For a standard, full-time, home-based U.S. Schooley Mitchell office, the strongest reproducible range is an estimated pre-tax owner-operator benefit, with a base scenario of about $7,800. This is not an official profit figure: it includes the economic value of the owner’s labor and is calculated after modeled operating expenses and the recurring franchise fees identified below.
This range is an independent analytical scenario, not an Item 19 financial performance representation by 1073355 Ontario Limited. It combines identified facts from the 2025 Schooley Mitchell Franchise Disclosure Document with the Internal Revenue Service’s 2023 U.S. sole-proprietorship data for management, scientific, and technical consulting services and explicit scenario assumptions. Actual results can differ materially because of client acquisition, contract timing, collections, service mix, owner involvement, labor, office costs, financing, geography, and execution.
Legal franchisor: 1073355 Ontario Limited, operating as Schooley Mitchell. Item 19 status: the 2025 FDD discloses Annual Secured Revenue for a combined U.S. and Canadian population, but it does not disclose U.S.-only Gross Sales, business profit, EBITDA, Net Income, owner compensation, or cash flow. Population: 79 full-time and 161 part-time franchisees, with company-owned outlets, 21 ceased operators, and 52 new operators excluded. Benchmarks: IRS 2023 Schedule C statistics for NAICS 5416 and BLS May 2025 manager wages. Date checked: July 19, 2026.
Derived from $67.087 billion of 2023 receipts across 1,109,907 management, scientific, and technical consulting sole-proprietorship returns.
IRS industry net income less deficit divided by business receipts, before adding Schooley Mitchell-specific recurring fees.
8% royalty, 2% advertising fee, and 25% production fee for a standard franchise.
The $120 monthly Software and Marketing Programs Fee annualized for twelve months.
A combined U.S. and Canadian sample, not a U.S.-only earnings cohort.
Operating at the end of fiscal 2025 under Item 20; this count is not the Item 19 reporting sample.
What does the 2025 Item 19 actually measure?
Officially, Item 19 measures Annual Secured Revenue from contracts signed during the reporting period—not annual cash sales and not owner earnings. The FDD defines Annual Secured Revenue as revenue a franchisee received or expects to receive under customer contracts signed in the period, even when the customer pays over a multi-year contract term. No franchise fees, operating costs, owner compensation, or other expenses are deducted. The relevant disclosure appears in the 2025 FDD, Item 19, pages 32–35.
A contract-production measure that includes expected future receipts from contracts signed in the reporting year. It is not the same as cash collected during that year.
Item 6 defines this as sales connected with the franchise business when payment is received, excluding government tax. Recurring percentage fees are calculated from this different measure.
Cash available after normal operating expenses and recurring franchise fees, before personal income taxes and financing principal. The FDD does not report this measure.
Residual business economics plus the value of work performed by the owner. It is not passive profit and should not be compared directly with a manager-run distribution.
Item 19’s strongest evidence cannot be converted directly into a U.S. owner-income figure. The table combines U.S. and Canadian franchisees, the FDD does not provide a U.S.-only split or state that all observations were converted to one U.S.-dollar basis, and Annual Secured Revenue can include future collections. The article therefore does not use the Item 19 dollar amounts as U.S. revenue inputs.
How broad is the official sample?
The official sample is broad in count but narrow in comparability. It includes 240 active U.S. and Canadian franchisees: 79 classified as full-time because they reported at least 15 hours of work per week and 161 classified as part-time because they reported less than 15 hours. The FDD excludes company-owned and affiliated outlets, 21 operators that ceased during the reporting year, and 52 new operators. Those exclusions remove important ramp-up and closure outcomes from the disclosed performance population.
The full-time table covers the 12 months ending February 28, 2025. The part-time table heading states the 12 months ending May 31, 2025, although the introductory Item 19 narrative refers to February 28, 2025. That period inconsistency should be clarified through written substantiation before the part-time figures are used in underwriting.
How is the U.S. owner-operator range calculated?
The range is estimated by applying a U.S. consulting-business margin benchmark to a U.S. receipts benchmark, then deducting the standard franchise’s disclosed recurring fees. It is a structural scenario for one home-based standard franchise, not a prediction and not the midpoint of the mixed-country Item 19 results.
