JACKSON HEWITT TAX SERVICE

Entry runs $71,050-$105,000 per Item 7, including a $25,000 franchise fee, with franchisees often launching three offices in territories. Royalties start low at 3% in year one, ramping to 6%, 9%, then 15%, plus 6.5% ad fund, monthly tech fees, and bi-annual assistance charges—potentially squeezing margins in a field battling TurboTax and free-file options. Item 19 discloses average gross revenue of $117,660 and median $86,880 across units, implying lean profits after fees and seasonality; no net income data leaves EBITDA guesses to operators, but 88 SBA loans averaging $617,068 with just 1.1% default rate signals viable debt service for survivors.

Franchising since 1986, the system contracted 8% from 2,981 locations in 2024 to 2,744 in 2025 per Item 20, with 37 terminations, only 3 non-renewals, 52 transfers, and 33 projected new units—transfers outpacing growth flags owner exits amid competition. Corporate dominates with 2,423 owned units versus 321 franchised, reducing franchisor desperation but questioning expansion commitment. Litigation involving 94 franchisees alleging fraud over incentives (settled post-arbitration) underscores payout disputes; prospective investors face a mature but contracting network where high fees and sales medians demand volume to thrive.