Bottom line
- Total investment $59K – $79K including a $35K franchise fee, 14.0% ongoing royalty.
- Average unit revenue of $111K/year.
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 14 loans (below the industry average).
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one ATAX unit return on the cash you put in?
Unlevered ROIC · per unit
9%
Below typical band (30–60%)
Overview
About
ATAX franchisees operate tax preparation and accounting service centers, typically handling individual and small business tax returns during peak filing seasons. Day-to-day operations include client intake, tax return preparation using franchisor software systems, compliance filing, and year-round accounting/bookkeeping services. The model relies heavily on seasonal tax season revenue concentration with variable profitability dependent on client acquisition and local market conditions.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 27 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
ATAX presents meaningful investment risk due to unsustainably high royalty burden on modest average revenue, stagnant unit growth, extensive litigation ecosystem, governance failures, and undisclosed profitability metrics.
Score breakdown · what drove the 52 / 100 rating
- 01MINORAggressive 14% royalty rate on gross revenues (industry standard 5-8%) creates high breakeven threshold given $110,515 avg revenue
- 02MINORSlow unit growth (4.5% YoY) and stagnant system size (116 units) suggests market saturation or franchisee dissatisfaction
- 03HIGHMultiple concurrent litigation categories including investor claims, IP disputes with Liberty Tax Service, shareholder derivative suits, and governmental consent orders indicate systemic governance and compliance failures
- 04HIGHGoing concern status combined with pending litigation regarding financial controls and opportunity zone claims raises franchisor operational stability concerns
- 05MEDNo disclosed average net income despite disclosing gross revenue — suggests marginal or negative profitability for typical franchisees after 14% royalty
- 06HIGHHistorical litigation with former CEO John Hewitt and governmental consent orders indicate past compliance/transparency violations that may recur
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
95 numbers
One-time purchase · CSV download · Validation questions included
FDD download
ATAX · FDD (2025) PDF