This is an estimated pre-tax owner-operator benefit for one U.S. Young Rembrandts territory, not an official profit disclosure. The base scenario is about $35,500. Because the model treats the owner as the full-time operator, the amount can include both residual business profit and compensation for the owner’s labor.
Independent estimate. The $20,200–$58,500 range is an analytical scenario, not an Item 19 financial performance representation by Young Rembrandts Franchise, Inc. It combines 2026 FDD revenue and fee facts with an IRS Educational Services margin benchmark and an explicit margin sensitivity. Actual results can differ materially because of territory sales, class enrollment, instructor payroll, host-site economics, local marketing, merchant costs, financing, owner involvement, and execution.
2025 Item 19 result for 46 franchised territories. Revenue is before every expense.
The average exceeds the median, indicating that higher-revenue territories pull the mean upward.
Item 19 states that every franchised territory was included in the 2025 revenue disclosure.
Median FDD revenue multiplied by the 28.44% IRS Educational Services benchmark margin.
Illustrative FDD royalty, current marketing and technology fund rates, technology fee, and required software.
Annualized from the May 2023 BLS median hourly wage for General and Operations Managers in private NAICS 611600.
What does the 2026 Young Rembrandts FDD actually disclose?
The official disclosure measures territory revenue, not owner earnings. Item 19 reports 2025 Annual Gross Revenues for all 46 franchised territories, with an overall median of $124,927, an average of $143,084, and a $24,479-to-$323,308 range. “Gross revenue” is defined as total revenue earned before deductions.
The table is per territory, even though Item 20 says the 46 territories were owned by 41 franchisees. It therefore cannot be read as income per owner, and it does not show instructor payroll, supplies, insurance, merchant fees, local advertising, manager compensation, debt service, or personal taxes.
| 2025 Item 19 cohort | Mean gross revenue | Median gross revenue | Reported range |
|---|---|---|---|
| 1st quintile (9 territories) | $270,676 | $270,425 | $229,595–$323,308 |
| 2nd quintile (10 territories) | $188,561 | $186,061 | $166,326–$219,689 |
| 3rd quintile (9 territories) | $122,177 | $121,666 | $96,906–$161,227 |
| 4th quintile (8 territories) | $79,098 | $79,549 | $67,730–$89,396 |
| 5th quintile (10 territories) | $52,831 | $58,287 | $24,479–$64,503 |
| All 46 territories | $143,084 | $124,927 | $24,479–$323,308 |
Official source: 2026 Young Rembrandts Franchise Disclosure Document, Item 19, pp. 34–35. The franchisor states that the information is historical, results may differ, and written substantiation is available on reasonable request.
A territory at the $124,927 median has not “made” $124,927 for its owner. That amount must fund instructors, supplies, insurance, required franchise fees, software, merchant charges, transportation, marketing, administrative costs, and any manager compensation before an owner benefit exists.
How was the $20,200–$58,500 owner-earnings range estimated?
The range is a reproducible FDD-anchored scenario, not a franchisor forecast. It uses actual Item 19 revenue observations for one territory and converts them with a government benchmark for sole proprietors in Educational Services.
The central margin is derived from IRS Statistics of Income data for Tax Year 2022: Educational Services sole proprietorships reported $16.161 billion of business receipts and $4.597 billion of net income less deficit, a 28.44% aggregate ratio. The conservative and upside cases apply a transparent sensitivity of minus or plus three percentage points. The IRS category is broader than Fine Arts Schools and is not franchise-specific, which is why the confidence rating remains Limited. The U.S. Census definition of NAICS 611610 Fine Arts Schools confirms that art instruction belongs within the relevant instructional sector.
The model is before personal income taxes and financing principal payments. It does not produce after-tax take-home pay. Because the IRS sole-proprietor measure does not deduct a salary paid to the proprietor, the result can compensate the owner’s labor as well as capital.
| Scenario | FDD revenue anchor | Margin assumption | Owner-operator benefit |
|---|---|---|---|
| Conservative | $79,549 | 25.44% | $20,200 |
| Base | $124,927 | 28.44% | $35,500 |
| Upside | $186,061 | 31.44% | $58,500 |
How do the three earnings scenarios compare?
