LIBERTY TAX Leaked Email Exposes Sleazy Sales Tactics
September 25, 2012
Liberty Tax former superstar trainer Annie Fuller reveals sales tactics using fear, greed, shame and guilt on customers to boost revenue in an internal email leaked to UnhappyFranchisee.com.
Annie Fuller was a Liberty Tax Services franchisee superstar.
UnhappyFranchisee.com has received an internal memo that is also an exhibit in an active Liberty Tax lawsuit. In the email, Fuller outlines the sales process she has used to train franchisees and their tax preparers nationwide.
The questionable sales process promoted by Fuller is based on manipulating the customer’s emotions (Fear, Greed, Shame, Guilt) to get them to accept a seemingly inflated tax preparation fee.
The first, and most useful emotion, according to Fuller is FEAR.
Step One (Fear): Give the customer a “heartattack”
“Fear sells,” writes Fuller. She instructs the preparers to scare Liberty Tax customers by showing their tax liabilities before any deductions, and emphasize the size of the amount due to instill panic.
Writes Fuller:
Start by putting in ONLY and ALL their income…
State clearly “based on your income you owe the IRS $_____”
Use the word THOUSAND if it applies not 15 hundred. 2 THOUSAND 5 hundred dollars. 3 THOUSAND dollars!
If they owe very little or have a refund… you owe the IRS some money right now or you are ONLY getting back $___ dollars.
If Step One is done correctly, according to the Liberty Tax trainer, “they are having the heart attack you want them to have because maybe they cant get themselves out of all that amount.
“they are worried…” writes Fuller. “USE THAT TO YOUR ADVANTAGE… Fear sells!
Step Two (Relief): Be the hero with magic Liberty Tax forms
Once the customer is sufficiently scared (or depressed), the preparer should announce that he/she will now save the day.
Fuller instructs preparers to say “Ok now its time for me to go to WORK (emphasise this word, You’re in good hands, we are going to work together to get this amount lower/refund higher. We [Liberty Tax) will be like the safety net between you and the IRS...”
Fuller tells Liberty Tax franchisees and preparers to begin to simultaneously lower the customer’s tax burden and raise/justify the growing preparation fee in a series of stages.
Liberty Tax preparers are never to name the additional forms they add to the return, just to call them by the amount of Liberty’s upcharge for including the form.
Writes Fuller:
“ok we are only going to ADD (emphasis this word) a $70 form and lets see how this helps you, as you know we ONLY charge for forms we use on YOUR (emphasise this word) return, so we’ll see how well this helps you…
Put in basic sch A stuff but do not educate client on name of form just call it a $70 form…
“Ok based on your income you OWED the IRS $_____ so now you only owe the IRS $_____” or are getting back $_____
at any point if they aren’t actually getting a refund state this even more emphatically “I was able to get you $_____ MORE! ISNT THAT GREAT?” (nod head while doing this to get them to nod back)
“Now lets see if we can do more, I’m going to ADD another $45 form, again we only charge for the forms we use for YOUR return so lets get going.”
Add in a 2106 but again do NOT educate client on what form…
If they have other deductions like vehicle use the same method… we’re going to add a $25 form, let’s see where we’re at now… etc. etc.
Fuller emphasizes the importance of not educating the client as to the names of the forms, and to refer to them by their upcharge value to desensitize the customer before presenting the whopping prep fee at the end.
Former Liberty Tax superstar trainer instructed preparers to use her techniques to boost their tax preparation fees so high ($400 – $650) that she has developed more steps to help preparers actually tell the customers the final fee with a straight face.
Check back for more steps to come…
ARE YOU FAMILIAR WITH LIBERTY TAX SALES PRACTICES?
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Also read:
LIBERTY TAX SERVICE Franchise Complaints
LIBERTY TAX Fraud: Preparer Could Get Prison Time
LIBERTY TAX Fraud: Preparer Could Get Prison Time
September 20, 2012
Liberty Tax fraud: UnhappyFranchisee.com has received information alleging that JTH, Inc., parent of Liberty Tax franchise system, not only condones but has provided training to its franchisees and employees in using deceptive techniques for maximizing customer refunds from the IRS.
One of those alleged techniques is to encourage tax filers to add non-existent business income in order to maximize Earned Income Tax Credit.
This past Tuesday, a tax-preparer working for a Michigan Liberty Tax franchise pleaded guilty U.S. District Court to preparing and filing more than 40 fraudulent income tax returns.
According to the Detroit News, “Marquitta Nicole Jackson, 28, worked as a tax preparer at a Liberty Tax franchise from 2007-10 when she worked on the fraudulent returns for various taxpayers, according to court records.
“Jackson admitted she had prepared the returns to falsely claim the taxpayers had received self-employment income from a business they operated to maximize the Earned Income Tax Credit, according to court records. The taxpayers were not entitled to the credit.”
The Liberty Tax franchise preparer’s fraudulent returns caused the government to lose $155,000.
A sentencing hearing was set by Judge Judge John Corbett O’Meara for January 15, 2013.
Marquitta Nicole Jackson faces a maximum penalty of three years in prison and a $250,000 fine.
DO LIBERTY TAX PREPARERS ENCOURAGE CUSTOMERS TO LIE ON THEIR TAX RETURNS?
HOW PREVALENT IS THIS PRACTICE?
SHARE A COMMENT BELOW.
