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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

3,887 Responses to “LIBERTY TAX SERVICE Franchise Complaints”

  1. ZeeOut says:

    Edmonton Alberta,

    I wish I had done what you did. I bought the cool aid. I never believed it was as easy as they made it sound – but I also didn’t do enough homework to realize how stacked the franchise model is in thier favor.

    You made the right decision and I’m glad this site is helping.

  2. Looking for people that would like to open and own their own tax service business at a low cost this is not a franchise it’s a joined venture / partnership that will be ran like a franchise without all the costly fees the only fee you pay is your start up cost. If you would like more info please inbox me and I can give you the details.. call [redacted] someone is there 24/7 to take your call

  3. Looking for people that would like to open and own their own tax service business at a low cost this is not a franchise it’s a joined venture / partnership that will be ran like a franchise without all the costly fees. The only fee you pay is your start up cost $20K you make more then you would with someone in your pocket asking for 15% and additional fees for advertising and franchising. The up side is you really are YOUR OWN BOSS. If you would like more info please call [redacted] people are there to answer your call I highly advise it…

  4. texastee says:

    Liberty Tax fails to recognize the imminent change in the tax industry. What they don’t tell the potential franchisee is that there is a greater number of more sophisticated tax return programs that can do tax preparation easier and more accurately than a preparer that they have trained for all of two weeks. What also should be revealed is the government’s eventual awakening to making the tax return process simpler and quicker for the vast majority of taxpayers.

    Liberty has to be facing the fact that they have a system that is no longer valid in the marketplace. They recognize this by making a first generation, on line tax preparation program that directly competes with its franchisees. Again, given Liberty’s ability to deceive its franchisees, they do not reveal that they can predict the obvious direction the industry is going.

    Now we will see an ever increasing level of sophistication in the marketplace where over 90% of taxpayers will be able to do their tax returns themselves. HR Block knows this as well. Liberty is trying to get to be number 2 in tax preparation after almost 20 years in the business. That should be telling as well that this is a shrinking market.

    It can’t be said enough that Liberty loves to sue their franchisees and uses this as a stick to keep them in line. Evidence: all the litigation for the same issues in the VA federal court. Liberty wins these all the time since they are ” friends ” of this court.

    Most franchisees have noticed the marked increase in required paperwork by corporate that is mostly busy work, but, more importantly, an indication that this is now a failed concept and the only way to keep its inertia is to produce more and more paperwork that is onerous to the franchisee. These reports are meaningless. It seems that they do this just to justify the corporate existence and to cover their butts. When an entity spends more time reporting than doing, they are doomed. Seems king of like the government.

    This market is in the middle of significant technological change that Liberty’s outdated and ancient system does not have the capacity to keep up with.

  5. Trisha Grabert says:

    I have to agree and disagree with a couple of points that you made Texastee.You are a better writer than I, but I will give it a shot hoping most understand my point to add.

    1. I agree it was unfair to all of the franchisees when they marketed directly against the owners to sell DIY software online. They countered our arguments with objections such as for examples, well these customers were not coming in your store anyhow, or it is designed to get them stuck just like all softwares so that the majority get frustrated enough to come in to your store so the odds are a franchisee would benefit a small percent of that market and if they still decide to keep the do it yourself mentality using OUR corporate software endorsed product then we will credit the zee a dollar per return and we will report it to the zee. They also sent hundreds of free CDs to give to people in our markets. WHY WOULD WE WANT TO PASS THOSE OUT early season!!? I actually did because I always tried to follow the system and expect their guidance as a mentorship to follow and question later. Well that worked out for how many? For my stores, I only had ONE come in and say I tried using it, got stuck on one question. Once I answered the so simple question (what does AGI mean or something similar) for the so simple software that was NOT designed to confuse them, they were back on their way without paying me.
    Then we were told to market “free second look” right after all this came out. Liberty told us if we use our best salesmen tax preparers for this late season ploy, get rid of the weak preparers, then we can sell a tax return by finding a mistake in the current year or previous year returns. That worked to an extent during late season, for mainly small dollars but in fairness we would sometimes get a retainable yearly customer from impressing them, HOWEVER, we don’t have sales people with a high turnover of tax preparers for giving unsteady hours. The Liberty program was never designed that way to keep and train people to that much advancement. You were lucky to have a level 3 certified preparer with knowledge to get through a complicated return, much less someone who was also savvy at sales and overcoming objections on hard closes. We all strived for at least one in each store and some of us were real lucky and had real closers. With high respect of my store employees that I am so proud to this day of, I had excellent employee retention by refusing to treat tax preps as disposables. As the internal Corporate auditor once said to one of my veteran preparers, wow! it is unheard of to have the same preparers for 5 years, you must love working with your franchisee.
    So for the majority of stores, it had to be a manager or the owner to do these types of sales and it would be very odd when the mistakes you were finding upon a “free second look-marketed client” (these are clients you picked up by begging them to bring in past year returns and we will give you 50$ if we do not find a mistake from an outside preparer _-_) on a prior year was from a Liberty store that was not in your territory that you were fixing. We have all had those strange moments to have to advise them of the money back guarantee and hope corporate honors it, but sometimes our area developer would tell us to eat it and do the return for free, ….yeah big help those second looks for free were, but worked much better than the smart software they marketed behind our backs and then to our faces for us to go along with.

