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LIBERTY TAX SERVICE Franchise Complaints

August 11, 2009

UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiarliberty_logo with the Liberty Tax franchise, please share a comment below.

Entrepreneur magazine has ranked the Liberty Tax Service franchise #3 behind  McDonald’s & Subway.  However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.

BostonTax wrote:

I’m a former Liberty Tax Franchisee

I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.

Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.

Barbara Green wrote:

I too was a Liberty Tax Franchisee and I agree with everything you said.

The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.

Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.

At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.

It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.

WHAT DO YOU THINK?  DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE?  ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY?  WHY OR WHY NOT?

Comments

4,295 Responses to “LIBERTY TAX SERVICE Franchise Complaints”

  1. Greg says:

    Franchisee,
    When I first thought about eitc fraud it was pretty deflating to realize how much money goes out illegally……then as I thought further on the issue with eitc on self employment frauds I realized the refund was just the tip of the iceberg. Those credits “paid” into social security through the fraud business are going to result in tons and tons of money paid out in ss benefits to the fraud perpetrator. Lots of these folks file for disability at 45-50 years old and 30 years of ss/disability payments equates to hundreds of thousands of dollars generated by the years of eitc fraud converted into ss credits.

  2. Sad but true says:

    We know when we have touched a nerve – Barilla awakens from his dream world.

  3. Franchizee says:

    That is a point of view I had not yet thought of, but so true. I also like when you give someone EIC and it goes to pay their back taxes or child support. All illegal money. Basically it is money laundering.

    IRS should really require Anti-Money Laundering along with Ethics. Apparently the “Top Guns” are not paying much attention to their illegal money they are collecting by defrauding the government and the tax payers. They are no worse than Madoff stealing every day during the tax season.

    I hope Barilla checks his conscience while he is counting his 10’s of thousands of dollars, he will remember he just stole from himself and others who support the system.

    I like the back of the envelope, it has happened to me multiple times. Yup, you can’t sweep that under the rug. Barilla does not even do tax returns nor does any of the Top Guns, they just get the money and the accolades. They get the big trips and time at Hewitt’s beach house. They strut around like they have accomplished something and all they did was “legally” steal money that may or may not be due to a EIC person. Only due diligence would prove otherwise.

  4. guest1 says:

    Ha ha! Beautiful. Eitc fraud is an epidemic. The IRS is not trying to stop it. That’s obvious by how fast they send the refunds. No you can’t judge all by a few but I’m bettin liberty, hr block, JH, turbo will have new reviews for 2016.

  5. SanFranDan says:

    There is no question that the LTS of my day, not toooo long after the 1997 ‘beginning’ (in Canada), that several corporate dweebs promoted fraud. No question. FACT. Much of it was done in person in VA Beach at the dog & pony shows.They used it to their advantage as they have done many, many, many, many times over the past 18 years. They do whatever they can to roll over everyone else while ‘preserving’ their image. FACT. I can’t WAIT to tell my story someday.

    Fraud = LTS
    LTS = Fraud

    Run (don’t walk) RUN away. Do not sign. Do not pass go. You will end up in jail. Not THEM. You. The IRS needs to interview as many ex franchisees as they can to see the patterns. It’s much harder going after a corporate entity than it is a small franchisee.

  6. Sad but true says:

    IRS reports tax returns received at 50 million as of 2/20. This is up from 49.6 million last year on. So, Liberty’s loss of market share cannot be blamed on less filings.

  7. Horatio says:

    Whatever thoughts I had of starting a LTS for next tax season has quickly vanished. I am in awe and cannot believe what is going on with them this season. Just wow.

  8. Lucretia says:

    I have worked for Liberty Tax Service in three major cities in the U.S. Milwaukee, Wisconsin; Minneapolis and St. Paul, Minnesota and Tallahassee, Florida. I always received a bonus each year until I came to Florida. I went from senior preparer to office manager after two years, and am teaching the tax classes. BUT I have been consistently told that NO BONUSES are paid until the franchise reached their target number of returns for the year. That number increase each year, and I have not received a bonus in four years. As franchise owners, is this a true representation the facts?

