Estimated owner-operator benefit per reporting franchise is about $45,000 in the Conservative scenario, $105,000 in the Base scenario, and $157,000 in the Upside scenario. The 2026 Sir Grout Franchise Disclosure Document reports 2025 Gross Revenues, not profit or owner compensation. A salary-only manager-run model produces a much lower range: roughly a $45,000 loss to $67,000 of residual profit, with a Base result near $16,000.
This range is an independent analytical scenario. It is not a financial performance representation by Sir Grout Franchising, LLC. The model combines identified facts from the 2026 FDD with a broad Internal Revenue Service net-income benchmark, a Bureau of Labor Statistics manager-wage benchmark, and clearly labeled margin assumptions. Actual results can differ materially because of location, number of Territories, Gross Revenues, technician productivity, supplies, labor, local advertising, vehicle costs, financing, owner involvement, and execution.
Legal franchisor: Sir Grout Franchising, LLC. FDD issuance date: April 10, 2026. Item 19 status: 2025 Gross Revenues only; no business-profit, EBITDA, Net Income, cash-flow, salary, draw, or distribution disclosure. Format and population: vehicle-based, no required retail storefront; 44 reporting franchises operating 78 Territories for the full 12-month reporting period. External benchmarks: IRS Tax Year 2023 nonfarm sole proprietorship data for Administrative and Support Services and BLS May 2023 wages for General and Operations Managers in NAICS 561700. Date checked: July 21, 2026.
What does the 2026 Item 19 actually measure?
Officially, Item 19 measures 2025 Gross Revenues per reporting franchise—not annual owner earnings. The population consists of 44 U.S. franchises operating 78 Territories that reported a full 12 months of Gross Revenues for the year ended December 31, 2025. A franchise with multiple Territories reports the combined revenue of all its Territories, so the figures cannot be treated as single-Territory unit economics.
The official median was $496,484 and the official average was $622,650. Only 17 of 44 reporting franchises, or 39%, met or exceeded the average, which shows why the median is the more stable central revenue anchor for this analysis. The FDD reported a high of $2,178,651 and a low of $119,610, but those endpoints combine different Territory counts and business ages.
Independent pre-tax scenario range; includes value for owner labor and is not passive business profit.
2025 revenue per reporting franchise, including all Territories owned by that franchise.
Full-year Item 19 reporting population; 44 of 55 year-end operating franchises were included.
IRS 2023 Administrative and Support Services receipts-to-net-income proxy; not a Sir Grout margin.
BLS May 2023 annual mean wage for General and Operations Managers in NAICS 561700.
After the initial three months: 6% of Gross Revenues or $1,250 per month, whichever is greater.
Item 19 states that its Gross Revenues figures do not reflect cost of sales, operating expenses, or other costs needed to determine Net Income or profit. The FDD also excludes two franchises that did not report required data, nine franchises that opened during 2025, and two franchises that closed during 2025. The 44-franchise population represents 80% of the 55 franchises operating at year-end, but not every business that operated at any point during the year.
How wide was the official revenue distribution?
The official quartile medians ranged from $246,788 to $1,034,592 in 2025. These are revenue observations for reporting franchises, not profit bands, and the upper quartile includes several multi-Territory businesses. The scenario model therefore uses the fourth-quartile median for Conservative revenue, the overall median for Base revenue, and the second-quartile median for Upside revenue rather than treating the first quartile as a typical outcome.
| Official Item 19 population | Average Gross Revenues | Median Gross Revenues | High / Low |
|---|---|---|---|
| All 44 reporting franchises | $622,650 | $496,484 | $2,178,651 / $119,610 |
| First quartile | $1,210,352 | $1,034,592 | $2,178,651 / $857,894 |
| Second quartile | $640,154 | $647,851 | $768,025 / $499,478 |
| Third quartile | $403,869 | $397,428 | $493,490 / $319,578 |
| Fourth quartile | $236,225 | $246,788 | $311,447 / $119,610 |
Source: Sir Grout 2026 Franchise Disclosure Document, Item 19, pp. 50–57. Gross Revenues are rounded to the nearest dollar and are reported per franchise, not per Territory.
How was the annual owner-earnings range estimated?
The estimate applies an 18.2%–24.2% analytical margin band to three official Item 19 revenue anchors. This is a Mode C independent estimate for a reporting franchise in the 2025 population. The central 21.2% ratio comes from aggregate IRS Tax Year 2023 receipts and Net Income less deficit for broad Administrative and Support Services; the Conservative and Upside margins are three percentage points below and above that benchmark.
The IRS ratio is an aggregate of sole proprietorship receipts and Net Income, not an average franchise margin. It may include owner labor, interest, and depreciation deductions reported on Schedule C. It is used because Sir Grout Item 19 does not disclose expenses or profit, but it is a broad proxy and materially limits confidence. The closest structural Census reference is NAICS 561790, Other Services to Buildings and Dwellings; the IRS table is broader than that category.
