From the filed FDD — automated extraction, check the source
2019 FDD · 6+ years old — too old to rate
H&R Block
Tax preparation · parent company: not identified
H&R Block is a tax preparation franchise providing individual income tax filing and related services. A franchisee operates a retail tax office staffed by trained preparers, serving consumers and small businesses with heavy seasonal volume around tax deadlines.
H&R Block net unit count declined 5.2% over 2017–2019 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.
Our rating · opinion
Filing too old to rate
The newest FDD we hold for this brand is from 2019, more than two years old. Franchise systems change a lot in that time, so we don't rate it until we have a current filing. For context, SBA loans to its franchisees approved FY1991–2020 charged off far less often than franchise loans of the same years (3 vs about 17 expected, 0.2×).
Exit rate · fiscal 2019
3.9%
vs 6.0% median across 48 comparable systems (business services)
Cost to open
$32K–$149K
Item 7 total investment range
SBA loan losses · vs same-year loans
0.2×
3 of 109 charged off vs ~17 expected
Market density · Texas
Typical density
2% thinner than the national average
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Data as of 2026-10-29. Figures come from H&R Block's public FDD filings (latest: MN 2019, extracted 2026-07-23) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.
Buying an existing H&R Block? Transfer fee $2,500, resale record and asking-price check →
What each source says
FDD record · SBA loans · model · auditor
We don't rate on an FDD more than two years old; the loan record and model are shown as context until a current filing arrives.
FDD record · Item 20
Filing too old
Latest FDD we hold is from 2019.
SBA loans · vs same-year loans
Far fewer defaults than expected (0.2×)
3 charge-offs among 109 resolved loans approved FY1991–2020; about 17 expected.
Modeled risk
Lower risk
The brand's own loan record contradicts this prediction; the record leads.
Auditor opinion · Item 21
Clean opinion
Unqualified audit, 2019 FDD. Says nothing about franchisee results.
Behind the verdict
the record, factor by factor · Item 20
latest consecutive years · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness · shown, not counted in the verdict
Systemwide units
2017–2019
Survival record
FDD Item 20 · outlet status by year
In fiscal 2019, 129 of 3,345 franchised outlets left the system — an exit rate of 3.9% (fiscal 2019), vs a 6.0% median across 48 comparable systems (business services). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2017 | 2018 | 2019 |
|---|---|---|---|
| Outlets at start | 10,192 | 10,046 | 10,106 |
| Opened | 61 | 105 | 48 |
| Transfers | 125 | 129 | 123 |
| Terminations | 11 | 18 | 20 |
| Non-renewals | 1 | 0 | 1 |
| Reacquired by franchisor | 172 | 101 | 128 |
| Ceased — other reasons | 64 | 32 | 108 |
| Outlets at end | 10,046 | 10,106 | 9,524 |
| Net change | -146 | +60 | -582 |
The franchisor's own finances
FDD ITEM 21 · AUDITED STATEMENTS · 2019 FDD
Deloitte & Touche LLP gave an unmodified (clean) opinion on the statements in the 2019 FDD; revenue rose 2% from FY2017 to FY2019.
This is the company selling the franchise, not any franchisee. A clean opinion means the statements are fairly presented — not that the business is healthy.
Audit opinion
Unmodified (clean) opinion
Deloitte & Touche LLP
Revenue · FY2019
$3.09B
extracted · not cross-checked
Net income · FY2019
$422.5M
extracted · not cross-checked
Where FY2019 revenue came from
13% royalties
initial-fee share not extracted
Show the statement figures ↓Hide the evidence ↑
| Fiscal year | FY2017 | FY2018 | FY2019 |
|---|---|---|---|
| Total revenue | $3.04Bextracted · not cross-checked | $3.16Bextracted · not cross-checked | $3.09Bextracted · not cross-checked |
| Royalty revenue | $388.0Mextracted · not cross-checked | $393.5Mextracted · not cross-checked | $403.2Mextracted · not cross-checked |
| Net income (loss) | $408.9Mextracted · not cross-checked | $613.1Mextracted · not cross-checked | $422.5Mextracted · not cross-checked |
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 150 SBA-backed loans to H&R Block franchisees since 1991. Of the 109 approved FY1991–2020 that have resolved, 3 charged off — where about 17 would be expected for franchise loans made in the same years. That is 0.2× the expected rate: these loans defaulted far less often than comparable franchise loans.
All-time, 3 of 110 resolved loans charged off (2.7%). That raw figure mixes every approval year since 1991 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score.
0.2×
3 of 109 resolved (FY1991–2020) vs ~17 expected
2.7%
3 of 110 resolved, every approval year
—
charged-off $ ÷ approved $, defaulted loans
$323,662
what recent franchisees borrowed
—
shown with 10+ defaults
10 vs 35
distinct banks — fewer than FY16–20 (loan volume and SBA name coding affect this)
Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO H&R BLOCK BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
The owner's side of the deal
FDD × federal loan record
Who finances it
Union Bank and Trust Company
7.7% of this brand's loans
Who buys it
61.7%
borrowers with no other franchise SBA loan on record
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators have charged off less often than brands sold mostly to newcomers (see methodology).
Does experience help here?
−2.6pp
multi-unit vs single-unit owners
Owners of multiple units default at 0.0%; single-unit owners at 2.6% (each on 15+ resolved loans, owners identified by borrower-name matching).