  9. Out and glad says:

    Lucretia,
    The offices are owned by the franchise owner. It sounds like this one found a way to not pay bonus’. I paid people the bonus on that they wrote. The office manager would receive a bonus on office amounts.
    The problem the owner would find is that they will not be able to keep the best preparers.
    Can you let us know who the franchise owner is?
    I would like to know if is one of the big players or just a smaller owner.

    The final question I have is why are you still working for the jerk?

  10. bill says:

    Liberty announced its results today and during the press conference JH made the following points:

    Liberty had a decline of 100 stores from last year. But permanent stores increased by 100.

    Siempre Tax opened 60 locations in its first year, more then any others of the top three opened in their first year. He did indicate that over 50 were converted Liberty Tax office but would not give the actual number.

    Liberty can reach the 10,000 store mark if the current 2000 franchisees open 3 to 4 more stores each.

    Currently 1/3 of the 2000 franchisees own only 1 store.

    Of the 2000 franchisees in the system, 1/3 are great franchisees, 1/3 are average and 1/3 are poor franchisees.

    Before they take down the replay I encourage any former, current or potential franchisee to listen to the replay or view the webcast.

    A telephonic replay of the call will be available beginning shortly after the call and continue until Thursday, March 12, 2015, by dialing
    855-859-2056 (domestic) or 404-537-3406 (international). The conference ID code is 91108801.

    Buyer Beware!!!

  11. SanFranDan says:

    ^^Horatio:

    Congratulations on your decision to back away. (Dan: you too)
    It is nothing but trouble and money lost. Ain’t that the truth. :(

    Bill: The “spin Doctors’ are at it again! No matter how much you embellish it, it is still cow manure.

  12. NCHILLBILLY says:

    Not sure how John determines that 1/3 of the offices are great franchisees. Let the numbers tell the truth. This past tax season Liberty had less than 120 offices that did greater than 1000 returns. That means there should have been 667 Top Gun Zee’s and there were not. John did not mentioned that the average office was actually down by 11.2% in returns.

    Liberty’s income revenue is not from the tax royalties or marketing income it is from the fees that are earned from the bank products. A majority of the bank products are issued via JTF Financial (John Hewitt’s bank) and 12% interest that is charged to Zee’s that borrow money. What was not mentioned that between Jan 12 and Feb 12th, most offices have returns marked up by a minimum of $65.00 to cover the $50.00 cash in the flash that is return to the client. This number is reflected in the gross revenue as the franchisee pays both royalties and marketing fees unlike the send a friend program.

    John talked about Liberty growing to 10,000 offices by 2020 if each existing office expanded by 3 – 4 offices. He keeps forgeting that his focus is only on low income areas, and these are already developed, limiting his growth theory.

    John’s excuses for the downward slump was high employment and bad weather. He does not realize that the increase is in DIY returns and this is taking away from his early market share. Since, Liberty does not have a national marketing plan, gaining any permanent ground is extremely difficult, unless an office follows Vanessas Dickens example.

  13. Sad but true says:

    Right on, NCHILLBILLY, with the DIY returns increase. Remember, the ACA was supposed to make this a great year for the tax prep business. Not so for Liberty, I guess. This is how tough it is for the do it yourselfers when it comes to the ACA;

    Question 1 – Did you have health insurance in 2014? if answer is yes, Question 2 – Did you buy it on the Health Exchange? if answer is no, GREAT, let’s move on. Not so hard to handle for those with health insurance and doing their own returns.

    Remember, most working people still have employer paid or partially paid plans. People who work do tax returns. Some of those people do their own returns and are not being hampered by the simple ACA related questions. People do talk to each other and I can just imagine that the do it yourself crowd are telling their friends that doing your own taxes are not so hard.

    I am sure that as the computer literate crowd increases with each of the younger generation working, and filing taxes, that the do it yourself market grows more and more . This means that Liberty is toast! Done! Finished!

    It is easy for John to suggest how others should spend their money. Open more stores? Buy more territories? I am sure with this decrease in business that more franchisees will be dropping out. Is this the time to be buying into this system? When sales are decreasing? Sounds like crazy talk to me.

