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H&R Block Franchise ProfileTax Franchises > Tax Preparation |
To open an H&R Block franchise, you will need to consider a range of initial investments. The total investment can vary significantly, with a low of $33,824 and a high of $158,344. The initial franchise fee is set at $2,500. Additionally, you should be prepared for ongoing costs, including a royalty fee of 30% and a marketing fee of 4%. It’s also important to have a net worth between $300,000 and $500,000 to qualify for franchise ownership.
An H&R Block franchise can be financially rewarding, with an average annual revenue of $1,692,254 per unit. The median revenue is $85,000, while the lowest recorded revenue stands at $5,000 and the highest at $1,200,000. Franchisees can expect a breakeven time of around 24 months and an investment payback period of just 12 months, making it a potentially lucrative opportunity for those willing to invest.
The ongoing costs for running an H&R Block franchise can add up, with average annual expenses totaling approximately $33,500. Key expenses include rent ($7,000), utilities ($2,500), marketing and advertising ($6,000), and salaries for management and administration ($13,000). Understanding these costs is crucial for effective financial planning and ensuring the profitability of your franchise.
As of 2024, H&R Block operates a total of 8,764 units, comprising 2,135 franchised units and 6,629 corporate-owned units. The number of franchised units has seen a decline from 2,561 in 2022 to 2,135 in 2024, reflecting market dynamics. This information can help potential franchisees gauge the brand's stability and market presence as they consider their investment.
H&R Block Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
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H&R Block Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
Units | 2022 | 2023 | 2024 |
---|---|---|---|
Total Units | 9226 | 8915 | 8764 |
Net Change YoY | -311 | -151 | |
Franchised Units | 2561 | 2339 | 2135 |
Net Change YoY | -222 | -204 | |
Corporate Units | 6665 | 6582 | 6629 |
Net Change YoY | -83 | 47 |
H&R Block is a leading tax preparation service with a strong presence in the financial services sector. Established in 1955, the franchise has grown to encompass thousands of locations worldwide, helping individuals and businesses navigate the complexities of tax filings. With a focus on customer service and accuracy, H&R Block offers a variety of services, including tax preparation, bookkeeping, and financial consulting, making it a trusted partner for clients seeking financial clarity.
Starting an H&R Block franchise involves a range of initial investments. The total initial investment can range from $33,824 to $158,344, which includes a franchise fee of $2,500. Franchisees are also required to maintain a net worth of $300,000 to $500,000, ensuring they have the financial stability necessary to operate a successful business. Additionally, a cash reserve of $33,824 to $158,344 is required to cover initial operating expenses and setup costs.
H&R Block franchises demonstrate strong revenue potential, with an average annual revenue per unit reported at $1,692,254. While some units may generate as little as $5,000 annually, others can achieve revenues up to $1,200,000. This wide range highlights the importance of location, marketing, and operational efficiency in driving financial success within the franchise model.
Franchisees are subject to ongoing fees that can impact profitability. A royalty fee of 30% on gross sales is charged for new units, in addition to a 4% marketing fee. These fees contribute to the overall support and resources provided by H&R Block, including national marketing campaigns and operational guidance, which can help franchisees maximize their business potential.
The average breakeven time for H&R Block franchises is approximately 24 months, indicating that franchisees can expect to recover their initial investment within this timeframe. Moreover, the investment payback period is relatively quick at 12 months, allowing franchisees to start seeing returns on their investment sooner than in many other franchise opportunities.
H&R Block has seen fluctuations in its number of franchised units over recent years. In 2022, there were 2,561 franchised units, which decreased to 2,339 in 2023 and is projected to decline further to 2,135 in 2024. This trend suggests a need for strategic planning and market adaptation to maintain and grow franchise presence in a competitive landscape, emphasizing the importance of robust support systems for franchisees.
Frequently Asked Questions
The initial investment for an H&R Block franchise ranges from $33,824 to $158,344. This includes the franchise fee of $2,500 and other startup costs.