Official 2026 FDD earnings evidence
This is the strongest defensible planning range for a full-year active, rent-reporting Primrose School: the 2025 median EBITDA from the bottom and top occupancy quartiles was $137,379 and $678,972 per school. It is an official operating-earnings measure, not salary, distributions, cash flow, or after-tax take-home pay.
Why confidence is high: the current Item 19 directly reports EBITDA for 357 franchised Schools that reported rent expense.
Important interpretation: the range above is not a forecast or guarantee. It translates the official Item 19 quartile medians into a decision-useful range. EBITDA includes rent and normal reported school operating expenses, but it is measured before interest, taxes, depreciation, amortization, owner compensation, capital expenditures, debt principal, and personal income taxes. Actual results can differ materially by occupancy, tuition, labor, rent, financing, owner involvement, location, and execution.
Data basis
Legal franchisor: Primrose School Franchising SPE, LLC. Disclosure: Franchise Disclosure Document issued April 24, 2026; Item 19 reports calendar-year 2025 results. The relevant EBITDA population is 357 franchised Schools that operated throughout 2025 and reported rent expense. Item 19 excludes 2025 openings, five Primrose on Premise Schools, 115 Schools that submitted no profit-and-loss data, and 48 reporting Schools with no rent expense. The official Primrose U.S. franchising overview separately highlights the same top-quartile average EBITDA disclosure. No external profit benchmark is used. Data and public sources checked July 17, 2026.
Direct earnings answer
How much may a Primrose School owner earn annually?
A reasonable evidence-led answer is about $137,000 to $679,000 in annual EBITDA before owner pay and financing costs for a full-year active, rent-reporting School, using the official median results across occupancy quartiles. The disclosed averages were higher, from $159,702 in the bottom quartile to $768,966 in the top quartile, but only 40%-49% of each quartile met or exceeded its average EBITDA.
Second-quartile median EBITDA
For rent-reporting Schools averaging 83% occupancy in 2025.
Rent-reporting Schools
The Item 19 population used for EBITDA and rent analysis.
Average EBITDA margin range
Bottom through top occupancy quartiles, after reported rent.
Core revenue-based obligations
Royalty, current Brand Fund, and minimum local advertising; already reflected in reported EBITDA.
How wide was the official 2025 EBITDA distribution?
Each line shows the observed low-to-high EBITDA range; the dark circle is the median and the outlined diamond is the average.
Interpretation: occupancy quartiles separate the central results clearly, but every quartile had substantial variation. Three quartiles included at least one School with negative EBITDA. Source: 2026 Primrose FDD, Item 19, Table 6C, p. 86.
Item 19 definition
What does the strongest evidence actually measure?
The official figure is EBITDA for franchised Schools that reported rent, not a direct statement of an owner's salary or annual distributions. Item 19 defines EBITDA as adjusted operating income before interest, taxes, depreciation, and amortization and states that owner compensation is not included.
| Measure | What it includes | What it does not establish |
|---|---|---|
| Gross Revenue | Tuition and other revenue generated through the School, net of specified sales, use, or service taxes. | Owner earnings, profit, cash flow, or take-home pay. |
| EBITDA | Reported revenue less payroll, advertising and royalty, other expenses, school operating expenses, and rent. | Cash after interest, capital spending, debt principal, or personal taxes. |
| Owner compensation | Excluded from the Item 19 payroll and EBITDA calculation. | A separate guaranteed salary. Salary, draws, and distributions must come from available economics. |
| Pre-tax owner benefit | Potentially combines salary, draws, and distributions attributable to the owner. | An official Item 19 line item; it requires financing, capital, and owner-pay details not disclosed. |
Revenue is not earnings
The 2025 average Gross Revenue ranged from $1,956,524 to $3,557,271 across the rent-reporting occupancy quartiles. Those values should never be presented as owner income. The corresponding average EBITDA was $159,702 to $768,966.
The FTC's consumer guide to buying a franchise explains that Item 19 claims must have a reasonable factual basis and that buyers should evaluate the source, population, assumptions, and limitations rather than relying on a headline number.
Occupancy economics
How does occupancy change the earnings pool?
Higher occupancy was associated with materially higher EBITDA and lower rent burden as a percentage of revenue. In the rent-reporting population, average EBITDA margin rose from 8.2% at 53% average occupancy to 21.6% at 94% average occupancy.
| Occupancy quartile | Average occupancy | Median EBITDA | Average EBITDA margin |
|---|---|---|---|
| Top | 94% | $678,972 | 21.6% |
| Second | 83% | $534,712 | 17.8% |
| Third | 71% | $341,261 | 13.2% |
| Bottom | 53% | $137,379 | 8.2% |
What did revenue have to cover before EBITDA?
Official third-quartile averages illustrate the operating bridge at 71% average occupancy.
Interpretation: payroll and payroll taxes were the largest expense category. After all reported operating expenses and rent, the third-quartile average retained $342,824 of EBITDA from $2,594,458 of Gross Revenue. The components differ from the reported total by $1 because the FDD displays rounded averages. Source: 2026 Primrose FDD, Item 19, Table 6A, p. 85.
