Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

FDD Talk: The Jackson Hewitt Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on March 13, 2017

in FDD Talk 2017: Service Franchises, Franchise Earnings, Tax Preparation Franchise

Franchise Chatter Membership Information

Don't Invest in a Franchise Until You Check Out This List

In this FDD Talk 2016 post, you’ll learn the following:

  • Section I – Background information on the Jackson Hewitt franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Jackson Hewitt franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of Jackson Hewitt’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2015 fiscal year average reported revenue, EBITDA (excluding owner compensation), and margin (excluding owner compensation) for the 464 Jackson Hewitt franchisees that submitted Schedule Ds for the most recently completed fiscal year ended April 30, 2015. These 464 Jackson Hewitt franchisees own 4,196 Jackson Hewitt offices representing 82.1% of all franchisee entities in existence at April 30, 2015.

Section I – Background Information

From Small Tax Service Company to Second Largest in America

Jackson Hewitt was founded by John Hewitt and a group of investors in 1982. Hewitt and the investors purchased the six-unit Mel Jackson Tax Service in Norfolk, Virginia and renamed the company Jackson Hewitt.

Over the next few years, the company opened a few more locations in the area and started franchising in 1986, which was the same year that the IRS began experimenting with e-filing services. By the 1987 tax season, Jackson Hewitt had 22 locations.

A few years after franchising, Jackson Hewitt was contracted by department store chain Montgomery Ward to open offices in 169 locations throughout the U.S. The sudden growth was initially too much for Jackson Hewitt to handle and the company decided to close 67 locations to avoid filing for bankruptcy. However, by the end of 1990, the company had returned to profitability and opened additional Montgomery Ward locations.

Over the next few years, the company continued to expand and by the end of 1993, Jackson Hewitt had 900 locations across 37 states.

The following year, in 1994, the company went public although no new stock was offered; instead, the company’s 700 investors’ private shares were converted to public ones in an effort to boost the company’s profile and spur franchise sales. That same year, Jackson Hewitt began opening offices in Sam’s Club and Wal-Mart locations.

In 1996, John Hewitt left the company and Keith Alessi took over as CEO. Two years later, the company was acquired by Cedant Corporation, a consumer conglomerate, for $480 million. Under Cedant, the company aggressively pushed expansion, opening 1,000 new offices by the start of the 1999 tax season.

Despite doing well over the next decade, the company filed for bankruptcy in late May 2011. Earlier in the month, Jackson Hewitt ceased being traded on the New York Stock Exchange and by the summer, the company once again became privately held.

Today, Jackson Hewitt is privately held by Bayside Financial and the company has over 6,000 locations across the U.S.

CEO Leaving After Three Years

Although David Prokupek has only been CEO of Jackson Hewitt for three years, he announced that he would be stepping down from his position in early 2017. Prokupek will stay on as co-CEO through this year’s tax season and then stay on as an investor and an advisor to the board of directors.

Under Prokupek’s leadership, Jackson Hewitt experienced new client growth, launched its online tool Express Refund Advance, and led the company through a brand transformation.

Alan D. Ferber will step in as the company’s CEO. Ferber previously served as President of ADT home security.

Jackson Hewitt Now Offering a Tax Refund Advance

Prior to the start of the 2016 tax season, Jackson Hewitt announced that it would be offering a tax refund advance worth up to $750. The refund is a no-fee, 0% interest, 0% APR loan, which would be repaid when the client received their tax refund. Jackson Hewitt is also offering the tax refund advance for the 2017 tax season.

In late 2016, customers were able to pre-qualify for an Express Refund Advance worth between $200 and $1,300. The company says that the advance will help the millions of taxpayers who will experience a refund delay due to the new PATH Act, which states that the IRS may take longer to examine any refunds that contain Earned Income Tax Credit (EITC) and/or Additional Child Tax Credit (ACTC).

Jackson Hewitt Teams Up With American Express

In early 2016, Jackson Hewitt announced that it was joining forces with American Express to offer services that would help people who either have no access or limited access to bank accounts. Those that are unbanked or underbanked often have to wait longer for tax refunds since these aren’t going through direct deposit.

To help those without proper banking services, anyone who has their taxes prepared by Jackson Hewitt has the option to have their refund added to an American Express Serve account. American Express Serve is a reloadable prepaid account backed by American Express.

Missing From Entrepreneur’s Franchise 500 List for Years

Despite being a large franchise and the number two tax service company in the United States, Jackson Hewitt has only appeared on Entrepreneur’s Franchise 500 list twice in the last decade. Jackson Hewitt has not appeared on Entrepreneur’s list since 2008 when it ranked No. 21. The highest ranking the company has achieved in the last decade was No. 3 in 2007.

Section II – Estimated Costs

  • Please click here for detailed estimates of Jackson Hewitt franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis

To Access the Rest of This Article and Other Premium, Income-Enhancing Content, Subscribe Now or Log In.

Gain the Insider Information (and Actual Earnings Data) You Need to Make a Safe and Smart Franchise Investment. Click Here to Learn More.

Gain the Insider Information (and Actual Earnings Data) You Need to Make a Safe and Smart Franchise Investment - See more at: https://www.franchisechatter.com/register/#sthash.le7wKJKM.dpuf

Franchise Matching Quiz

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: