Yes. H&R Block franchises tax offices: 1,987 franchised vs 6,701 company-owned, a $2,500 fee, a 30% to 60% royalty, and an Item 19 that discloses nothing.
Quick answer Yes. H&R Block Tax Services LLC franchises tax offices, and 1,987 of its 8,688 outlets were franchised at June 30, 2025, against 6,701 company-owned. The 2025 FDD sets the initial franchise fee at $2,500 and the royalty at 30% to 60% of revenue, and Item 19 discloses nothing.
Item 5 of the 2025 H&R Block FDD, issued September 30, 2025, sets the initial franchise fee at $2,500, payable in a lump sum when you sign the Franchise License Agreement. Across the 2,040 live records in our library that disclose a fee, the median is $42,500. Thirty-eight brands charge $2,500 or less, under 2% of the file. So the answer to “is H&R Block a franchise” is yes, and the entry ticket is priced like a rounding error.
The rest of the build is modest too. H&R Block Tax Services LLC estimates $34,080 to $158,750 for a new office in a new territory, of which $15,200 to $23,150 goes to the franchisor or its affiliates. You need 800 to 1,200 square feet and parking for five cars. Additional funds for the first three months run $430 to $12,000, the thinnest working capital line in the document, and it tells you what this business is: seasonal, light on fixed cost, staffed by people you hire in December.
The cheap door is deliberate. So is the fee schedule behind it.
Item 20 tracks both halves of the system across three fiscal years ending June 30.
| Outlet type | Start of FY2023 | End FY2023 | End FY2024 | End FY2025 |
|---|---|---|---|---|
| Franchised | 2,561 | 2,339 | 2,135 | 1,987 |
| Company-owned | 6,665 | 6,582 | 6,629 | 6,701 |
| Total | 9,226 | 8,921 | 8,764 | 8,688 |
The franchised side lost 574 offices in three years, a 22% decline. The company side grew. Table 3 names the mechanism: the franchisor reacquired 151 franchised outlets in fiscal 2023, 169 in fiscal 2024, and 118 in fiscal 2025, a total of 438, against terminations of 20, 11, and 9. This system is not contracting because franchisees are failing out of it. It is being bought back.
Table 4, covering company-owned outlets, records zero outlets reacquired from franchisees in any of those years, so the 438 reacquisitions never surface in the parallel table. Ask the franchisor to reconcile them before assuming a reacquired office simply becomes a corporate one.
Item 6 does not quote a percentage. It quotes a schedule.
| Revenue type | Standard rate | Rate if paid within 4 days |
|---|---|---|
| First $5,000 of annual revenue | 60% | 50% |
| Revenue above $5,000 | 40% | 30% |
| Revenue above your prior two-year average | not available | 20% |
| Business services revenue | 15% | 10% |
| Second Look and Peace of Mind revenue | 20% | 20% |
The second column is conditional. The 30% rate applies only if payment reaches the franchisor within four days of the end of the Reporting Period and nothing else you owe is overdue. Reporting Periods run twice monthly through February and March and monthly the rest of the year, so you sit that test more than a dozen times a year, and every miss costs ten points of revenue.
The 20% Incentive Royalty Rate covers revenue above your average for the two previous calendar years, again only on four-day payment, and only after two full Tax Seasons. A first-year franchisee pays 30% or 40% on everything above $5,000.
There is no advertising fund fee anywhere in Item 6, and Item 11 explains why. The franchisor buys and controls all advertising at its own expense, while stating that it is not obligated to spend any amount in your Franchise Territory. What comes back is a Brand Management Budget allocation of the greater of $500 or 1% of the revenue you reported in the prior fiscal year, spendable only on expenses the franchisor approves in advance and discontinuable at its discretion.
The 2025 FDD has an Item 19, and it contains no numbers. The entire section is a refusal: the franchisor “does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets.” No table and no range, from a franchisor sitting on 6,701 company offices whose results it could publish tomorrow.
Jackson Hewitt does the opposite. Its 2025 FDD reports gross volume of business for 2,663 franchised offices, 97.05% of those active at the close of the 2025 Tax Season.
| Jackson Hewitt 2025 FDD, franchised offices | Standard | Kiosk | All |
|---|---|---|---|
| Offices in sample | 1,525 | 1,138 | 2,663 |
| Average gross volume of business | $160,361 | $60,438 | $117,660 |
| Median | $133,435 | $49,630 | $86,880 |
| Share at or above the average | 39.1% | 37.5% | 36.5% |
| Range | $450 to $1,396,455 | $403 to $371,055 | $403 to $1,396,455 |
Put the two documents together and you can price the H&R Block royalty without knowing a single H&R Block revenue figure. Apply the disclosed schedule to Jackson Hewitt’s standard-office median of $133,435 and the royalty is $54,374 at the base rates, or $41,031 with every payment inside the four-day window, which is 41% and 31% of revenue. That is arithmetic on a competitor’s number rather than a claim about what an H&R Block office earns, because the FDD offers no figure of its own. Our guide to what a missing Item 19 means covers how to underwrite when the franchisor stays silent.
Table 5 of Item 20 projects the year ahead. Franchise agreements signed but not yet opened: zero. Projected new franchised outlets for the fiscal year ending June 30, 2026: zero. Projected new company-owned outlets: 138.
