Annual owner earnings answer
These are independent, pre-tax scenario ranges for one traditional U.S. Pure Barre studio. The manager-run range estimates residual business earnings after normal operating costs; the owner-operated range adds a $60,000 annual labor-value assumption for an owner who replaces a paid studio manager. The 2026 Amended Franchise Disclosure Document reports revenue, not owner profit.
This range is an independent analytical scenario, not an Item 19 financial performance representation by PB Franchising SPV, LLC. It combines 2026 FDD facts with an IRS industry-margin benchmark and clearly identified editorial assumptions. Actual results can differ materially because of location, studio age, membership retention, pricing, instructor payroll, manager cost, rent, financing, owner involvement, and execution.
Legal franchisorPB Franchising SPV, LLC
Disclosure document2026 Amended FDD, issued April 17, 2026 and amended June 18, 2026
Item 19 statusGross Revenue and operating metrics for 606 qualified franchised studios; no profit or owner-compensation disclosure
External benchmarkIRS 2022 corporate returns for Amusement, Gambling, and Recreation Industries; May 2025 BLS occupation framework
PopulationTraditional U.S. studios owned by franchisees for all of January 1–December 31, 2025
Research checkedJuly 15, 2026
All 606 qualified studios during calendar 2025; revenue is not owner earnings.
98.2% of the 617 U.S. studios open at year-end 2025 were represented.
IRS net income less deficit divided by total receipts for a broad recreation-industry group.
Royalty, fund, minimum local advertising, and current technology fee applied to $362,500.
Item 19 evidence
What does the 2026 Pure Barre Item 19 actually disclose?
Item 19 officially discloses 2025 Gross Revenue and operating activity, but it does not disclose Operating Profit, EBITDA, Net Income, owner salary, owner draws, or distributions. The applicable population is 606 traditional franchised studios that were owned by a franchisee for the full measurement period. Eleven studios were excluded because they were not open for the entire year.
The FDD defines Gross Revenue as revenue from approved services and products, excluding sales tax. It also warns that Gross Revenue is not identical to the Franchise Agreement definition of Gross Sales used to calculate recurring fees. That distinction matters: the Item 19 revenue table cannot be treated as a royalty invoice or silently renamed “owner income.” See 2026 Amended FDD, Item 19, pages 65–67.
| 2025 Item 19 cohort | Studios | Average Gross Revenue | Median Gross Revenue |
|---|---|---|---|
| First quartile | 151 | $623,800 | $568,400 |
| Second quartile | 152 | $418,600 | $414,800 |
| Third quartile | 152 | $315,200 | $312,100 |
| Fourth quartile | 151 | $213,100 | $224,000 |
| All qualified studios | 606 | $392,600 | $362,500 |
Official source: 2026 Amended FDD, Item 19, page 67. Quartiles are revenue-ranked cohorts, not probabilities. The all-studio range was $68,500 to $1,613,600, and 266 studios, or 44%, met or exceeded the overall average.
The strongest same-brand evidence measures studio revenue. It does not show rent, instructor payroll, manager compensation, merchant fees, insurance, supplies, repairs, interest, depreciation, capital spending, or owner distributions. Any owner-earnings figure therefore requires a separate margin model and must carry lower confidence than the Item 19 revenue table.
Which operating indicators help interpret the revenue?
The official operating indicators point to a recurring-membership business whose earnings depend heavily on member count and retention. Across the 606 qualified studios, Item 19 reported a median of 195 monthly active members, 16 monthly new memberships, and 5.8% monthly attrition. The average revenue mix was 84% memberships, 9% services, 1% fees, and 6% products.
Those metrics do not provide a profit formula, but they identify the main operating lever: recurring membership revenue must cover a relatively fixed studio footprint, instructors, local management, and occupancy. Xponential Fitness describes the typical Pure Barre studio as approximately 1,500 to 1,800 square feet and centered on recurring memberships in its 2025 Form 10-K.
Scenario model
How is the annual owner-earnings range estimated?
The manager-run estimate multiplies three official Item 19 revenue anchors by three transparent margin assumptions. Conservative uses the fourth-quartile median revenue and a 3.7% margin; Base uses the all-studio median and a 6.7% margin; Upside uses the first-quartile median and a 9.7% margin. The margin band is analytical, not FDD-reported.
| Scenario | Revenue anchor | Margin assumption | Estimated manager-run earnings |
|---|---|---|---|
| Conservative | $224,000 | 3.7% | $8,300 |
| Base | $362,500 | 6.7% | $24,300 |
| Upside | $568,400 | 9.7% | $55,100 |
Estimated annual pre-tax residual business earnings per traditional studio
Interpretation: The revenue position matters more than small changes in the benchmark margin. A studio near the fourth-quartile median can leave little residual profit after ordinary operating costs.
