At 80% to 120% of the 2026 FDD’s median Gross Sales per Franchised Business, the independent model does not produce positive owner earnings. It estimates an owner-operator benefit of approximately –$56,000 to –$26,000 per year. Because that measure includes the value of the owner’s full-time labor, it is not passive business profit.
This range is an independent analytical scenario, not an Item 19 financial performance representation by The Grout Medic, LLC. It combines identified 2026 FDD facts with separately identified IRS, BLS, and editorial assumptions. Actual results can differ materially with territory, sales, service mix, technician productivity, labor, local advertising, vehicle expense, financing, owner involvement, and execution.
- Legal franchisor
- The Grout Medic, LLC
- Current disclosure
- Franchise Disclosure Document issued April 22, 2026, as amended July 6, 2026
- Item 19 evidence
- 2025 Gross Sales only; no operating profit, EBITDA, Net Income, Owner Compensation, or cash-flow disclosure
- Applicable population
- 35 franchisees operating 53 Franchised Businesses for the full 2025 fiscal year; 41 other businesses were excluded under the stated eligibility rules
- Estimate method
- FDD median revenue, FDD recurring obligations, 2023 IRS sole-proprietor expense evidence, and a 2023 BLS industry-specific manager wage
- Date checked
- July 22, 2026. A matching franchise-controlled public copy of the 2026 FDD was not verified, so FDD references below are stated by Item and page rather than linked.
What does The Grout Medic’s Item 19 actually report?
The 2026 FDD reports Gross Sales, not owner earnings. For the 2025 fiscal year, the strongest per-business figures are $202,400 median Gross Sales and $331,330 average Gross Sales for 53 Franchised Businesses operated by 35 franchisees. Revenue does not disclose technician wages, materials, vehicles, insurance, advertising, franchise fees, debt service, or owner compensation.
| Item 19 measure | Average Gross Sales | Median Gross Sales | Population |
|---|---|---|---|
| Per Franchised Business | $331,330 | $202,400 | 53 businesses |
| Per franchisee | $599,860 | $424,800 | 35 franchisees operating 53 businesses |
Source: The Grout Medic, LLC 2026 FDD, Item 19, Table A, p. 43. “Gross Sales” follows the Franchise Agreement definition and is the basis for royalty reporting.
Do the quartiles show what one outlet earns?
No. The quartile table is an official sales distribution by franchisee, and some franchisees owned more than one Franchised Business. It is useful for understanding portfolio dispersion, but it cannot be treated as a per-unit or per-owner earnings distribution.
| Franchisee band | Median Gross Sales per franchisee | Average Gross Sales per franchisee | Population |
|---|---|---|---|
| Top quartile | $1,044,063 | $1,315,974 | 9 franchisees / 20 businesses |
| Middle 50% | $282,176 | $282,428 | 17 franchisees / 23 businesses |
| Bottom quartile | $96,085 | $101,719 | 9 franchisees / 10 businesses |
Source: The Grout Medic, LLC 2026 FDD, Item 19, Table B, p. 43. The bands describe franchisee portfolios, not identical single-territory units.
The FTC cautions that gross-sales figures do not reveal costs or profit. The gap between The Grout Medic’s $331,330 average and $202,400 median also means the average is not a safe stand-in for a typical unit. Buyers should request Item 19 written substantiation and compare the precise unit count behind each franchisee result.
The FDD excluded 32 franchisees operating 41 Franchised Businesses because those businesses either did not operate for the entire 2025 fiscal year or did not use the CRM in a way that allowed the franchisor to collect the disclosed data. Item 20 reported 94 franchised outlets at year-end 2025, no company-owned outlets, 29 openings, one non-renewal, and three outlets that ceased operations for other reasons. The reported sales cohort therefore excludes a material share of the system and is not a complete system-wide profitability sample.
Sources: The Grout Medic, LLC 2026 FDD, Item 19, pp. 42–44; Item 20, pp. 44–49. The FTC Consumer’s Guide to Buying a Franchise explains how to evaluate Item 19 claims, averages, population coverage, and written substantiation.
How was the annual owner-earnings estimate built?
The estimate starts with the FDD’s $202,400 median Gross Sales per business, applies a broad official operating benchmark, and then subtracts the recurring obligations specifically disclosed for The Grout Medic. The calculation is estimated for a post-first-year, home-based mobile business and is not a franchisor-reported result.
What does the 30.6% benchmark contribution include?
