Hundreds of H&R Block retail locations have closed in recent years. What’s behind the strategy shift?
When Americans need to do their taxes, many go to H&R Block, which has thousands of locations across the country. But some may have noticed that H&R Block’s retail presence is not as robust as it used to be, as the company has notably closed tons of physical locations in recent years. According to a recently issued franchise disclosure document, H&R Block had 1,816 franchised physical outlets as…
H&R Block, a prominent tax preparation company with thousands of retail locations across the United States, has been reducing its physical presence over the past few years. As of the end of June, the company had 1,816 franchised physical locations, down from 2,135 two years prior—a decline of 319 stores. Simultaneously, H&R Block has seen a net increase of 116 company-owned stores during the same period, resulting in an overall 203-store decline in its total outlets.
This reduction in physical locations is primarily attributed to H&R Block's evolving business strategy, which aims to consolidate its franchise portfolio under company-owned operations. According to a spokesperson, the company's decision to bring franchise locations back under its direct control aligns with its broader transformation strategy. The shift reflects a natural evolution in the company's ownership mix, including the reacquisition of franchise locations and the integration of these stores into its own operations.
Several factors may be driving this strategy change. First, the increasing reliance on online platforms and tools, such as H&R Block's own digital offerings, may have reduced the demand for physical locations. Additionally, the rise of AI tools has likely contributed to this shift, as data from Adobe indicates that U.S. workers are 136% more likely to use AI for tax filing in 2026 compared to 2025. While AI tools may account for some of the change in strategy, the data suggests a broader move away from the franchise model.
Despite the decline in physical storefronts, H&R Block continues to acquire franchised locations through buybacks at attractive EBITDA multiples. During fiscal year 2026, the company reacquired 167 stores from franchisees, continuing its pattern of increasing company-owned stores. CFO Tiffany Mason emphasized that these acquisitions are a core part of H&R Block's long-term growth strategy, stating that the company will continue to pursue these opportunities as they arise.
With its stock price up 113% over the past five years and growing, H&R Block appears confident in its decision to transition away from a franchise-based model. The company emphasizes its commitment to providing clients with convenient access to tax preparation expertise and services through a combination of retail offices, digital experiences, and other channels.
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