How much does it cost?
We believe in providing affordable opportunities to entrepreneurs who are looking for the
excitement of establishing their own business without the burden of high start-up costs.
Out of all the major tax companies in the franchise industry, H&R Block has one of the lowest
initial investment costs. Some of our competitors require an initial franchise fee that ranges
from $24,000 to $39,000. However, you can operate a new H&R Block franchise for
no initial
fee, other than a fully refundable $2,500 security deposit. Plus, you don't pay any additional
costs for national advertising and marketing. Of course, the expenses of furnishing and running an
office are your responsibility.
Financing Options
If you are looking to purchase an
existing H&R Block franchise, we may be able to help.
Franchise Partner, Inc., an H&R Block affiliate, offers two loan products for current and
prospective H&R Block franchisees. First, we offer a revolving, secured commercial line of
credit called a Franchise Equity Line of Credit (FELC). This financing is offered through an
affiliate of H&R Block, Franchise Partner, Inc., and is offered only to those who qualify.
The second loan, especially appropriate for buying an existing franchise, is an Annual Payments,
Adjustable Rate, Term Loan (APARTL). You can apply for credit before being approved as an H&R
Block franchisee. It may be possible to get a loan commitment in which the first draw on the line
of credit, or the initial advance on the term loan, would be to pay the seller for a portion of
the business sales price. At closing, you become the new franchisee, offer your new business
property as collateral for the loan, and use the money from the loan to pay the sales price.
As a lender to new H&R Block franchisees, Franchise Partner, Inc., considers the following:
- Your Ability to Repay the Loan - You should be able to pay the debt and earn a
reasonable return on your investment. Some of the factors contributing to your ability to
repay the loan are:
- Agree to a reasonable price for the business.
- Grow the business revenue in future years.
- Keep business expenses under control.
- Consider other sources of income, such as a spouse's income or other funds and
investments.
- The Amount of Your Down Payment - Without a sizeable down payment, it may be
necessary to rely on other sources of cash to meet your living expenses during the first
few years. At some higher prices, with a five-year seller-financed term loan, most of the
business's cash flow may have to go to just paying off the acquisition debt.
- Your History of Paying Your Debts - We use the national credit bureaus. As with
any investment opportunity, your current financial situation should not have too much
debt compared to your ability to pay that debt.
- Existing Liens or Claims on the Franchise Property - The seller should not have
any liens against the business, so you receive property that is free and clear of any
liens or claims of others. Look for all types of claims (e.g. tax liens, UCC liens,
judgment liens - your attorney will help you with this). Franchise Partner, Inc., will
only accept collateral that is free and clear of these claims. You cannot have any
pre-existing liens that would attach to the new business when it is purchased. For
instance, if you already have a loan that specifies its collateral includes real or
personal property now owned or hereafter acquired, that pre-existing lien would attach
to your new business.
If you would like to apply for franchise financing or learn more about the available loan options,
email Doug Webb.
You should always use your own consultants, attorneys and financial advisors to determine whether
to make an offer to purchase an existing franchise.