    2. I do not remember researching many lawsuits where Liberty ever truly won against a franchisee other than by default when I looked into it a couple years ago. The numbers showed a high percentage of default judgements. I assume because people did not get served. Second speculation could be because they had not a penny to live on to get to the federal court by the time Liberty took all they had like some repo game when they were not expecting it. I have spoke to some who lost their marriage, their kid’s tuition, their homes, their entire life savings and on the verge of mental admission to a hospital from trauma where they could not fight them with such emotions to cope with and financial disaster to overcome.
    I wish people would NOT keep assuming Liberty has “friends” in the federal courts and go for their disputes. Do not be intimidated by this. Make your motions and your moves as soon as possible. It takes years or forever to get back on your feet after you lose your entire investment, but do not give up. Make the moves and get judgements to lean the numbers of people who could show up for court. They do not have big city Corporate suit lawyers, I have met some in a depositon who probably could not pass a GED test. You could just about represent yourself almost as fairly as what they have for representation. Do not get involved with Liberty as a franchisee would be the best way to avoid the trouble and devastation in the first place, but for all of you who have a grievance, HIT THEM with your motions until there is not a motion left to make. Do not discourage people by saying they always win, they do NOT. They are usually alone in the courtroom fighting people who had no means to go or were even aware. Lawyers do not play nice or fair, they play to win in the cheapest and easiest manner even if it is sleazy. Fight back. If there ARE cases that judgements were made in error and anyone believes it was because there was a friend on the bench, please prove it by sharing that story even if you wish to be anonymous.

    Trisha Grabert :-)

  6. Trisha Grabert says:

    Congrats to EdmontonAlberta, but also beware of other bad franchises. Best of Luck hopefully in your own sole venture!!

  7. Trisha Grabert says:

    @Bill,

    Of the new franchisees enrolling in training (EOT), obviously mostly company financed, correct? I can just imagine their enthused faces until they find out the truth in their future. My garbage man will even take that deal, 100percent financing is appealing until you learn how to run numbers.

    I agree with the recent poster and admin on the topic that starting your own tax business in general will profit you faster with less risk.

    I do NOT agree that just because you are a Liberty you can charge more. My babysitter can charge me twice what H&R Block can if she is great at MY tax situation and I build a relationship with her who takes interest in MY taxes. It is not the brand. It is the complexity, the perceived value of help because of the pecieved value of the customer’s opinion of complexity, the preference of who the customers relates to and is attracted by comfort level of the preparer and the following through with all steps of getting their return filed.

    “I am going to a brand store and let some stranger do my taxes because the sign is pretty or the wavers look cool”, said no tax customer ever!

    “I am going to this place because my friend says they are great about knowledge and others have let me down in those big name places” is way more common.

    Trisha :-)

  8. Trisha Grabert says:

    Question of the day:

    WHY buy a Liberty Tax Store?

    What you may be told by the Company as some of has:

    1. John Hewitt, grandfather of the invention of the very first tax software blah blah.
    a.) He is a leader in nothing. Newsflash- There are softwares everywhere, bigger, better, more support offered.

    2. You will have support with going with this franchise, we promise, we hope.
    a.) There is a deep history of failed support and CEO apologies every single year, every single year, every single year (understand?) of not only by tech and corporate, but even from the perceived leaders sent down to you such as Area Developers and surrounding franchisees and chat boards across the Country. Truth is when they are too busy to help your troubleshoot problems: You learn you are on your own just as they are.These so called leaders you can rely on have absolutely no dependency on your success. They will not fall when you fall. There is nothing tying your upper management to any responsibility to help you, nothing.(understand) Your emergencies will come at a time they cannot help many many times or they will say you must learn to roll with it and learn better by next season if you have one.

