Kansas City, Mo. (Jan. 13, 2004) -- H&R Block agreed to pay $130 million to settle lawsuits filed by some of its former franchisees over the payment price they received when Block bought out their firms.
The $130 million settlement, which resolves pending litigation over the fair market value of the business upon expiration of the franchise contracts, is in addition to the $107 million Block paid the former franchisees earlier under their franchise contracts. It frees Block from having to go to trial with each franchisee to determine the amount of any additional payments to be made.
"We're pleased with this agreement and believe that it's an appropriate resolution for all parties," said Mark A. Ernst, H&R Block chairman and chief executive officer. "After working with the franchisees 30 years or longer, we have a high regard for the individuals and their contributions to H&R Block's success."
Unlike Jackson Hewitt and Liberty Tax Service, which favor the franchise model, Block has been buying back its franchise operations to expand its products in the mortgage and financial services sectors.
-- WebCPA staff
