Ledgers Area Representative Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$155,250 - $314,000
Franchise Fee
$135,000
Total US Locations
1
Business Summary
Ledgers offers a franchise opportunity for an Area Representative to recruit and support unit franchisees within a specific territory. These unit franchisees provide business advisory, bookkeeping, payroll, and income tax preparation services. The Area Representative's role is to find new unit franchisees and then help them with marketing and ongoing operational support.
Corporate History
Loyalty Business Services LLC, operating as Ledgers, was formed as a Virginia Limited Liability Company on October 30, 2019, initially under the name Fide Holding LLC before changing it on June 4, 2020. Ledgers is based in Virginia Beach, Virginia, and exclusively focuses on offering and supporting area representative franchises for business advisory, bookkeeping, payroll, and income tax preparation services, having started offering franchises in June 2020. It has never operated a unit franchise itself. Ledgers is a subsidiary of Loyalty, LLC, which was formed in 2017 and provides franchise sales assistance to Ledgers and its other affiliates. These affiliates operate in diverse sectors, including tax services (ATAX LLC), pet waste management (Cooper's Scoopers LLC), business brokerage (Loyalty Business Brokers LLC), pet salons (Purely Pet LLC d/b/a Salty Dawg), home exteriors (Tectum Franchising LLC d/b/a CR3 American Exteriors), inspection services (The Inspection Boys Franchise USA LLC), and pet grooming (Zoomin Groomin USA, LLC). Ledgers itself has no predecessors.
Financial Overview
Investment Range
$155,250 - $314,000
Franchise Fee (Low)
$135,000
Franchise Fee (High)
$300,000
Equipment Costs (Low)
$750
Equipment Costs (High)
$1,500
Working Capital
$3,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Going concern qualification
Financial Health Notes
Ledgers' financial statements indicate concerns about its ability to continue as a going concern. As of December 31, 2024, Ledgers had negative working capital of $468,670, operating losses of $490,281, and negative operating cash flows of $471,328 for the year. The franchisor acknowledges these conditions and has implemented strategic measures, including reducing personnel costs and maintaining a $250,000 cash reserve. Ledgers has also secured a new strategic relationship in 2025 with Bookkeeping Express, which is expected to generate new franchisee referrals. Based on these efforts, management anticipates meeting its liquidity needs for the next year. However, the FDD's Special Risks section specifically notes that Ledgers' financial condition calls into question its financial ability to provide services and support to franchisees.
Financing Details
Ledgers may, at its discretion, offer direct financing for all or a portion of the initial franchise fee. The financing comes directly from Ledgers, and there are no specific maximum amounts or fixed repayment periods, as these terms will vary. An interest rate of 12% per year applies. Franchisees will be required to provide a personal guarantee, and if the franchisee is a corporate entity, its owners must also personally guarantee the debt. There are no prepayment penalties. Defaulting on the loan can lead to the entire amount becoming immediately due, responsibility for Ledgers' collection costs and attorney fees, and potential termination of the franchise business. Franchisees would also waive certain legal rights, such as the right to a jury trial. Ledgers does not currently intend to sell or assign these debts to third parties and receives no payments for arranging financing.