    3. They have something different to offer than other companies, like?? believing in you so much they can finance you 100%
    a.) Interest rate is high, it is a huge part of their business. They sell to people with no money, just a dream and motivation. People with money will think much much harder than you and not buy this franchise. That should tell you something.
    b.) What else do they offer or sell any differently than any other company in the world? Nothing. Some influence, some promised leadership, some we believe in your dream, we will be a community? We will be number 1? Newsflash: They still are not number one, except in complaints despite the huge difference in store counts.

    4. We will train you in at least three phases. EOT, IOT, AOT. (That is get your doors open, learn more later, get intermediate training after seeing the bumps the next season, get advanced training when you can sign up and start getting the hang of it in a few seasons)
    a.) Why believe a company can train you in a couple weeks in effective operation training? If it was so effective, the information in Intermediate and Advanced Operations training is not important enough to enroll in right away for your best chance of immediate success? When the doors open, their meter on interest on your loans start. It is like a bad student loan. By the time you get to advanced training, you are bruised badly.

    5. We have defeated IRS investigations, we have no bad history. (Only if you ask)
    a.) Untrue. John may brag about it but the IRS and DOJ enjoy his attitude as they continue to work their cases and interview thousands. You have no choice but to believe someone interviewed to tell you and I have named myself out. I have stood for days and hours of questioning about the operations of this company. I have stood in depositions that became settled by the choice of the company to not take the losses further or become public record. I am your public record. Settlements are for the GUILTY in general common sense.

    6. ___________________________________(fill in the blank) I have hogged an entire page. Let us share the forum.

    Feel free for someone else to do #6 thru #4800 to continue this topic of awareness on our free advice and opinion from experience to not allow yourself to experiment with this franchise.

    Trisha :-)

    Trisha :-)

  9. SanFranDan says:

    ^^^Yea Trisha. Excellent posts.

    TO ANYONE READING THIS FORUM/BLOG WHO IS CONTEMPLATING BECOMING A LIBERTY TAX FRANCHISEE:

    -Just say no. Back away. They are VERY adept at selling. It’s crap, and soooooo not worth all the headaches and stress.

    -Not sure why anyone would even consider buying into this franchise after reading almost 4,000 predominately negative posts.

    -We have already been through the ringer by joining this franchise. We are here to warn others to stay away. I would be extremely wary to join something that the overwhelming majority on here is warning me to stay away.

    -We have told you over & over again they are in the business of selling territories…..which is fine, but they do it at the expense of everything else. NO Training, NO support, spyware in their software, making YOU accountable for E-V-E-R-Y-T-H-I-N-G, notices to cure if you sneeze the wrong way, and fee intercepts at lightnening speed. And SO much more.

    -This experience, as Trisha points out, and I can attest to, ends marriages, forces people into bankruptcy, mental trauma and anguish, life savings depleted……..and that’s just the beginning.

    -PLEASE STAY AWAY. Please also post on here that this forum was helpful to you and you backed away. We’ve heard from others and would love to hear from more of you that you backed away and went elsewhere. It is very refreshing to know we are helping many of you out there from making the most serious mistake of your lives.

  10. texastee says:

    Let’s get back on track a little bit: We must remember that Liberty Tax has blatantly taught us franchisees how to defraud the US Govt by falsifying EIC taxpayer returns to provide the optimal refund. I have had the privilege of conferring with the IRS regarding the practices of Liberty Tax. It is a very interesting experience to inform them of what Liberty’s actual practices are. I understand the wheels of justice move quite slowly and that if more of us are willing to step up and relate our experiences with Liberty, it will lead to their quicker demise as a predatory company.

    The idea of “closing the sale” as euphemistically described for the Liberty Tax corporate culture, is a way of saying “cheat the government through EIC claim exaggeration”. The main marketing ploy of Liberty is to optimize the EIC refund through any means possible- this is what they taught me from the beginning. This is what they ‘unofficially’ promote now. This is not a company that is on the up and up. In fact, they still manipulate their stock to show value increase by insider trading. This is something to also think about.

