Does 'Payroll Expense' for a Closet Storage Concepts include owner compensation?

According to Closet Storage Concepts's 2025 Franchise Disclosure Document, the 'Payroll Expense' does not include owner compensation. The FDD specifies that Payroll Expense represents salary and wage amounts paid to all employees, explicitly excluding compensation for the owner. This is an important distinction for prospective franchisees as they evaluate the financial performance representations provided in Item 19.

When analyzing the financial performance of the five representative Closet Storage Concepts franchise locations, it's crucial to understand that the payroll expenses listed in Table 7 only reflect employee compensation. For example, the average payroll expense for these locations in 2024 was $906,185, with the highest being $1,193,731 and the lowest being $678,188. These figures do not account for any salary or draws that the owner might take from the business.

Prospective franchisees should consider this when projecting their own potential earnings and expenses. They will need to factor in their desired owner compensation separately when creating a business plan and assessing the financial viability of the Closet Storage Concepts franchise. This exclusion of owner compensation from 'Payroll Expense' is not uncommon in franchise FDDs, as owner compensation can vary widely based on individual circumstances and business performance.