Item 1 describes three ways in: open a new retail office in a defined territory, buy a furnished company-owned office from the affiliate that runs it, or use the assisted acquisition program to buy an independent tax business. The second route carries a footnote worth its own paragraph. Item 7 note 17 discloses that no company-owned outlet or territory was sold during the preceding fiscal year, and Table 4 agrees, showing zero outlets sold to franchisees across all three years. Item 1 also reserves the right to stop offering company offices for sale.
That leaves resale between franchisees, which Item 20 counts at 40 in fiscal 2023, 42 in fiscal 2024, and 26 in fiscal 2025. A transfer needs the franchisor’s approval and a $2,500 transfer fee, and the franchisor holds a 30-day right of first refusal on any offer you receive, so a seller can line up a buyer and still lose the deal.
Pull the full H&R Block FDD data sheet
A rate that high is not automatically a bad deal. The franchisor buys the advertising, the System and its software arrive at no charge, and initial training plus the roughly 19 hours of required annual training cost nothing. Affiliate Franchise Partner, Inc. lends against the business at prime plus 3% in most states. A conventional stack looks different: a 6% royalty beside a 2% ad fund, a technology fee, and a training charge, with the franchisee still buying media.
What you carry here is the office: rent, seasonal payroll, hardware of roughly $10,800 for a six-desk setup, and $3,000 to $5,000 for upgrades. Whether 40% is expensive depends on what share of revenue those lines consume, and this FDD gives you nothing to answer that with. Our royalty explainer, the three-brand comparison, and the tax preparation franchise rankings are where to test it against brands that disclose.
Item 17 runs the term to June 1 following your tenth full Tax Season, with no automatic renewal and a successor franchise offered at the franchisor’s sole discretion on then-current terms.
Leaving early is expensive. If you are not in default you may terminate on 30 days’ written notice before June 1 of any year, and you then pay 25% of the business’s gross sales for the three prior years. Open less than three years, and you pay 100% of the previous year’s gross sales. Non-competition runs 45 miles during the term and 25 miles for two years after, with non-solicitation of your own clients attached. Disputes go to court in Jackson County, Missouri, and there is no arbitration clause.
Territory is not exclusive, and Item 12 says the minimum granted may be a single street address. Competing with your own brand is designed in: Item 1 names the affiliates’ offices as your direct competition, and Item 12 reserves online tax preparation, tax software, and virtual services to the franchisor.
One line in Item 20 belongs in your validation plan. During the last three fiscal years, some current and former franchisees signed provisions restricting their ability to speak openly about their experience with the franchisor. Expect that not everyone on the contact list can talk. Two franchisee bodies appear there: the franchisor-sponsored Franchisee Leadership Council and an independent group, the Franchise Community Association. Call both.
So H&R Block franchises, the fee is trivial, and the system has given up 574 franchised outlets in three years while the franchisor plans 138 company openings and zero franchised ones. The $2,500 buys a seat. The 30% to 60% is the rent.
Read the full H&R Block FDD breakdown
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is h&r block a franchiseh&r block franchise costH&R Block Tax Services LLCtax preparation franchisefranchise royaltyitem 19Financial Services franchise
About this analysis The franchise data in this article is drawn from VetMyFranchise's structured analysis of 2,300+ Franchise Disclosure Documents filed with U.S. state regulators. See our data & methodology.
Yes, in part. H&R Block Tax Services LLC, an indirect wholly owned subsidiary of H&R Block, Inc., has offered franchise licenses since July 1, 2008, and its predecessor did so from 1993. The parent began franchising in 1957. Item 20 counts 8,688 outlets at June 30, 2025, of which 1,987 were franchised and 6,701 were owned by the company and its affiliates. Most H&R Block offices a customer walks into are corporate.
Item 7 of the 2025 FDD estimates $34,080 to $158,750 for a new office in a new territory, including a $2,500 initial franchise fee. Of that total, $15,200 to $23,150 is paid to the franchisor or its affiliates. The office needs 800 to 1,200 square feet and parking for at least five cars. Buying an existing territory or multiple offices costs more, and the FDD does not estimate how much more.
It runs from 20% to 60% depending on the revenue band and how fast you pay. The base schedule is 60% of the first $5,000 of annual revenue and 40% on everything above it. Paying within four days of the end of each Reporting Period, with nothing else overdue, drops those to 50% and 30%. Revenue above your average of the two prior calendar years qualifies for a 20% Incentive Royalty Rate, but only after you have completed two full Tax Seasons. Business services revenue carries a separate 15% rate, cut to 10% for prompt payment.
The FDD does not say. Item 19 of the 2025 document states that the franchisor makes no representations about a franchisee's future financial performance or the past performance of company-owned or franchised outlets. There is no table, no average, and no range. Anyone quoting an H&R Block franchise income figure is not quoting the disclosure document, and the franchisor has 6,701 company offices whose results it chooses not to publish.
Not easily. Item 20 Table 5 projects zero new franchised outlets for the fiscal year ending June 30, 2026, and lists zero franchise agreements signed but not yet opened. One franchised office opened in fiscal 2025 and none opened in the two years before. Item 7 note 17 discloses that no company-owned outlet or territory was sold during the preceding fiscal year. The 26 franchisee-to-franchisee transfers recorded in fiscal 2025 are the realistic route in.
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