For the cleaner independent-owner reference, the 2026 Franchise Disclosure Document reports 2025 median EBITDA ranging from a $4,480 loss in the bottom sales quartile to $317,908 in the top quartile across 146 non-private-equity-backed U.S. franchised Gyms. This is an official Item 19 operating-earnings measure, not an owner salary, distribution, or after-tax take-home figure.
Data basis. The legal franchisor is TLGI, LLC. The FDD was issued April 24, 2026. Item 19 reports Gross Sales, Cost of Goods Sold, Occupancy, Advertising, Payroll, Insurance, Other Costs, EBITDA, and EBITDA percentage for U.S. franchised Gyms open for at least a full year. The principal range above uses the 146-unit non-private-equity-backed subset in Item 19, Table 2; the full reporting population was 166 units. The owner-role calculation later uses the U.S. Bureau of Labor Statistics May 2025 wage table. Sources were checked July 19, 2026. See the official U.S. franchise website, the franchisor's public earnings overview, and the official Unleashed Brands profile.
No matching franchise-controlled public FDD PDF was verified. FDD evidence is therefore cited in plain text by year, Item, table, and page.
Independent estimate disclosure. The owner-operator benefit figures later in this article are independent analytical scenarios, not an Item 19 financial performance representation by TLGI, LLC. They combine identified FDD facts with a separately identified BLS wage assumption. Actual results can differ materially by location, sales, occupancy, labor, financing, owner involvement, operating format, and execution.
The confidence rating is HIGH for the disclosed EBITDA distribution because the current FDD directly reports a defined earnings measure for 166 U.S. franchised Gyms. Confidence is lower when converting EBITDA into personal cash income because owner labor, debt service, excluded insurance, capital spending, and personal taxes are not normalized.
What does the 2026 FDD actually say an owner may earn?
The official answer is a wide per-Gym EBITDA distribution for fiscal 2025, not a single owner salary. For non-private-equity-backed franchised Gyms, median EBITDA was $317,908 in the top sales quartile, $205,945 in the second quartile, $96,566 in the third quartile, and -$4,480 in the bottom quartile.
Across all 166 reporting Gyms, including 20 private-equity-backed units, the comparable quartile medians were $345,956, $233,537, $117,059, and -$3,411. The non-private-equity-backed table is the more relevant reference for an independent buyer, while the all-unit table is the broader system disclosure. Neither table is per owner or per development portfolio.
Non-private-equity-backed franchised Gyms, fiscal 2025.
A lower-central reference, not a forecast or expected result.
U.S. franchised units open at least a full year with complete data.
166 reporting units divided by 255 U.S. franchised units at year-end.
8% royalty, 1% NAF Contribution, and 5% Local Marketing Expenditure.
Annualized BLS median wage for entertainment and recreation managers, excluding employer burden.
Top-quartile non-private-equity-backed median Gross Sales were $980,498, but median EBITDA was $317,908. The $662,590 difference reflects reported Cost of Goods Sold, Occupancy, Advertising, Payroll, Insurance, Other Costs, and the relationship between those expenses and sales. Gross Sales should never be presented as owner income.
How widely do earnings vary across independent-owner units?
The official fiscal 2025 distribution is extremely wide: non-private-equity-backed median EBITDA moves from a slight loss in the bottom sales quartile to more than $317,000 in the top quartile. The FDD organizes units by Gross Sales quartile, so these are performance bands, not probabilities that a new unit will reach a particular result.
| Gross Sales quartile | Gyms | Median Gross Sales | Median EBITDA |
|---|---|---|---|
| Top quartile | 36 | $980,498 | $317,908 32.3% of sales |
| Second quartile | 36 | $724,239 | $205,945 28.2% of sales |
| Third quartile | 37 | $491,078 | $96,566 17.5% of sales |
| Bottom quartile | 37 | $326,189 | -$4,480 -1.4% of sales |
Interpretation: Sales productivity is the dominant disclosed driver. The gap between the third and top quartile medians is $221,342 of annual EBITDA per Gym.