  14. ZeeOut says:

    “John talked about Liberty growing to 10,000 offices by 2020 if each existing office expanded by 3 – 4 offices. He keeps forgeting that his focus is only on low income areas, and these are already developed, limiting his growth theory”

    John is no dummy – he KNOWS the good territories are taken. Remember.. he makes $$ even when the franchisee LOOSES money. He is gauranteed a minimum of THOUSANDS, which should be illegal.

    John states “1/3 are bad franchisees”.. What gall!!! …hard working, resourceful people buy his loosing franchise and he blames the buyer. The buyer was a person who had the drive and resources to open his own business. The buyer did nothing wrong except trust and be blindsided by a con artist.

    Lets look at the truth – hard working,honest, trusting people are sold a loosing territory, LTS makes $$ no matter how much the franchissee looses, then LTS gets to churn the territory for another round of profits and blame the failure on the victim

    DISGUSTING.

  15. Liberty Franchisee says:

    I own a Liberty Tax in the metro detroit area and just when we thought the coast was clear these Jackson Hewitt tax offices are popping back up (I guess there encouraging new franchisees to open next to Liberty) I have lost 20% of my business to these JH walmart garbage peddlers. It’s getting to competitive-I am selling soon (maybe invest in a burger joint -people in America love fatty foods lol

  16. Out and Glad says:

    Jackson Hewitt is using a page out of the Liberty playbook. Where Liberty wanted you to be with in 1/2 mile of an H&R block or Jackson Hewitt, Jackson Hewitt wants you to be closer. One thing about Jackson Hewitt, is that they get incentives from the corporate office, see the comments on this about Jackson Hewitt.

  17. guest says:

    Unless Jackson Hewitt lowers the cost of a store, it’s the least of concerns. How do you know they took 20% and not a mom and pop? There’s tons of them that now copy Liberty. Did Jackson Hewitt lower their fees? Cause they’re high.

  18. SanFranDan says:

    ^^Huh? “There’s tons of them that now copy Liberty”. Huh?

    JTH is a direct decendent of H & R Block. Let’s see: Who copied who? Not to mention that any Accountant with a brain can do what Liberty thinks is so wonderful & so secret. Puuleease. You pay all this money for a territory……none of it is so secretive. It’s all common sense. Especially for people that know Accounting and Taxes. Total waste of money.

    Thank goodness I am now out of this field 100%. However if I had to do it all over again, I would NEVER put my money into a Tax franchise where I was taught NOTHING new. I could have EASILY done this myself and taken that franchise fee to start my own mom & pop. I would have had a thriving business today because of all the tons of referrals I was getting due to my own hard work. NOT LIBERTY ONE IOTA.

    Gee, who do you think Liberty copied to get where they are today? Total dishonesty, Total mistreating of people, Total lies, Total spyware, Total con-artists……the most dispicable group of people I’ve ever dealt with. My life today is calm, stress-free, lucrative and wonderful. My years with LTS were disgusting & a train wreck.

    My condolences to anyone plunking down their hard earned money on ANY Tax franchise at this date & time.

  19. Sad but true says:

    Yes, SanFranDan, buying a tax franchise is a total waste of your money. Supposedly having your own business but paying 19% to do so is not having your own business. If you are still a franchisee, I feel sorry for you. Even if you are making money, it is not all yours to keep.

  20. ZeeOut says:

    Lets not forget that Jackson Hewitt was JH’s stores before it went public and he was tossed out.

    I agree with San Fran this time. Yes, even an independent business must spend money, you can’t keep it all, but at least you are in control and getting something useful for your money. 19% off the top for less than great software and a marketing strategy which is spend your own money. I used Turbo Tax last year and it was easier and better than the Lib Tax crap.. Sorry.. its true.

  21. SanFranDan says:

    ^^ZeeOut says: “I agree with San Fran this time”.

    What?!?!? You don’t agree with me all the time?? Just kidding! :)

  22. ZeeOut says:

    Most of the time ;-)

  23. Franchizee says:

    Remember with a tax franchise business, you can only WRITE business in your territory, no other (technically nor advertise in any area you want). Where as a mom and pop, you can write a tax return in any town, any area and advertise anywhere and everywhere.

