Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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  • Planet Fitness
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Franchise Costs: Detailed Estimates of H&R Block Franchise Costs (2016 FDD)

by Franchise Chatter on September 11, 2016

in Franchise Costs, Tax Preparation Franchise

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H&R Block Franchise Photo by Makaiinc

Detailed Estimates of H&R Block Franchise Costs Based on Item 7 (Estimated Initial Investment) of H&R Block’s 2016 Franchise Disclosure Document

1.  Initial Franchise Fee:  $2,500

2.  Real Property (estimated cost total is for 3 months):  $1,400 to $30,000

  • You will need 800 to 1,200 square feet of interior space per retail outlet for the Franchised Business, as well as parking facilities, for at least 5 automobiles. Parking facilities may include street parking, shopping mall parking lots, or other facilities.
  • This square footage is typically sufficient to provide for 5 to 6 workstations, a reception area, and back office support area.
  • The franchisor estimates the annual costs of leasing commercial space to be anywhere from $7 to $100 per square foot. This includes the cost of security deposits of 1 month’s rent that may be required by the landlord.

3.  Leasehold Improvements, Construction Costs:  $0 to $50,000

  • You may need to install at least some wiring and lighting. The cost will vary depending on the condition of the premises and typically averages $20 to $30 per square foot.
  • Depending on your negotiations, these costs may be partially or fully offset by the landlord’s willingness to cover some of the build-out costs.

4.  Signage:  $1,200 to $5,000

  • You will need to install signage and pay the prepaid freight. Depending on your location, you may also need to obtain your landlord’s approval and city permits for your signage. This may result in additional cost to you if you are required to obtain a site survey for the proposed signage.

5.  Furniture and Decor Items:  $15,000 to $23,000

  • You will have the option to either self-install furniture and decor items or choose professional installation at an additional fee. The cost information provided is representative of a complete office furniture package with 6 workstations.

6.  Equipment:  $8,000 to $12,000

  • You must have certain computer equipment, as well as a multi-line telephone or telephone system.
  • The franchisor currently offers all hardware (server, POS, backup, router, workstations, and peripherals) free of charge to a new conversion franchisee, and offers a basic kit to assisted acquisition candidates.
  • Items such as a fax and copy machine are optional equipment that you may choose to purchase. Estimated costs for these items are included in the totals.

7.  Opening:  $500 to $1,000

  • Before opening the Franchised Business, the advertising that you will need consists of media buys.

8.  Pre-Opening Salaries, Travel, and Initial Training:  $1,500 to $3,000

  • You will incur salary, travel, lodging, and food expenses. You will also incur expenses associated with the initial training program. For this training program, the franchisor provides instructors and instructional materials, but you must arrange and pay for transportation, lodging, and food for yourself and your employees to attend. You are also responsible for any wages for your employees.

9.  Start-Up Supplies:  $500

  • The franchisor estimates that the range listed will be sufficient to cover standard office and cleaning supplies for 3 months following the opening of the Franchised Business.

10.  Insurance:  $425 to $600

  • The figures in the chart are annual expenses. You may purchase the required insurance through an independent provider or take advantage of insurance made available to you through a program administered by H&R Block Insurance Agency, Inc.

11.  Zoning Expenses:  $0 to $500

  • Unless you must obtain a variance, waiver, or otherwise alter current zoning conditions, you are not expected to incur zoning expenses.

12.  Utility Deposits:  $50 to $300

  • The franchisor estimates that you will need deposits for utilities. The amount of these deposits varies depending on the practices of utility companies.

13.  Architect Design:  $0 to $4,500

  • You may want to employ a qualified architect to prepare preliminary and final architectural drawings for the Approved Location, but that would be unusual.

14.  Professional Fees:  $0 to $2,500

  • You may want to employ an attorney, accountant, and other consultants. Costs for these services will vary.

15.  Additional Funds:  $430 to $12,000

  • You will need capital to support ongoing expenses, such as payroll and utilities, to the extent these costs are not covered by sales revenue. This is only an estimate and there is no assurance that additional working capital will not be necessary during this start-up phase or thereafter.

16.  Applicable Business Licenses, if required:  $0 to $1,800

  • Some states and local governments regulate various industries. Consequently, you may incur costs associated with business licensing, tax preparer certification and registration for your employees, and other applicable registrations.

17.  Total:  $31,505 to $149,200

  • The franchisor relied upon its Parent’s and its collective experience of over 60 years in the industry to compile these estimates to assist franchisees with establishing offices.

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