Source: The Little Gym 2026 FDD, Item 19, Table 2, pp. 58-59. Values are official medians, not forecasts.
What does EBITDA include—and what is still missing?
The official Item 19 measure is EBITDA for fiscal 2025 franchised Gyms. It is closer to business operating profit than Gross Sales, but it is not the same as cash available for personal spending, because the FDD explicitly excludes interest, taxes, depreciation, amortization, and debt-service costs and does not normalize owner compensation.
- Included in reported expenses
- Cost of Goods Sold; Occupancy; Advertising; Payroll; commercial general liability Insurance; and Other Costs. Other Costs include royalty fees, office expenses, and processing fees.
- Payroll definition
- Personnel wages, management salaries, benefits, and payroll taxes are included. Bonuses, paid time off, severance, fringe benefits, training costs, and disbursements to franchise owners are excluded.
- Insurance limitation
- Only commercial general liability insurance is included. Other required coverages are excluded because costs vary by location, space, lender, landlord, carrier, and jurisdiction.
- Below EBITDA
- Interest, personal and business taxes, depreciation, amortization, financing principal, capital expenditures, and owner distributions are not resolved by the Item 19 figure.
Because Payroll excludes disbursements to franchise owners, an actively managed Gym may report EBITDA that partly reflects uncompensated owner labor. A manager-run Gym may instead carry a paid management salary in Payroll. The FDD does not separate units by this owner-role variable, so EBITDA cannot be treated as a standardized passive return.
How does owner involvement change the economic result?
The answer is estimated rather than official: an owner who personally serves as the Designated Manager may capture both residual EBITDA and the market value of management work, while a manager-run owner receives only residual operating earnings after paying management compensation. Item 15 allows the Designated Manager to be an owner, gym director, or general manager and requires substantial full-time, in-person daily supervision.
The BLS May 2025 national median hourly wage for entertainment and recreation managers, except gambling, was $38.23. Annualized at 2,080 hours, that equals $79,518, rounded here to $79,500. This wage-only proxy excludes employer payroll taxes and benefits and is not specific to The Little Gym. See the BLS May 2025 national occupational wage table.
- Manager-run residual: use the official non-private-equity-backed median EBITDA as the operating result after a paid manager's compensation is already included in Payroll.
- Owner-operator benefit: add $79,500 of management labor value only when the owner genuinely replaces a paid manager. The result combines business profit and compensation for work performed.
- No double counting: do not add the labor value when the underlying Gym already relies on unpaid owner management or when another paid gym director remains necessary.
Interpretation: Owner involvement can materially increase total economic benefit, especially at lower EBITDA levels, but the added amount compensates the owner for full-time management labor. It is not passive profit.
Sources and formula: The Little Gym 2026 FDD, Item 15, p. 44; Item 19, Table 2, pp. 58-59; BLS OEWS May 2025 median hourly wage of $38.23 × 2,080 hours = $79,518, rounded to $79,500. Scenario totals are independent estimates.
Which recurring fees matter most to the earnings figure?
The official 2026 Item 6 fee structure imposes a current 14% core sales-based burden before considering technology and call-center charges: an 8% Royalty Fee, a current 1% NAF Contribution, and a current 5% Local Marketing Expenditure. These amounts should not be subtracted again from reported EBITDA because Item 19 already places royalty fees in Other Costs and local marketing in Advertising.
The current base Technology Fee is $119 per month, plus specified messaging pass-through costs, and the current Call Center Service Fee is $80 to $120 per month per Gym plus a variable e-commerce cost allocation. These fixed and variable charges are small relative to high-volume EBITDA but can be more material at low sales. The official investment page confirms the current U.S. offer and initial cost context; startup investment is not an annual expense and is not subtracted from one year of sales.
The $2,500 monthly Minimum Royalty equals $30,000 annually. At Gross Sales below $375,000, that minimum exceeds an 8% royalty rate, increasing the effective royalty percentage for a low-revenue Gym. This is one reason the bottom-quartile economics deserve separate scrutiny.