    With a franchise, your hands are tied to your specific area and GAWD forbid if one of your advertisements lands in another territory or covers multiple territories.

    Buying a franchise is such a tie down in so many arenas.

  24. Sad but true says:

    Another negative of the Liberty marketing strategy is their once a year postcard mailing. They send your prior year clients a postcard with the Liberty toll-free phone number on it. If the client has a cell phone number not associated with your territory, then the call will most likely go to another franchisee. If they call from their work number, and their workplace is not in your territory, then another franchisee gets that call. With a retention rate of around 40% (maybe), your former clients may just set an appointment with another Liberty, even if their home is in your territory. Oh, the horrors of their system.

    How about paying for your own mailings and being required to put their toll-free number on the advertising you are paying for. Is that still required? So, you possibly could be paying ad fees for some other franchisee’s benefit. You would hope that the clients you lost would be made up by another franchisee’s clients coming your way. Needless to say, you never feel good about these mailings because sometimes you lose clients you have had in previous years.

    Many Liberty customers are not loyal. Losing over 50% of your clients every year is a tough nut to swallow. This means you have to add 50% more new clients to make up for your previous years lost client base. It is maddening enough to get the tax returns correct with all of the normal issues of this business. When you add the marketing and advertising responsibilities, it is just not worth it. A mom and pop will develop a more loyal clientele. Not so with the Liberty clients.

    Save your money – stay away from any tax franchise business – stay far, far away. If you still buy into any tax franchise business, you will find out all of the many woes associated with being a tax franchisee. You have been warned!!

  25. bill says:

    The tax business has a minimum of three distinct markets. The predominately lower income market, the middle class market and the upper class market. Liberty business model is the same business model that JH used with Jackson Hewitt which was designed specifically for the lower income market. However, that market has changed for several reasons the first being the loss of the RAL, the theirs competition from volunteer groups offering free tax prep and most of all technology. No longer do you need a computer, you can file from your phone and have the money sent to your debit card.

    Sad but True points out the turnover in the tax prep. industry. No matter what type of market people will look for value. In the market where people are less transient you will develop long term relationships with your tax client. But because of the higher retention rates in those communities it will take longer to develop a client base. When I did have a franchise my clients came in through out the season and many followed me when I went to accounting firm.

    There is one consistent message on this forum from former franchisees and that is how much better off we would have been if we invested in ourselves then in this franchise.

    Buyer Beware!

  26. Guest says:

    The message is consistent from the same people. Mom and pop organizations have a multitude of problems. There are thousands of them for sale on the businesses for sale websites. Tax prep is really not a business to go into from scratch if it’s a new venture for you. Profitable, yes but constantly needing to look for new business and with falling per client fees. I wouldn’t want to start from scratch franchise or not.

  27. Sad but true says:

    I would never start a tax prep only business either. In order to make money, renting out a storefront as a brand new mom and pop will probably lose money too. You have to be creative when starting your own tax prep business. Maybe share an office with another business. Maybe start out from home and see if you have enough connections and referrals to build a decent client base. It is never a one size fits all success plan, as Liberty touts.

    Since many small business people start from scratch, I would assume a person starting a tax prep business has some tax prep background. If you don’t have tax prep experience, then why would you want to start this type of business? For those who do want to go it alone, it will be better not to spend 40k on a franchise fee purchase and other franchise related expenses (payroll, royalties, 5% ad fee, signage, etc.).

    Many new businesses and businesses in general have problems. You have to be wise and creative to make it on you own in the tax business or any business.

    So, as the tax prep business is changing, we are simply pointing out that if you really want to get into this type of business, it will be hard to be successful. It is a good part-time source of income and maybe that is all it is these days.

    What is best? – invest in a franchise and sign a five year contract and be out about $80,000 to $100,000 after five years or try to earn some part-time money doing taxes and maybe you will hit a home-run and be successful beyond your dreams.

  28. balancetrend says:

    Best way to run a tax business is to do it out of your home, no office, no signage, no advertising! I run my business through word-of-mouth referrals, I have ZERO overhead and my only expense is my software, its the best thing ever! I’ve been out of Liberty for 3 years now and I would never go back to the headache of owning an actual office location.

