outputting taxonomy hierarchy

OK, so if the empty terms shouldn’t be displayed in there, then it’ll be pretty easy 😉

All you have to do is to use wp_list_categories function:

<ul>
    <?php
        wp_list_categories( array(
            'taxonomy' => 'sfcategory',
            'title_li' => false,
            'hide_empty' => true // or false, as you wish
        ) );
    ?> 
</ul>