A defensible planning range is approximately $45,000 to $303,000 in annual pre-tax residual business profit per established U.S. franchised territory, before financing principal payments and personal income taxes. The 2026 U.S. Lawns Franchise Disclosure Document does not report owner take-home pay. Its strongest earnings evidence is an official 18.7% average Net Profit margin for 165 franchised territories operating throughout 2025, after administrative expenses that include owner/officer salaries and owner benefit.
What does the 2026 FDD actually report?
The official answer is a 18.7% average Net Profit margin, not a dollar amount of owner earnings. It applies to 165 franchised territories that were continuously open for all of calendar 2025. The FDD defines Net Profit as the percentage of Gross Sales remaining after operational and administrative expenses are paid. Because administrative expenses include owner/officer salaries and owner benefit, the reported Net Profit is residual business profit after those compensation items, not total owner economic benefit.
For the same 165-territory population, Item 19 reports average Gross Sales of $1,500,018 and median Gross Sales of $943,856. Only 56 territories, or 34%, met or exceeded the average, which makes the median the more conservative central revenue anchor. Item 19 also reports average Gross Profit of $507,412 and median Gross Profit of $309,377. Gross Sales is revenue; Gross Profit and Net Profit are different measures and should not be described as owner salary.
How is the $45,000–$303,000 range calculated?
The range is estimated by applying a transparent margin sensitivity to three official Item 19 sales anchors. The Conservative case uses the fourth-quartile median Gross Sales, the Base case uses the all-territory median, and the Upside case uses the second-quartile median. The FDD reports only the 18.7% average Net Profit margin; the 15.7% and 21.7% margins are analytical assumptions three percentage points below and above that official figure.
| Scenario | Official revenue anchor | Applied margin | Estimated residual profit |
|---|---|---|---|
| Conservative | Fourth-quartile median Gross Sales: $283,620 | 15.7% | $45,000 |
| Base | All-territory median Gross Sales: $943,856 | 18.7% | $177,000 |
| Upside | Second-quartile median Gross Sales: $1,394,979 | 21.7% | $303,000 |
Per established franchised territory; pre-tax and before financing principal payments.
Interpretation: Revenue scale and margin execution create a wide result. These scenarios are not probabilities and the midpoint is not a forecast. Source: 2026 U.S. Lawns FDD, Item 19, Tables A, C, and F, pp. 43–49; calculations rounded to the nearest $1,000.
- Conservative: $283,620 × 15.7% = $44,528, rounded to $45,000.
- Base: $943,856 × 18.7% = $176,501, rounded to $177,000.
- Upside: $1,394,979 × 21.7% = $302,710, rounded to $303,000.
- Deliberate limitation: The first-quartile median Gross Sales of $2,590,821 is not used as the core upside anchor because applying a systemwide average margin to the highest-sales cohort would imply more precision than Item 19 supports.
What does Item 19 Net Profit include?
The official 18.7% Net Profit measure is residual profit after two disclosed expense groups for the 2025 cohort. Operational Expenses averaged 66.2% of Gross Sales and included labor, materials, supplies, royalties, subcontractor payments, equipment costs, supervisory salaries, waste disposal, and uniforms. Administrative Expenses averaged 15.1% and included owner/officer salaries, owner benefit, rent, utilities, insurance, office supplies, promotional and advertising expenses, sales expenses, licenses, and interest.
The official expense percentages applied to the $943,856 all-territory median Gross Sales.
Interpretation: The bridge fully reconciles to median Gross Sales, but the dollar amounts are derived because Item 19 reports the expense categories as average percentages rather than a median-territory profit-and-loss statement. Source: 2026 U.S. Lawns FDD, Item 19, Table F, pp. 48–49.
- Gross Sales: Revenue less documented refunds and sales taxes; it is not owner earnings.
- Gross Profit: Gross Sales less the FDD-defined operational expenses, including royalties and service-delivery costs.
- Net Profit: Gross Profit less administrative expenses, including owner/officer salaries, owner benefit, and interest.
- Estimated pre-tax residual owner earnings: The scenario's residual profit available after the FDD-defined expenses, before personal income taxes and financing principal payments. Interest is already included in the FDD administrative-expense definition.
- Capital expenditures and depreciation: Item 19 does not separately state their treatment, so the scenarios do not claim to estimate free cash flow after equipment replacement.
How does owner involvement change the result?
For an established territory modeled from the 2025 Item 19 cohort, owner involvement can change total economic benefit by roughly the value of a full-time management role, but this is an estimated role sensitivity rather than an official role-specific result. Item 19 does not separate owner-operated and manager-run territories. Item 15 requires the principal operator to devote full time and best efforts to the business and personally supervise day-to-day operations, unless U.S. Lawns, Inc. approves a full-time Designated Manager. Even with a Designated Manager, the owner remains responsible for proper operation.
The closest official labor benchmark is the U.S. Bureau of Labor Statistics May 2023 Landscaping Services estimate: General and Operations Managers had an annual mean wage of $90,760. BLS excludes self-employed workers, and the figure is a wage benchmark rather than an owner-income claim. The more recent May 2025 cross-industry national mean was $134,940, but it is less specific to landscaping and is not used in the calculation below.
Residual business profit compared with an owner-operator benefit that includes management labor value.