It is a derived cash-like contribution ratio, not a published franchise margin. IRS Tax Year 2023 nonfarm sole-proprietor income statements for the broad Administrative and Support Services sector show a 21.2% net-income-less-deficit margin. The model adds back the benchmark’s advertising, legal and professional, office, depreciation, and business-interest ratios, producing 30.6% before substituting The Grout Medic’s identified advertising, accounting, technology, contact-center, royalty, and marketing obligations.
- Conservative contribution rate: 27.6%. The 30.6% benchmark is reduced by 3 percentage points.
- Base contribution rate: 30.6%. Derived from IRS receipts, deductions, and Net Income data for Tax Year 2023.
- Upside contribution rate: 33.6%. The 30.6% benchmark is increased by 3 percentage points.
- Revenue spread: 80%, 100%, and 120% of the FDD median. This analytical spread is not reported in Item 19 and is not a probability forecast.
The IRS sector is broader than grout and tile restoration, contains different business forms and operating mixes, and does not identify The Grout Medic franchisees. Its remaining deductions still include operating categories such as cost of sales, vehicle expense, contract labor, wages, insurance, rent, repairs, supplies, taxes, travel, utilities, and other expenses. That comparability gap is the main reason for the LIMITED evidence-confidence rating.
Which recurring FDD obligations materially reduce the estimate?
The $60,000 annual local-advertising floor is the largest disclosed fixed burden at sales near the Item 19 median. At $202,400 of Gross Sales, the model subtracts approximately $103,972 of recurring franchise and required-program costs before any owner benefit remains.
| Recurring obligation | FDD rule used | Base-case annual amount |
|---|---|---|
| Royalty | 6% of Gross Sales; $150 weekly minimum | $12,144 |
| Marketing Fund Contribution | 2% of Gross Sales; $50 weekly minimum | $4,048 |
| Local Advertising | $5,000 monthly or 10% of Gross Sales, whichever is greater | $60,000 |
| Contact Center Fee | 2% or post-first-year $220 weekly minimum; weekly cap applies | $11,440 |
| Technology Fee | $210 weekly | $10,920 |
| Accounting and Business Advisory Services | $85 weekly | $4,420 |
| Annual convention | Recent attendance fee stated as $1,000 per attendee; model assumes one attendee | $1,000 |
Sources: The Grout Medic, LLC 2026 FDD, Item 6, pp. 15–18; Item 11, pp. 27–29. The base-case total uses $202,400 Gross Sales and full-precision calculations before rounding. Cooperative advertising is not added separately because the FDD says it can be funded through the local-advertising obligation. After 12 months, an approved third-party accounting provider may replace the franchisor’s service; the model retains the disclosed $4,420 annual fee as a transparent proxy because third-party pricing is not disclosed.
Personal income taxes, financing principal, financing interest, depreciation, capital expenditures, vehicle replacement reserves, owner draws, and distributions are not calculated. Depreciation and benchmark business interest are added back before the FDD-specific bridge. The estimate therefore should not be read as after-tax take-home pay or free cash flow after reinvestment.
What do the Conservative, Base, and Upside scenarios show?
All three modeled owner-operator scenarios remain below zero. The annual estimated owner-operator benefit ranges from approximately –$56,000 at $161,920 of sales to –$26,000 at $242,880 of sales. These are scenario outputs for one Franchised Business, not Item 19 earnings results.
| Scenario | Revenue anchor | Estimated owner-operator benefit | Estimated manager-run residual |
|---|---|---|---|
| Conservative | $161,920 | –$56,070 | –$145,610 |
| Base | $202,400 | –$42,071 | –$131,611 |
| Upside | $242,880 | –$25,643 | –$115,183 |
Annual pre-tax amount before financing and capital expenditures; each bar is below the $0 line.
Interpretation: The analytical upside scenario improves the result by about $30,000 versus the Conservative case, but it still does not cover the modeled recurring cost structure.
Source and method: 2026 FDD median Gross Sales and recurring obligations; IRS Tax Year 2023 benchmark; editorial 80%/100%/120% revenue spread and ±3 percentage-point margin sensitivity. Values are independently calculated.
How does owner involvement change the result?
Active owner operation improves the economic result because the owner performs the Designated Manager’s work, but that improvement is labor compensation rather than passive profit. Item 15 requires direct, full-time supervision by a Designated Manager. If the owner is not serving in that role, the model subtracts the BLS annual mean wage of $89,540 for General and Operations Managers in NAICS 561700, Services to Buildings and Dwellings.
Owner-operator
The scenario does not deduct an owner salary. The resulting “owner-operator benefit” includes both residual business economics and the market value of the owner’s full-time management labor. It is not equivalent to passive distributions.
Manager-run
The scenario deducts $89,540 as a replacement-manager wage. It does not add payroll taxes, benefits, recruiting cost, or regional wage premiums, so a fully loaded manager cost could be higher.
