A defensible annual range for an established full-year office after its first Tax Season, near the system’s 2025 median sales level is approximately $9,000 to $19,000 in estimated pre-tax owner-operator benefit, with a base scenario of about $14,200. This is not pure passive business profit: it includes the economic value of work performed by the owner.
Data basis and publication definition
- Legal franchisor
- Toro Taxes Franchise, LLC.
- Disclosure reviewed
- 2026 Franchise Disclosure Document issued April 20, 2026; Item 19 covers 2024 and 2025 operating results.
- What the disclosure reports
- Tax return counts, average fees, and Gross Sales for Operational Franchise Outlets and Company Owned Outlets. It does not report franchisee operating profit, EBITDA, net income, owner compensation, or cash flow.
- Estimated measure
- Pre-tax owner-operator benefit after modeled operating expenses, required royalty, Global Brand Development Fund, DMA Marketing Fund, and Annual Dues; before personal income taxes, debt service, depreciation, capital expenditures, and optional or contingent fees.
- External benchmark
- IRS Statistics of Income, tax year 2023, sole proprietorship “Other accounting services.” The model uses selected detailed operating-expense lines equal to 43.2% of receipts, rather than the dataset’s all-in net-income margin.
- Date checked
- July 19, 2026.
What does the financial-performance disclosure actually measure?
Officially, the disclosure measures revenue activity—not owner earnings—for Offices that were open before the start of the calendar year and remained open through the entire year. For the 2025 full-year franchised population, the document reports median Total Gross Sales of $42,598.35 and average Total Gross Sales of $63,874.42. Gross Sales are customer revenue before payroll, occupancy, software, bank-product costs, franchise fees, financing, and taxes.
The document defines an Operational Franchise Outlet as a franchised Office open and operating before January 1 and continuously operating through December 31. The financial information is franchisee-reported, unaudited, historical, and not prepared under generally accepted accounting principles. Those limitations make the data useful as a revenue anchor but insufficient as a direct earnings statement. Source: Toro Taxes Franchise, LLC, 2026 FDD, Item 19, pp. 60–65.
Mode C — FDD-anchored scenario estimate. The same-brand FDD supplies sales and recurring-fee facts, while an official external benchmark supplies the operating-cost proxy.
Limited. The disclosure does not provide profit, and the model relies materially on a broad sole-proprietorship accounting-services benchmark rather than same-brand expense statements.
| 2025 disclosure measure | Statistic | Reported value |
|---|---|---|
| Total Gross Sales | Average | $63,874.42 |
| Total Gross Sales | Median | $42,598.35 |
| Total Gross Sales | High | $501,602.69 |
| Total Gross Sales | Low | $300.00 |
| Overall Returns Created | Average | 229 |
| Overall Returns Created | Median | 161 |
What owner-operator earnings range does the evidence support?
The model supports an estimated owner-operator benefit of about $8,964 in the Conservative scenario, $14,170 in the Base scenario, and $19,043 in the Upside scenario. These are independent estimates for a single full-year outlet profile, using the disclosed 2025 median revenue as the central anchor—not franchisor-reported profit.
Because the disclosure gives a median, average, high, and low but no quartiles, the lower and upper revenue assumptions are set at 80% and 120% of the median. This analytical spread is not reported by the franchisor. Every scenario applies the same 43.2% selected operating-cost ratio, while a separate unclassified-cost reserve changes from 9% to 6% to 3% of revenue. That reserve is an editorial sensitivity, not a government or franchisor result.
| Scenario | Revenue anchor | Unclassified-cost reserve | Estimated owner-operator benefit |
|---|---|---|---|
| Conservative | $34,079 | 9.0% | $8,964 |
| Base | $42,598 | 6.0% | $14,170 |
| Upside | $51,118 | 3.0% | $19,043 |
Pre-tax benefit before debt service, capital expenditures, depreciation, and personal income taxes.
Interpretation: The estimated benefit changes by more than $10,000 across the revenue and unclassified-cost sensitivities, showing that sales volume and operating cost control dominate the result.