Also read:
LIBERTY TAX SERVICE Franchise Complaints
LIBERTY TAX Service Fiscal 2013 First Quarter Results
August 30, 2012
UnhappyFranchisee.com – LIBERTY TAX Service Reports Fiscal 2013 First Quarter Results
JTH Holding, Inc. (NASDAQ:TAX), franchisor of Liberty Tax Service, reported a $6.2 million loss for loss for the fiscal first quarter ended July 31, 2012.
The press release from JTH Holding Inc. included interesting information regarding the performance of existing Liberty Tax franchise owners, as well as the recruitment of new Liberty Tax franchisees.
Also read:
LIBERTY TAX SERVICE Franchise Complaints
According to the Liberty Tax press release (below):
Liberty Tax has held a record number of franchisee meetings this quarter.
“During the first quarter the Company held a record number of meetings with franchisees planning for the 2013 tax season. “The involvement of our franchisees in our tax season planning is one of the key attributes that separates Liberty from the other national players,” noted John Hewitt, Chairman and CEO.
John Hewitt considers franchisee input the key to Liberty Tax’s success
“The marketplace insights provided by our franchisees allow us to continually enhance our system of doing business, which is a key to our success,” noted Hewitt.
Liberty Tax franchise sales activity is up 27%
The Company reported that its franchise sales season is off to a good start with leads, conference call attendance and seminar visits all up by more than 27% from fiscal 2012. During the previous two years, approximately 10% of the Company’s yearly territory sales and new franchisees closed during the first quarter. “Although the economic climate has reduced the amount of available investment capital for new and existing franchisees, I am very pleased with the interest levels shown during the first quarter by potential new franchisees and the eagerness of our existing franchisees to consider expanding,” said Mr. Hewitt.
JTH Holding lent franchisees $68M at 12% interest, John Hewitt $750,000 at 4.5%
According to UnhappyFranchisee.com commenter Bill:
Looking over the 10K and you see that Liberty tax lent John 750,000 at 4.5% meanwhile they sock it to the franchisees at 12%.
341 Liberty Tax locations (8.8%) closed in 2011
Bill states:
The 10K will also show you the 341 stores closed in 2011 a failure rate of 8.8% based on number of stores open in 2011. 2012 results show the average store did 523 returns. The net average fee was $173.00. The average store revenue was $85,847. These figures are an average. A new store is more likely to have a return count of around 150 to 200 and grow around 15% per year over the next couple of years. For people that already have the tax knowledge, the purchase of any franchise doesn’t make sense if that is the kind of return volume you are going to do.
Are you familiar with the Liberty Tax franchise or JTH Holding, Inc. (NASDAQ:TAX)? Share a comment below.
Here is the company press release, distributed Aug. 29, 2012
JTH Holding Inc : Liberty Tax Service Reports Fiscal 2013 First Quarter Results
VIRGINIA BEACH, Va.–Aug. 29, 2012– JTH Holding, Inc. (NASDAQ:TAX)( the “Company”), the parent company of Liberty Tax Service, today reported a net loss for the fiscal first quarter ended July 31, 2012, of $6.2 million, or $0.51 per share, compared to a loss of $5.0 million, or $0.44 per share, in the prior year period. Revenues grew 39% to $6.8 million for the fiscal first quarter ended July 31, 2012 compared to the prior year period. The Company’s operating expenses in the quarter included approximately $525,000 of costs associated with being a public company that were not incurred in the prior year quarter.
“We are pleased to announce first quarter financial performance, in-line with our expectations,” noted Mark Baumgartner, CFO. “Increased losses in our first and second quarter, when compared to prior periods, are expected as our company prepares for another high growth tax season,” explained Baumgartner.
Traditionally the Company spends a significant portion of the first quarter of its fiscal year planning for the upcoming tax season and kicking off the franchise sales season. During the first quarter the Company held a record number of meetings with franchisees planning for the 2013 tax season. “The involvement of our franchisees in our tax season planning is one of the key attributes that separates Liberty from the other national players,” noted John Hewitt, Chairman and CEO. “The marketplace insights provided by our franchisees allow us to continually enhance our system of doing business, which is a key to our success,” noted Hewitt. The Company plans to host an Investor Day in New York on December 12, 2012, at which time the Company anticipates sharing some of its 2013 plans.
The Company reported that its franchise sales season is off to a good start with leads, conference call attendance and seminar visits all up by more than 27% from fiscal 2012. During the previous two years, approximately 10% of the Company’s yearly territory sales and new franchisees closed during the first quarter. “Although the economic climate has reduced the amount of available investment capital for new and existing franchisees, I am very pleased with the interest levels shown during the first quarter by potential new franchisees and the eagerness of our existing franchisees to consider expanding,” said Mr. Hewitt. The Company plans to provide detailed sales activity in the second and third quarters, when historically, the cumulative closing activity becomes significant.
The Company also announced that its first meeting of stockholders since becoming a public company will be held at 11:00 a.m. on Friday, November 16, 2012 at the Virginia Beach Convention Center. The Board of Directors of the Company has established the close of business on September 19, 2012 as the record date for stockholders to vote at the meeting.
Conference Call
At 8:30 a.m. Eastern time on August 29, 2012, the Company will host a conference call for analysts, investors and shareholders. To access the call, please dial the number below approximately 5 to 10 minutes prior to the scheduled starting time:
U.S./Canada
866-713-8307
International
617-597-5307
Passcode:
39414021
The call will also be webcast in a listen-only format. The link to the webcast may be accessed on the Company’s investor relations website at www.libertytax.com
A replay of the call will be available beginning at approximately 10:30 a.m. eastern on August 29, 2012 and continuing until September 5, 2012, by dialing (888) 286-8010 (U.S./Canada) or (617) 801-6888 (International). The participant passcode is 92585839.