Sources and method: 2026 Amended FDD, Item 19, page 67; IRS Corporation Income Tax Returns Complete Report, Tax Year 2022. Calculations use full precision and are rounded to the nearest $100.
What assumptions sit behind the scenario margins?
- Central proxy: IRS 2022 “net income (less deficit)” of $6.953 billion divided by $103.655 billion of total receipts for Amusement, Gambling, and Recreation Industries equals 6.7%.
- Sensitivity: Conservative and Upside use the central proxy minus and plus 3 percentage points, producing 3.7% and 9.7%.
- Compatibility limit: The IRS group is broader than NAICS 713940 Fitness and Recreational Sports Centers and includes businesses with different capital structures, fee arrangements, and operating models.
- Expense treatment: The IRS net-income measure reflects deductions including wages, rent, interest, depreciation, amortization, advertising, and other expenses. The model therefore does not subtract FDD fees a second time.
- Cash-flow limit: The result is not EBITDA, free cash flow, or after-tax take-home pay. Financing principal, personal income taxes, distributions, retained earnings, and future capital expenditures remain separate.
The 6.7% proxy is official government data, but not Pure Barre-specific data. It is the largest unresolved modeling weakness. A buyer should replace it with actual studio-level profit-and-loss statements, written Item 19 substantiation, and franchisee interviews before relying on the range.
Owner role
How does owner involvement change the result?
Owner involvement can increase total economic benefit when the owner performs the work that a paid Designated Manager would otherwise perform, but that added amount is compensation for labor, not passive business profit. Item 15 recommends, but does not require, personal supervision. It permits an approved Designated Manager and requires the studio to be managed and staffed by at least one person who completed the Owner/Operator training module.
The owner-operator illustration adds a $60,000 annual manager-labor placeholder to each manager-run residual-profit scenario. The placeholder is an editorial assumption, not a disclosed Pure Barre salary and not a quoted BLS wage. It should be replaced with local cash wages, payroll taxes, benefits, bonus structure, and the actual duties the owner will absorb. The relevant current federal reference points are the May 2025 BLS industry-specific wage tables and the BLS profile for Entertainment and Recreation Managers, Except Gambling.
Owner-operator benefit adds the assumed $60,000 value of management labor
Interpretation: The apparent gain from owner operation is the assumed market value of work performed. It should not be presented as passive income or as evidence that the underlying studio is more profitable.
Sources and method: 2026 Amended FDD, Item 15, pages 53–54; manager-run scenario calculations above; $60,000 is an editorial labor-value assumption. Values rounded to the nearest $100.
At the Base case, the studio model produces about $24,300 of residual business earnings. Adding $60,000 for management work produces about $84,300 of owner-operator benefit. The first amount is modeled business profit; the second includes compensation for the owner’s time and responsibility.
Recurring obligations
Which FDD fees put the most pressure on owner earnings?
The largest disclosed recurring obligations are the 7% Royalty, the current 2% Brand Development Fund contribution, and the Local Advertising Requirement of the greater of $1,500 per month or 2% of prior-month Gross Sales. The current Technology Fee is $304 per month. These are official FDD terms for the traditional studio format, not independent assumptions.
| Recurring obligation | 2026 FDD amount | Owner-earnings relevance |
|---|---|---|
| Royalty | 7% of Gross Sales | Direct variable charge beginning when the studio collects operating revenue. |
| Brand Development Fund | Currently 2% of Gross Sales | Variable marketing charge; may be adjusted subject to the Marketing Expenditure Cap. |
| Local Advertising Requirement | Greater of $1,500 per month or 2% of prior-month Gross Sales | The $18,000 annual minimum is proportionally heavier at lower sales levels. |
| Technology Fee | Currently $304 per month | $3,648 annualized at the disclosed rate; the FDD permits annual increases of up to 50%. |
| Marketing Expenditure Cap | 7% per month in aggregate | Applies to Fund, co-op, and local advertising requirements; it does not include the 7% Royalty. |
Official source: 2026 Amended FDD, Item 6, pages 16–21. Item 7 startup investment is not an annual expense and is not subtracted from one year of revenue.
What do those fees look like at the three revenue anchors?