Sources: 2026 FDD, Item 19, pp. 60–65 and Item 6, pp. 14–26; IRS nonfarm sole-proprietorship statistics, 2023 Income Statements table. Calculations use full-precision inputs and are rounded to the nearest dollar for display.
How does the model move from sales to owner benefit?
The central scenario starts with $42,598 of revenue, deducts $18,387 of selected operating expenses, a $2,556 unclassified-cost reserve, approximately $5,000 of royalty, $735 of required brand and DMA marketing charges, and $1,750 of Annual Dues. The resulting $14,170 is estimated owner-operator benefit, not Item 19 profit.
Estimated owner-operator benefit = Revenue − selected operating expenses − unclassified-cost reserve − Toro Taxes royalty − required Global Brand Development Fund and DMA Marketing Fund charges − Annual Dues.
- Revenue: Central revenue equals the disclosed 2025 median Total Gross Sales of $42,598.35 for full-year franchised outlets.
- Selected operating expenses: The 43.2% ratio is derived from detailed 2023 government tax-data lines for cost of sales, advertising, vehicle expense, commissions, contract labor, employee benefits, insurance, professional services, meals, office expense, pensions, equipment and property rent, repairs, supplies, wages, taxes, travel, and utilities. The category is broader than NAICS 541213 Tax Preparation Services.
- Unclassified-cost reserve: The same dataset reports “Other business expenses” equal to 10.5% of receipts but does not identify what those expenses contain. To avoid silently charging franchise fees twice, the model excludes that broad line and substitutes a clearly labeled 9%, 6%, or 3% reserve after adding the known FDD fees.
- Royalty: The FDD formula is the greater of 10% of Bank Product Gross Sales plus $30 per Non-Bank Product Transaction, or the $5,000 Minimum Tax Season Royalty Fee Requirement after the first Tax Season.
- Required marketing: The model subtracts 2% of Bank Product Gross Sales for the Global Brand Development Fund and 5% for the DMA Marketing Fund.
- Fee mix: Because component medians do not reconcile to the total-revenue median, the model proportionally scales the 2025 average Bank Product Gross Sales and average non-bank return count to each scenario’s revenue.
- Not separately itemized: Bank Product, transmitter/software, non-bank transaction, local cooperative, optional Business Division, currently uncharged Technology Fee, and other contingent fees. The unclassified-cost reserve is intended to absorb some of these unknowns, but an Office with heavier charges could earn less than the scenario.
A reconciled allocation using unrounded inputs; displayed labels are rounded to the nearest dollar.
Interpretation: At the disclosed median revenue, the $5,000 minimum royalty is a large fixed burden relative to revenue; owner benefit is therefore highly sensitive to client volume, average fee, and unclassified operating costs.
Source and treatment: 2026 FDD, Item 6, pp. 14–26 and Item 19, pp. 60–65; IRS 2023 sole-proprietorship Income Statements. Interest, depreciation, capital expenditures, manager pay, debt principal, and personal taxes are excluded from this allocation.
How much does owner involvement change the result?
For the modeled single fixed-location Office using the 2025 full-year sales anchor, owner involvement can determine whether the estimated benefit remains positive because the central scenario does not support a market-rate full-year operating manager. The FDD requires the Managing Owner to remain responsible for management and overall supervision, but it allows an approved and trained Operating Manager to handle day-to-day on-site operations. Each Office must be supervised on-site by one of those roles. Source: 2026 FDD, Item 15, p. 54.
The sole-proprietor benchmark does not deduct a salary for the proprietor, so $14,170 is best labeled owner-operator benefit rather than passive profit. To illustrate manager-run sensitivity, the table below deducts the May 2023 national median wage of $63,450 for First-Line Supervisors of Office and Administrative Support Workers, or one-half of that wage for a six-month staffing illustration. The Bureau of Labor Statistics wage profile is national, not tax-office-specific, and excludes employer payroll taxes and benefits.
| Operating structure | Manager wage assumption | Base residual before debt and tax | Interpretation |
|---|---|---|---|
| Owner-operated | $0 separately deducted | $14,170 | Includes owner labor value; not passive profit. |
| Manager-run, six-month illustration | $31,725 | −$17,555 | Editorial half-year wage sensitivity; payroll burden excluded. |
| Manager-run, full-year illustration | $63,450 | −$49,280 | National BLS median; not a forecast for a specific Office. |
Which uncertainties matter most to the earnings range?