About JTH Holding, Inc.
JTH Holding, Inc. is the parent company of Liberty Tax Service. Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 10 million individual income tax returns. With 43 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service. Liberty Tax Service is the only tax franchise on the recently released Forbes “Top 20 Franchises for the Buck.”
| JTH Holding, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| Unaudited, amounts in thousands | ||||||
| July 31 | April 30 | |||||
| 2012 | 2012 | |||||
|
Assets |
||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 2,228 | $ | 19,848 | ||
| Receivables, net | 73,129 | 76,776 | ||||
| Prepaid expenses and other current assets | 8,393 | 5,655 | ||||
|
Total current assets |
83,750 | 102,279 | ||||
| Property, equipment, and software, net | 25,462 | 23,948 | ||||
| Notes receivable, excluding current portion, net | 37,544 | 35,863 | ||||
| Goodwill | 1,913 | 1,913 | ||||
| Other intangible assets, net | 25,483 | 22,158 | ||||
| Other assets, net | 2,589 | 2,580 | ||||
| Total assets | $ | 176,741 | $ | 188,741 | ||
|
Liabilities and Stockholders’ Equity |
||||||
| Current liabilities: | ||||||
| Current installments of long-term debt | $ | 3,174 | $ | 2,736 | ||
| Accounts payable and accrued expenses | 7,301 | 14,170 | ||||
| Due to area developers | 15,859 | 21,893 | ||||
| Income taxes payable | - | 6,689 | ||||
| Other current liabilities | 4,452 | 4,492 | ||||
|
Total current liabilities |
30,786 | 49,980 | ||||
| Long-term debt, excluding current installments | 25,756 | 26,249 | ||||
| Revolving credit facility | 11,078 | - | ||||
| Other non-current liabilities | 13,839 | 12,310 | ||||
|
Total liabilities |
81,459 | 88,539 | ||||
| Stockholders’ Equity | ||||||
| Class A preferred stock, $0.01 par value per share | - | 2,129 | ||||
| Special voting preferred stock, $0.01 par value per share | - | - | ||||
| Class A common stock, $0.01 par value per share | 121 | 103 | ||||
| Class B common stock, $0.01 par value per share | 9 | 9 | ||||
| Exchangeable shares, $0.01 par value | 1 | 1 | ||||
| Additional paid-in capital | 6,708 | 3,182 | ||||
| Accumulated other comprehensive income, net of taxes | 493 | 676 | ||||
| Retained earnings | 87,950 | 94,102 | ||||
|
Total stockholders’ equity |
95,282 | 100,202 | ||||
| Total liabilities and stockholders’ equity | $ | 176,741 | $ | 188,741 | ||
| JTH Holding, Inc. | ||||||||
| Condensed Consolidated Income Statement | ||||||||
| Unaudited, amounts in thousands, except per share and share data | ||||||||
| Three months ended July 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenues: | ||||||||
| Franchise fees, net | $ | 2,411 | $ | 1,203 | ||||
| Royalties and advertising fees | 1,007 | 1,018 | ||||||
| Financial products | 302 | 159 | ||||||
| Interest income | 2,659 | 2,021 | ||||||
| Tax preparation fees, net of discounts | 216 | 156 | ||||||
| Other revenue | 191 | 311 | ||||||
|
Total revenues |
6,786 | 4,868 | ||||||
| Operating expenses: | ||||||||
| Employee compensation and benefits | 6,666 | 5,650 | ||||||
| General and administrative expenses | 5,616 | 3,844 | ||||||
| Advertising expense | 2,560 | 1,790 | ||||||
| Depreciation, amortization, and impairment charges | 1,891 | 1,622 | ||||||
|
Total operating expenses |
16,733 | 12,906 | ||||||
|
Loss from operations |
(9,947 | ) | (8,038 | ) | ||||
| Other income (expense): | ||||||||
| Foreign currency transaction gains | 2 | 2 | ||||||
| Interest expense | (292 | ) | (312 | ) | ||||
|
Loss before income taxes |
(10,237 | ) | (8,348 | ) | ||||
| Income tax benefit | (4,085 | ) | (3,369 | ) | ||||
| Net loss | $ | (6,152 | ) | $ | (4,979 | ) | ||
| Net loss attributable to common stockholders | ||||||||
| Basic and Diluted | $ | (0.51 | ) | $ | (0.44 | ) | ||
| Weighted-average shares outstanding | ||||||||
| Basic and Diluted | 12,170,977 | 11,361,258 | ||||||
| JTH Holding, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| Unaudited, amounts in thousands | ||||||||
| Three months ended July 31, | ||||||||
| 2012 | 2011 | |||||||
| Net cash used in operating activities | $ | (16,217 | ) | $ | (11,384 | ) | ||
| Cash flows from investing activities: | ||||||||
| Issuance of operating loans to franchisees | (9,956 | ) | (7,985 | ) | ||||
| Payments received on operating loans from franchisees | 999 | 1,134 | ||||||
| Purchases of assets from franchisees | (1,329 | ) | (285 | ) | ||||
| Proceeds from sale of customer lists and other assets | 350 | 87 | ||||||
| Purchases of property and equipment | (1,976 | ) | (3,267 | ) | ||||
| Net cash used in investing activities | (11,912 | ) | (10,316 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from the exercise of stock options | 1,592 | 21 | ||||||
| Repurchase of common stock | (843 | ) | (1,654 | ) | ||||
| Repayment of long-term debt | (1,561 | ) | (704 | ) | ||||
| Borrowings under revolving credit facility | 11,078 | 28,597 | ||||||
| Repayments under revolving credit facility | - | (4,145 | ) | |||||
| Payment for debt issue costs | (8 | ) | - | |||||
| Tax benefit of stock option exercises | 269 | 458 | ||||||
| Net cash provided by financing activities | 10,527 | 22,573 | ||||||
| Effect of exchange rate changes on cash, net | (18 | ) | (1 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (17,620 | ) | 872 | |||||
| Cash and cash equivalents at beginning of period | 19,848 | 1,662 | ||||||
| Cash and cash equivalents at end of period | $ | 2,228 | $ | 2,534 | ||||
| Supplementary cash flow data: | ||||||||
| Cash paid for interest, net | $ | 282 | $ | 221 | ||||
| Cash paid for taxes, net | 6,364 | 6,968 | ||||||
JTH Holding, Inc.