The model rises from approximately $20,200 to $58,500 as both territory revenue and the assumed net-income margin increase. These labels are analytical cases, not probabilities or promises.
One U.S. territory; pre-tax; before financing principal
Interpretation: Revenue dispersion is the dominant driver. The conservative anchor is the fourth-quintile median, the base anchor is the system median, and the upside anchor is the second-quintile median; they are observations from the FDD distribution, not probability estimates.
Sources and calculation: 2026 FDD Item 19, pp. 34–35; IRS Sole Proprietorship Returns, Tax Year 2022, Table 1. Values are calculated at full precision and rounded to the nearest $100.
- Conservative revenue: $79,549, the official fourth-quintile median—not the disclosed minimum.
- Base revenue: $124,927, the official median across all 46 franchised territories.
- Upside revenue: $186,061, the official second-quintile median—not the disclosed maximum.
- Margin sensitivity: 28.44% IRS Educational Services net-income ratio, adjusted by minus or plus three percentage points.
- Not modeled separately: depreciation, business interest, capital expenditures, financing principal, owner distributions, and personal income taxes cannot be isolated from the same-brand disclosure.
How does owner involvement change Young Rembrandts earnings?
Active owner operation is economically central to the range. Item 15 requires the business to operate year-round on a full-time basis under the direct supervision of the franchisee or a trained full-time manager. The official Young Rembrandts franchise FAQ says owners generally hire and manage part-time instructors and run day-to-day operations rather than teach classes themselves.
The owner-operator scenarios therefore include the value of management work performed by the owner. To test a manager-run structure, the analysis subtracts $67,496—the annualized May 2023 BLS median hourly wage of $32.45 for General and Operations Managers in privately owned NAICS 611600 Other Schools and Instruction. The result is a sensitivity test, not a claim about the exact salary a particular territory must pay.
Official FDD source: Young Rembrandts Franchise, Inc. 2026 FDD, Item 15, p. 28.
Can the same revenue support a full-time manager?
Not under these assumptions. After subtracting the illustrative full-time manager labor value, residual pre-tax owner earnings remain negative in all three cases, although the upside case has the smallest shortfall before debt principal and personal taxes.
Manager-run residual subtracts $67,496 of full-time management labor
Interpretation: At the modeled revenue levels, a full-time paid manager changes the economics more than the franchise fee burden. A manager-run territory would need higher revenue, a higher operating margin, lower manager compensation, or some combination of the three.
Source and formula: Owner-operator scenarios above; BLS May 2023 wage estimates for private NAICS 611600. Manager-run residual = owner-operator benefit − ($32.45 × 2,080 hours). Rounded to the nearest $100.
The active-owner figure should not be described as passive profit. Part of the $20,200–$58,500 range is compensation for full-time supervision, staff management, school and community relationships, scheduling, enrollment administration, and local business development.
How much do disclosed recurring fees absorb?
Core recurring franchisor and required-system charges equal roughly 11.6%–13.9% of the three revenue anchors. This is a same-FDD derived calculation, but it is shown as a fee-burden diagnostic and is not subtracted again from the all-in IRS margin scenario.
The calculation uses the Item 6 royalty—10% of the first $75,000 of Gross Revenues and 8% above $75,000—plus the current 1% National Marketing Fee, current 1% Technology Fund Fee, $250 annual Technology Fee, and the Item 8 required Active Network software fee of $110 per month.
| Revenue anchor | Royalty | Marketing + technology funds | Core total and revenue share |
|---|---|---|---|
| Conservative: $79,549 | $7,864 | $1,591 | $11,025 · 13.9% |
| Base: $124,927 | $11,494 | $2,499 | $15,563 · 12.5% |
| Upside: $186,061 | $16,385 | $3,721 | $21,676 · 11.6% |
Calculation note: Each core total also includes $1,570 of fixed annual technology and required software charges. It excludes the estimated $600–$800 per-person annual conference fee if a conference is held, conference travel, estimated merchant fees of 2.5% of credit-card charges, instructor payroll, insurance, supplies, transportation, local marketing, and other operating costs. FDD source: Item 6, pp. 5–8, and Item 8, pp. 12–14.