Manager-run residual formula: owner-operator benefit − $89,540 BLS manager wage.
Values are calculated at full precision and rounded to the nearest $1,000 for publication.
| Scenario | Official revenue anchor | Modeled margin | Owner-operator benefit | Manager-run residual |
|---|---|---|---|---|
| Conservative | $246,788 | 18.2% | $45,000 | −$45,000 |
| Base | $496,484 | 21.2% | $105,000 | $16,000 |
| Upside | $647,851 | 24.2% | $157,000 | $67,000 |
What does the owner-operator scenario produce?
Estimated annual owner-operator benefit by official revenue anchor and modeled margin.
Interpretation: Revenue movement and margin movement are both material. The Base case is not a forecast or “most likely” result; it is the official overall median revenue combined with the central government benchmark.
Sources: Sir Grout 2026 FDD, Item 19, pp. 50–57; IRS, Nonfarm Sole Proprietorships, Tax Year 2023, Table 1. Scenario margins of benchmark minus/plus three percentage points are editorial assumptions.
- Revenue anchors are official. $246,788 is the fourth-quartile median, $496,484 is the overall median, and $647,851 is the second-quartile median for 2025 reporting franchises.
- The 21.2% ratio is a benchmark, not a Sir Grout result. It equals $24.229 billion of aggregate Net Income less deficit divided by $114.423 billion of aggregate receipts for IRS Administrative and Support Services sole proprietorships.
- The margin spread is analytical. The FDD does not report an 18.2%, 21.2%, or 24.2% margin; the outer scenarios apply a transparent three-percentage-point sensitivity.
- Recurring fees are not subtracted a second time. The IRS ratio is treated as an all-in net-income proxy. Separately deducting every FDD fee would risk double counting, so the fee schedule is shown independently for buyer verification.
How much does owner involvement change the result?
Owner involvement changes the modeled annual result by about $89,540 before payroll taxes and benefits. This is an estimated role adjustment for the same 2025 reporting-franchise format: Item 15 permits direct supervision by the owner, Operating Principal, or a full-time manager, while the BLS benchmark values a General and Operations Manager at an annual mean wage of $89,540 in NAICS 561700.
The owner-operator figure is therefore labeled benefit, not pure business profit. It combines the modeled residual economics with the market value of management labor performed by the owner. The manager-run figure represents residual profit after a salary-only manager deduction; because employer payroll taxes, benefits, recruiting, and management overhead are omitted, the manager-run result may be overstated.
Owner-operator benefit versus manager-run residual
Same revenue and margin scenario; the gap is the $89,540 BLS manager wage assumption.
Interpretation: A manager-run structure does not make the business passive. Item 15 requires full-time day-to-day supervision by the owner, Operating Principal, or manager, and the manager-run scenario leaves little cushion at the median-revenue Base case.
Sources: Sir Grout 2026 FDD, Item 15, pp. 42–43; BLS May 2023 OEWS, General and Operations Managers, NAICS 561700. Employer payroll burden and benefits are excluded.
- Gross RevenuesOfficial Item 19 revenue before cost of sales, labor, advertising, franchise fees, vehicle costs, financing, and other operating expenses.
- Estimated owner-operator benefitModeled net-income proxy plus the economic value of management labor performed by the owner. It is not passive profit, salary, draw, distribution, or after-tax take-home pay.
- Estimated manager-run residualOwner-operator benefit less the BLS annual mean manager wage. It remains before employer payroll burden, benefits, debt principal, personal income taxes, and unmodeled capital expenditures.
- Personal take-home payNot estimated. Entity choice, state and local taxes, deductions, owner payroll, distributions, and personal circumstances determine after-tax outcomes.
Which FDD fees can move Sir Grout owner earnings most?
The largest disclosed recurring earnings pressures are the royalty, local advertising, Business Center Fee, and per-Territory Brand Fund Fee. These are official 2026 FDD obligations for the U.S. mobile service format, but their annual effect varies by Gross Revenues, business age, Territory count, optional programs, and available multi-Territory waivers.