An illustrative application produces about $41,800, $54,300, and $72,800 of annual royalty, fund, minimum local-advertising, and technology obligations. These figures are derived, not FDD-reported totals, because Item 19 Gross Revenue is not identical to contractual Gross Sales and monthly timing can change the Local Advertising calculation.
| Scenario revenue | Illustrative fee dollars | Share of revenue anchor | Interpretation |
|---|---|---|---|
| $224,000 | $41,808 | 18.7% | The $18,000 local-advertising minimum has its largest proportional effect. |
| $362,500 | $54,273 | 15.0% | Base illustration used in the key-metric card. |
| $568,400 | $72,804 | 12.8% | Fixed technology and local-advertising minimums dilute across higher revenue. |
Derived formula: 7% Royalty + 2% Fund + greater of $18,000 or 2% annualized local advertising + $3,648 Technology Fee. This is a structural fee illustration only and is not subtracted again from the IRS all-in margin proxy.
Uncertainty and verification
How much uncertainty is in a reasonable Pure Barre earnings range?
Uncertainty is material, so the evidence-confidence rating is Limited. Same-brand Item 19 revenue coverage is broad, but the missing studio expense data force the earnings model to rely on a broader government-industry margin. The revenue distribution is also wide: Item 19 reported qualified-studio Gross Revenue from $68,500 to $1,613,600.
Item 20 adds operating context rather than profit proof. The U.S. franchised system ended 2025 with 617 studios, after 14 openings, one termination, and 13 studios that ceased operations for other reasons. There were 53 transfers during 2025. Closures and transfers do not establish why a particular studio changed hands, but they are relevant diligence signals when reviewing earnings durability. See 2026 Amended FDD, Item 20, pages 74, 79, and 84.
- Estimated pre-tax manager-run owner earnings
- Residual modeled business earnings after normal operating expenses, including manager compensation and recurring franchise charges embedded in the broad margin proxy, before personal income taxes and financing principal payments.
- Estimated owner-operator benefit
- Manager-run residual earnings plus the assumed value of management labor performed by the owner. It is not pure business profit.
- Debt service
- Business interest may be represented within the IRS net-income benchmark, but loan principal is not an operating expense and would reduce cash available for distributions separately.
- Capital expenditures
- Replacement equipment, required modernization, and remodel spending are not modeled as annual cash outflows. Depreciation is included in the IRS accounting benchmark, but actual capital timing can differ.
- Personal taxes
- No after-tax estimate is provided because entity form, state, deductions, owner wages, distributions, and personal circumstances differ.
What should a buyer verify before relying on an earnings estimate?
- Obtain the written Item 19 substantiation and confirm the exact Gross Revenue definition, reporting population, excluded studios, and any post-amendment changes.
- Ask multiple franchisees for trailing-12-month profit-and-loss statements, separating owner compensation, manager payroll, instructor payroll, rent, merchant fees, interest, depreciation, and capital spending.
- Compare studios near the fourth-quartile, system-median, and first-quartile revenue levels rather than interviewing only high performers.
- Verify local membership pricing, active-member count, new-member conversion, monthly attrition, class utilization, instructor wage rates, and manager coverage.
- Recalculate Royalty, Brand Development Fund, Local Advertising Requirement, Technology Fee, insurance, and any local co-op charge using contractual Gross Sales.
- Ask about the 53 transfers, one termination, and 13 studios reported as ceasing operations for other reasons in 2025, including lease issues, owner workload, staffing, resale economics, and operating history.
- Model financing principal and interest separately, then test whether cash distributions remain adequate after required reserves and future remodel or equipment spending.
Decision synthesis
What is the strongest defensible earnings takeaway?
A reasonable independent range is approximately $8,000 to $55,000 in annual pre-tax residual business earnings for a manager-run traditional studio, or approximately $68,000 to $115,000 in owner-operator benefit when a $60,000 management-labor assumption is added. These are scenario-based figures, not official Pure Barre owner-income disclosures and not predictions.
The most important earnings driver is studio revenue position, which in turn is closely connected to active memberships and retention. The largest unresolved uncertainty is the absence of same-brand studio expense and profit data in Item 19. Before making a decision, a buyer should verify the Item 19 substantiation, contractual fee calculations, actual profit-and-loss statements, manager and instructor payroll, occupancy costs, debt terms, capital requirements, and franchisee experiences across multiple revenue cohorts.
The Federal Trade Commission explains that financial performance claims must follow the Franchise Rule framework; the FTC compliance guide is useful for understanding why Item 19 evidence, written substantiation, and careful population definitions matter.