Computed from 150 SBA 7(a)/504 loans matched to H&R Block by SBA franchise code in the SBA FOIA file. Debt service assumes level amortization at the average disclosed term and rate. Owner-level splits rely on borrower-name matching and may misclassify. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $2,500 franchise fee (Item 5) and a total investment of $32K–$149K (Item 7). The franchisor publishes no earnings claim (Item 19) — ask current and former franchisees for real numbers.
To open (Item 7)
$32K–$149K
all-in investment range
Franchise fee (Item 5)
$2,500
upfront, one-time
Royalty (Item 6)
See Item 6
not a single flat % — read the fee table
This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on labor, rent, supplies, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).
Build a real pro-forma for H&R Block with a buyer-paid CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 16 wage cases against operators of this system, recovering $444K in back wages for 592 workers. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
16
Back wages owed
$444K
Employees affected
592
Since 2020
1
Read this carefully. The employers in these cases are individual H&R Block franchisees — separately owned businesses operating under the brand name — not H&R Block itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Cases are matched to the brand by trade name and may include misattributed employers. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2022.
Modeled risk
FDD Risk Score · a prediction from disclosure and loan-file features
This brand's own loan record is better than the model predicts: its franchisees' SBA loans charged off at 0.2× the rate of same-year franchise loans, where the model expects about 0.5×. We lead with the observed record; the model is shown for context.
Observed · vs same-year loans
0.2×
3 of 109 seasoned loans charged off
Risk percentile
2nd
Checkable · higher = riskier
Modeled · vs same-year loans
0.5×
≈ 7.7% at the all-loan vintage mix
Top drivers: System size (log units) (lowers) · Item 3 litigation (log) (lowers) · Share financed by high-loss lenders (lowers) · No Item 19 disclosure (lowers). The observed record differs from the model, so treat the score as context only. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Public records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
We have no verified public-record signals published for H&R Block. This is not evidence that no events exist. Check PACER, the FDD's Item 3 (litigation) and Item 4 (bankruptcy), and recent news yourself.
11 questions to ask an H&R Block franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These questions come from what H&R Block has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
H&R Block’s own Item 20 shows 129 of 3,345 franchised outlets left the system in fiscal 2019 — about 3.9%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2019
- 02
123 units transferred to new owners in fiscal 2019. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.
FDD Item 20 · FY2019
- 03
The system went from 10,046 units to 9,524 over 3 disclosed years. What's the explanation you've been given, and do you believe it?
A shrinking system means fewer owners funding the ad fund and support staff you're paying for.
FDD Item 20 · FY2017–FY2019
- 04
SBA loans to H&R Block franchisees approved 1991–2020 defaulted far less often than franchise loans made in the same years: 3 charge-offs among 109 resolved loans, where about 17 would be expected (0.2×). Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of how these loans ended, from public federal records matched by SBA franchise code — independent of anything the franchisor discloses — compared with franchise loans made in the same years. A charge-off is a loan outcome, not proof the business closed.
SBA 7(a)/504 loan record, seasoned loans FY1991–FY2020 · 0.2× of same-vintage franchise loans
- 05
Item 7 puts the cost to open at $32K–$149K, yet the average recent SBA loan to H&R Block franchisees was $324K — above the whole range. What did those loans pay for: new units, resales, real estate, several units at once? And what did you actually spend to open, all in?
A loan above the disclosed range can mean buyers routinely overspend Item 7, or that SBA money in this system funds resales, property or multi-unit deals. The filing doesn't say which; an owner can.
FDD Item 7 vs SBA approvals FY2020+
- 06
H&R Block’s FDD makes no financial performance representation at all — legally, they've told buyers nothing about earnings. What did your first 24 months actually look like, month by month?
When a franchisor won't publish numbers, existing owners are the only source. Silence in Item 19 is a choice, not a requirement.
FDD Item 19 · 2019
- 07
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 08
Item 3 discloses 19 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2019
- 09
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 10
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 11
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
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A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing H&R Block’s numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
H&R Block franchise questions, answered from the filings
How many H&R Block franchised outlets left the system last year?
In H&R Block's latest FDD Item 20 (fiscal 2019), 129 of 3,345 franchised outlets left the system — an exit rate of 3.9% — compared with a 6.0% median across 48 comparable systems (business services) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.
How much does a H&R Block franchise cost?
Per H&R Block's 2019 FDD, buying in requires an initial franchise fee of $2,500 (Item 5) and a total initial investment of $32K–$149K (Item 7).
Does H&R Block disclose earnings (Item 19)?
No — H&R Block's 2019 FDD makes no financial performance representation in Item 19. That is legal and common, but it means the franchisor publishes no earnings claim; ask current franchisees for real numbers.
How often do SBA loans for H&R Block franchises default?
SBA loans to H&R Block franchisees approved 1991–2020 defaulted far less often than franchise loans made in the same years: 3 charge-offs among 109 resolved loans, where about 17 would be expected (0.2×). All-time, 3 of 110 resolved loans since 1991 charged off (2.7%); that raw figure mixes every approval year, so we compare with same-year loans instead. A charge-off is a loan loss, not proof the business closed. Source: public SBA 7(a)/504 FOIA data.