| Official recurring item | FDD amount | Base-revenue illustration | Owner-earnings interpretation |
|---|---|---|---|
| Royalty | First 3 months: $600/month; then 6% of Gross Revenues or $1,250/month minimum | $29,789 at 6% | Percentage royalty exceeds the $15,000 annualized minimum at the $496,484 Base revenue anchor. |
| Brand Fund Fee | $500/month per Territory | $6,000 per Territory | Item 19 revenue is per franchise, while this fee scales with Territory count. |
| Local advertising | $3,500/month during the first 2 years or until the stated revenue threshold is achieved | $42,000 annual floor | After the condition ends, the FDD recommends 15%–20% of annual Gross Revenues but does not state that recommendation as a fixed minimum. |
| Business Center Fee | $1,500/month | $18,000 | Possible waiver treatment applies to certain contiguous multi-Territory structures; buyers should obtain the written calculation. |
| Website Fee | $49–$59/month | $588–$708 | Small relative to labor and advertising, but still recurring. |
| Franchise Option Program | Royalty rises from 6% to 10% for the 10-year term in exchange for an Initial Franchise Fee refund | +$19,859 at Base revenue | The 4-percentage-point royalty increase reduces annual operating economics even though it changes the upfront fee. |
At the $496,484 Base revenue anchor, a one-Territory annualized illustration of the 6% royalty, Brand Fund, Business Center, website fee, and $42,000 launch-period local-advertising floor totals about $96,400 before supplies, technicians, payroll taxes, insurance, vehicle expense, merchant fees, accounting, and other operating costs. This is a transparency check—not an additional deduction from the scenario margin—and multi-Territory businesses may owe more or receive limited fee waivers.
Source: Sir Grout 2026 Franchise Disclosure Document, Items 5 and 6, pp. 11–20. Item 7 startup investment is excluded from annual operating earnings; it is not subtracted from one year of Gross Revenues.
Where is the earnings estimate least certain?
Confidence is LIMITED because the FDD supplies same-brand revenue but no same-brand expense or profit data. The resulting annual earnings range is estimated for the 2025 reporting-franchise population and depends materially on an external sole-proprietor margin proxy, an older BLS wage benchmark, and a population that mixes one- and multi-Territory businesses.
- Territory count is unresolved. Item 19 combines all Territories owned by each franchise, while several recurring fees are charged per Territory. The FDD does not publish owner earnings by Territory count.
- The margin benchmark is broad. IRS Administrative and Support Services includes businesses beyond tile, grout, stone, and hard-surface restoration. Its 21.2% ratio is aggregate Net Income less deficit divided by aggregate receipts, not the median individual-business margin.
- Owner labor is embedded. Sole-proprietor Net Income can compensate both capital and labor. A full-time owner may receive economic benefit, but that does not make the same amount available to an absentee owner.
- Closed and new businesses are not in the full-year table. Item 19 excludes two 2025 closures, nine 2025 openings, and two nonreporting franchises. This is a historical full-year cohort, not a survival-adjusted forecast.
- Business age matters, but not monotonically. The FDD reports median Gross Revenues of $492,812 for franchises open more than 10 years, $691,285 for those open more than 5 but less than 10 years, and $346,969 for those open more than 1 but less than 5 years.
- Debt and taxes remain separate. Financing principal is not an operating expense and is not modeled. Personal federal, state, and local taxes are not estimated.
Item 20 shows 91 franchised Territories and no company-owned outlets at December 31, 2025. During 2025, 23 Territories opened, three were terminated, two transferred to new owners, and the year-end count increased by 20. Because there are no company-operated units, there is no same-brand corporate operating-margin proxy to strengthen the earnings model.
What should a buyer verify before relying on this range?
A buyer should treat the $45,000–$157,000 owner-operator range as a diligence framework until actual franchisee expense records support it. The range is estimated for the 2025 full-year reporting population, not promised for a specific Territory, market, owner role, or financing structure.
- Request Item 19 written substantiation. Confirm the underlying 2025 Gross Revenues data, each reporting franchise’s Territory count, and whether any revenue was generated outside assigned Territories.
- Interview owners in comparable cohorts. Ask single- and multi-Territory franchisees for technician labor, materials, rework, vehicle, insurance, merchant-processing, lead-generation, local-advertising, and manager costs as a percentage of Gross Revenues.
- Separate owner labor from residual profit. Ask how many weekly hours the owner performs sales, estimating, scheduling, quality control, customer recovery, recruiting, and management work.
- Reconcile every recurring charge. Obtain a written one-, two-, and three-Territory fee schedule, including Brand Fund, Business Center waivers, digital marketing, website, technology, and the Franchise Option Program.
- Review excluded and former franchisees. Item 20 identifies current and former franchisees and states there were no recent confidentiality restrictions preventing discussion of their experience.
- Build a local operating statement. Replace the IRS proxy with market-specific technician wages, workers’ compensation, insurance, travel time, materials, advertising, and manager compensation before making an investment decision.
The strongest defensible annual range is about $45,000–$157,000 of estimated owner-operator benefit per reporting franchise, with a Base scenario near $105,000. It is scenario-based, not official owner earnings. The most important driver is Gross Revenues relative to technician, advertising, and management costs; the largest unresolved uncertainty is the absence of same-brand expense data separated by Territory count and owner role. A buyer should verify the Item 19 substantiation, build a local profit-and-loss model, and test the model against current and former franchisee interviews before relying on any earnings figure.