What costs are included in 'Payroll' for an Amorino franchise, and what costs are excluded?

According to Amorino's 2025 Franchise Disclosure Document, the definition of 'Payroll' includes specific labor-related expenses while excluding others. For an Amorino franchise, payroll encompasses the costs associated with hourly employees, management labor, and manager salaries or bonus payments. This means that all compensation provided to these categories of employees is factored into the payroll calculation.

However, the definition explicitly excludes the owner's salary or draw. This is a common practice in franchising, as the owner's compensation is often considered a distribution of profits rather than a direct labor cost. The average payroll costs are determined by summing the labor costs of included franchisees and dividing by the number of stores. This average is then used to calculate a percentage by dividing the average labor cost by the average net revenues.

Understanding what constitutes 'Payroll' is crucial for prospective Amorino franchisees as they evaluate their potential operating expenses and profitability. By excluding the owner's salary, the payroll metric provides a clearer picture of the labor costs associated with running the business, independent of the owner's personal income. This distinction helps in comparing the operational efficiency and labor management across different franchise locations.