  29. Lawhead says:

    I have been with Liberty Tax since 2005, in South Florida. I like LTS! We have 2 stores that are doing very well. Although we stick to the marketing plan, as outlined, we also get involved with our community,which brings in more business. We have agents who have been with us since we opened and happily come back every tax season. You get what you put in. Maybe the people complaining should have talked to successful franchise owners and not everyone else who is complaining and not succeeding.

  30. SanFranDan says:

    ^^^^^^^^^Hahahahahahahahahahahahahaha!!! :)

  31. Sad but true says:

    Can’t talk to the successful one in Maryland. She was shut down.

    Glad you are happy giving them 0.19 of every $1 you make. Some successful franchisees got smart and decided their hard work and profits were not worth sharing, not 19% worth sharing.

  32. ZeeOut says:

    “You get what you put in” – In a bad territory (and there are lots of them) you put in as much $$, time and sweat as you want but you’re not going to get very far.

    “Maybe the people complaining should have talked to successful franchise owners and not everyone else who is complaining and not succeeding” – DONE THAT – for a few years.. then you realize that the successful franchisees (and success is a relative term) are not in my area and are few and far between. My mentors were in other states!

    If the “system” works for all areas, why do some Top Gun Zees have loosing stores they can’t turn around? Becasue the “system” only works for certain territories but they will sell you a franchise (take your money) then force you to pay minumum fees on a loosing territory. Territories that have been loosing for years.. just churn and churn. Everyone looses except LTS.

    Lawhead – I’m glad you are happy. I don’t want to see anyone loose money. But don’t accuse the many, many hard working people who were sold a loosing territory, with no or little chance of ever making a DECENT profit, as loosers or not following the system. People put thier hard earned money and time into this. I know what JH promotes.. and he’s full of sh*t and everyone knows it. Some territories are good, some aren’t.

    And isn’t it odd how his rising stars…. Anne Fuller, etc. turn out to be scam artists? yeah… somthing is rotten in Denmark.. or maybe Virginia Beach

  33. bill says:

    This site and our post have definitely effected the sale of new franchises. This not only effects the company but also impacts the current franchisees especially the successful ones. So it’s only natural that franchisees like Scott Shrader post on here to defined their investment.

    Scott had a location in Burlington County NJ in one of the malls. So I did talk to a “successful franchisee”. It was a typical Liberty ploy, set someone up to look successful to help sell additional franchises. At the meeting I attended Scott talked about how great the business was and at the same time told us he was headed to Florida. He said he was keeping the store up here and his brother was going to run it. If I remember correctly it was a whole family affair even his mom was there.

    The following tax season Scott was in Florida and that location was closed.

    I don’t know if Scott is an area developer but he does have 9 locations in Florida and does have a vested interest in keeping up the image of Liberty Tax. He also is involved with Sycamore Consulting that has locations in NJ and again not sure if they are area developers in NJ but there is financial gain for him to talk up being a franchisee.

    Zeeout: Liberty will sell a territory to anyone anywhere. But what potential franchisees need to understand is the Liberty business model is obsolete. JTH is aware of this that’s and that’s why the franchise agreements require minimum royalties.

    Where the company is really seeing growth is in the financial products I.e. prepaid debt card. At the last shareholder meeting John H. said fees from financial products will exceed royalties from franchisees.

    The company still needs locations to sell its products but is not concerned about the financial well being of their franchisees. If they where they would not have done away with their rebate program to franchisees for selling financial products.
    They are also now exercising a clause in the franchise agreement that let’s them intercept fees in anticipation that franchisees will need operating loans in the future.

    Buyer Beware!!!

  34. guest says:

    You know what,. if you can spend the time to develop a customer base, then make some money at this. Better believe its going to cost you money if you don’t have the skills to bring in customers. Then you’d better be pretty good at knowing who to hire, because next is spending time trying to make sure they dont take the fees or the customers you worked to get. The problem with all of them is they make it sound easy and that’s what causes lost investment. We’re all in it to make money and if not then be best to get another hobby. Same goes with the so called mom and pops. Same problems, different set-up. I’m having a good season but had to put in lots of work and I have lots of experience. Bought a mom and pop to go with franchise store. No game for newbees.

