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Jackson Hewitt Tax Service Franchise ProfileTax Franchises > Tax Preparation |
What Are the Initial Investment Costs for a Jackson Hewitt Tax Service Franchise?
To open a Jackson Hewitt Tax Service franchise, you should expect an initial investment ranging from $96,050 to $127,500. This includes a franchise fee of $50,000. Additionally, you'll need to have at least $50,000 in cash readily available and a net worth between $100,000 and $500,000. These financial requirements are crucial to ensure you can sustain operations, especially during the initial stages of your franchise journey.
What Are the Ongoing Fees Associated with a Jackson Hewitt Franchise?
As a Jackson Hewitt franchisee, you will be responsible for ongoing fees that include a royalty fee of 3% of your revenue and a marketing fee of 6.5%. These fees contribute to the overall support and resources provided by the franchisor, helping you to effectively market your services and maintain operational standards. Understanding these fees is essential for budgeting and financial planning as you grow your business.
What Is the Average Revenue Potential for Jackson Hewitt Franchisees?
Jackson Hewitt franchisees can expect an average annual revenue of approximately $114,848, with a median revenue of about $85,915. Revenue can vary significantly, with some units generating as low as $25,000 and others achieving up to $1,357,878 annually. This variance highlights the importance of location, management, and marketing strategies in determining your franchise's financial success.
How Quickly Can You Expect to Break Even with a Jackson Hewitt Franchise?
Franchisees can anticipate breaking even within approximately 10 months of operation, with an investment payback period of around 11 months. This relatively quick return on investment can be appealing for aspiring entrepreneurs, especially in the tax service industry, which often experiences high demand during tax season. Understanding these timelines can help you plan your financial strategy effectively.
Jackson Hewitt Tax Service 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.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Jackson Hewitt Tax Service Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 5,607 | 5,483 | 5,287 |
| Net Change YoY | -124 | -196 | |
| Franchised Units | 3,671 | 3,413 | 3,092 |
| Net Change YoY | -258 | -321 | |
| Corporate Units | 1,936 | 2,070 | 2,195 |
| Net Change YoY | 134 | 125 |
Initial Investment
The initial investment for a Jackson Hewitt Tax Service franchise ranges from $96,050 to $127,500. This includes a franchise fee of $50,000, along with other costs such as lease payments, insurance, and initial advertising. Potential franchisees should ensure they have adequate cash reserves and financial backing to cover these initial expenses.
Ongoing Fees
Franchisees are required to pay a royalty fee of 3% of gross sales, along with a marketing fee of 6.5%. These ongoing fees contribute to the overall support and brand marketing provided by Jackson Hewitt, helping franchisees attract and retain customers throughout the tax season.
Financial Performance
The average annual revenue per unit for Jackson Hewitt franchises is approximately $114,848, with a median revenue of $85,915. However, revenue can vary significantly, with some units reporting as low as $25,000 and others achieving up to $1,357,878. Understanding these figures can help potential franchisees assess their earning potential.
Breakeven and Payback
Franchisees typically reach breakeven within about 10 months and can expect to recoup their initial investment in approximately 11 months. This relatively quick payback period is an attractive aspect for aspiring entrepreneurs looking to enter the tax service industry.
Franchise Growth
Jackson Hewitt has seen a decline in the number of franchised units over recent years, dropping from 3,671 in 2021 to 3,092 in 2023. This trend may indicate market challenges or increased competition, which potential franchisees should consider when evaluating the brand's stability and growth prospects.
Corporate Structure
Jackson Hewitt operates both franchised and corporate-owned units, with 2,195 corporate locations as of 2023. This dual structure allows for a diverse business model, providing franchisees with support from an established corporate entity while also fostering a network of independent operators.
Frequently Asked Questions
The initial investment to open a Jackson Hewitt franchise ranges from $96,050 to $127,500, which includes a franchise fee of $50,000.