Estimated annual owner-operator benefit: an independent 2025-based model for a Stratus Building Solutions master franchise produces a conservative loss of about $20,000, a base benefit of about $104,000, and an upside benefit of about $226,000. A manager-run version of the same scenarios ranges from an estimated $162,000 loss to an $83,000 profit before debt principal and personal taxes.
This range is an independent analytical scenario, not an Item 19 financial performance representation by SBS Franchising, LLC. It combines identified facts from the 2026 Franchise Disclosure Document with separately identified U.S. Bureau of Labor Statistics, Silicon Valley office-market, and editorial scenario assumptions. Actual results can differ materially by territory, revenue mix, unit-franchise sales, labor, occupancy, financing, owner involvement, and execution.
Legal franchisor: SBS Franchising, LLC. FDD: 2026 Franchise Disclosure Document, issued March 16, 2026. Item 19 status: official Gross Revenues disclosure, but no owner compensation, operating profit, EBITDA, net income, or cash-flow disclosure. Population used: 58 franchised Reporting Regions open at least 12 months in 2025. Benchmarks: May 2025 occupational wages, March 2026 employer-benefit costs, and Q2 2026 Silicon Valley Class B office rent. Checked: July 20, 2026. The current master-franchise operating model is described on the official Stratus master-franchise website.
LIMITED confidence: the same-brand FDD provides a strong revenue anchor and contractual fee mechanics, but the earnings result depends materially on modeled retained revenue, local office overhead, and manager compensation that Item 19 does not disclose.
What does the 2026 FDD actually report?
Officially, Item 19 reports Gross Revenues, not owner earnings. For the 58 franchised Reporting Regions open at least 12 months during calendar 2025, median annual Gross Revenues were $1,877,760 and average annual Gross Revenues were $2,843,931. Only 26 of 58 regions, or 44%, reached or exceeded that average, which is why the median is the more conservative central revenue anchor.
Item 19 defines Gross Revenues as cash received from customer revenue, including special services, plus franchise fees paid by Unit Franchisees. A Stratus master region is principally a regional franchising and administrative-support business; Unit Franchisees perform the cleaning work. The official Stratus master-franchise FAQ describes the owner’s role as recruiting, training, and supporting the local Unit Franchisee network.
| 2025 Item 19 population | Regions | Average Gross Revenues | Median Gross Revenues |
|---|---|---|---|
| Franchised regions, open at least 12 months | 58 | $2,843,931 | $1,877,760 |
| Affiliate-owned regions, open at least 12 months | 12 | $4,019,430 | $3,016,728 |
| All Reporting Regions, open at least 12 months | 71 | $3,042,607 | $2,482,217 |
| Regions operating 5+ years, mixed ownership | 52 | $3,927,826 | $3,424,019 |
Source: 2026 Franchise Disclosure Document, Item 19, pp. 29–33. The 5+ year cohort combines franchised and affiliate-owned regions and is not substituted for the pure franchised-region median.
A $1.878 million Item 19 median is mostly a measure of customer collections and franchise-fee receipts flowing through a master region. It is not the owner’s salary, business profit, distribution, or take-home pay. The Federal Trade Commission’s franchise-buying guide specifically warns that gross-sales figures do not reveal operating costs or profit.
How is the owner-earnings range calculated?
The estimated owner-operator benefit is calculated from the franchised-region median Gross Revenues, a modeled net master contribution ratio, and a local office-support cost estimate. The result is scenario-based for a San Jose-area master franchise, not reported by the franchisor.
- Revenue: 80%, 100%, and 120% of the $1,877,760 franchised-region median, producing $1,502,208, $1,877,760, and $2,253,312. This spread is analytical, not FDD-reported.
- Net master contribution: 14%, 17%, and 20% of Item 19 Gross Revenues. The corridor is anchored by an approximately 11% routine-contract floor—15% Unit Franchisee royalty and administration fees less the 4% SBS royalty—and an imperfect 24.3% affiliate proxy derived from same-FDD revenue data after a 4% royalty allowance.
- Local office and support overhead: $230,000, $215,000, and $225,000. The model includes an approximately $86,000 annual Class B office-rent benchmark for 1,600 square feet, one loaded San Jose office-support employee at approximately $96,000, FDD technology costs, and explicit allowances for insurance, local marketing, accounting, legal, travel, supplies, and scale-related support.
- Excluded from operating benefit: financing principal, personal income taxes, depreciation, expansion capital expenditures, and owner retirement or health-benefit choices. Interest is not included in the operating result and should be assessed separately.
