Padgett Business Services^®

Q: Is Padgett Business Services a good franchise to own?

Whether Padgett Business Services is a good franchise depends on your goals, experience, and local market. Key factors from the 2026 FDD: Padgett Business Services operates 164 locations, received a legal risk score of 88/100, a training and support score of 58/100. Financial performance data is disclosed in Item 19. Prospective franchisees should review the full Franchise Disclosure Document and consult with a franchise attorney before making any investment decision.

Q: Is a Padgett Business Services franchise worth the investment?

The value of a Padgett Business Services franchise investment depends on factors such as location, operator experience, and market demand. The initial investment ranges from $125,195 to $201,415. Padgett Business Services disclosed average gross sales of $558,702 in 2026. The system reported 3 terminated units in 2026. Franchise investments carry inherent risk, and prospective buyers should conduct thorough due diligence before committing capital.

Q: What is the failure rate of Padgett Business Services franchises?

In the 2026 FDD, Padgett Business Services reported 3 terminated franchises and 0 non-renewals out of 164 total locations. Franchise closures can result from many factors including market conditions, operator decisions, lease expirations, and franchisor enforcement actions. The FDD's Item 20 provides the most detailed unit turnover data.

Q: How long does it take to break even with a Padgett Business Services franchise?

Break-even timelines for Padgett Business Services franchises are not disclosed in the 2026 Franchise Disclosure Document. Break-even periods vary significantly based on initial investment level, local market conditions, operating costs, and revenue ramp-up speed. Prospective franchisees should build a pro forma financial model using Item 7 cost estimates and, where available, Item 19 financial performance data from the FDD.

Q: Is Padgett Business Services a franchise or a corporate-owned business?

As of the 2026 FDD, Padgett Business Services operates 164 franchised locations and 0 company-owned locations. Franchise opportunities are available through the franchisor's disclosure process.

Business Services • Year: 2026

All product and company names mentioned are trademarks™ or registered® trademarks of their respective holders. Use of these names does not imply any affiliation with, sponsorship by, or endorsement by them.

What Is Padgett Business Services?

Padgett Business Services is a franchise in the Business Services category that grants franchisees the right to operate businesses providing preparation of financial statements for management use, income tax advice and preparation services, payroll services, data processing, business counseling and related services under the Padgett System. It targets a broad spectrum of the general public (B2C) as its customer base. The core service bundle is delivered using Padgett's authorized forms, systems, procedures and approved partners.

Padgett Business Services Franchise: Pros and Cons

A higher-than-average Franchise Stability Score of 66/100 signals better-than-typical franchisee retention and a Territory Protection Score of 61 (top quarter) offers stronger territorial protection. However, estimated initial training costs of $22,000–$40,000 (top 10%–5%) significantly raise upfront cash needs and represent a major early financial risk.

Pros

The Franchise Stability Score of 66/100 is above typical for this industry, indicating better-than-average franchisee retention.

The Territory Protection Score of 61 is well above typical for Business Services (top quarter), giving you stronger territorial protection against nearby franchised competitors.

The Item 7 maximum reserve of $2,400 is well below typical for Business Services, keeping the upper estimate of operating cash needs relatively low.

Cons

Zero company-owned units is well below typical for Business Services (bottom 5%), meaning the franchisor lacks corporate-run locations to field-test systems or maintain direct operational experience.

Estimated initial training costs of $22,000–$40,000 are well above typical for Business Services (top 10%–5%), materially increasing the upfront cash you’ll need to open.

One franchisor-initiated enforcement action is well above typical for Business Services (top quarter), signaling the franchisor actively pursues legal enforcement - a potential source of operational friction with operators.

Lawsuits & Legal Risk

88/100

NORMAL

Padgett Business Services - Part 1 (The Facts): Litigation concerned a former employee’s purchase of client accounts and competing rights; Padgett asserted trademark, unfair competition, breach and related claims. The dispute was resolved via settlement, with dismissal and franchise relationships ended, without admission of liability. Part 2 (The Advice): Review post‑termination covenants, transfer/assignment terms and Item 12 territorial protections, and assess franchise agreement enforcement and settlement provisions during due diligence.

Territory Protection

61/100

Good

Padgett Business Services grants a nonexclusive, protected territory (typically zip-code-based) with site-specific rights and a first right to service multi-territory national accounts, while franchisees may relocate with prior approval. The franchisor retains rights to develop additional nearby units, operate company-owned outlets, and sell via alternative distribution channels including e-commerce.

Training & Support

58/100

NORMAL

Padgett Business Services provides a robust 80-hour training curriculum designed to prepare franchisee personnel for launch, and the initial franchise fee does not include training participation for any franchisee staff. The program includes on-site launch support for operational readiness, with franchisees responsible for travel and living expenses while on-site support is provided without an additional franchisor charge.

Franchisee Stability

66/100

Good

Padgett Business Services earns a Good Stability Score. Three-year turnover of 4.97% sits below the typical Business Services franchise (around 6.6%). Out of 25 total exits, terminations dominated with 21, alongside no non-renewals, no franchisor buybacks, and 4 ceased operations.

This pattern points to franchisor-initiated exits, suggesting either operators struggled with the model or the franchisor enforces standards aggressively. That makes it sensible to probe how the franchisor supports underperforming owners, the common reasons that lead to termination, and whether documented remediation plans and timelines exist. Ask for examples where a struggling unit was turned around or where enforcement led to exit, and how the franchisor balances coaching with termination. Speak with current franchisees about support experiences and typical remediation timeframes. For prospective franchisees, review franchisee support quality and termination triggers in Item 17.

