Atax Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
ATAX is a tax preparation and financial services franchise serving individuals and small businesses, with a focus on multicultural communities. Franchisees run local offices, preparing tax returns and offering bookkeeping and related services.
FranchiseVerdict summary · 2026
A ATAX franchise requires a total initial investment of $59K – $89K, including a $35K franchise fee. Per the 2025 FDD, average unit revenue was $111K[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $59K – $89K
- 32nd pct Financial Ser…
- Avg gross sales
- $111K
- 2nd pct Financial Ser…
- Royalty
- N/A
- Units
- 117
- 52nd pct Financial Ser…
- SBA charge-off
- N/A
Quick verdict · Financial Services · color = vs category peers
Green = favorable by >10% vs Financial Services avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $59K – $89K including a $35K franchise fee.
- RETURNSAverage unit revenue of $111K/year.
- RISKVerdict B (Above average), verdict score 54/100 (higher is better).
- LEGAL12 litigation matters disclosed in Item 3, higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- ATAX LLC d/b/a ATAX
- Parent company
- Loyalty, LLC
- Predecessor
- ATAX Franchise, Inc.
- Prior franchisor entity
- CEO title
- Interim Chief Executive Officer
- Timothy Tyler Wynn
- Incorporated in
- Virginia
- HQ
- 780 Lynnhaven Parkway, Suite 240, Virginia Beach, Virginia 23452
- Auditor
- Bernard Robinson & Company, L.L.P.
- Audited financials
- Franchisor revenue
- $2.9M
- vs $2.8M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- has offered franchises s
- LMS Franchising
- Tectum Franchising
- Loyalty Business Services
- Loyalty Brokers
- companies listed below
- The Inspection Boys Franchise USA
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Timothy Tyler Wynn
- Headquarters
- Virginia
- Founded
- 2019
- FDD year
- 2025
- States available
- 24
Can you afford it, and what does the money buy?
Entry cost runs 43% below the typical financial services franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown15 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $35K | $35K | |
| Construction & Leasehold Improvements | $3K | $5K | |
| Furniture, Fixtures and Equipment | $4K | $6K | |
| Interior & Exterior Signage | $2K | $4K | |
| Rent and Security Deposit | $3K | $5K | |
| Software and Software Support Services | $100 | $1K | |
| Computer and Point of Sale Systems & Connectivity | $3K | $4K | |
| Training Travel and Living Expenses | $1K | $2K | |
| Opening Inventory & Supplies | $500 | $2K | |
| Grand Opening Advertising | $2K | $5K | |
| Permits and Licenses | $200 | $500 | |
| Utilities | $450 | $1K | |
| Initial Insurance Deposit/Advanced Premium | $400 | $500 | |
| Professional Fees | $3K | $4K | |
| Additional Funds - 3 months | $4K | $5K | |
| Total initial investment | $59K | $79K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $59K – $89K
- Top 40% of category vs category
- Liquid capital req'd
- $4K – $15K
- Top 40% of category vs category
- Franchise fee
- $35K – $35K
- Top 40% of category vs category
- Royalty
- Royalty Fee is 14% of Gross Revenues, payable weekly (sub…
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 17.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Marketing / ad fund | 3.0% of gross sales |
| Transfer fee | $10K |
| Renewal fee | $2K |
| Inventory (initial) | $500 – $2K |
| Total fee load | 17.0% of rev |
At 17.0% total fee load, roughly $19K per year goes to the franchisor before you pay a single operating expense.
What do units actually make?
Average unit sales run 56% below the financial services norm.
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$15K
14.0% margin
Unlevered ROIC
19%
EBITDA / total invested capital
Payback
5.4 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one ATAX unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
19%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 ATAX units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$155K
on $774K purchase
Total debt
$619K
SBA $0.4M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
- Avg gross sales
- $111K
- Per unit, per year
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Sample size
- 100
- vs category median 72
- Range (low → high)
- $2K→$923K
- Cohort dispersion (min → max)
- Transparency tier
- revenue_only
- Categorical assessment of disclosure depth
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 3 / 10
- vs category median 0 / 10 · above
Compared against 45 Financial Services brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $111K/year in gross sales. Revenue-to-investment ratio: 1.5x.