The office benchmark combines the FDD’s 1,400–1,800-square-foot office guidance with the Q2 2026 Silicon Valley office report, which reported a $4.49 per-square-foot monthly full-service asking rent for Class B space. The support-employee estimate uses the May 2025 San Jose occupational wage release and the March 2026 BLS small-establishment compensation table.
| Scenario | Gross Revenues | Net contribution | Owner-operator benefit |
|---|---|---|---|
| Conservative | $1,502,208 | 14% | −$19,691 |
| Base | $1,877,760 | 17% | $104,219 |
| Upside | $2,253,312 | 20% | $225,662 |
Annual pre-tax benefit before financing principal; the owner performs the Regional Director function.
Interpretation: modest changes in retained contribution and operating scale move the owner-operator result from a small loss to a six-figure benefit. Source: independent calculation using 2026 FDD Items 6, 8, 11, 15, and 19; Exhibit G §§7.3–7.4; BLS wage and compensation data; and Q2 2026 Silicon Valley office data.
How much does owner involvement change the result?
Owner involvement changes the modeled annual result by approximately $143,000. Item 15 requires direct participation by the owner or day-to-day management by a full-time Regional Director. The owner-operator figures therefore include the economic value of labor performed by the owner; they are not passive business profit.
The manager-run sensitivity deducts $142,740 of annual employer cost. That benchmark starts with the May 2025 national median wage of $105,770 for General and Operations Managers in the official BLS occupational wage table, then applies the 25.9% benefit share reported for private establishments with 1–49 workers. It is not a San Jose salary quote. The San Jose broad management-group mean was $110.19 per hour in May 2025, indicating substantial local upward wage risk.
The horizontal distance is the $143,000 modeled cost of replacing the owner’s day-to-day management labor.
Interpretation: at the base revenue and contribution assumptions, hiring a full-time Regional Director changes the modeled result from a $104,000 owner-operator benefit to a $39,000 manager-run loss. Source: 2026 FDD Item 15 and BLS May 2025 wage data with March 2026 small-establishment benefit costs.
The owner-operator number combines residual business economics with compensation for full-time management work. It should not be described as passive income. The official Stratus article on whether the master model fits an owner likewise states that the model is not designed for passive investors.
Which variables can move annual owner earnings most?
The largest variable is the percentage of Item 19 Gross Revenues that becomes usable master-office contribution after Unit Franchisee payments and recurring SBS fees. The 2026 FDD does not split customer collections, Unit Franchise Fees, special-service revenue, product revenue, insurance revenue, or account-acquisition revenue in Item 19, so the modeled 14%–20% net contribution range remains the article’s largest financial uncertainty.
A buyer using the maximum FDD-described franchisor financing would subtract roughly $6,000–$16,700 per year from cash available during the three-year note term. The estimate does not assume that financing is offered, accepted, or sufficient for the rest of the initial investment.
What should a buyer verify before relying on this range?
A buyer should replace every modeled input with territory-specific written evidence. The most valuable diligence is a reconciliation from Item 19 Gross Revenues to actual master-office recognized revenue, operating expenses, owner compensation, and distributions for comparable regions.
- Request the written substantiation for Item 19 and obtain the exact Gross Revenues composition for franchised regions similar in age and scale to the proposed San Jose territory. The FTC’s Item 19 guidance confirms a prospect may ask for written substantiation.
- Reconcile customer receipts to Unit Franchisee remittances, the 5% royalty, the 10% administration fee, Unit Franchise Fees, special services, account-acquisition fees, products, insurance, and every royalty paid to SBS.
- Obtain current San Jose office proposals, payroll quotes, workers’ compensation and insurance estimates, technology invoices, local advertising plans, and Regional Director compensation quotes.
- Interview current and former master franchisees listed in Item 20 about owner hours, staffing by revenue tier, working-capital needs, bad debt, Unit Franchisee turnover, and distributions. Ask for results by years in operation rather than systemwide averages.
- Confirm current California offering status through the California Department of Financial Protection and Innovation franchise records, because the March 16, 2026 FDD’s state-effective-date exhibit listed California as pending at issuance.
What is the strongest defensible earnings answer?
The strongest defensible range is an estimated annual owner-operator benefit of approximately a $20,000 loss to a $226,000 benefit, with a $104,000 base scenario. This is scenario-based, not an official Stratus profit disclosure. A manager-run structure produces a materially lower modeled range of approximately a $162,000 loss to an $83,000 profit, with a $39,000 base loss.
The most important earnings driver is the net contribution retained from Item 19 Gross Revenues after Unit Franchisee payments and SBS fees. The largest unresolved uncertainty is the undisclosed revenue mix and operating-expense structure of comparable franchised master regions. Before making a decision, a buyer should verify Item 19 substantiation, territory-specific revenue composition, actual owner-versus-manager payroll, and current and former franchisee P&Ls and distributions.
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