783,876 | 7.0% | $54,871 |
Calculations use full precision and are rounded to the nearest dollar after multiplication. The 1% and 7% margins are editorial sensitivity assumptions, not FDD-reported margins.
Estimated annual pre-tax owner earnings for one manager-run traditional Restaurant.
Interpretation: a small change in both sales position and net margin produces a large change in owner residual. Sources: 2026 Port of Subs FDD, Item 19, pp. 54–56; National Restaurant Association 2025 Restaurant Operations Data Abstract summary.
What does the scenario definition include and exclude?
For one traditional Restaurant using the 2025 full-year franchised-unit sales anchors, the scenario is intended to approximate pre-tax owner residual after normal unit-level operating expenses and recurring franchise obligations, but before personal income taxes and financing principal. Because the public benchmark summary reports “income before taxes” without a full public line-item definition, the treatment of interest, depreciation, owner compensation, and capital expenditures cannot be confirmed precisely. No separate interest or depreciation adjustment is added. Capital expenditures, remodel reserves, financing principal, and personal taxes are excluded from the published estimate.
- Manager-run treatment: the limited-service benchmark is treated as an all-in bottom-line proxy that already reflects ordinary labor, including management labor. FDD fees are not subtracted a second time.
- Revenue treatment: only traditional franchised Restaurant medians from the 2025 full-year cohort are used; company-owned and non-traditional sales are not blended into the model.
- Margin treatment: 4.0% is a broad limited-service respondent median, not a Port of Subs margin. The 1% and 7% values are explicit sensitivity assumptions.
- Debt treatment: Item 10 states that POS Franchising, LLC and its affiliates do not offer or guarantee financing. Debt service must be modeled separately for each buyer.
How does active owner involvement change the result?
An owner who personally fills one food-service-manager role could increase estimated annual owner-operator benefit by about $74,880, producing a scenario range of $78,090 to $129,751. This is estimated labor-plus-profit for an active Operating Principal using the same 2025 full-year traditional franchised-unit sales anchors, not passive profit and not an official FDD earnings disclosure.
Item 15 does not require the franchisee personally to operate the Restaurant, but it requires an approved Operating Principal with an ownership position to supervise and participate personally in day-to-day operations. The owner-operator scenario assumes the owner performs one manager role that would otherwise be paid, while the manager-run scenario leaves management labor inside operating expenses.
| Scenario | Manager-run residual | Manager labor proxy | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | $3,210 | +$74,880 | $78,090 |
| Base | $20,993 | +$74,880 | $95,873 |
| Upside | $54,871 | +$74,880 | $129,751 |
The $74,880 proxy is the May 2025 U.S. annual mean wage for Food Service Managers from the Bureau of Labor Statistics. It excludes employer-paid benefits and does not prove that a specific Port of Subs Restaurant can eliminate the full cost.
The owner's role changes the composition of earnings more than it changes underlying restaurant economics. A manager-run owner receives residual business profit after paying management labor. An owner-operator may receive the same residual plus compensation for day-to-day work. If the Restaurant still needs a paid general manager, assistant managers, or additional certified management coverage, the labor add-back should be reduced.
Which disclosed fees put the most pressure on earnings?
The 2026 FDD requires recurring sales-based payments or spending equal to 13% of Gross Sales: a 6% Royalty Fee, 4% Brand Fund Contribution, and 3% Local Store Marketing obligation. These are official FDD obligations for the current traditional Restaurant offer; a Local Advertising Cooperative contribution, if established, is credited toward the 3% Local Store Marketing requirement rather than added on top.
Required percentage of Gross Sales before food, labor, occupancy, technology, insurance, and other operating costs.
Interpretation: the sales-based obligations are material even before ordinary restaurant expenses. Source: 2026 Port of Subs FDD, Item 6, pp. 16–20, and Item 11, pp. 31–33.
The FDD also identifies required third-party technology subscriptions of approximately $1,000 to $1,495 per month, or $12,000 to $17,940 annually, before optional online-ordering fees and delivery commissions. The franchisor's Technology Fee is currently $0, but the FDD allows a future fee without a stated cap. These fixed and variable technology costs are economically important, but they are not charged again in the scenario because the 4% benchmark is used as an all-in income-before-tax proxy.
How much uncertainty should a buyer build into the earnings range?
Uncertainty is high enough that the $3,210 to $54,871 manager-run range should be treated as a sensitivity envelope, not a forecast. The FDD supplies strong same-brand sales evidence for the 2025 traditional full-year cohort, but the profit margin comes from a broad 2024 limited-service restaurant benchmark rather than Port of Subs unit-level expense statements. Actual earnings can be negative; the Conservative scenario is not a downside floor.
The largest unresolved variable is the actual relationship among food cost, hourly labor, management labor, occupancy, delivery commissions, and local pricing at the proposed location. Because a 3-percentage-point margin shift changes base-scenario earnings by roughly $15,745, modest operating differences can overwhelm the central estimate.
What should a buyer verify before relying on any earnings figure?
For the 2025 traditional franchised-unit population, the buyer should request Item 19 substantiation and reconstruct the economics from actual franchisee profit-and-loss statements for comparable Restaurants. Verification should cover the same calendar period, operating format, owner role, geography, and maturity profile as the proposed unit.
- Resolve the Item 19 footnote discrepancies involving the overall maximum, First Quartile maximum, and company-owned percentage-achieving statement.
- Ask for sales and expense records from traditional franchised Restaurants near the proposed sales volume, not only top-quartile units.
- Separate owner labor from business profit by identifying every paid manager, the owner's weekly hours, and whether an Operating Principal receives salary through payroll.
- Reconcile recurring obligations including the 6% Royalty Fee, 4% Brand Fund Contribution, 3% Local Store Marketing, current technology subscriptions, delivery commissions, insurance, and required remodel reserves.
- Include excluded and closed units in diligence by interviewing current and former franchisees listed in Item 20 and asking why full-year or non-traditional units were excluded.
- Model debt separately using the buyer's actual loan amount, rate, amortization, fees, and working-capital needs. Financing principal reduces cash available but is not an operating expense in this article's owner-earnings definition.
Personal income taxes are not estimated. Tax outcomes depend on entity structure, jurisdiction, deductions, owner compensation policy, and individual circumstances. Company-owned Gross Sales are not used in the scenario because those Restaurants do not pay royalties, making their economics structurally different from franchised units.
What is the decision-useful takeaway?
Using the 2025 Item 19 traditional franchised-unit sales anchors and the 2024 limited-service margin benchmark, the strongest defensible annual range is approximately $3,000 to $55,000 of manager-run pre-tax owner earnings per Restaurant, or approximately $78,000 to $130,000 of owner-operator benefit when one manager wage is replaced by the owner's labor. Both ranges are scenario-based, not official Item 19 profit results. Gross Sales and labor efficiency are the principal earnings drivers; the largest unresolved uncertainty is the absence of same-brand franchised-unit expense and profit data. Before underwriting the purchase, verify the 2026 Item 19 substantiation, reconcile the footnote inconsistencies, and test the model against comparable franchisee profit-and-loss statements and owner-role interviews.