The initial H&R Block Franchise Fee is $2,500. You have to pay this upfront fee when opening an H&R Block franchise.
The estimated total investment necessary to begin the operation of an H&R Block Franchise ranges from $31,557 to $157,898. The following costs are part of the upfront costs included in the initial investment for an H&R Block. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy an H&R Block franchise in 2022.
|Type of Expenditure||New Outlet Amount||To Whom Payment is to Be Made|
|Initial Franchise Fee||$2,500||$2,500||Us|
|Real property (Estimated Cost total is for three months)||$1,400||$30,000||Landlord|
|Leasehold improvements; construction costs||$0||$50,000||Contractor|
|Signage||$1,200||$6,500||Us, carrier, and installers|
|Furniture, Fixtures, Decor items||$15,000||$30,000||Suppliers|
|Equipment||$8,000||$12,000||Suppliers and us|
|Pre-opening salaries, travel, and initial training||$1,500||$3,000||Suppliers of transportation, food, and lodging|
|Start-up suppliers||$500||$500||Suppliers and us|
|Zoning Expenses||$0||$500||Various government entities|
|Utility deposits||$50||$300||Landlord, utility companies|
|Applicable business licenses, if required||$0||$1,800||Various government entities|
|Initial investment (midpoint)||%Profit margin of median franchise sales||Estimated Profits||Time to recoup investments|
Based on the median sales provided by H&R Block’s franchise locations, at an average of a 30% profit margin, it will take around 5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 30% profit margin, which would elongate getting a return on your investment.
To assign a valuation multiple for H&R Block franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.
When you go to sell an H&R Block franchise based on the median multiple of .86 and AUV of $130,661, it would sell for $112,368. This is higher than the midpoint investment of $94,727.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.
|Years ended in April 30,|
|Royalty, product and other revenues||$346,764||$312,397||$403,154|
|Costs of revenues||$1,842,092||$1,712,276||$1,756,922|
|Impairment of goodwill||–||$106,000||–|
|Selling, general and administrative||$802,268||$744,361||$722,167|
|Total operating expenses||$2,644,360||$2,562,637||$2,479,089|
|Other income (expense), net||$5,979||$15,637||$16,419|
|Interest expense on borrowings||($106,870)||($96,094)||($87,051)|
|Income (loss) from continuing operations before income taxes (benefit)||$668,736||($3,374)||($545,160)|
|Income taxes (benefit)||$78,524||($9,530)||($99,904)|
|Net income from continuing operations||$590,212||($6,156)||($445,256)|
|Net loss from discontinued operations, net of tax benefits of $3,883; $4,085 and $6,788||($6,421)||($13,682)||($22,747)|
|NET INCOME (LOSS)||$583,791||($7,526)||$422,509|
|BASIC EARNINGS (LOSS) PER SHARE:|
|COMPREHENSIVE INCOME (LOSS):|
|Net Income (loss)||$583,791||($7,526)||$422,509|
|Change in foreign currency translation adjustments||$56,362||($31,160)||($6,113)|
|Other comprehensive income (loss)||$56,362||($31,160)||($6,113)|
|Comprehensive income (loss)||$640,153||($38,686)||$416,396|
H&R Block is a very profitable business for the franchisor with retained earnings of $640.15 million in 2021. Compared to $416.39 million in 2019, they saw an increase of 53.73% from 2019 to 2021. This is a good indication of high growth as a company overall.
|Outlet type||Year||Outlets at the Start of the Year||Outlets at the End of the Year||Net Change|
Over the last three years, the company has been in decline. Both franchising units and company-operated stores have decreased. Over the last three years, franchises have closed at a rate of around 198 units a year. This is an indicator that these stores may not be performing well. Or their franchise term is up, and they are not renewing it.
H&R Block offers people the opportunity to be a part of a business that is never going to close, as taxes are one of the few things in life that are sure. However, it needs to be looked into why so many franchisees are leaving the system, as it is clearly not a COVID-linked thing.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Professional Business Services Industry.
Looks like your subscription is due. Please renew to keep using our services.
You are going to downgrade your subscription.This action will proceed the difference in cost of plans and reset subscription period after moneyback.
You are going to upgrade your subscription.This action will proceed the difference in cost of plans and reset subscription period after moneyback.
You’re about to cancel your subscription. Please confirm by clicking on the “Cancel Subscription” button below.
Performing this action will delete your account.
Your current subscription plan is:
Sorry. You must be logged in to view this form.