Mark F. Baumgartner, 757-493-8855
investorrelations@libtax.com
ARE YOU A LIBERTY TAX FRANCHISE OWNER OR FRANCHISEE?
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LIBERTY TAX IPO: Fiscal 2012 Full Year Results, OTC Trading
June 15, 2012
JTH Holding, Inc. (the "Company"), the parent company of Liberty Tax Service, has released this press release containing its Fiscal 2012 Full Year Results and announcing that shares of Class A Common Stock to become available for trading on the OTC Bulletin Board on June 14, 2012.
To learn how Liberty Tax franchise owners are feeling, read: LIBERTY TAX SERVICE Franchise Complaints.
To share your thoughts on Liberty Tax 2012 results and the IPO, please share a comment below.
Here’s the company press release:
JTH Holding, Inc. Reports Fiscal 2012 Full Year Results and the Initiation of Trading on the OTC Bulletin Board
June 14, 2012, 8:00 a.m. EDT – press release
VIRGINIA BEACH, Va., Jun 14, 2012 (BUSINESS WIRE) — JTH Holding, Inc. (the "Company"), the parent company of Liberty Tax Service, today reported net income for the fiscal year ended April 30, 2012 of $17.4 million, or $1.23 per diluted share. During its fourth quarter, the Company determined that it would postpone its planned initial public offering (IPO), and for this reason incurred an after tax charge of approximately $0.8 million associated with the costs of that offering. Adjusting for that one-time charge, adjusted (non-GAAP) income for fiscal 2012 was $18.3 million, an increase of 16% compared to net income in the prior year. Adjusted earnings per share increased 21% to $1.29 per diluted share due to both the increased earnings and a decline in weighted average shares outstanding. Revenues grew 14% to $109.1 million in fiscal 2012 compared to the prior year.
During the recent tax season the Company operated in 4,183 office locations in the United States and Canada, compared to 3,845 in the prior year. In both years, more than 98% of our office locations were operated by franchisees of the Company. Total returns filed by the company increased to approximately 2.2 million from approximately 2.0 million in the prior fiscal year, an increase of 7%. The IRS recently reported that total tax returns filed grew 2.1% during this tax season compared to 2011 tax season; however tax returns claiming a refund grew by only 0.9% during the 2012 tax season.
"Fiscal 2012 was another important year in Liberty’s growth strategy to become the leader in the tax preparation industry," noted Founder and CEO John Hewitt. "In a tough economic climate that has impacted small businesses around the country, and resulted in fewer businesses being operated through franchisees, Liberty Tax Service continues to grow and expand. Issues at the IRS during the early portion of the season and the expiration of the Make Work Pay Tax Credit made customer service a challenge," noted Mr. Hewitt, "however our franchisees continue to provide the best service in the industry."
New Credit Facility
During the fourth quarter of Fiscal 2012, the company replaced its credit facility that was due to mature in March 2013 with a new five year credit facility through a syndicate of seven banks. The new credit facility totals $130 million and is comprised of a $25 million term loan and a $105 million revolving line of credit. " The increase in the size of the facility and the fact that a majority of the existing banks chose to continue in our facility is another demonstration of the confidence our partners have in our business model, and our ability to grow and expand our brand," noted Mark Baumgartner, CFO.
Initiation of Trading on the Over the Counter Bulletin Board (OTCBB)
Although the Company recently determined that it would postpone its IPO, it also concluded that given the size of the Company’s stockholder base, it would be appropriate for the Company to make itself subject to the reporting and other requirements applicable to public companies, and to seek to facilitate stockholders liquidity in their investment. Accordingly, the Company’s registration statement under the Securities Exchange Act of 1934 has been declared effective as of June 13, 2012, and the Company expects its shares of Class A Common Stock to become available for trading on the OTC Bulletin Board on June 14, 2012. While traded on that system, the Company’s Class A Common Stock will be represented by the symbol "LTAXA." The Company has filed an application for listing its Class A Common Stock on NASDAQ, and that application is pending.
"We believe that the tax preparation marketplace will change in response to increased regulation and oversight and have been positioning Liberty to benefit from these changes," noted Mr. Hewitt. "Becoming a public company is another step in our process and provides us additional flexibility to finance potential growth opportunities that may present themselves," Mr. Hewitt noted.
