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JACKSON HEWITT Franchise Complaints

October 11, 2010

UnhappyFranchisee.Com – Are you familiar with the Jackson Hewitt tax franchise opportunity?  What do you think?  You’re invited to share a comment below.

According to the Jackson Hewitt website, Jackson Hewitt Tax Service Inc. (NYSE: JTX) is an industry leader providing full service individual federal and state income tax return preparation through more than 6,400 franchised and company-owned offices throughout the United States.

After its rapid rise to the #2 position in the industry, Jackson Hewitt has had some rough years and myriad problems.  According to Wikipedia:

“The 2007 Department of Justice investigation, poorly constructed financial products, and a company-wide tax law compliance initiative that many insiders believe did more harm than good combined to erase nearly 50% of the company’s market share over merely four years.

“Additionally, the company negotiated out of a default on its debt in May 2009 and technically defaulted for several days in May 2010 (though an agreement with creditors was announced within one week of the ‘default’).

“During the 2010 tax season, Jackson Hewitt was not able to provide its flagship refund anticipation loan product in 50% of its stores, placing it at a operational and marketing competitive disadvantage. The company’s current agreement with creditors requires that it secure refund anticipation loan funding adequate for 100% of its stores by September 30, 2010 and that written commitments from lending institutions be made available to creditors by November 15, 2010.  Failure to do either will place the company once more in default.

charts “Finally, in July 2010, the Internal Revenue Service announced its intention to discontinue the provision of the debt indicator to tax return preparers.

“The debt indicator is a significant part of the provision of refund anticipation loan funding and its lack of availability is expected to increase the cost of such products to consumers and decrease the level of their availability.

“This IRS change significantly reduces the probability that Jackson Hewitt will be able to comply with its renegotiated loan covenants as discussed above. The stock currently trades below one dollar*.”

* The Jackson Hewitt stock price is listed at $1.11 today

Unhappy Franchisee has received numerous complaints about the rival Liberty Tax Service (see LIBERTY TAX SERVICE Franchise Complaints).

Is Jackson Hewitt franchise have worse problems? 

How is the franchisor doing in helping Jackson Hewitt franchisees weather the storm of operational & marketing challenges, and adverse publicity?

Is this simply a franchise (Stock?  Tax preparer?) to avoid at all costs?

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

Company responses, clarifications or rebuttals welcome.  Contact the author/site admin at UnhappyFranchisee[at]gmail.com.

Comments

264 Responses to “JACKSON HEWITT Franchise Complaints”

  1. Up Hill Battle says:

    Sure Ray M, act before it is too late. It is the opportunity of a lifetime. It sounds like the same strategy that everyone has, sell as many franchises as possible.

  2. Guest says:

    Ray M. What a great franchise pitch! “Jackson Hewitt is fresh out of bankruptcy, has a new logo, and a fresh crop of gullible inexperienced franchisees! Get in quick, mortgage your house, buy’m up before the next bankruptcy!”

    Plus… they are “in talks” with Walgreens about installing 8,000 kiosks, which is exciting because everyone gets their taxes done at the drug store, and they’ll surely be in place by this tax season.

    Ray, I’ve been searching for the right opportunity, and “recent bankruptcy” and “in talks with respected retailer” “new management” and “flooding the market with franchises” are some of my top criteria. Where do I send a check, or should I just bring a suitcase of cash?

  3. Franchizee says:

    It sounds like it is too good to be true! We all know what that means!

    Another dog and pony show. They have not opened anything new in my market nor a market nearby my home. It is not true in my area, just the same locations.

  4. Ray M says:

    Wow, I lay my opinion and you year into me? It takes money and risk to make it. If your scared to lose this might not be your calling, New York Life is always hiring.

  5. Guest says:

    “Wow, I lay my opinion and you year into me?”

    Ray M. sorry for yearing into you but… your opinion is funny funny funny. “Hey, they may have bankrupted their business, but look at the snazzy new logo!”

    I laughed so hard by eyes were yearing up!

  6. Ray says:

    Liberty tax zees are scared,….I can smell it from here….nothing like paying 3% royalties for the first 3 years…what are you paying? lol

  7. Ray says:

    Liberty tax Franchise is the biggest scam….they are going downhill. Jackson Hewitt is still the #2 largest in the country…..and growing real fast…don’t be scurrrred.

  8. John Barilla says:

    haha… scared of Jackson Hewitt… Too funny….

    Over the last 5 years all of JH closed in my territories, I am sure I had a lot to do with taking all their customers. I am sure they are still doing good in SanFran, Franchizee and Bill’s territories because we had loser zees competing against you there.

    Bigger than HR Block by 2020!!!! , Ok back to counting my money, averaged 8 returns in each of my offices today….

  9. SanFranDan says:

    ^^^Give it up, Barf villa. You keep calling everyone “losers”. Too bad that’s your only vocabulary. YOU ARE THE LOSER the way you speak to others. You sir are a huge asshole. Keep it up, asshole. You keep calling everyone losers. Somehow in your sick, twisted mind, that’ll make you feel better. Only we know the real truth. Being away from that disgusting Liberty Tax Service was the absolute BEST thing I ever did. Someday you will find that to be true too. But you’ll never admit it. C ya loser.

  10. Ray says:

    5 days into the season and JH is up 300% in sales. I have already processed 45 returns on hold in 5 days @ an average $230 per return (my rent for the year is almost paid lol at $900 a month). It’s gonna be a great year!..I expect to finish conservatively at about 300+ for my first year! Jackson Hewitt all day baby!

  11. Erik says:

    I am also a new jh zee and the company has done a complete 180, it’s not the same company as 2010, how it plays out we will see, but for now at least they got there shit together and have an aggressive attitude encouraging and backing us to open next to Liberty locations (JH is offering corporate subsidies if your within a 1 mile radius of a Liberty) the plan could work or completely backfire.

  12. Mike says:

    Way to go JH, I hope you kick the crap out of Liberty!!! Keep us posted on your success!!

  13. Guest says:

    Really? You just can’t be serious.

  14. Aarom says:

    I am a new JH zee and I think the jury is still out on how the new concept is going to fare. I am just happy they rebounded from bankruptcy and are back in the mix, I agree with Erik they need to fire all the old guard and keeping moving forward with the fresh new concepts, they need to follow H&R Blocks mode with the clean organized stores. As far Liberty Tax goes there territory model is horrible and confusing and there marketing is zilch, no TV, no Radio, I mean Guerilla marketing can only go so far…I see H&R Block staying at the top with Jackson Hewitt a close #2 and Liberty Tax continue it’s mediocre existence.

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