LIBERTY TAX SERVICE

Item 7 pegs initial investment at $49,700-$71,400, including a $25,000 franchise fee, lower than many service brands but paired with steep ongoing fees: 14% royalty plus 5% brand fund, totaling 19% of sales—high versus the 6-10% norm for tax prep peers. Item 19 shows average gross revenue of $164,860 and median $139,486 across units, suggesting solid top-line potential in peak season (Jan-Apr), though ancillary services like refund loans add revenue streams under IRS rules. System health flags concerns: locations dropped 9% from 1,687 (2024) to 1,537 (2025), with 62 terminations, 38 non-renewals, and 54 transfers, yet 26 projected new units hint at stabilization; litigation centers on typical disputes like breaches and non-competes.

SBA data underscores viability with 170 loans averaging $203,226 and a low 8.2% default rate—better than many franchises—indicating franchisees can finance and sustain. Bankruptcy history exists, and parent BP LTCT LLC oversees from Virginia Beach since 1997. For investors eyeing business services, high fees and contraction demand caution; profitability hinges on volume in underserved markets, but median revenue implies half the units underperform averages, pressuring ROI in a digital/online competitive landscape.