A mature, manager-run U.S. Woodhouse Spa may produce estimated pre-tax owner earnings of roughly $317,000 to $789,000 per year, with a base scenario near $537,000. An owner who personally replaces the general manager may have an estimated owner-operator benefit of about $386,000 to $859,000, but the additional amount compensates the owner for labor and is not passive business profit.
This range is an independent analytical scenario, not an Item 19 financial performance representation of franchisee profit by The Woodhouse SPAS, LLC. It combines 2026 FDD facts - franchised-location Gross Sales, company-owned Spa-Level EBITDA, and recurring fees - with clearly identified margin sensitivity and a government wage benchmark. Actual results can differ materially by market, sales mix, labor, occupancy, financing, owner involvement, gift-card activity, and execution.
What does the Woodhouse Item 19 actually measure?
The strongest official evidence does not disclose franchisee take-home pay. The 2026 FDD reports 2025 Gross Sales for a broad franchised cohort and Spa-Level EBITDA for a separate four-location company-owned cohort. Gross Sales is revenue; Spa-Level EBITDA is a store-level operating measure before interest, taxes, depreciation, and amortization.
| Item 19 population | Official measure | 2025 result | Main limitation |
|---|---|---|---|
| 81 qualifying U.S. franchised spas | Gross Sales | Average $2,711,439 Median $2,596,280 |
Revenue, not owner earnings; excludes eight open locations that did not satisfy all reporting criteria. |
| 4 company-owned spas open at least 12 months | Spa-Level EBITDA | Average $650,229 Median $521,065 Average margin 20.7% |
Company-operated proxy with a small Texas and Colorado sample; only one location met or exceeded average EBITDA. |
The franchised cohort had to be open before January 1, 2025, remain operating under a Franchise Agreement at year-end, be at least 3,000 square feet, avoid franchisor or affiliate ownership during the specified period, and submit required sales reports. The FDD says typical current franchised spas range from 5,000 to 7,000 square feet. Item 20 showed 89 franchised outlets at December 31, 2025, up from 84 a year earlier, with one 2025 termination and no other listed cessation. Source: The Woodhouse SPAS, LLC 2026 FDD, Item 19, pp. 44-48, and Item 20, pp. 49-53.
The Federal Trade Commission's franchise buyer guide cautions that Gross Sales does not reveal costs or profits. For Woodhouse, the earnings estimate therefore needs a separate expense or margin bridge.
Median Gross Sales for the Bottom 50%, all qualifying locations, and Top 50% performance bands.
Interpretation: location-level sales dispersion is substantial, so applying one margin to the system average would conceal a major source of owner-earnings uncertainty.
Source: The Woodhouse SPAS, LLC 2026 FDD, Item 19, Table 1, pp. 45-46. Performance bands are observed FDD groups, not probabilities or promises.
How is the annual owner-earnings range calculated?
The model multiplies three official franchised-sales anchors by a same-brand company-owned Spa-Level EBITDA margin with a transparent three-percentage-point sensitivity. The resulting figures are estimates for a mature manager-run spa, not reported franchisee profits.
Estimated manager-run pre-tax owner earnings = franchised Gross Sales anchor × scenario Spa-Level EBITDA margin. Conservative uses the Bottom 50% median and 17.7%; Base uses the overall median and 20.7%; Upside uses the Top 50% median and 23.7%. The 17.7% and 23.7% margins are editorial sensitivities around the FDD's 20.7% company-owned average, not franchisor-reported franchisee margins.
| Scenario | Revenue × margin | Manager-run estimate | Owner-operator benefit |
|---|---|---|---|
| Conservative | $1,789,306 × 17.7% | $316,707 | $386,477 |
| Base | $2,596,280 × 20.7% | $537,430 | $607,200 |
| Upside | $3,328,447 × 23.7% | $788,842 | $858,612 |
The base estimate is close to the official $521,065 median Spa-Level EBITDA for the four company-owned spas, which provides a useful cross-check. It is not a direct comparison: the modeled base uses the franchised median revenue and the company-owned average margin, while the official $521,065 figure is a company-owned median.
- Gross Sales
- The FDD-defined revenue measure, including service, product, and gift-card sales, subject to stated exclusions. It is not owner income.
- Spa-Level EBITDA
- Gross Sales less the ordinary recurring operating expenses shown in Item 19 Table 3. It remains before interest, taxes, depreciation, and amortization.
- Estimated pre-tax owner earnings
- The manager-run Spa-Level EBITDA proxy used here, before personal income taxes, financing principal, capital expenditures, and owner distributions. Interest is also outside EBITDA.
- Owner-operator benefit
- Estimated operating profit plus the market wage value of general-manager work performed by the owner. The labor component is not passive profit.
How does owner involvement change the result?
Owner operation can increase the owner's total economic benefit by the value of the general-manager role, but it does not make the underlying spa more profitable by the same amount. Item 19 says company personnel costs include the general manager and notes that some franchise owners serve in that role. Item 15 permits a General Manager, subject to consent, while keeping the Operating Principal ultimately responsible.
The official Woodhouse franchise website describes the model as active rather than passive and states that owners lead teams and oversee day-to-day operations. For a labor-value benchmark, the U.S. Department of Labor's Spa Managers occupation profile reports a 2025 national median annual wage of $69,770. The estimate adds that wage only; it does not add benefits, employer payroll taxes, or a second management salary.