Conference Call
At 8:30 a.m. Eastern time on June 14, 2012, the Company will host a conference call for analysts, institutional investors and shareholders. To access the call, please dial the number below approximately 5 to 10 minutes prior to the scheduled starting time:
U.S. 866-831-6267
International 617-213-8857
Passcode: 29370301
The call will also be webcast in a listen-only format. The link to the webcast can be accessed on the Company’s investor relations website at www.libertytax.com
Webcast replay will be available starting at approximately 12:00 p.m. Eastern time today.
About Liberty Tax Service
Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 10 million individual income tax returns. With 43 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service. Liberty Tax Service is the only tax franchise on the recently released Forbes "Top 20 Franchises for the Buck."
SOURCE: Liberty Tax Service
Liberty Tax Service:
Mark F. Baumgartner, 757-493-8855
investorrelations@libtax.com
ARE YOU FAMILIAR WITH THE LIBERTY TAX IPO AND THE LIBERTY TAX FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
H&R BLOCK Franchise Complaints
April 26, 2012
H&R Block tax franchise is experiencing turbulent times.
Yet despite undergoing a “broad strategic realignment,” that includes the elimination of hundreds of jobs and the closing of 200 underperforming company-owned offices, H&R Block continues to recruit new franchisees.
Are you familiar with the H&R Block franchise opportunity? What challenges do H&R Block franchisees face? Share an opinion below.
According to H&R Block franchise marketing, “no one knows the tax industry like we do, and no competitor can offer a better franchise opportunity.
“So you can rest assured that our long history with the franchise business model will work to your advantage.
“We’ll supply the tools you need to help you effectively beat the competition and to help you ensure your franchise’s success.
“There are many benefits to becoming an H&R Block franchisee.
Learn about the advantages of working with the No. 1 brand in tax preparation.
Over 55 Years of Experience
Largest Tax Network in the United StatesLow Initial Investment
Available Business Financing
Strong Support to Help Expand Your Business
Unmatched Industry Training and Technology
Superior Products and Services
ALSO READ:
H&R BLOCK To Close 200 Company Locations, Cut 350 Jobs April 26, 2012
TAX FRANCHISES: Biggest Winners & Losers of 2010 January 12, 2011
H&R BLOCK Dumps EXPRESSTAX… & Franchisees? October 3, 2011
About H&R Block
H&R Block, Inc. has prepared more than 575 million tax returns worldwide since 1955, making it the country’s largest tax services provider. In fiscal 2011, H&R Block had annual revenues of nearly $3 billion and prepared more than 24.5 million tax returns worldwide, including Canada and Australia. Tax return preparation services are provided in company-owned and franchise retail tax offices by approximately 100,000 professional tax preparers, and through H&R Block At Home(TM) digital products. H&R Block Bank provides affordable banking products and services. For more information, visit the H&R Block Online Press Center.
SOURCE: H & R Block
ARE YOU FAMILIAR WITH THE H&R BLOCK AND THE H&R BLOCK FRANCHISE OPPORTUNITY? IS IT STILL A VIABLE H&R BLOCK FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
H&R BLOCK To Close 200 Company Locations, Cut 350 Jobs
April 26, 2012
H&R Block, Inc. has announced a “broad strategic realignment,” that includes the elimination of approximately 350 full-time positions throughout its Kansas City headquarters and nationwide field organization, streamline its seasonal workforce and close approximately 200 underperforming company-owned offices.
As part of the realignment, Amy McAnarney has been appointed President of Retail Client Services and “will be squarely focused on driving service delivery of tax and financial services to the company’s 14.9 million U.S. retail clients throughout its nationwide network of more than 10,000 company-owned and franchise offices.”
Recently, McAnarney served as Senior Vice President of Operations Support and Franchise Development where she was accountable for strategy deployment, client experience development, operations support, and the strategy and development of the company’s franchisee network.
How will this “broad strategic realignment” affect H&R Block franchise owners and employees of H&R Block franchisees? Share an opinion below.
ALSO READ: TAX FRANCHISES: Biggest Winners & Losers of 2010 January 12, 2011
H&R BLOCK Dumps EXPRESSTAX… & Franchisees? October 3, 2011
H&R Block Announces Strategic Realignment of Organization; Preliminary Fiscal 2012 Financial Results
KANSAS CITY, MO, Apr 25, 2012 (MARKETWIRE via COMTEX) — H&R Block, Inc.
- Strategic realignment expected to realize net annualized savings of $85 to $100 million by end of fiscal year 2013
- Company to record fourth quarter pretax charge for lease termination, severance and related costs of approximately $30 million, or $0.06 per share
- Company expects fiscal 2012 total revenues of approximately $2.9 billion and GAAP diluted earnings per share from continuing operations of $1.09 to $1.15
H&R Block, Inc. today announced a broad strategic realignment to create a more cohesive end-to-end client experience, to drive better efficiency and accountability throughout the organization, and to align its resources to balance long-term client and revenue growth. Overall, the company expects to realize net annualized savings of $85 to $100 million by the end of fiscal year 2013 as a result of the strategic realignment.
"Following the completion of my first tax season and a strategic review of our organization, we believe this realignment is an important next step in becoming a nimbler, more profitable, and more client-centric company," said Bill Cobb, H&R Block’s President and Chief Executive Officer. "We have settled on a new organizational structure and identified more efficient ways to operate. We believe these actions will allow us to compete more effectively, more quickly respond to our clients’ needs, and invest in our future as we intensify efforts in our core businesses."