Unit Growth Analysis

Padgett Business Services is down 11 units since 2022, a modest decline to 164 franchised locations (about a 6% drop). At this scale the system reads as a mature, low‑growth operation-you're buying established processes and steady cash flow more than runway for rapid expansion-and the recent -1.8% year‑over‑year volatility points to some franchisee turnover, so confirm why units closed, how support handled attrition, and what territories (if any) remain attractive before committing.

How Much Does It Cost to Open a Padgett Business Services Franchise?

Opening a Padgett Business Services franchise requires a total initial investment of $125,195 to $201,415, according to the 2026 Franchise Disclosure Document. This range covers the franchise fee, real estate, equipment, training, and initial working capital needed to launch and operate through the early months.

Minimum Investment

$125,195

Franchise Fee

Real Estate

Equipment & Assets

Reserves

Training

Other

Maximum Investment

$201,415

Minimum Investment Breakdown

Franchise Fee$48,520

Real Estate$1,200

Equipment & Assets$5,500

Reserves$2,400

Training$22,000

Other$45,575

Maximum Investment Breakdown

Franchise Fee$65,540

Real Estate$1,200

Equipment & Assets$5,500

Reserves$2,400

Training$40,000

Other$86,775

Investment Analysis

This investment analysis is coming soon. Have ideas for other analyses you'd like us to add? Get in touch.

The initial investment amounts shown are estimates only. Actual costs may vary based on location size, business model, and multi-unit ownership arrangements. We recommend reviewing the full Franchise Disclosure Document for complete details.

How Much Do Padgett Business Services Franchise Owners Make?

Padgett Business Services franchise locations reported average gross sales of $558,702 in 2026, based on financial performance data disclosed in Item 19 of the Franchise Disclosure Document.

Average Gross Sales:

$558,702

Median Gross Sales:

N/A

Sample Size:

130

Percent Attaining Average:

36.9%

Audit Status:

Unaudited

Franchise vs Corporate Performance: For fiscal year ending 12/31/2025 the 130 franchisees who submitted complete financial data reported combined revenues of $72,631,244 (average per reporting franchisee ≈ $558,702) and combined adjusted profits of $18,721,573 (average adjusted profit ≈ $144,012 per reporting franchisee). The overall adjusted profit percent for the reporting group is 25.8%. There were 47 franchisees in the $500,000+ revenue band, contributing $53,761,865 (average within that band ≈ $1,143,869). Note: 20 franchisees exceeded $1 million in revenue in FY2025.

Performance Variability Analysis: Performance is highly variable by revenue band. Reported counts by band: 47 franchisees $500,000+, 23 in $300k–$499,999, 44 in $100k–$299,999, and 16 < $100,000. Adjusted profit percents (averages by band) show meaningful dispersion: $300k–$499,999 band average profit percent = 36.7%, $100k–$299,999 = 28.8%, $500k+ = 23.8% (band average), and < $100,000 = 8.0%. For client-level metrics the median annualized ongoing revenue per monthly client is $9,028 (mean $8,177); 72 of 130 franchisees (55%) attained or surpassed the average ongoing annual revenue per client. These figures indicate both scale benefits for mid/high revenue units and substantial downside risk for lower-revenue units.

Data Scope and Limitations: The Item 19 disclosure is based on historic financial performance for 130 of 146 franchisees (PADGETT had 165 franchised locations operated by 146 franchisees; 130 provided complete data). Financials were adjusted for depreciation, interest and certain owner/discretionary expenses; adjustments generally increase reported profits relative to franchisees' internal P&Ls. Some franchisee data were excluded due to tax extensions or reporting timing. The disclosure is not labeled as audited and the franchisor notes results are historic and not a guarantee of future performance; written substantiation is available on request.

Frequently Asked Questions

Is Padgett Business Services a good franchise to own?

Whether Padgett Business Services is a good franchise depends on your goals, experience, and local market. Key factors from the 2026 FDD: Padgett Business Services operates 164 locations, received a legal risk score of 88/100, a training and support score of 58/100. Financial performance data is disclosed in Item 19. Prospective franchisees should review the full Franchise Disclosure Document and consult with a franchise attorney before making any investment decision.

Is a Padgett Business Services franchise worth the investment?

The value of a Padgett Business Services franchise investment depends on factors such as location, operator experience, and market demand. The initial investment ranges from $125,195 to $201,415. Padgett Business Services disclosed average gross sales of $558,702 in 2026. The system reported 3 terminated units in 2026. Franchise investments carry inherent risk, and prospective buyers should conduct thorough due diligence before committing capital.

What is the failure rate of Padgett Business Services franchises?

In the 2026 FDD, Padgett Business Services reported 3 terminated franchises and 0 non-renewals out of 164 total locations. Franchise closures can result from many factors including market conditions, operator decisions, lease expirations, and franchisor enforcement actions. The FDD's Item 20 provides the most detailed unit turnover data.

How long does it take to break even with a Padgett Business Services franchise?

Break-even timelines for Padgett Business Services franchises are not disclosed in the 2026 Franchise Disclosure Document. Break-even periods vary significantly based on initial investment level, local market conditions, operating costs, and revenue ramp-up speed. Prospective franchisees should build a pro forma financial model using Item 7 cost estimates and, where available, Item 19 financial performance data from the FDD.

Is Padgett Business Services a franchise or a corporate-owned business?

As of the 2026 FDD, Padgett Business Services operates 164 franchised locations and 0 company-owned locations. Franchise opportunities are available through the franchisor's disclosure process.

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