In the Base scenario, the owner-operator result is approximately –$42,000. Hiring a manager reduces the modeled residual to approximately –$132,000. The $89,540 difference is the assumed value of labor performed by the owner, not an increase in underlying store-level profitability.
Sources: The Grout Medic, LLC 2026 FDD, Item 7, pp. 18–20, and Item 15, p. 38; BLS May 2023 wage estimates for Services to Buildings and Dwellings. The BLS figure is a national industry proxy and is not a The Grout Medic wage disclosure.
At what sales level does the model turn positive?
Under the Base assumptions, estimated owner-operator benefit reaches approximately $0 at about $388,700 of annual Gross Sales. That is above both the official $202,400 median and the official $331,330 average per Franchised Business. The threshold is derived, not reported by the franchisor, and it changes immediately when labor, advertising, materials, vehicles, or other expenses differ.
Official FDD sales points are shown beside derived scenario points; the contribution rate stays at 30.6%.
Interpretation: The fixed $60,000 local-advertising floor makes the model highly sensitive to sales scale. A manager-run business does not reach modeled break-even until approximately $1.0 million of annual Gross Sales because it must also support the $89,540 wage assumption.
Source and method: 2026 FDD revenue and fee terms, the 30.6% IRS-derived contribution ratio, and the BLS manager wage. Break-even figures are algebraic scenario results, not Item 19 thresholds or forecasts.
What could move actual annual earnings outside this range?
The largest unresolved uncertainty is the actual expense structure of comparable The Grout Medic businesses. Item 19 does not disclose labor, materials, vehicle, insurance, lead cost, marketing efficiency, operating profit, owner compensation, or capital spending. The external benchmark cannot resolve those brand-specific variables.
- Sales distribution
- The per-business average is 64% above the median, so a few higher-volume businesses can materially raise the average.
- Cohort coverage
- The Item 19 population includes 53 businesses and excludes 41 businesses under full-year-operation and CRM-data rules.
- Advertising burden
- The $5,000 monthly local-advertising minimum equals 29.6% of the official median per-business Gross Sales before the separate 2% Marketing Fund Contribution.
- Owner labor
- Owner-operator benefit includes the owner’s full-time Designated Manager labor; manager-run residual depends on local wage and payroll burden.
- Capital and vehicles
- The model excludes depreciation and capital expenditures, so vehicle and equipment replacement can reduce cash available to the owner.
- Financing
- Item 10 states that the franchisor does not offer or guarantee financing. Interest and principal depend on each buyer’s lender, amount, rate, and term.
What should a buyer verify before relying on any income estimate?
A buyer should reconstruct real unit economics from written substantiation and franchisee records rather than treating Gross Sales as salary. The following checks directly address the largest gaps in the current evidence.
- Request the written substantiation for every Item 19 table and reconcile each franchisee’s number to its count of Franchised Businesses.
- Ask for anonymized 12-month profit-and-loss statements for businesses near the $202,400 median and $331,330 average, separated by age and territory count.
- Confirm how the $5,000 monthly local-advertising requirement is enforced, what spending qualifies, and whether current operators routinely spend more.
- Interview owner-operators and manager-run franchisees separately about technician payroll, materials, vehicles, insurance, lead conversion, callbacks, and seasonality.
- Verify whether accounting, technology, contact-center, supplier, and advertising charges have changed since the July 6, 2026 amendment.
- Model debt service and vehicle or equipment replacement separately using the buyer’s actual financing proposal and local operating plan.
The Census category and BLS industry are only directional comparables: grout and tile cleaning, repair, restoration, recaulking, and protection do not map perfectly to Carpet and Upholstery Cleaning Services or the wider Services to Buildings and Dwellings industry. Public franchise-webpage figures should also be reconciled to the current 2026 FDD before use; the FDD is the controlling disclosure for the offer analyzed here.
What is the strongest defensible owner-earnings takeaway?
The strongest defensible range is a scenario-based annual owner-operator loss of approximately $26,000 to $56,000 at 80% to 120% of the 2026 FDD median Gross Sales per Franchised Business. It is not an official earnings disclosure. The most important driver is the interaction between sales scale and the $60,000 annual local-advertising floor; the largest unresolved uncertainty is the true brand-specific operating expense structure.
A hired manager materially lowers the result because the FDD requires full-time Designated Manager supervision and the model assigns $89,540 of replacement labor value. Before making a decision, a buyer should verify Item 19 substantiation, obtain comparable-unit profit-and-loss statements, separate single-business from multi-business franchisee results, and test the model against direct interviews with current and former franchisees.