H&R Block Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
H&R Block is a tax-preparation franchise serving individuals and small businesses, in person and online. Franchisees run local offices handling client intake, return preparation, e-filing, and year-round tax services.
FranchiseVerdict summary · 2026
A H&R Block franchise requires a total initial investment of $34K – $159K, including a $3K franchise fee and an ongoing 40.0% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. SBA 7(a) loans show a 5.6% charge-off rate across 54 loans[1]. 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
- $34K – $159K
- 14th pct Financial Ser…
- Avg gross sales
- N/A
- Royalty
- 40.0% (?)
- Likely extraction error
- Units
- 8,688
- 84th pct Financial Ser…
- SBA charge-off
- 5.6%
- % of SBA 7(a) loans not repaid · median varies by category
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 $34K – $159K including a $3K franchise fee, 40.0% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict B (Above average), verdict score 53/100 (higher is better). SBA loan charge-off rate of 5.6% across 54 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem contracting at -15.0% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- H&R Block Tax Services LLC
- Parent company
- H&R Block, Inc.
- Predecessor
- H&R Block Tax Services, Inc.
- Prior franchisor entity
- CEO title
- President, Global Consumer Tax & Chief Product Officer
- Curtis Campbell
- Incorporated in
- Missouri
- HQ
- One H&R Block Way, Kansas City, Missouri 64105
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $3.8B
- vs $3.6B prior year
Independent franchisee associations
- Independent Franchisee Association
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- Emerald Financial Services
- Franchise Partner
- the Proprietary Marks used in the System
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Curtis Campbell
- Headquarters
- MO
- Founded
- 1955
- FDD year
- 2025
- States available
- 49
Can you afford it, and what does the money buy?
Entry cost runs 22% below the typical financial services franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $3K | $3K |
| Working capital (3–6 mo) | $430 | $12K |
| Equipment, build-out, other | $31K | $144K |
| Total initial investment | $34K | $159K |
Source: H&R Block 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $34K – $159K
- Top 40% of category vs category
- Liquid capital req'd
- $430 – $12K
- Top 40% of category vs category
- Franchise fee
- $3K – $3K
- Top 40% of category vs category
- Royalty
- 40.0%
- Tiered by sales volume · typical 6–8%
- Ad fund
- -n/d
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 40.0% of gross sales |
| Transfer fee | $3K |
| Inventory (initial) | $500 – $2K |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
H&R Block makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one H&R Block unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, ad fund rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
40.0% royalty — higher than the category average of 13.5%.
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System contracting at -15.0% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
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 H&R Block Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 8,688
- Opened
- 1
- Last reporting year
- Closed
- 21
- Terminated
- 9
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 1.6%
- Company-owned
- 6,701
- Corporate units in the system
- % franchised
- 23%
- vs corporate-owned
- Net growth (3-yr)
- -15.0%
- Net unit change over 3 years
- 3-yr CAGR
- -15.0%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 21
- Terminated (3yr)
- 9
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 26
- Reacquired (3yr)
- 118
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 50 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
- California
- Illinois
- Indiana
- Michigan
States where the franchisor is registered to sell new franchises (FDD registration filings).
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 54
- Loan volume
- $8.6M
- Median loan
- $100K
- 50th percentile
- Charge-off rate
- 5.6%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 94.4%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 41
- Defaults
- 3
- Typical loan rate
- 5.8%
- avg rate to borrowers
- Franchised industry avg
- 7.8%
- brand beats franchise avg ↓
- Jobs supported
- 895
- 5.7 per loan
- Lender concentration
- 21%
- top lender's share
Borrower mix: 27% went to startups / new businesses, 73% to established operators
Franchise vs independent — in tax preparation services, franchised businesses charge off at 7.8% vs 17.7% for independents — franchising is associated with 56% lower SBA default risk in this category.
Vintage analysis
H&R Block charge-off rate by loan vintage
Top lenders financing H&R Block franchisees
Showing 3 of 41 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into H&R Block's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 5-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 5.6% — 65% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
H&R Block presents HIGH RISK due to system contraction, aggressive royalty structure, absent financial disclosures, active litigation, and unprotected territory—making ROI validation impossible and franchisee success uncertain.
Litigation (Item 3)
Two settled compliance fee class actions (Lopez/Perras, total $660K); Form 8863 MDL settled $150K; Vocational Consultants settled $840K; FTC administrative complaint settled $7M; Colorado Tax Specialists (ongoing, Missouri Franchise Act claim dismissed without prejudice); H&R Block v. Calise (settled May 2025 with consent injunction). One lawsuit against franchisee (Sandra Moore) for restrictive covenant enforcement.
Largest disclosed settlement: $7,000,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Consolidated financials are for parent H&R Block, Inc. (2025 Form 10-K), whose performance is unconditionally guaranteed (Exhibit C), not the franchisor entity H&R Block Tax Services LLC alone. Revenues = Service revenues $3,473,932K + Royalty, product and other revenues $287,063K = $3,760,995K (FY ended June 30, 2025; in 000s).
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 53 / 100 verdict
- 01MINORDeclining unit count (-6.9% YoY) suggests system contraction and potential market saturation or franchisee dissatisfaction
- 02MINORExtremely high royalty structure (60% on first $5,000, then 40%) consumes majority of early-stage revenue, creating cash flow pressure
- 03MEDNo average revenue or net income disclosed in FDD Item 19, making ROI projections impossible and preventing informed investment decisions
- 04HIGHMultiple active litigation matters including FTC settlement, class actions on deceptive fees, and restrictive covenant disputes indicate compliance and reputational issues
- 05MINORUnprotected territory exposes franchisees to direct competition from other H&R Block franchisees and company-owned locations
- 06MINORDeclining system size suggests fewer operational references and reduced collective bargaining power for franchisees
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
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 | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| 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 | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | No |
| Governing law | MO |
| Litigation count | 7 |
View Item 3 litigation summary
Two settled compliance fee class actions (Lopez/Perras, total $660K); Form 8863 MDL settled $150K; Vocational Consultants settled $840K; FTC administrative complaint settled $7M; Colorado Tax Specialists (ongoing, Missouri Franchise Act claim dismissed without prejudice); H&R Block v. Calise (settled May 2025 with consent injunction). One lawsuit against franchisee (Sandra Moore) for restrictive covenant enforcement.
Items 10, 11
Training & Operations
- Classroom training
- 42 hrs
- On-the-job training
- 19 hrs
- Training location
- Kansas City, MO (in-person first session); remaining sessions virtual at franchisee's approved location
- Ongoing training
- Required
- Time to open
- 2 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Offered
- Item 10
- POS system
- POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: POS
Item 20 · call current owners
Franchisee Contacts
2,052 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
H&R Block · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a H&R Block franchise?
The total investment to open a H&R Block franchise ranges from $34K – $159K, with an initial franchise fee of $3K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do H&R Block franchise owners earn?
H&R Block makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
What is Item 19 in the H&R Block 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 H&R Block FDD and qualifies whose outlets they describe.
What is H&R Block's franchise failure rate?
Based on SBA 7(a) loan data, H&R Block has a charge-off rate of 5.6% across 54 loans, meaning 5.6% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many H&R Block franchise locations are there?
As of their most recent FDD filing, H&R Block has 8,688 total units in the United States, including 1,987 franchised units and 6,701 company-owned units. 1 new units were opened in the latest reporting year.
Is H&R Block a good franchise to buy?
FranchiseVerdict rates H&R Block as a B-grade franchise with a verdict score of 53 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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 H&R Block, you can request corrections or provide updated information.
Other Financial Services franchises
Compare similar franchise opportunities in the Financial Services category
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.