H&R Block

H&R Block, a H&R Block Inc franchise, has been franchising since 1956 — 1 years after the concept was founded in 1955 , currently with 9,000 total locations (6,000 franchised, 3,000 company-owned — a 67% franchise-to-corporate ratio that signals the operator's reliance on independent owners) in the business services sector, headquartered in MO. According to the 2024 FDD, the total initial investment ranges from $32K to $139K — a 341% spread between the low and high end that reflects how site size, market, and buildout scope change the capital requirement. This figure includes the franchise fee of $3K, equipment, leasehold improvements, and initial working capital through the ramp-up period.

Ongoing royalties run 30.5% of gross sales. Critically, H&R Block does disclose financial performance data in Item 19, a voluntary disclosure that only about a third of U.S. franchisors make. The reported average gross revenue per location is $150K, meaning the typical unit pays roughly $46K per year in royalty alone. Revenue is not profit — actual franchisee take-home depends on rent, labor, cost of goods, and local demand.

Network momentum is currently negative: H&R Block contracted by 1.1% year-over-year with 200 closures on the record. Contraction warrants careful investigation — it can reflect market saturation, unit-level unprofitability, franchisee disputes, or a deliberate pruning of underperforming locations. Call Item 20 contacts and ask specifically about closure reasons. Before committing capital, triangulate this summary against the full FDD, a franchise attorney's review, and direct conversations with five or more current and former franchisees from Item 20.