Fee burden
Total ongoing fee load of 17.0% (near the Financial Services average).
Disclosure
Transparency score 3/10 — moderate disclosure depth. Average and range data are available but detailed cohort breakdowns may be limited.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Financial Services averages
How Atax Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 117
- Opened
- 8
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 12.9%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 1
- Franchisor bought back
- Transfer rate
- 2.6%
- Owners selling to other franchisees
- Termination rate
- 4.3%
- Franchisor-initiated terminations
- Ceased ops
- 8.6%
- Units that stopped operating
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 20 · 24 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- Maryland
- Michigan
- Minnesota
- New York
- Rhode Island
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 8 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 8
- Loan volume
- $295K
- Median loan
- $28K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (8 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 5
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Item 3 discloses 12 matters: 2 pending (minority-investor suit against Hewitt/ATAX/Loyalty alleging fraud/breach of fiduciary duty; arbitration with Fortis Lux/Tutum re: joint venture breach) and concluded actions including ATAX v. Mercedes/Toro Taxes (trade secrets, $350,000 judgment), JTH Tax/Liberty Tax v. Hewitt et al (trade dress/trade secrets, settled $545,000), two Virginia Beach contract/employment suits (settled $50,000 each), Delaware shareholder derivative suits against Hewitt re: Liberty Tax (settled, no liability found), RSL Senior Partners derivative suit (settled), Shahabuddin v. JTH Tax/Hewitt (settled $775,000), a California DFPI consent order requiring Hewitt to disclose a prior federal Final Order, and the underlying DOJ action against Liberty Tax Service (settled via compliance-monitor order).
Largest disclosed settlement: $775,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Bernard Robinson & Company, L.L.P.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
Score breakdown · what drove the 54 / 100 verdict
- 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
What are you signing up for?
Ongoing fees run about 17.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Territory population | 31,500 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 60 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 1 |
| Mandatory arbitration | Yes |
| Arbitration location | Virginia Beach, Virginia |
| Jury trial waiver | Yes |
| Governing law | Virginia |
| Litigation count | 12 |
View Item 3 litigation summary
Item 3 discloses 12 matters: 2 pending (minority-investor suit against Hewitt/ATAX/Loyalty alleging fraud/breach of fiduciary duty; arbitration with Fortis Lux/Tutum re: joint venture breach) and concluded actions including ATAX v. Mercedes/Toro Taxes (trade secrets, $350,000 judgment), JTH Tax/Liberty Tax v. Hewitt et al (trade dress/trade secrets, settled $545,000), two Virginia Beach contract/employment suits (settled $50,000 each), Delaware shareholder derivative suits against Hewitt re: Liberty Tax (settled, no liability found), RSL Senior Partners derivative suit (settled), Shahabuddin v. JTH Tax/Hewitt (settled $775,000), a California DFPI consent order requiring Hewitt to disclose a prior federal Final Order, and the underlying DOJ action against Liberty Tax Service (settled via compliance-monitor order).
Items 10, 11
Training & Operations
- Classroom training
- 32 hrs
- On-the-job training
- 0 hrs
- Training location
- Virginia Beach, Virginia (or online)
- Ongoing training
- Required
- Time to open
- 3 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Offered
- Item 10
- POS system
- QuickBooks Online / Xero
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: QuickBooks Online / Xero
Item 20 · call current owners
Franchisee Contacts
123 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
ATAX · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a ATAX franchise?
The total investment to open a ATAX franchise ranges from $59K – $89K, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do ATAX franchise owners earn?
According to Item 19 of the ATAX FDD, the average gross sales per unit is $111K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the ATAX FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the ATAX FDD and qualifies whose outlets they describe.
What is ATAX's franchise failure rate?
SBA 7(a) loan charge-off data is not available for ATAX (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many ATAX franchise locations are there?
As of their most recent FDD filing, ATAX has 117 total units in the United States, including 116 franchised units and 1 company-owned units. 8 new units were opened in the latest reporting year.
Is ATAX a good franchise to buy?
FranchiseVerdict rates ATAX as a B-grade franchise with a verdict score of 54 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent ATAX, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.