For the modeled fixed-location Office and 2025 full-year population, the largest uncertainty is the actual franchisee expense structure because the financial-performance disclosure provides sales but no labor, rent, software, bank-product, operating-profit, or owner-compensation data. The $9,000–$19,000 range is therefore scenario-based, and several specific limitations could move an individual Office materially outside it.
How reliable is the reported outlet population?
The applicable population is uncertain because the 2025 outlet narrative does not reconcile internally. It states that there were 205 Franchise Outlets and 192 Operational Franchise Outlets, then says 79 outlets were excluded; it separately identifies 28 newly opened outlets and 33 outlets that ceased operations, which totals 61 rather than 79. Item 20 also reports 205 franchised outlets at the start of 2025, 20 openings, 33 terminations, two non-renewals, and 192 at year-end. A buyer should ask for written reconciliation of the eligible, reporting, and excluded populations.
Why not use the company-owned sales figures?
The official 2025 company-operated results are an unsuitable primary proxy for franchisee earnings. The disclosure covers only two Operational Company Owned Outlets, reports average Total Gross Sales of $129,671.50, and expressly states that company outlets benefit from experienced management and local brand recognition while not paying the royalty, DMA Marketing Fund, or Global Brand Development Fund charges imposed on franchisees.
What expenses could reduce the estimate?
Actual processing and system charges could reduce the estimate if they exceed the model’s unclassified-cost reserve. Item 6 lists a current $39.95 Bank Product Fee per applicable return, a $64.95 transmitter and variable software fee per Bank Product return, a $5 non-bank product fee, possible local cooperative advertising up to 2% of Gross Sales, a Technology Fee up to $250 monthly that is currently not charged, and other optional or contingent charges. The scenario does not itemize each charge because return mix is unknown; it uses the explicit reserve instead and therefore remains sensitive to the actual transaction profile.
What should a buyer verify before relying on this range?
A buyer should treat $9,000–$19,000 as a screening range because it is an independent estimate anchored to 2025 full-year sales, then replace every broad assumption with location-specific evidence before making a decision. The most important work is to verify the reported population, obtain the supporting records, and build a monthly Office-level profit-and-loss model that separates owner labor from residual business profit.
- Request written Item 19 substantiation. Ask the franchisor to reconcile the stated 192-outlet cohort, the 79 exclusions, and the 28-plus-33 exclusion categories. The FTC explains that prospects may request substantiation for a financial-performance claim.
- Interview current and former franchisees. Ask separately about Gross Sales, return mix, average preparation fee, seasonal payroll, rent, bank-product charges, software fees, Annual Dues, advertising, owner hours, and year-round Business Division revenue.
- Model the exact owner role. Price a Managing Owner schedule, a seasonal Operating Manager, and a full-year Operating Manager. Do not classify owner labor as passive distributions.
- Separate operating earnings from financing. Item 10 offers certain initial-fee financing, but interest and principal are not included in the owner-operator range. Add the buyer’s actual debt schedule below operating earnings.
- Use the local lease and staffing market. Replace broad IRS and BLS proxies with signed rent terms, local wage quotes, payroll burden, insurance premiums, and a realistic staffing calendar.
- Test fee sensitivity. Confirm the expected Bank Product share, non-bank return count, minimum royalty, required marketing funds, local cooperative obligations, and every current technology or transaction fee in writing.
What is the strongest defensible answer?
The strongest defensible annual range is approximately $9,000 to $19,000 in estimated pre-tax owner-operator benefit for an established full-year office after its first Tax Season, around the 2025 median sales profile, with a base scenario near $14,200. It is a Mode C independent estimate, not official owner earnings. The most important driver is revenue relative to the $5,000 minimum royalty and local operating costs. The largest unresolved uncertainty is the absence of same-brand expense and profit data, compounded by the unreconciled 2025 outlet-exclusion narrative. Before relying on the range, a buyer should verify written substantiation, reconstruct a location-specific profit-and-loss statement, and compare it with detailed interviews from current and former franchisees.