Interpretation: The approximately $267,000 figure is an estimated owner-operator benefit, not pure business profit. It combines the $177,000 base residual with the $90,760 management labor benchmark. The FDD already places owner/officer salaries and owner benefit inside administrative expenses, so this add-back is only a role sensitivity; actual compensation and accounting classifications must be verified territory by territory.
Which FDD fees materially affect annual earnings?
For the 165 full-year franchised territories in the 2025 Item 19 cohort, the official profit percentages already include royalties and the reported operating and administrative expense structure, so the recurring fees below should not be subtracted a second time from the scenario results. They still matter because future fee changes, territory growth, launch-year requirements, and accounting classification can move actual earnings away from the disclosed cohort averages.
| Obligation | 2026 FDD term | Annual earnings treatment |
|---|---|---|
| Royalty | 6% of monthly Gross Billings through $62,500; 5% on the next band through $125,000; 4% above $125,000. | Included in Item 19 Operational Expenses; do not deduct again. |
| Marketing Contribution | Currently the lesser of 2% of Gross Billings or $625 per month; may increase subject to the disclosed limits. | Advertising is within the FDD administrative-expense definition. |
| Technology, CRM, and accounting software | $299 monthly plus $250–$450 annually for CRM and $215–$400 annually for accounting software. | Current combined annual amount: approximately $4,053–$4,438; assumed within the cohort expense structure. |
| Minimum Royalty | $450 monthly in months 13–18, $550 in months 19–24, and $650 from month 25 onward per territory. | A payment floor, not an additional royalty when the calculated royalty is higher. |
| Grand Opening and local advertising | $1,000 per month for the first year of operations as directed. | A launch-year burden; the scenario uses established full-year territories and should not be treated as a first-year forecast. |
Sources: 2026 U.S. Lawns FDD, Items 5 and 6, pp. 12–19; Item 11, pp. 28–31. Item 7's initial investment is not treated as a recurring annual expense.
How reliable is the owner-earnings estimate?
The evidence confidence is Moderate. The same-brand 2026 FDD directly reports a broad 2025 Net Profit margin, but the annual dollar range is derived and the disclosure does not separate owner compensation, Standard versus Conversion Franchise results, owner-operated versus Designated Manager-run territories, or single-territory versus multi-territory owners.
The Item 19 cohort represented 165 of the 208 franchised territories open at year-end, or approximately 79%. The FDD excluded 43 year-end open territories: 9 were not continuously operating for the full year and were pending formal termination, 20 lacked at least 10 months of reported sales by March 1, 2026, and 14 opened during 2025. Item 19 also excluded 17 territories that closed during 2025. Item 20 separately reports 15 openings, 16 terminations, and 208 year-end franchised outlets for 2025, with no company-owned outlets.
| Population fact | Count | Why it matters |
|---|---|---|
| Year-end U.S. franchised territories | 208 | System denominator at December 31, 2025. |
| Full-year Item 19 territories | 165 | Source population for sales, Gross Profit, expense, and Net Profit measures. |
| Year-end open territories excluded | 43 | Incomplete year, insufficient reporting, or pending termination. |
| Territories closed during 2025 and excluded | 17 | Closed-territory economics are absent from Item 19. |
| Company-owned outlets | 0 | No company-operated comparison is available. |
The FTC's guidance on financial performance representations emphasizes reviewing the source, assumptions, limitations, and written substantiation behind Item 19. Its Consumer's Guide to Buying a Franchise also recommends comparing the disclosed population with the outlets being offered and speaking with current and former franchisees.
What should a buyer verify before relying on this range?
The range remains uncertain until a buyer separates owner compensation from residual profit and matches the Item 19 cohort to the territory, format, maturity, and staffing plan under consideration. The most decision-useful verification is a normalized profit-and-loss review using written Item 19 substantiation and franchisee interviews.
- Request Item 19 substantiation: Confirm how each territory reported Gross Sales, Gross Profit, Operational Expenses, Administrative Expenses, and Net Profit.
- Separate owner economics: Ask franchisees to identify owner salary, owner benefit, distributions, retained earnings, Designated Manager compensation, and any related-party payroll.
- Normalize financing: Separate interest, debt principal, equipment leases, vehicle payments, depreciation, and replacement capital expenditures.
- Match the operating format: Determine whether the target is a Standard Franchise, Conversion Franchise, additional territory, or multi-unit structure and whether Item 19 contains a comparable mix.
- Test the sales mix: Compare contract maintenance, enhancement, snow and ice management, irrigation, subcontractor, and other revenue with the target market.
- Interview current and former franchisees: Ask for mature and newer territory economics, labor utilization, customer concentration, seasonal cash flow, and the practical cost of owner involvement.
What is the strongest defensible earnings view?
The strongest defensible planning view is approximately $45,000 to $303,000 in annual pre-tax residual profit per established franchised territory, with a base calculation of about $177,000. The range is derived, while the underlying 18.7% average Net Profit margin is official 2026 FDD Item 19 evidence for the 2025 full-year cohort.
The dominant earnings driver is Gross Sales scale combined with labor and equipment cost control. The largest unresolved uncertainty is that Item 19 includes owner/officer salaries and owner benefit within Administrative Expenses but does not disclose those amounts or separate owner-operated from manager-run territories. A buyer should verify the Item 19 substantiation, normalize owner and manager compensation, and compare the target territory with current and former franchisee profit-and-loss statements before treating any figure as personally achievable.