Loyalty Business ServicesFranchise Cost, Revenue & Review 2026
Data from FDD filing
FranchiseVerdict summary · 2026
A Loyalty Business Services franchise requires a total initial investment of $68K – $100K, including a $40K franchise fee and an ongoing 14.0% royalty[2]. The 2021 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2021 FDD issuance
Overview
- Investment
- $68K – $100K
- 35th pct Financial Ser…
- Avg gross sales
- N/A
- 30th pct Financial Ser…
- Royalty
- 14.0%
- 23rd pct Financial Ser…
- Units
- 2
- 9th pct Financial Ser…
- SBA default
- N/A
Quick verdict · Financial Services · color = vs category peers
Green = >15% above Financial Services avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
10 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $68K – $100K including a $40K franchise fee, 14.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict F (Bottom Quintile) with a risk score of 84/100.
- 10 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
- Legal entity
- Loyalty Business Services LLC
- Parent company
- Loyalty, LLC
- CEO title
- Chief Executive Officer
- Steven M. Rafsky
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- VA
- HQ
- 780 Lynnhaven Parkway, Suite 240, Virginia Beach, VA 23452
- Auditor
- Bernard Robinson & Company, L.L.P.
- Audited financials
- Franchisor revenue
- $0
- vs $0 prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Loyalty Business Services appears to provide customer loyalty program management and consulting services to small and mid-sized businesses. Franchisees likely manage client relationships, implement loyalty platforms, and generate recurring revenue through program setup and management fees. Day-to-day operations probably involve sales prospecting, client onboarding, system administration, and ongoing customer support.
- CEO
- Steven M. Rafsky
- Headquarters
- VA
- Founded
- 2019
- FDD year
- 2021
- States available
- 2
FDD Item 7 · 2021 filing · 15 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Construction & Leasehold Improvements | $0 | $10K | |
| Furniture, Fixtures and Equipment | $5K | $7K | |
| Interior & Exterior Signage | $2K | $3K | |
| Rent and Security Deposit | $3K | $6K | |
| Software and Software Support Services | $100 | $500 | |
| Computer and Point of Sale Systems & Connectivity | $3K | $4K | |
| Training Travel and Living Expenses | $1K | $2K | |
| Opening Inventory & Supplies | $500 | $2K | |
| Grand Opening Advertisingnot refundable | $5K | $5K | |
| Permits and Licenses | $700 | $700 | |
| Utilities | $500 | $1K | |
| Insurance | $400 | $500 | |
| Professional Fees | $3K | $4K | |
| Additional Funds - 3 months | $5K | $15K | |
| Total initial investment | $68K | $100K |
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
- $68K – $100K
- Better than avg vs category
- Liquid capital req'd
- $5K – $15K
- Better than avg vs category
- Franchise fee
- $40K – $40K
- Better than avg vs category
- Royalty
- 14.0%
- Gross Revenues · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 17.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 14.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Transfer fee | $5K |
| Total fee load | 17.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Financial Services averages
How Loyalty Business Services Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 2
- Opened
- 2
- 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
- 0.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 22
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 2 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
2
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Micro-franchise with only 2 units, undisclosed financials, high royalty burden, and serious litigation history tied to management's troubled past at Liberty Tax creates extreme execution and legal risk.
Litigation (Item 3)
PENDING: JTH Tax LLC d/b/a Liberty Tax Service v. John T. Hewitt, Loyalty LLC, ATAX LLC, ATAX Franchise, Inc. and Yneva Marte (Case No. 2:21-cv-00076-RBS-LRL, E.D. Virginia, Feb 2021) - alleges confusingly similar signage/trade dress, tortious interference with contracts, breach of employment agreement regarding trade secrets/confidential information, and conspiracy to unfairly compete. CONCLUDED: (1) Rose Mauro v. Liberty Tax, Inc., Edward L. Brunot, John T. Hewitt, and Kathleen Donovan (Case No. 18 CV 245, E.D.N.Y., Jan 2018) - securities class action dismissed Jan 16, 2020, affirmed on appeal; (2) Patrick Beland v. Liberty Tax, Inc., Edward L. Brunot, John T. Hewitt, and Kathleen E. Donovan (Case No. 17 CV 7327, E.D.N.Y., Dec 2017) - consolidated with Rose Mauro case, dismissed; (3) Kenneth Martin et al. v. JTH Tax, Inc. d/b/a Liberty Tax Service, John Hewitt and Danny Hewitt (Case No. 9:10-3016-CWH) - document incomplete.