As part of the measure, the company is offering a voluntary separation program to eligible employees throughout the organization. The company will review each application for voluntary separation on an individual basis. In the event the company does not achieve the targeted number of separations from the voluntary program, involuntary separations will follow. Overall, the company plans to eliminate approximately 350 full-time positions throughout its Kansas City headquarters and nationwide field organization. The company also will streamline its seasonal workforce and close approximately 200 underperforming company-owned offices.
"We believe offering a voluntary separation program is an important option to reduce our cost structure," added Cobb. "Changes such as these are always difficult and we appreciate the hard work and dedication of all our associates. However, these steps are necessary so we can create a stronger company, invest in our future, and produce greater value for our clients and shareholders."
U.S. Client Services
The company also announced an organizational realignment, including the formation of U.S. Client Services. The four executives leading this unit will all directly report to Cobb.
"It became clear during our strategic review and benchmarking that the model of having separate retail and digital leadership is no longer viable," said Cobb. "Consistent with many other consumer-facing companies who serve clients effectively through both retail and digital offerings, we have taken steps that will enable us to drive a more cohesive end-to-end client experience, and go to market in a seamless fashion for the 22.2 million clients we serve in the U.S. The four executives who will lead U.S. Client Services all have a proven track record of generating strong results, and their leadership, energy and commitment to our clients will serve us well as we continue our work to position the company for long-term revenue and earnings growth."
-- In-line with its philosophy of serving clients anywhere, anyway, and
anyhow they choose to be served, the company will integrate the
strategy, planning and development of all forms of U.S. tax services
under the leadership of Jason Houseworth, who was named President of
U.S Tax Services. Over the past two years, Houseworth has led the
company's digital tax operations to cumulative client growth of 26
percent and an estimated 150 basis points of cumulative share gains in
the digital online category. Houseworth joined H&R Block in 2008
and is credited with founding the company's Client Innovation Lab.
-- Susan Ehrlich, President of Financial Services, will continue to lead
the company's efforts to grow its H&R Block Emerald Prepaid
MasterCard(R) and all other forms of financial services offered to
its retail and digital tax clients. She also will continue to have
direct oversight of H&R Block Bank. Ehrlich joined H&R Block
in 2011 after a 20 year career in key leadership roles to develop and
deliver payment and credit solutions for JP Morgan Chase, Sears
Financial Services, WaMu Card Services (Providian Financial), and
Citibank. Ehrlich has been recognized the past three years by American
Banker magazine as one of the 25 Most Powerful Women in Finance.
-- Amy McAnarney has been appointed President of Retail Client Services
and will be squarely focused on driving service delivery of tax and
financial services to the company's 14.9 million U.S. retail clients
throughout its nationwide network of more than 10,000 company-owned
and franchise offices. She has held numerous executive positions since
joining H&R Block in 1997, including Vice President of Finance and
Vice President of Tax Strategy. Most recently, McAnarney served as
Senior Vice President of Operations Support and Franchise Development
where she was accountable for strategy deployment, client experience
development, operations support, and the strategy and development of
the company's franchisee network. She also founded The Tax
Institute(TM) at H&R Block, which quickly developed into a
leading source for objective insights into tax law, policy and
research.
-- Robert Turtledove, Chief Marketing Officer, will continue to drive the
company's client acquisition, retention and growth across U.S. Client
Services by leading the company's brand, online, field, research and
social marketing strategies. Turtledove joined H&R Block in 2009
after more than 25 years of experience in consumer, brand, retail,
digital and international marketing with some of the world's most
iconic brands such as Pepsi, Pizza Hut, Frito Lay and Unilever.
Phil Mazzini, President of Retail Tax Services, has resigned from the company effective April 30, 2012.
"I am very sorry that Phil has decided to move on, but I understand his desire to take on new challenges. He did a great job leading the growth of our U.S. Retail Tax business over the past two years and we wish him all the best in the future," said Cobb.
Chief Financial Officer
The company also announced it has retained Crist|Kolder Associates to lead the search for a new Chief Financial Officer. The company’s current CFO, Jeff Brown, will remain with the company and continue to serve as CFO during the search for a successor. Once a successor is found, Brown will transition to Chief Accounting and Risk Officer, where he will oversee all aspects of the company’s accounting function and coordinate its enterprise risk management approach.
"I would really like to thank Jeff for stepping into the CFO role 18 months ago during a period of significant change," said Cobb. "Jeff’s profound knowledge and insight into the business has been a valuable resource to H&R Block over the past 10 years. I am very pleased that we are able to continue leveraging his extensive leadership and accounting experience going forward."
Preliminary Fiscal 2012 Financial Results
H&R Block plans to report its fourth quarter and fiscal 2012 results on Tuesday, June 26 after the NYSE market close. The company expects to incur a pretax charge for lease termination, severance and related costs of approximately $30 million, or $0.06 per share, which will be recorded in the fiscal fourth quarter ending April 30. The company expects fiscal 2012 total revenues of approximately $2.9 billion and GAAP diluted earnings from continuing operations of $1.09 to $1.15 per share.
"Over the past year, we have sharpened our strategy, taken steps to resolve outstanding litigation, and shed non-core assets, which detracted focus away from our core businesses and negatively impacted our margins," said Cobb. "These actions, along with today’s realignment resulted in a number of charges in fiscal 2012. We believe we’ve essentially cleared the decks this year to better position us for long-term earnings growth, margin expansion and improved shareholder returns."
