How Much Does a Jackson Hewitt Tax Service Franchise Owner Make?

Item 19 officially measures revenue, not owner earnings. Jackson Hewitt uses the term Gross Volume of Business, defined broadly as revenue generated by the Jackson Hewitt Business, subject to specified exclusions such as taxes collected for authorities, authorized refunds and discounts, and customer bad debt. The reporting period was the fiscal year ended April 30, 2025.

Source: 2025 Jackson Hewitt Inc. FDD, Item 19, pp. 44–46. The franchisor says franchisee-submitted data were not audited or verified. The 2,663 Covered Offices represented 97.05% of the 2,744 active franchised offices at the end of the 2025 Tax Season.

The estimate starts with format-specific Item 19 medians and models both office mixes stated in the FDD. One Standard Office plus two Kiosk Offices produces a base revenue anchor of $232,695. Two Standard Offices plus two Kiosk Offices produces $366,130. Neither total is an official per-owner or per-territory result; each is a derived portfolio scenario.

The three cases vary both revenue and the all-in net-income margin. Because Item 19 gives medians and ranges but no quartiles, the model applies an explicit 80%, 100%, and 120% spread to each portfolio’s combined median revenue. The IRS 2023 sole-proprietorship ratio for “Other accounting services” is $4.596 billion of net income less deficit divided by $11.708 billion of receipts, or approximately 39.25%.

The Conservative margin is 36.25%, the Base margin is 39.25%, and the Upside margin is 42.25%. The IRS measure is all-in: its net income follows the sampled businesses’ total deductions. The model therefore does not subtract the FDD fees again, because the IRS table does not establish which sampled expenses included franchise or comparable business fees. The separate fee-load figures are a compatibility test, not an additional deduction from the displayed earnings scenarios.

• Conservative: 80% of combined median revenue and a 36.25% all-in owner-benefit margin.
• Base: combined median revenue and the 39.25% IRS all-in net-income ratio.
• Upside: 120% of combined median revenue and a 42.25% all-in owner-benefit margin.
• Proxy limitation: IRS “Other accounting services” is broader than the Census NAICS 541213 Tax Preparation Services definition and does not isolate multi-location franchise owners.
• Fee limitation: The 15% full-rate Royalty Fee plus 6.5%–7% Advertising Fee equals 21.5%–22% of Gross Volume of Business, but the overlap with the IRS expense pool cannot be measured from either source.

The earnings proxy and fee load answer different questions. The IRS ratio supplies an all-in net-income benchmark. The FDD fee rows show how much the disclosed percentage fees equal at each base revenue anchor. They are not subtracted from the IRS result a second time because the benchmark does not identify whether equivalent fees are already present in its total deductions.

Fee source: 2025 Jackson Hewitt Inc. FDD, Item 6, pp. 9–15. The 7% Advertising Fee applies only under the growth condition described in the FDD.

Owner involvement can be worth tens of thousands of dollars because the sole-proprietor proxy includes the value of the owner’s labor. Item 15 requires supervision by the owner or an on-premises manager who completed required training. It does not establish how many paid managers a multi-office territory needs, especially when offices operate concurrently.

For sensitivity analysis, one seasonal supervisor is modeled at 600 hours × $35.33 per hour = $21,198, using the BLS May 2025 national mean wage for First-Line Supervisors of Office and Administrative Support Workers. The 600 hours—approximately 15 weeks at 40 hours—is an editorial assumption and excludes payroll taxes, benefits, overtime, and off-season coverage.

The model estimates a pre-tax owner-benefit proxy, not after-tax take-home pay. The IRS source reports Schedule C-style net income less deficit for sole proprietors, while the FDD supplies revenue, fees, formats, and operating obligations.

Personal income taxes

Excluded. Entity structure, state, deductions, and owner circumstances determine tax outcomes.

Debt service

Principal repayment is excluded from operating earnings. Interest is embedded in the IRS benchmark, but the buyer’s actual loan payments must be modeled separately.

Interest and depreciation

Embedded in the IRS all-in net-income benchmark; no acquisition-loan schedule is modeled separately.

Capital expenditures

Excluded as a separate cash deduction. Depreciation is embedded, but cash for replacement equipment, signage, renovations, or remodels is not modeled.

Owner compensation

Not deductible as wages to a sole proprietor, so the benchmark includes the economic value of owner labor.

Manager compensation

The base scenarios do not add a replacement manager. The owner-role chart deducts $21,198 for each modeled 600-hour seasonal supervisor.

Royalty and advertising

Actual franchisee results must include these fees. They are shown separately but not deducted again from the all-in IRS margin because source overlap is unknown.

Technology and technical assistance

Not separately quantified because Item 6 lists these fees as variable. Their overlap with the IRS expense pool is also unknown.

Initial investment

Not deducted from annual revenue. Item 7 startup costs are capital and opening-period requirements, not a one-year operating expense.

The same-brand revenue evidence is broad, but same-brand profit evidence is absent. Item 19 covers 97.05% of active franchised offices and separates Standard Offices from Kiosk Offices. It does not disclose payroll, rent, technology costs, operating profit, EBITDA, net income, cash flow, owner compensation, or results by owner involvement.

The IRS benchmark is also structurally different: it covers sole proprietors in a broader accounting-services category, not this franchise’s multi-location territories. Most importantly, its all-in deductions cannot be mapped to Jackson Hewitt’s 21.5%–22% percentage-fee burden. That compatibility gap is why the calculated range should be treated as a screening scenario rather than an expected result.

Item 19 excludes seven offices with no reported activity and 74 offices that had not operated during at least one prior Tax Season. Item 20 shows franchised offices declining from 2,981 to 2,744 during fiscal 2025 while company-owned offices increased from 2,240 to 2,423. Those changes do not determine an individual owner’s earnings, but buyers should understand closures, reacquisitions, transfers, and cohort composition before relying on a median.

Source: 2025 FDD, Items 19 and 20, pp. 44–59.

Resolve the office mix and replace the benchmark with written, comparable franchisee records. The FTC Consumer’s Guide to Buying a Franchise explains that gross sales do not reveal actual costs or profits and advises buyers to examine the source, population, assumptions, and substantiation behind earnings claims.

• Confirm in the proposed Franchise Agreement and Schedule A whether the opening plan is one Standard Office plus two Kiosk Offices, two Standard Offices plus two Kiosk Offices, or another approved mix.
• Request Item 19 written substantiation and compare Standard Office and Kiosk Office records for markets with similar rent, wages, tax-season timing, and National Account arrangements.
• Ask current franchisees for separate profit-and-loss statements by office, including payroll, occupancy, royalty, advertising, technology, insurance, refunds, and bad debt.
• Calculate the actual post-fee margin and compare it with the 39.25% IRS proxy; do not assume the government ratio already reflects the disclosed fee structure.
• Confirm how many trained on-premises managers are needed when several locations operate concurrently and whether the owner will personally supervise one or more offices.
• Separate first-season offices from later Reporting Years; compare revenue ramp with the applicable graduated Royalty Fee schedule.
• Review Item 20 contacts for current and former franchisees, including closures, transfers, and franchisor reacquisitions.
• Model interest and principal using the buyer’s actual financing proposal; do not subtract the Item 7 initial investment from one year of sales.