The fee percentage declines as revenue rises because the royalty rate falls from 10% to 8% above $75,000 and the fixed charges are spread across more sales. The disclosed minimum monthly fees can be more important below the modeled revenue anchors.
How much confidence should a buyer place in this range?
Confidence is Limited. The 2025 revenue distribution is unusually complete, but Young Rembrandts does not disclose territory expenses, operating profit, EBITDA, owner compensation, cash flow, or manager-run results.
- Strongest evidence
- Current same-brand Item 19 Annual Gross Revenues for all 46 franchised territories, including medians, means, quintiles, and ranges.
- Largest model gap
- No Young Rembrandts expense bridge. The IRS 28.44% ratio covers broad Educational Services sole proprietorships, not specifically franchised children’s art programs.
- Format uncertainty
- Item 20 lists 45 Gold Franchises and one Silver Franchise, but Item 19 does not separate their revenue or cost structures.
- Owner-versus-unit issue
- The disclosure is per territory. Forty-one franchisees owned 46 territories at year-end 2025, so multi-territory owner income cannot be inferred by simple multiplication.
- System movement
- Franchised territories declined from 47 to 46 during 2025; no territories opened, one ceased operations for other reasons, and three transfers occurred.
- Franchisor condition
- The 2026 FDD cover flags going-concern and financial-condition risks. Those risks do not determine territory profit, but they can affect support continuity and should be reviewed with counsel and an accountant.
Official FDD sources: Young Rembrandts Franchise, Inc. 2026 FDD, Item 20, pp. 36–40, and Special Risks on the cover pages.
The FTC Consumer’s Guide to Buying a Franchise explains why Item 19 should be read together with written substantiation and Item 20 franchisee contacts. The official Young Rembrandts U.S. franchise website confirms the current home-based instructional model, but its marketing descriptions do not replace the FDD’s financial definitions.
What should a prospective owner verify before relying on the estimate?
Verify the expense structure territory by territory. The most useful diligence is a reconciliation from Item 19 Gross Revenues to actual cash available to an owner, using current and former franchisee records rather than a generic margin.
- Request the franchisor’s written substantiation for the 2025 Item 19 representation and confirm that the figures reconcile to the current FDD.
- Interview franchisees in several Item 19 quintiles and ask for owner hours, years in operation, Gold or Silver format, number of territories, and whether a full-time manager is employed.
- Obtain actual instructor payroll, payroll taxes, workers’ compensation, class supplies, insurance, vehicle and transportation, merchant processing, software, local marketing, bookkeeping, and host-site costs.
- Ask how summer camps, school calendars, cancellations, refunds, enrollment seasonality, and instructor availability change monthly cash flow.
- Separate owner salary or labor value, draws, distributions, retained earnings, interest, depreciation, capital expenditures, and financing principal.
- For a manager-run plan, obtain local compensation quotes and test the territory’s revenue needed to cover a trained full-time manager without assuming passive ownership.
- For multiple territories, build a separate portfolio model that includes ramp-up timing, required management structure, shared overhead, and the fact that Item 19 is reported per territory.
- Review Item 20 contacts, the FDD’s financial statements and special-risk disclosures, state addenda, and any later amendments with a franchise attorney and accountant.
What is the most defensible earnings view?
The strongest defensible range is approximately $20,200–$58,500 in annual pre-tax owner-operator benefit for one territory, with a base scenario near $35,500. It is scenario-based, not an official Young Rembrandts profit figure. The largest earnings driver is territory revenue combined with whether the owner personally performs the full-time management role. The largest unresolved uncertainty is the absence of same-brand expense and owner-compensation data.
A buyer should verify the current Item 19 table and written substantiation, rebuild the revenue-to-cash bridge from franchisee profit-and-loss statements, and test owner-operated and manager-run structures separately. Debt principal and personal income taxes must remain outside the operating-earnings comparison because they depend on financing and owner-specific circumstances.