About H&R Block
H&R Block, Inc. has prepared more than 575 million tax returns worldwide since 1955, making it the country’s largest tax services provider. In fiscal 2011, H&R Block had annual revenues of nearly $3 billion and prepared more than 24.5 million tax returns worldwide, including Canada and Australia. Tax return preparation services are provided in company-owned and franchise retail tax offices by approximately 100,000 professional tax preparers, and through H&R Block At Home(TM) digital products. H&R Block Bank provides affordable banking products and services. For more information, visit the H&R Block Online Press Center.
SOURCE: H & R Block
ARE YOU FAMILIAR WITH THE H&R BLOCK AND THE H&R BLOCK FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
LIBERTY TAX Franchise for Sale – Raleigh, North Carolina – 2 Territories
December 14, 2011
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Asking Price: $35,000 per Territory. 2 Territories Avail.
FF&E: None Inventory: $5,000 Real Estate: None Transfer Fee: Paid by current owner Year Established: 2007 Employees: General Manager Broker: For Sale by Owner
For more information, email us your inquiry and contact info to UnhappyFranchisee[at]gmail.com |
Business Description
We are selling our Liberty Tax franchise territories (2) in Raleigh, N.C. (North) as we’ve moved out of the area and can no longer run this business effectively. No offices open at this time, though our former office is still available. Large physical territories with large population centers in both. We are asking $35,000 per territory, for one or both of (2) territories available. We will pay franchise transfer fees. $5000 worth of desks, chairs, computers and more is available. Gross income and cash flow numbers are available from owner with NDA (non-disclosure agreement). Tax preparation can be combined with other complementary business to create a good value proposition. This is a chance to own a personal service business with strong brand recognition in a solid growing city. Former client lists available. Financing may be available through Liberty Tax Corporation.
Location or Territory: Raleigh, NC (North)
Physical location: No offices open at this time, former office still available.
Asking Price: $35,000 per territory, (2) territories available
Gross Income: Available with NDA
Cash Flow: Available with NDA
Inventory: $5,000
Real Estate: None
Year Established: 2009
Employees: General Manager
Broker: For Sale by Owner: For Sale by Owner, transfer fee paid by current owner
Business Description: Tax preparation can be combined with other complementary business to create a
good value proposition. Opportunity to own a personal service business with strong brand recognition in a solid growing city. Former client lists available
Detailed Information:
Facilities/Equipment: No current location open, desks, chairs, computers available for purchaser.
Competition: H&R Block, Jackson-Hewitt
Growth/Expansion Potential: Large physical territories with large population centers in both
Financing: through Liberty Tax Corporation
Support/Training: through Liberty Tax Corporation
Reason For Selling: Have moved out of the area and can no longer run effectively.
For more information about this listing, email us your inquiry and contact info to UnhappyFranchisee[at]gmail.com
If you would like to list a franchise for sale by owner, contact us at UnhappyFranchisee[at]gmail.com
LIBERTY TAX SERVICES Zero Franchise Fee Offer
November 1, 2011
Liberty Tax Franchise is promoting a Zero Franchise Fee offer. Their Email newsletter solicitation is below.
What do you think? Is it a great deal? The text reads:
“Owning a Liberty Tax office is now more affordable than ever. With some franchise fees totaling more than $40,000, Liberty Tax Service is offering No Franchise Fee. Liberty’s No Franchise Fee Offer helps reduce the initial costs associated with purchasing a franchise and gets you on the path to owning your own business.
“Franchise Fee is $0. Territory must be an un-owned, undeveloped territory. Franchisee will pay a $2,500 refundable security deposit. Security deposit is refunded upon the completion of 5 year franchise agreement or the sale of territory. Territory must be opened by 1/8/2012. Offer expires 12/31/2011. Available in select areas…”
Here’s the email offer:
Last Chance – Zero Franchise Fee
| Time is running out for this exclusive offer | ||||
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| Owning a Liberty Tax office is now more affordable than ever. With some franchise fees totaling more than $40,000, Liberty Tax Service is offering No Franchise Fee. Liberty’s No Franchise Fee Offer helps reduce the initial costs associated with purchasing a franchise and gets you on the path to owning your own business. Franchise Fee is $0. Territory must be an un-owned, undeveloped territory. Franchisee will The franchising information contained in this email is not If you wish to unsubscribe from e-mail promotional messages from Liberty Tax Service, please |
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ARE YOU FAMILIAR WITH THE LIBERTY TAX FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
H&R BLOCK Dumps EXPRESSTAX… & Franchisees?
October 3, 2011
Tax Preparation giant H&R Block (NYSE: HRB) has announced that it is discontinuing its franchised EXPRESSTAX subsidiary. What this means for the franchise owners of 269 EXPRESSTAX locations is not quite clear. H&R Block has stated that it will give some franchise owners the opportunity to convert to the H&R Block brand. It did not say how many would be extended the conversion option, nor what would happen to those who weren’t.
The news comes a little over two weeks after the nation’s biggest tax preparer announced it won’t offer refund anticipation loans next tax season because the appeal of the high-cost loans is shrinking. CEO Bill Cobb said in a statement that the company is getting rid of the brand because “it was no longer a growth driver and therefore not a good fit for our company.”
