That is an independent estimate of pre-tax owner-operator benefit for one TCBY Traditional Store, using 2025 Item 19 Gross Revenue anchors and an official U.S. restaurant cash-flow proxy. The base scenario is about $25,000. TCBY Systems, LLC does not report store profit, EBITDA, owner compensation, or cash flow in Item 19.
This range is an independent analytical scenario, not an Item 19 financial performance representation by TCBY Systems, LLC. It combines identified 2026 FDD facts with separately identified IRS and BLS benchmarks and explicit sensitivity assumptions. Actual results can differ materially because of location, store format, Gross Revenue, product cost, labor, occupancy, financing, owner involvement, seasonality, and execution.
Legal franchisor: TCBY Systems, LLC. FDD: issued June 9, 2026. Item 19 status: unaudited Gross Revenue only for franchised Traditional Stores; no expense or profit disclosure. Population: 71 Traditional Stores from 115 franchised Stores operating at year-end 2025; 44 nontraditional Stores were excluded. Benchmark: 2023 IRS Schedule C data for restaurants and drinking places, with a May 2024 BLS Food Service Managers wage sensitivity. See the official TCBY U.S. franchise information.
OFFICIAL — 2025 median for all 71 Traditional Stores in Item 19 Table 1. Revenue is not owner earnings.
SCENARIO — rounded cash-flow proxy before personal taxes, financing principal, and capital expenditures.
OFFICIAL — 6% Royalty Fee plus 3% Brand Fund contribution, both based on Gross Revenue.
OFFICIAL — 61.7% of year-end Stores were in the Traditional Store data set used for Tables 1 and 2.
BENCHMARK — May 2024 median annual wage for Food Service Managers in food services and drinking places.
The current FDD supplies strong sales evidence but no TCBY unit-level expense or earnings statement.
What does TCBY Item 19 actually measure?
Item 19 measures Gross Revenue, not profit or owner pay. The official 2025 disclosure covers unaudited results from 71 franchised Traditional Stores and states that the figures do not reflect operating expenses, gross profit, or net profit. The applicable evidence is TCBY Systems, LLC 2026 FDD, Item 19, pages 31–35.
The official all-store median of $393,866 is the center of a sales distribution. It cannot be read as salary, cash flow, distributions, or take-home pay. The FTC franchise buyer guide recommends checking whether an earnings claim reports sales or profits and requesting written substantiation.
| 2025 Item 19 group | Stores | Median Gross Revenue | Average Gross Revenue |
|---|---|---|---|
| Top quartile | 18 | $711,286 | $812,627 |
| Second quartile | 18 | $486,971 | $484,217 |
| Third quartile | 18 | $313,574 | $325,941 |
| Bottom quartile | 17 | $184,040 | $178,392 |
| All Traditional Stores | 71 | $393,866 | $454,124 |
Official source: TCBY Systems, LLC 2026 FDD, Item 19, Table 1, page 32. The FDD defines Gross Revenue broadly and excludes collected sales, use, or service taxes. Three Stores opened in the first half of 2025 were annualized. Nontraditional, seasonal, gas-station, and add-on locations were excluded.
Which TCBY formats are not covered by this estimate?
Kiosks and nontraditional Stores are not covered. The FDD offers Store and Kiosk formats, but Item 19 excludes 44 nontraditional Stores and does not publish a separate earnings measure for kiosks. A buyer should not transfer the Traditional Store range to a 100–300 square-foot Kiosk or to a seasonal, co-branded, gas-station, or add-on outlet.
How was the annual owner-earnings range estimated?
The model applies a 3.38%–9.38% cash-flow sensitivity to three official TCBY revenue anchors. Conservative, Base, and Upside are analytical scenarios, not probabilities or franchisor forecasts. The model uses the third-quartile median, system median, and second-quartile median from Item 19 Table 1; it does not use the extreme top or bottom quartiles as the primary answer range.
| Scenario | Revenue anchor | Cash-flow proxy margin | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | $313,574 | 3.38% | $10,601 |
| Base | $393,866 | 6.38% | $25,132 |
| Upside | $486,971 | 9.38% | $45,682 |
The scenario combines a TCBY Gross Revenue anchor with an external all-in cash-flow proxy.
Interpretation: moving from the Base to Upside scenario requires both higher Gross Revenue and a three-percentage-point improvement in the cash-flow proxy; neither is assured. Sources: TCBY Systems, LLC 2026 FDD, Item 19, Table 1, page 32; IRS Statistics of Income, 2023 Schedule C Table 2.
What does the 6.38% base margin represent?
It is a derived pre-tax cash-flow proxy, not a TCBY margin. The 2023 IRS nonfarm sole-proprietorship income statement reports $2.610 billion of net income less deficit on $77.217 billion of receipts for “Restaurants (full & limited service) and drinking places,” a 3.38% net-income margin. Adding back $2.317 billion of depreciation, or 3.00% of receipts, produces a 6.38% pre-tax cash-flow proxy before capital expenditures.
- Conservative margin: 3.38%, equal to the derived 6.38% proxy minus 3 percentage points.
- Base margin: 6.38%, equal to IRS net income less deficit plus depreciation, divided by business receipts.
- Upside margin: 9.38%, equal to the derived 6.38% proxy plus 3 percentage points.