  35. Sad but true says:

    The market is slowly catching up with the tax franchisees that overcharge their customers. Let’s face it, Block, JH, and Liberty will charge their customers what they think the customer will pay without a fight. As soon as the customer gets ready to walk, the fees plummet. What a pathetic way to do business. The upper middle class, middle class, and even some lower income earners are wising up to this. The very low income people are like sheep and Liberty is the wolf that preys on them.

    Bill is spot on; ” the business model is obsolete”. It has always been a “win-win” for Liberty. They get the franchise fee and a minimum royalty no matter how bad the franchisee owner does in his territory. The good territories are gone. The free VITA places are even taking market share from some of the good locations.

    You guys that post on here supporting Liberty, try being honest. Only suckers buy in now. We that are posting the warnings are agreeing that some franchisees will be successful. When you charge $300 to $400 prep fees for one W-2 with EIC, do you feel good about your business ethics? Oh, it is so tough to complete the EIC check list for the how many hundreds of times in your low income business area? Your preparers can probably recite the EIC questions from memory. Let’s not forget to throw in some questionable dependents and away you go, more happy clients and more money for you. I am not saying you are committing fraud because you cannot call your clients liars when they say they are supporting sis’s kids. If you help them with their lies, then you are a fraudster. It is a very messy business in those low income areas. I feel dirty just thinking and writing about it.

    So, go on your merry way, charge the customers way too much and then tell us that you are so successful and the rest are losers.

    Yeah we want to make money! So why start out in a crater size hole by giving 40K to Liberty and those royalties. Those of you that brag about paying 19% to Liberty are nutty! That is what you are doing, bragging that you get to share 0.19 of every dollar you earn with Liberty. I would not mind paying Block 19% because you almost start to choke on their commercials from January to April (they flood the air waves with them). Liberty franchisees sends the waver costumes to the dry cleaners and then dresses their employee in them to bring in the business. It works,but no skin off Liberty Corp’s back because once again the franchisee eats all of the costs to pay the waver.

    Our objective is to be objective – Liberty’s a losing proposition for most investors who buy in today. We are always regurgitating the negatives so people who read the most current posts will be warned to stay away – stay far, far away from buying a franchise territory!!

  36. Franchizee says:

    Sad but True – You are correct on your observation. All it takes is Congress and the President with a swipe of a pen to take away EIC and/or change how it is delivered, and voila H and R Block, LTS and Jackson Hewitt are out of over half of their offices over night!

    In my tax business, I have maybe 5 or 10 percent of EIC people who actually work, so it is very little EIC. It is there children with mostly either the father’s last name or mother.

    As an independent, I am working more on people who are interested in retirement plans, small businesses and people with stock accounts etc. That takes a little longer to build that business, but you can charge a reasonable cost without being outrageous. These people are looking for someone with knowledge in specific areas. LTS nor H and R offer that type of service. They are too busy running after the elusive EIC return, which has a huge liability.

    There will be a need for tax preparer’s because people do their taxes wrong and get letter after letter, they usually give up and look for people to help them without jabbing them with huge fees.

    What I am noticing is there is large section of people who don’t like H and R, LTS or any large accounting firm. They want personable service and a business relationship. That type of business takes time to build.

  37. guest1 says:

    Franchisee, I agree with you 100 percent.

  38. Observer says:

    I have read some of the comments on here and wanted to add some of my thoughts.

    I am not an accountant and don’t own any type of tax office business. I am just an ordinary person that does own businesses that mostly deal with the public. I rely on the public’s tax refunds to sell my type of merchandise that is common to sell around tax season.

    I have to admit that this year is very different from previous years. I didn’t see the huge flow of traffic of buyers then previous years. I did some research on what the problem was and found two interesting possibilities. One being that this is the first year people have to file returns under the new obama health plan. People that didn’t have insurance or didn’t report the proper income were getting money taken out of there returns. The effect of that happening is people are being more careful about about where to get there taxes done and finding out what the fees are by and h&r or whatever. I think H &R has caught on to this ahead of time and that might be the reason for the commercials offering half off if you return.