- Revenue anchor: $60,443.86 of average receipts per 2023 IRS Schedule C return for management, scientific, and technical consulting services, with an explicit 80%, 100%, and 120% analytical spread.
- Margin anchor: 50.2469% net income less deficit divided by business receipts for the same IRS industry, with a minus-three, zero, and plus-three percentage-point sensitivity.
- Franchise fees: 8% royalty, 2% advertising, 25% production, and $120 per month for software and marketing programs, from the 2025 FDD, Item 6, pages 6–9.
- Operating format: one standard, full-time, home-based U.S. office. Builder and development franchises are not combined with this model because their fee rates and operating structures differ.
- Accounting treatment: the IRS margin already reflects industry-level deductions, including interest and depreciation. Owner compensation is not deducted from Schedule C net income. Capital expenditures, financing principal, and personal income taxes are excluded.
| Scenario | Revenue assumption | Pre-franchise margin | Estimated owner-operator benefit |
|---|---|---|---|
|
Conservative 80% receipts; benchmark margin −3 points |
$48,355 | 47.25% | $4,500 |
|
Base 100% receipts; benchmark margin |
$60,444 | 50.25% | $7,800 |
|
Upside 120% receipts; benchmark margin +3 points |
$72,533 | 53.25% | $11,800 |
The three values are independent estimates for a standard, home-based U.S. franchise before personal taxes and financing principal.
Interpretation: the modeled range remains modest because the standard franchise’s disclosed 35% variable fee load is applied after the IRS industry’s normal operating deductions. Sources: 2025 Schooley Mitchell FDD, Item 6, pages 6–9; IRS 2023 Nonfarm Sole Proprietorship Table 1; FranchisesBiz calculations rounded to the nearest $100.
Which recurring fees reduce the modeled owner benefit?
At the base revenue assumption, the production fee is the largest disclosed franchise-specific deduction. The bridge begins with about $30,371 of IRS-benchmark net income before Schooley Mitchell-specific fees, then deducts approximately $4,836 of royalty, $1,209 of advertising, $15,111 of production fees, and $1,440 of software fees to reach about $7,776 of estimated owner-operator benefit.
A fully reconciled waterfall using $60,443.86 of modeled revenue and the standard-franchise fee schedule.
Interpretation: production fees represent roughly half of the benchmark net income before franchise-specific fees in the base scenario. Important limitation: the IRS benchmark already includes the typical expense structure of independent consulting businesses. The FDD does not disclose whether centralized production replaces expenses that comparable independent firms would otherwise incur, so the strict fee overlay may understate owner benefit if meaningful costs are substituted rather than added.
The treatment of the 25% production fee is the largest unresolved issue. Item 6 says the franchisor charges this fee when it provides analysis, report, and post-audit services and states that those services are provided for clients in all expense categories. The IRS comparison group also incurs its own contract labor, payroll, and other delivery costs. Without a Schooley Mitchell expense statement, the model cannot determine how much of the general industry cost base the production fee replaces.
How does owner involvement change the result?
Owner involvement is economically decisive because the modeled range is owner-operator benefit, not manager-run passive profit. Item 15 permits a standard franchise to be supervised by the owner or a fully trained, approved manager, while recommending active owner participation. The IRS Schedule C benchmark does not deduct a wage for the proprietor, so the scenario includes compensation for the owner’s work.
Can the benchmark revenue support a full-time manager?
Not under this scenario. The BLS May 2025 national median hourly wage for general and operations managers was $50.85, equal to a $105,768 annual salary-equivalent at 2,080 hours. Subtracting that wage from the modeled owner-operator benefit produces a substantial negative manager-run residual even before employer payroll taxes and benefits.
| Scenario | Owner-operator benefit | Manager salary-equivalent | Manager-run residual |
|---|---|---|---|
| Conservative | $4,500 | −$105,768 | −$101,300 |
| Base | $7,800 | −$105,768 | −$98,000 |
| Upside | $11,800 | −$105,768 | −$94,000 |
This stress test does not mean every manager-run Schooley Mitchell office loses money. It means the broad U.S. sole-proprietor revenue benchmark is structurally incompatible with a separately paid full-time manager. A manager-run office would require materially higher collected revenue, a different cost structure, shared portfolio overhead, or a combination of those factors. The 2025 Item 19 does not provide a U.S.-only manager-run cohort to quantify that threshold.