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)
Score breakdown · what drove the 84 / 100 rating
- 01MEDOnly 2 units in entire system indicates extremely limited scale and unproven model
- 02MED14% royalty is high relative to undisclosed average revenues—profitability unclear
- 03MEDNo Item 19 financial performance disclosure (Avg Revenue and Net Income not disclosed) prevents ROI validation
- 04HIGHExtensive litigation history including pending trade dress/tortious interference claims and 9 concluded actions suggests operational and legal instability
- 05MINORChairman's previous tenure at Liberty Tax involved securities class actions and derivative suits—significant reputational and governance risk
- 06MINOR10-year term with $40,000 franchise fee locks capital into unproven 2-unit franchise with no growth trajectory
- 07MINORUnknown unit growth rate suggests stagnation or inability to attract franchisees despite being established
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Territory type | Zip codes, natural, or political boundaries |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 65,000 |
| 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 |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Virginia |
| Litigation count | 10 |
View Item 3 litigation summary
PENDING: JTH Tax LLC d/b/a Liberty Tax Service v. John T. Hewitt, Loyalty LLC, ATAX LLC, ATAX Franchise, Inc. and Yneva Marte (Case No. 2:21-cv-00076-RBS-LRL, E.D. Virginia, Feb 2021) - alleges confusingly similar signage/trade dress, tortious interference with contracts, breach of employment agreement regarding trade secrets/confidential information, and conspiracy to unfairly compete. CONCLUDED: (1) Rose Mauro v. Liberty Tax, Inc., Edward L. Brunot, John T. Hewitt, and Kathleen Donovan (Case No. 18 CV 245, E.D.N.Y., Jan 2018) - securities class action dismissed Jan 16, 2020, affirmed on appeal; (2) Patrick Beland v. Liberty Tax, Inc., Edward L. Brunot, John T. Hewitt, and Kathleen E. Donovan (Case No. 17 CV 7327, E.D.N.Y., Dec 2017) - consolidated with Rose Mauro case, dismissed; (3) Kenneth Martin et al. v. JTH Tax, Inc. d/b/a Liberty Tax Service, John Hewitt and Danny Hewitt (Case No. 9:10-3016-CWH) - document incomplete.
Items 10, 11
Training & Operations
- Classroom training
- 25 hrs
- On-the-job training
- 0 hrs
- Training location
- On-site and franchisor location
- Ongoing training
- Required
- Time to open
- 4 mo
- From signing to launch
- POS system
- TR Onvio, UltraTax, Checkpoint
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: TR Onvio, UltraTax, Checkpoint
Item 20 · call current owners
Franchisee Contacts
3 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Loyalty Business Services · FDD (2021) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Loyalty Business Services franchise?
The total investment to open a Loyalty Business Services franchise ranges from $68K – $100K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Loyalty Business Services franchise owners earn?
Loyalty Business Services does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Loyalty Business Services's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Loyalty Business Services (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 Loyalty Business Services franchise locations are there?
As of their most recent FDD filing, Loyalty Business Services has 2 total units in the United States, including 2 franchised units and 0 company-owned units. 2 new units were opened in the latest reporting year.
Is Loyalty Business Services a good franchise to buy?
FranchiseVerdict rates Loyalty Business Services as a F-grade franchise with a risk score of 84 out of 100, 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.
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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.