Primary earnings driver
Occupancy is the clearest disclosed driver. As occupancy falls, labor remains a large share of revenue and rent becomes more burdensome: average rent was 9.5% of revenue in the top quartile and 16.7% in the bottom quartile.
Owner role
Does owner involvement change the result?
Yes, but not through a simple manager-replacement adjustment. The 2026 FDD requires an approved On-Site Owner with at least a 5% ownership interest to be directly involved in day-to-day operations, while the School must also have a Director and an assistant director or education coach. The On-Site Owner generally may not serve as Director without written approval.
- Active owner requirement
- The contractual model is operationally active, not passive. The On-Site Owner must participate in daily management and on-premises supervision.
- Director payroll
- The Item 19 payroll category includes labor costs but excludes owner compensation. A buyer should not assume active ownership eliminates the Director position or its payroll cost.
- Owner salary or draw
- Compensation may be taken as salary, draws, or distributions depending on the entity and tax structure, but those methods do not create extra operating profit.
- Multi-unit ownership
- When an owner and affiliates operate more than two Schools, the franchisor may require one or more Multi-School Managers, adding portfolio-level overhead.
Owner-operator effect
Because owner compensation is excluded from EBITDA, the official EBITDA pool can fund owner salary and distributions. However, it is not pure distributable cash: interest, maintenance capital expenditures, working-capital needs, and debt principal can materially reduce cash available to the owner.
Recurring obligations
Which franchise fees are already reflected in EBITDA?
The main recurring franchise and marketing obligations are already included in Item 19's “Advertising and Royalty” expense line, so they should not be subtracted a second time from the official EBITDA figures.
| Obligation | 2026 FDD amount | Treatment in earnings analysis |
|---|---|---|
| Continuing Services and Royalty Fee | 7% of Gross Revenue | Included in the Item 19 Advertising and Royalty category. |
| Primrose Brand Fund Fee | Currently 2%; up to 3% | Included in Advertising and Royalty. |
| Local Advertising | 1% or $1,000 monthly minimum | Included in Advertising and Royalty. |
| Cooperative contribution | Up to 1%; potentially 2% | Included when incurred. Existing cooperatives were scheduled to dissolve June 30, 2026, but future cooperatives may be formed. |
| Academic curriculum license | Currently $4,000 annually | A recurring operating obligation; the exact P&L category is not separately identified in Item 19. |
The reported Advertising and Royalty expense averaged 9.8%-10.2% of Gross Revenue across the rent-reporting quartiles, consistent with the combined royalty, Brand Fund, and local advertising burden. Source: 2026 Primrose FDD, Items 6 and 19, pp. 25 and 85.
Uncertainty and verification
How much uncertainty should a buyer build into the range?
Substantial uncertainty remains even with a high-confidence Item 19 disclosure. The quartile medians are useful planning anchors, but the observed outcomes ranged from a $568,263 loss to $1,873,081 of EBITDA, and the FDD data were franchisee-reported and unaudited.
Sample limitation
The 357 rent-reporting Schools exclude 115 active Schools that submitted no 2025 profit-and-loss data, 48 reporting Schools with no rent expense, 33 Schools opened during 2025, and five Primrose on Premise Schools. Results may therefore differ for new Schools, owner-occupied real estate, and non-reporting operators.
Population count to reconcile
Item 19 describes 558 open franchises at year-end 2025, while Item 20's system-wide summary reports 557 franchised Schools at year-end. The one-School difference does not change the published EBITDA values, but a buyer should request a written reconciliation when reviewing substantiation.
What should a buyer verify before relying on the range?
- Request the written substantiation for Item 19 and confirm how each P&L account was mapped into payroll, other expenses, operating expenses, rent, and EBITDA.
- Compare local tuition, licensed capacity, achievable occupancy, staffing ratios, wage rates, and rent with the relevant occupancy cohort.
- Build a separate debt schedule showing interest and principal; neither is captured as owner take-home pay in the disclosed EBITDA.
- Estimate recurring maintenance capital expenditures and working-capital needs rather than treating EBITDA as distributable cash.
- Interview franchisees in multiple occupancy quartiles, including recent openings and owners who lease versus own their real estate.
- Confirm the On-Site Owner, Director, assistant director or education coach, and any Multi-School Manager staffing plan in writing.
FTC guidance recommends requesting Item 19 substantiation and testing whether the disclosed population and assumptions apply to the planned location. See the FTC's FDD review guidance. The official Primrose ownership and development process provides current format context, while the official Primrose owner information page describes the intended operational-leadership profile.
Decision-useful synthesis
The strongest defensible annual range is $137,000-$679,000 of EBITDA per full-year active, rent-reporting School, based on official 2025 quartile medians. It is an operating-earnings proxy before owner compensation, financing, capital spending, and personal taxes. Occupancy is the most important disclosed driver; the largest unresolved uncertainty is how a buyer's local rent, labor, debt, and capital requirements translate EBITDA into cash available for salary and distributions. A buyer should verify the Item 19 substantiation, the 557-versus-558 outlet count, and comparable franchisee P&Ls before treating any point in the range as relevant to a specific location.