How much uncertainty remains in the published numbers?
The official fiscal 2025 EBITDA disclosure is strong but incomplete for predicting a new owner's personal income. Item 19 includes 166 of 255 U.S. franchised units open at year-end, or 65.1%. The 89 excluded units comprised 39 that were not open for the entire fiscal year and 50 with incomplete data, including closures.
That exclusion matters because incomplete and closed-unit data may differ from the results of mature reporting units. Item 20 reports that U.S. franchised outlets increased from 218 at the start of 2025 to 255 at year-end, a net increase of 37. Growth expands the system, but newer units are not represented in the full-year Item 19 cohort.
- Maturity bias: only Gyms open for at least a full year were eligible, so ramp-up economics are outside the distribution.
- Reporting bias: 50 units had incomplete data, including closures. The FDD does not provide a complete earnings distribution for those outlets.
- Owner-role ambiguity: Item 19 does not separate owner-managed, gym-director-managed, and general-manager-run units.
- Portfolio ambiguity: the offer requires a two-unit minimum development commitment, but Item 19 is per Gym and does not report per-owner portfolio earnings, shared overhead, or development ramp-up.
- Cash-flow gap: EBITDA excludes financing principal and interest, taxes, depreciation, amortization, and capital expenditures; required insurance beyond commercial general liability is also excluded.
The Federal Trade Commission advises buyers to evaluate the source, population, limitations, and assumptions behind Item 19 and to request written substantiation. The FTC also emphasizes speaking with current and former franchisees listed in Item 20. See the FTC Consumer's Guide to Buying a Franchise.
What should a buyer verify before relying on the range?
The range is official for the disclosed fiscal 2025 cohorts, but its applicability to a proposed U.S. Gym remains uncertain until the buyer tests location economics, manager structure, debt, and excluded costs. The following questions should be answered with written substantiation and franchisee interviews rather than sales-stage generalities.
- Request the Item 19 written substantiation and confirm how each Gym's Payroll treated owner labor, gym-director compensation, benefits, and payroll taxes.
- Ask for separate results for owner-managed and manager-run Gyms, even if the franchisor can provide only a supplemental location-specific analysis permitted by the Franchise Rule.
- Compare the proposed site's rent, common-area charges, utilities, and local wages with the Occupancy and Payroll levels in the relevant sales quartile.
- Identify every required insurance policy excluded from Item 19 and obtain local quotes before translating EBITDA into cash available to the owner.
- Model financing interest and principal separately. Do not treat EBITDA as debt-service coverage or after-tax take-home pay.
- Interview mature, newer, transferred, and former franchisees from Item 20 about sales ramp, manager turnover, owner hours, maintenance capital, and the cash actually distributed after debt service.
- For the two-unit development requirement, build a phased portfolio model that accounts for different opening dates, shared management, central overhead, and the possibility that one Gym subsidizes another during ramp-up.
What is the strongest defensible annual earnings range?
The strongest defensible range for an independent-owner comparison is about -$4,500 to $318,000 in annual per-Gym EBITDA, using the bottom-to-top quartile medians for 146 non-private-equity-backed U.S. franchised Gyms in fiscal 2025. It is an official Item 19 range, not a forecast, salary, distribution, or after-tax take-home estimate.
The most important disclosed earnings driver is Gross Sales: median EBITDA rises sharply across sales quartiles. The largest unresolved uncertainty is owner-role normalization—Item 19 does not show whether a Gym's reported Payroll includes a paid manager or whether EBITDA partly reflects uncompensated owner labor.
A buyer should verify the Item 19 substantiation, obtain owner-managed versus manager-run evidence, price the proposed site's Occupancy and Payroll, and interview current and former franchisees about actual distributions after excluded insurance, capital spending, financing, and taxes. The two-unit development commitment also requires a portfolio model; one-unit EBITDA should not simply be multiplied by two.