H&R Block Tax Services

The royalty rate of 60% is significantly higher than the typical 6-10% for business service franchises. How is this royalty structured—is it based on gross revenue, and are there any circumstances under which it could be reduced or waived?

What were the specific legal claims in the 8 litigation cases, particularly the 6 cases where the franchisor was named as defendant? Are any of these cases still in discovery or appeal?

Of the 2 currently pending litigation cases, what is the nature of each claim, which party initiated each case, and what is the expected timeline for resolution?

The franchise agreement requires a minimum 15-day cure period for most breaches. What are the 10 specific non-curable defaults that would permit immediate termination without a cure opportunity?

Can you provide a detailed breakdown of the 305 unit closures in 2023? Were these primarily due to seasonal business fluctuations, franchisee underperformance, or other factors?

The non-compete clause restricts franchisees and associates from competing for 2 years within 25 miles post-termination. How is 'competing' defined—does this extend to all tax-related services or only H&R Block's specific service lines?

The franchise fee is $2,500 but the transfer fee is also $2,500. If a franchisee wishes to transfer their unit to another party, are there any other transfer-related costs beyond the $2,500 fee?

The territory is protected but non-exclusive. What does 'protected' mean in practical terms, and does this mean H&R Block could open competing locations within my territory?

Why is there no Item 19 financial performance data available? Can you provide historical financial performance data, including average gross sales, operating costs, and net income ranges for franchisees in similar territories?

The exit rate is 7.4% annually. Of the franchisees who exited in the past 3 years, how many cited profitability concerns versus other reasons such as health, relocation, or retirement?

What support and training does H&R Block provide during the initial term? Since the Contract Terms score is unusually high (70), what specific terms are particularly favorable to the franchisor?

The Ongoing Fees score is 0, which is extremely unusual. Does this mean royalties, advertising fees, and technology fees are all bundled into the 60% royalty rate, or are there additional unnamed fees?

Given the litigation history, have any legal judgments been entered against the franchisor? If so, what were the amounts and have they been paid or appealed?

The franchise agreement lists 10 non-curable defaults. Besides prohibited competition and fraud, what specific circumstances would constitute grounds for immediate termination?

Are there any pending regulatory investigations, class actions, or settlements involving H&R Block and its franchisees that may not yet appear in the litigation database?

The initial and total potential term are both 10 years with no specified renewal options. Is the franchise automatically terminated after 10 years, or is renewal at the franchisor's discretion?

How many of the 157 units closed in 2024 and 76 units closed in 2025 were voluntary closures by franchisees versus terminations by H&R Block?

The transfer fee is low relative to other business service franchises. Are there additional requirements or franchisor approval conditions beyond payment of the $2,500 transfer fee?

What percentage of current franchisees have renewed or are eligible to renew, and how many renewals were rejected or not pursued in the past 3 years?

Given that 6 litigation cases named the franchisor as defendant, were any settlements reached? If so, what were the general categories of claims (e.g., earnings claims, misrepresentation, breach of contract)?