H&R Block acquired EXPRESSTAX in 2006 when it was a 300-unit chain. According to Entrepreneur, H&R Block grew the chain to 408 locations in 2007 and to 509 EXPRESSTAX locations in 2008. EXPRESSTAX locations then declined to 376 in 2009, and 263 in 2010.
Here is H&R Block’s 9/29/11 press release regarding EXPRESSTAX:
H&R Block to discontinue EXPRESSTAX brand
Latest move signals another step to focus efforts on client growth and brand expertise
FOR RELEASE SEP 29, 2011
H&R Block (NYSE: HRB) announced today it will discontinue service under its EXPRESSTAX brand. Currently, there are 269 EXPRESSTAX franchise offices, which collectively prepared nearly 100,000 tax returns and generated $3 million of royalty fees to H&R Block in fiscal 2011. As H&R Block seeks to continue growth in its franchise base and clientele, it will invite many EXPRESSTAX franchisees to join the H&R Block brand.
“This move is consistent with where we want to focus our future investments and resources,” said Bill Cobb, H&R Block CEO. “After a thorough review of the EXPRESSTAX business model and its recent performance, we concluded it was no longer a growth driver and therefore not a good fit for our company.”
In connection with this announcement, H&R Block will record a pretax charge of approximately $0.02 to $0.03 per share in the fiscal second quarter ending October 31, 2011.
H&R Block purchased EXPRESSTAX in 2006. The EXPRESSTAX brand attracted mostly early-season filers who also sought quick-paying financial products. H&R Block offered EXPRESSTAX franchises in locations where it had competitive and geographic advantages.
H&R Block is coming off one of its strongest tax seasons in recent years. In Tax Season 2011, H&R Block grew new clients by nearly 19 percent, saw client retention improve by nearly 4 percent, and gained market share in both its retail and digital tax preparation channels.
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About H&R Block
H&R Block Inc. (NYSE: HRB) has prepared more than 575 million tax returns worldwide since 1955, making it the country’s largest tax services provider. In fiscal 2011, H&R Block had annual revenues of $3.8 billion and prepared more than 24.5 million tax returns worldwide, including Canada and Australia. Tax return preparation services are provided in company-owned and franchise retail tax offices by more than 100,000 professional tax preparers, and through H&R Block At Home™ digital products. The H&R Block Bank provides affordable banking products and services, and McGladrey is a top provider of tax, accounting and wealth management services to mid-sized businesses.
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To contact author or site admin, email UnhappyFranchisee[at]gmail.com
LIBERTY TAX: Are Liberty Tax Franchise Owners Living Their Dreams?
July 29, 2011
Liberty Tax is looking for dreamers.
Liberty Tax is looking for dreamers willing to invest their savings, retirement accounts and/or home equity and a good portion of their time and energy into a Liberty Tax franchise.
Liberty Tax is recruiting hard for dreamers – They are even willing to waive the $40,000+ franchise fee. (See email ad below, left)
But are Liberty Tax franchise owners really living the American Dream of business ownership… being their own bosses… controlling their own destinies?
Does the portrayal of the Liberty Tax franchise in the recruitment materials match the reality as reported by current and former Liberty Tax franchise owners?
We’ve included excerpts from a current Liberty Tax franchise ad, and asked Liberty Tax franchise owners to share their thoughts below.
“At Liberty, Dreamers are Welcome.”
In a franchisee recruitment page currently running on Franchise.Com, Liberty Tax describes their target franchisee:
“At Liberty, dreamers are welcome.”
“dreamers who want to work for no one … but themselves”
“have big dreams.”
“forward thinkers”
“dream of success.”
“Possess a passion.”
“Won’t accept average.”
“an exclusive group”
“No Tax Experience? No Worries.”
“motivated”
“prepared to jump in with both feet”
“people who have that fire in their belly and a desire to succeed”
“Liberty franchisees are CEOs”
Who they’ll be as Liberty Tax franchise owners:
“embracing proven marketing plans, working seasonally and connecting through cutting-edge social communications.”
“high profile.”
“you’ll have a proven system to follow that was 40+ years in the making”
“have access to more than 600 years of managerial experience, tax industry expertise and street-savvy marketing.”
“work really hard for 3 ½ months then spend the rest of the year pursuing other interests… Go on vacation. Raise alpacas. Learn to yodel…”
What they’ll get as Liberty Tax franchise owners:
“we will give you every bit of training you need—and then some. We’ll start with a week-long session at our corporate office in Virginia Beach, VA; follow it up with online and printed manuals, traditional and non-traditional training methods, webinars, onsite training, off-site training, conference calls and newsletters.
“Hewitt shares his insight with his franchisees, as a hands-on CEO, hosting conference calls, seminars and personally answering his e-mails.”
“A seasonal workforce keeps overhead lower than nearly any other industry.”
“No inventory. No worries about inventory loss.”
“Competitive advantage, population trends, traffic counts, visibility and more”
“Our team of experienced Site Selectors works one-on-one to locate, negotiate and sign the perfect location for your Liberty Tax office.”
“You will be in business for yourself with a very powerful partner ”
“We have nothing to hide.”
On the Franchise.com ad, Liberty Tax states “We have nothing to hide.” So we invite Liberty Tax franchise owners to share whether the Liberty Tax franchise has enabled them to live their dreams and control their own destinies.
How well does the Liberty Tax marketing materials reflect the reality of the opportunity?
Do you think that recruiting “dreamers” with an emotional appeal to their egos and self-image is a wise, long-term strategy?
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