Performance Metrics
Total US Locations
1
Franchised Units
1
Corporate Units
0
Franchising Since
2020
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
9
Litigation Summary
Ledgers' Chief Executive Officer and Chairman of its parent company, John T. Hewitt, has been involved in several concluded legal actions, none of which are currently pending. These cases predate April 29, 2022. One notable lawsuit, filed in 2021 by JTH Tax LLC (Liberty Tax Service), alleged that ATAX franchisees (an affiliate) used confusingly similar trade dress and that Mr. Hewitt interfered with contractual relations and used trade secrets. This case settled for $545,000. Mr. Hewitt was also involved in two 2017 lawsuits (K&A Publicidad and Kirke Franz Szawronski) related to alleged breach of contract and defamation from his time with Liberty Tax Service, settling for $50,000. Additionally, multiple shareholder derivative actions were filed against Mr. Hewitt and Liberty Tax, Inc. in 2017 and 2018, alleging breach of fiduciary duties and misconduct. These cases were consolidated and settled in 2019, with Liberty Tax agreeing to implement anti-harassment policies and conduct training. Another 2018 case concerning unpaid monies and fraud against JTH Tax, Siempre Tax, and John Hewitt settled for $775,000 plus future revenue. In 2019, the Department of Justice filed a complaint against Liberty Tax Service, asserting a failure to maintain adequate controls over tax returns; as part of that settlement, Liberty Tax agreed not to rehire Mr. Hewitt or grant him equity. Lastly, the California Commissioner of Financial Protection and Innovation issued a consent order against John T. Hewitt, requiring him to disclose findings from the DOJ case in any FDD where he holds a management role.
Bankruptcy History
Ledgers has no bankruptcy history to report in this document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew the Area Representative Agreement, Ledgers franchisees must notify Ledgers in writing at least 120 days before the current agreement expires. They must also sign Ledgers' then-current Area Representative Agreement, which will not have materially different terms from the original, and execute a general release of all claims against Ledgers. Currently, there is no renewal fee.
Training & Support Program
Franchisor Assistance
Ledgers provides several forms of assistance to its Area Representatives. Before opening, Area Representatives receive initial training, which covers fundamental skills and is offered in Newmarket, Ontario, Canada, another designated location, or online. Ledgers also supplies an Operations Manual for guidance. Area Representatives are expected to open within 30 days of completing initial training, but Ledgers does not assist with site selection or directly help with hiring and training employees, though the manual may offer best practices. During operation, Ledgers offers ongoing operational and marketing support, and may require attendance at advanced or refresher training (travel and living expenses are the franchisee's responsibility). Area Representatives must use specified computer hardware and software (e.g., email, computer with internet, printer, phone) and allow Ledgers independent, unrestricted electronic access to their computer systems and business data. Ledgers will also develop and maintain a corporate website that lists unit franchise contact information and controls all digital marketing efforts, including social media and digital advertising. Ledgers may supply print material templates and negotiate contracts for digital campaigns, where Area Representatives can participate and pay their share. Ledgers does not require contributions to an advertising or marketing fund and does not require grand opening advertising.
Initial Training Hours
26
Training Location
Virginia Beach, VA, or online
Ongoing Support
After opening, Ledgers provides ongoing operational support and marketing assistance to its Area Representatives. Ledgers may also offer and require attendance at advanced or refresher training sessions, which can be held at various locations or online, with Area Representatives responsible for their own travel and living expenses. Ledgers maintains a corporate website that includes unit franchise contact information. Additionally, Ledgers controls and promotes digital marketing initiatives, including websites, social media, and digital advertising, to support the brand. Area Representatives are responsible for maintaining and updating their own computer hardware and software as required by Ledgers.
Franchise Requirements
Ideal Candidate Profile
Ledgers is seeking individuals who are interested in owning their own small business, specifically in the field of business advisory, bookkeeping, payroll, and income tax preparation services. Ideal candidates typically have a small business background or aspire to become small business owners.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Home-Based
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
Ledgers' Area Representative territories are defined by zip codes, political, or other geographic boundaries. A typical Area Representative territory encompasses rights over approximately 10 to 20 individual unit franchise territories. Each of these unit franchise territories, in turn, is designed to contain a population of about 65,000 people, with population data sourced from the U.S. Census Bureau or other reliable services.
Staffing Notes
Ledgers clarifies that Area Representatives are entirely responsible for all aspects of managing their own employees, including hiring, firing, compensation, payroll taxes, and daily supervision. While the Operations Manual may offer advice on best practices for hiring and training staff, this guidance does not transfer any control over employees to Ledgers. The estimated initial investment includes funds for staff salaries during the first three months of operation.