Format distinctions also matter. The builder franchise is designed for part-time operation and carries a 12% royalty, 3% advertising fee, and 30% production fee. The development franchise may operate up to ten satellite locations and requires a fully trained manager. Neither format is merged into the standard-franchise estimate because a one-unit average cannot be multiplied across satellites without evidence on ramp-up, staffing, shared overhead, and collections.
What could move actual annual earnings above or below the range?
The range is most sensitive to collected revenue and the extent to which the production fee substitutes for—or adds to—normal consulting delivery costs. Confidence remains limited because the FDD’s official performance measure is not a U.S.-only cash-revenue or profit measure, while the IRS benchmark covers many non-franchise, part-time, and differently structured consulting businesses.
- Contract timing and collections: Annual Secured Revenue may be recognized when a contract is signed even though related cash is collected over later years. Annual Gross Sales and owner cash flow can therefore diverge.
- Sales concentration: A few large contingency contracts may produce volatile annual results. Item 19’s full-time distribution is highly dispersed, but its mixed-country dollar values are not used in the U.S. estimate.
- Owner selling capacity: The official “full-time” Item 19 classification begins at 15 hours per week, which is not equivalent to a conventional 40-hour manager position or to the full-time effort requirement in Item 15.
- Office choice: The FDD permits home-based operation. A leased office adds rent and related occupancy costs; Item 7 lists optional rent of $350 to $750 per month as initial-investment context, not as a guaranteed ongoing rate.
- Debt service: Item 10 states that the franchisor does not offer financing or guarantee obligations. Financing principal is excluded from the earnings range, while interest is already embedded statistically in the IRS industry margin.
- Taxes and entity structure: The estimate is pre-tax. Personal after-tax take-home pay depends on entity choice, state and local tax rules, deductions, other income, and owner circumstances.
Item 20 adds context rather than an earnings figure. U.S. franchised outlets increased from 227 at the start of fiscal 2025 to 258 at year-end, with 52 openings and 21 outlets that ceased operations for other reasons. Growth does not establish profitability, and the Item 19 exclusions mean the disclosed performance sample does not fully reflect new-unit ramp-up or cessation outcomes.
What should a buyer verify before relying on any earnings estimate?
A buyer should obtain U.S.-only cash-receipt and expense evidence for the exact format and owner role being considered. The FTC advises prospects to test Item 19 assumptions, geographic relevance, typicality, and written substantiation rather than treating a disclosed average as a promise.
- Request Item 19 written substantiation and ask for a U.S.-only reconciliation of Annual Secured Revenue, Gross Sales collected, accounts receivable, and cash received during the same period.
- Ask for profit-and-loss statements from standard U.S. offices, separated into owner-operated and manager-run groups, with royalty, advertising, production, software, payroll, contract labor, insurance, travel, and occupancy shown distinctly.
- Clarify whether the 25% production fee replaces costs that independent consulting businesses would normally record as payroll, contract labor, software, or report production.
- Ask why the part-time Item 19 table uses a May 31, 2025 ending date while the introductory narrative references February 28, 2025, and obtain the exact source population for each table.
- Interview current franchisees across multiple performance levels and former franchisees listed in Item 20, including operators who opened recently and those who ceased operations.
- Build a monthly cash-flow schedule that separates contracts signed, invoices issued, client payments collected, recurring franchise fees, owner draws, manager payroll, debt service, and tax reserves.
The strongest defensible annual range is approximately $4,500 to $11,800 of estimated pre-tax owner-operator benefit for one standard, full-time, home-based U.S. office, with a base scenario near $7,800. It is scenario-based, not an official Item 19 profit result. The most important driver is collected revenue after the combined royalty, advertising, and production fee burden. The largest unresolved uncertainty is whether Schooley Mitchell’s production fee replaces a meaningful share of the operating costs already embedded in the IRS consulting benchmark. Before making a decision, a buyer should verify U.S.-only cash receipts, expense statements, owner-versus-manager cohorts, Item 19 substantiation, and the experience of current and former franchisees.