    The problem is every industry changes and never stays the same. I learned from an old time business person that if you don’t change with your industry you will eventually become a dinosaur. It sounds like your tax business is going through those same changes and if you aren’t pro active in fixing those changes, then you will die like a dinosaur.

    I like what franchizee wrote. Your seeing the changes and decided to shift your business in more of a relationship type of business. You are also focusing on the customer that will need more then one type of service from you and not just once a year. It will cost you a little money and time to get things rolling but in the long run it will pay off.

    I hope everyone that is reading this and is struggling in this type of business will find my thoughts useful. I am not in this type of business but understand how you need to change as your industry changes to survive.

  39. bill says:

    Observer: Not sure why someone not in this industry would spend time reading this site, but to each his own.

    Observer to your point I suggest to anyone considering this franchise that they “Change” their mind.

    Buyer Beware!!!

  40. Frustrated and Disgusted says:

    I am guessing Lawhead is the same individual I saw at one of the BS Liberty Marketing nights in VB. I would like to thank you for helping me lose $100,000 on this POS. Love, love, love all around, it’s great, it’s wonderful, etc. etc. Of course I also know that those who sing the praises also get first choice of territories that have been taken back by LT,, you can give back territories that you take over that are not producing, and you are given territories to develop. Gosh what a win-win for the kool-aid drinkers. Unfortunately you have also given your soul to the devil, and when you try to leave, will find that the person you thought was your friend, has not become your worst nightmare. I still have my soul and for that I am thankful.

  41. SanFranDan says:

    ^^^Frustrated and Disgusted:

    Having been there, I feel your pain. So have many of the other posters here. This Franchise could not be more crooked, more egotistical, more lopsided, more sleezey, more greedy, etc.,etc.,etc. But I firmly believe that what goes around comes around and if we are patient, this “man” will have his day in court. I’ve said this many times and I’ll say it again: this company and it’s leader have perfected the art of ripping people off and hiding lots of facts. He WILL be brought to justice in our lifetime. Hopefully sooner rather than later.

    I also want to point out that Tax season is almost over and that means Barf villa will be posting again, oh joy. :( For those of you that haven’t read through all these pages, Barf villa ( aka Barilla) is soooooooooo happy! He is soooooooooo happy he should just buy up all the damn territories and lose millions. It would be wonderful for him and wonderful for potential franchisees who will save their shirts and not get suckered into this awful company.

    As Bill says, ‘Buyer Beware’. Then back away from the contract. You will thank your peace of mind, your sanity, your stress level and your wallet.

  42. ZeeOut says:

    There are many, many, many more unhappy franchisees than those who post here. I know several just from my area. Most move on, wanting to forget the awful experience as best they can.

    Stay away from this franchise!!! Run like hell.

  43. mike says:

    It’s not true that royalties are based on gross fees…
    It’s okay to be truthful about any complaints however since you exaggerate so much it makes me wonder if anything you have said is reality or a figment of your imagination and that makes me pretty much discount your complaint.
    I have been a liberty tax franchisee for eight seasons and I am making a profit.
    I am not going to say it has been without lots of help from a very good staff and I am blessed .
    It’s hard work but it is called work because it is hard.

  44. Franchizee says:

    Poor Mike! Who stated about gross fees? LTS fees are very expensive and excessive. There are no two ways about it.

    Also it seems the guys who post here are mainly AD or prior AD’s who cheated the system. Manipulation the system and manufacturing false refunds. Creating excessive refunds and they are heralded by Hewitt for being Top Guns.

    If I was the IRS, all they need to do is pick an EFIN and run the similarities between tax returns. There is probably a pattern.

    You’re right San Fran, John should be here soon, unless his office’s who were targeted for false returns. How ironic would that be??

    Bottom line is LTS steals semi legally from their franchisees and does not care one iota of great work nor keeping people legal with the IRS. It’s too bad John let a lot of great working people go for the offices who produce fraud returns.

    As I would say to people, send a friend not a fraud!

  45. original Mike says:

    I talked to a couple for zees here in my area, offices are down. Some are going to close. Don’t become a Liberty franchisee.

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