- Franchise-fee treatment: the IRS ratio is treated as an all-in industry benchmark, so the TCBY Royalty Fee and Brand Fund contribution are not subtracted again. That avoids mechanical double counting, but the IRS data do not identify the franchise mix, which lowers confidence.
- Measure treatment: business interest is included in IRS deductions; depreciation is added back; owner salary is not deducted on Schedule C; financing principal, personal income taxes, and capital expenditures are excluded.
The IRS category is broader than NAICS 722515 Snack and Nonalcoholic Beverage Bars, the classification that includes ice cream parlors and frozen yogurt shops. It also aggregates businesses of different sizes, ages, concepts, and ownership structures. This mismatch is the main reason the evidence-confidence label is Limited.
How does owner involvement change the result?
Active owner operation can be economically decisive because the modeled unit benefit is below a national manager wage in all three scenarios. Item 15 allows the owner to manage day-to-day operations or appoint a qualified manager, while Item 7 assumes the owner manages the Store when estimating initial additional funds. The owner-operator figures therefore include the value of work performed by the owner; they are not passive business profit.
Manager-run residual subtracts a $63,040 annual manager wage from each owner-operator scenario.
Interpretation: this sensitivity suggests that a single median-scale Traditional Store may not support both the modeled operating result and a full-market manager salary. The manager-run values are not forecasts. Source: BLS reports a $63,040 May 2024 median wage for Food Service Managers in food services and drinking places.
The BLS Food Service Managers profile describes responsibility for daily operations, staffing, purchasing, budgets, and payroll. If the owner performs that role, part of the estimated benefit compensates labor rather than capital. If the owner hires a manager, actual employer cost can exceed the $63,040 wage because payroll taxes and benefits are not included here. The IRS aggregate also does not identify whether paid management was already included in payroll, so the subtraction may double-count some manager cost; actual TCBY income statements are required.
How much do recurring franchise fees absorb?
The disclosed Royalty Fee and Brand Fund contribution equal 9% of Gross Revenue, or roughly $28,000–$44,000 across the three revenue scenarios. These are official FDD obligations, not estimates. A future Technology Fee could add up to the greater of $100 per month or 1% of Gross Revenue, but no Technology Fee is currently charged.
| Scenario | 6% Royalty Fee | 3% Brand Fund | Combined 9% |
|---|---|---|---|
| Conservative revenue | $18,814 | $9,407 | $28,222 |
| Base revenue | $23,632 | $11,816 | $35,448 |
| Upside revenue | $29,218 | $14,609 | $43,827 |
Official fee source: TCBY Systems, LLC 2026 FDD, Item 6, pages 5–8. Derived dollar amounts equal each Item 19 scenario revenue multiplied by 6% and 3%. They are shown for scale but are not deducted again from the all-in IRS benchmark margin.
Which operating costs remain unresolved?
Product cost, hourly labor, occupancy, utilities, insurance, repairs, and local execution remain unresolved at the TCBY unit level. Item 8 says approved-source purchases account for an estimated 65%–75% of operating purchases, but that is not a percentage of Gross Revenue. Item 7 also gives a very wide rent range and notes that site costs vary substantially, so neither figure can be converted into a reliable store margin without actual franchisee statements.
What should a buyer verify before relying on this range?
A buyer should verify actual store-level income statements, owner hours, manager payroll, occupancy, and capital spending before treating any scenario asdecision-grade. Item 19 is useful for sales dispersion, but it does not disclose the expense bridge needed to convert Gross Revenue into owner earnings.
- Request Item 19 substantiation. Confirm the source records, annualization of the three 2025 openings, and why Table 1 and Table 3 report different all-store averages and medians.
- Interview franchisees in the matching cohort. Ask Traditional Store owners at similar sales levels for cost of goods, hourly payroll, manager pay, rent, utilities, insurance, repairs, and owner hours.
- Separate owner labor from business return. Ask whether reported cash distributions include compensation for managing shifts, scheduling staff, ordering inventory, bookkeeping, or local marketing.
- Test the lease and seasonality. The FDD says frozen-yogurt sales are seasonal and occupancy varies widely by location; review monthly sales and rent as a percentage of sales.
- Verify replacement capital. The scenario adds back depreciation but does not deduct equipment replacement, remodels, or other capital expenditures.
- Model financing separately. The range is before loan principal and personal income taxes. Actual cash retained by an owner can be materially lower after debt service.
- Review system movement. Item 20 shows franchised Stores declining from 125 at the start of 2025 to 115 at year-end, with no company-owned Stores. Ask about closures, transfers, and the operating conditions behind those changes.
The FDD gives a current, broad same-brand Gross Revenue distribution, but the earnings conversion depends materially on an external restaurant benchmark that is broader than frozen-yogurt stores. The largest unresolved uncertainty is the actual TCBY Traditional Store expense structure at each sales level.
What is the strongest defensible TCBY owner-earnings takeaway?
The strongest defensible range is approximately $11,000–$46,000 per year in estimated pre-tax owner-operator benefit for one Traditional Store, with a Base scenario near $25,000. It is scenario-based, not official TCBY earnings data. The most important driver is the combination of Gross Revenue and unit-level margin; the largest unresolved uncertainty is the absence of same-brand expense and profit data. Owner involvement matters because the modeled benefit is below the national Food Service Managers wage in all three scenarios. Before proceeding, a buyer should reconcile Item 19 substantiation with comparable franchisee income statements and explicitly separate operating profit, owner labor compensation, debt service, capital expenditures, and personal taxes.