Each diamond adds the $69,770 median Spa Manager wage to the manager-run operating estimate.
Interpretation: owner operation changes who performs compensated management work. It should not be treated as a free margin increase or described as passive income.
Sources: The Woodhouse SPAS, LLC 2026 FDD, Item 15, pp. 35-36, and Item 19, pp. 47-48; U.S. Department of Labor O*NET Spa Managers profile using 2025 wage data. Values are rounded in the chart after full-precision calculations.
Which franchise fees are already reflected in the estimate?
The company-owned 20.7% Spa-Level EBITDA margin already includes the same 6% royalty, approximately 1.75% Advertising Fund contribution, 1.75% local advertising, and $550 monthly Technology Management Fee described for franchisees. These costs must not be deducted a second time from the scenario result.
| Recurring obligation | Current requirement | At $2,596,280 median sales |
|---|---|---|
| Royalty Fee | 6.00% | $155,777 |
| Advertising Fund contribution | 1.75% currently | $45,435 |
| Local advertising expenditures | 1.75% | $45,435 |
| Technology Management Fee | $550 monthly | $6,600 |
| Total current burden | 9.5% + $6,600 | $253,247 |
Item 6 permits the Advertising Fund contribution to rise to 2%. At the 2025 franchised median Gross Sales, that additional 0.25 percentage point would equal about $6,491 per year. The table is a fee-burden illustration, not an additional deduction from the earnings scenarios. Source: 2026 FDD, Item 6, pp. 9-11, and Item 19, pp. 47-48.
Item 19 Table 3 deducts Cost of Sales, personnel costs including a general manager, lease expense, royalty and fund contribution, credit-card and bank fees, insurance, local advertising and marketing, repairs and maintenance, utilities, office technology, and general and administrative expense. It does not convert EBITDA into debt-service coverage, free cash flow, owner distributions, or after-tax take-home pay.
What could move actual owner earnings outside the range?
Labor productivity and occupancy are likely the largest controllable and market-driven earnings variables, while the biggest evidence limitation is the four-spa company-owned margin sample. The FDD's company locations averaged approximately 5,886 square feet and operated only in Texas and Colorado; franchised locations can face materially different wage rates, rents, insurance costs, service mix, and marketing needs.
- Sales mix and gift cards: Gross Sales includes Gift Card Sales. Cash timing, redemptions, breakage treatment, and cross-location liabilities can affect working capital differently from recognized revenue.
- Labor: therapist, esthetician, nail-technician, front-desk, and management staffing must match service demand. Wage rates and utilization vary by metropolitan area.
- Occupancy: the FDD says lease expense varies greatly by geography. A large rent premium can erase several percentage points of EBITDA margin.
- Debt: Item 10 states that the franchisor does not offer financing. Interest and loan principal are outside the Spa-Level EBITDA estimate and can materially reduce cash available to the owner.
- Capital expenditure: depreciation is excluded from EBITDA, but equipment replacement, refreshes, required technology, and remodel spending require real cash.
- Cohort selection: the franchised sales data excludes outlets that were too new, too small, affiliate-controlled, closed before year-end, or missing required reports. One franchised outlet that had operated more than 12 months closed during 2025.
The confidence label is MODERATE: the model uses current, same-brand FDD revenue and operating evidence, and the FDD states that company-owned and franchised costs do not materially differ except as noted. Confidence is not high because franchisee earnings are not directly reported and the Spa-Level EBITDA proxy covers only four company-owned locations.
What should a buyer verify before relying on this estimate?
A buyer should test the model against the written Item 19 substantiation and multiple franchisee income statements, especially locations with similar rent, wages, square footage, maturity, and owner role. The official Woodhouse earning-potential page directs candidates to the 2026 FDD and existing franchisees; those conversations should focus on expenses and cash flow, not only Gross Sales.
- Request the franchisor's written substantiation for Item 19 and reconcile Table 1 Gross Sales to Table 3 expense definitions.
- Ask manager-run franchisees for general-manager salary, incentives, payroll taxes, benefits, and the owner's actual weekly involvement.
- Ask owner-operators to separate salary or labor value from distributions and retained business profit.
- Compare occupancy cost as a percentage of Gross Sales for locations with similar square footage and trade-area economics.
- Confirm whether local marketing labor, agency fees, maintenance, replacement equipment, and remodel reserves sit inside or outside the location-level P&L.
- Model interest and principal separately using the buyer's actual loan terms; do not treat Spa-Level EBITDA as spendable cash.
- Interview current and former franchisees listed in Item 20 about weak years, closures, transfers, and the time required to reach a mature sales level.
What is the strongest defensible earnings takeaway?
The defensible manager-run range is approximately $317,000 to $789,000 per mature U.S. spa per year, with a base scenario around $537,000; it is scenario-based, not an official franchisee-profit disclosure. Owner operation can raise total economic benefit to roughly $386,000-$859,000 by replacing paid Spa Manager labor, but that increment is compensation for work performed. The most important earnings driver is the combination of Gross Sales and labor efficiency. The largest unresolved uncertainty is whether the four company-owned locations' 20.7% average Spa-Level EBITDA margin transfers to a buyer's specific franchised market. Before investing, verify Item 19 substantiation, location-level expense definitions, owner compensation, debt service, and comparable franchisee results in direct interviews.