    As I see it, Liberty has demonstrated total disregard for compliance with tax rules as well as financial standards that continue to defraud prospective franchisees and investors. Just look at the marketing efforts regarding how they justify a $400 charge on a simple return or hoe the insiders manipulate the stock price through low volume to make a high price on trade. Everyone gets excited on the huge increase in stock value, yet, they don’t see that it is a result of very low trading volumes by these insiders. Many insiders have or are leaving the company and cashing in their options to make a fortune. Hewitt will buy an equal amount of shares to offset these transactions to artificially prop up the share price to the program investor. Some one will be the last one holding the shares of this company, don’t let it be you.

  11. SaraEA says:

    Texastee, that was a mean-tempered post. Even if it can be proven that Liberty gives “hints” about how to maximize EITC claims by cheating to increase client refunds and thus client count (and I’m not at all sure it can be proven), how many franchisees actually bite? Most zees are hard-working people trying to make an honest living, and I seriously doubt that many of them would jeopardize everything they worked for by cheating. Sure there are some, but you make it sound like that is the general rule rather than the exception. I strongly disagree.

    I am a professional. If my boss told me to bend the rules, I’d have my desk cleaned out within the hour. Liberty staff are free to do the same. Franchisees have too much invested to just walk away, but they don’t have to listen to that crap either. I seriously doubt many of them do.

    Insider trading, on the other hand, is another story. It happens in many companies. Liberty zees and their staff do not bear any of the guilt.

  12. Guest says:

    Ditto. I’m hard working and have never been told or asked to break any laws. The posts can help with providing information about what to do and what not to do. That can be helpful, but if it’s vengeance you want, watch Dallas.

  13. bill says:

    SaraEA: The problem with your assumption is you think all franchisees have your skills and integrity. Unfortunately these are not requirements of owning a Liberty Tax Franchise.

    I personally was never encouraged to make up things on a tax return,and I think that was probably due to the fact that I was a licensed tax professional. But I did listen to many conference calls and would cringe with the aggressive marking ideas and what was a company accepted approach of enticing lower income/EIC clients to do business with Liberty. “Cash in a Flash” is a good example. Here they entice people to file with them by giving them cash upfront. Then they back load the advancement into the client’s fees without ever telling them. Not illegal but certainly lacks integrity.

    I do remember in one conference call Liberty Tax making an announcement to be careful when someone was claiming a babysitting job as a business. At the time I thought this was proactive but after hearing comments on this board it was more likely a way for protect themselves from the current accusations.

    One other thing to keep in mind circular 230 does not apply to the franchisors. Not sure why especially when you consider they collect a fee on each return filed, can monitor each franchisee, see the fees that are being charged and know the refund amounts. In my view they certainly can see patterns of questionable behavior and should be responsible to provide some type of oversight, however they are not required to do so, Therefore they ignore them.

    Liberty because of its layered structure may not be considered/found guilty of any wrong doing but their certainly complicit.

    Buyer Beware!!!

  14. texastee says:

    Sara: I was part of the early regime when these practices occurred. I know what was said to me in order to “maximize refunds” and “give value added” in terms of marketing. These were clear policies when I was unfortunately associated with Liberty and encouraged in order for them and me to get our fees. I can appreciate your perspective of how the EIC’s are handled in your office. I very much commend you for how you perceive you would handle the situation. What you forget is that this company is in the business of squeezing all those that come in touch with it dry, whether you are a franchisee or a customer. I do not condone these practices, but when you are facing a minimum franchisee royalty fee of $11K , your perspective would change. These are the facts, it is ok to sit in an ivory tower and be protected professionally, but when you need to feed your family and to pay the bills, the line gets blurred. I do do not condone the practices forced upon us by Liberty, but there are realities that many of us have to face when this is our livelihood based in a very depressed market. No excuses, but this is the way it works.

    Most people are willing to be aggressive when applying the rules. Yes, in a strict sense, this is a form of cheating. Knowing how things work can sometimes encourage your bending the rules, looking the other way, or any other way we can justify our actions. I can only speak for myself, but when AD’s, Vice presidents and corporate trainers encourage the systematic fabrications with EIC’s as well as Schedule C’s and E’s by leading you to believe that this is “accepted practice” in the marketplace, then there is something wrong. Clearing your desk when the boss tells you to do things is a very commendable mindset, but , sometimes not a reality when you are the one responsible for all the bills and corporate office breathing down your neck. I would have loved to have the luxury you have to clear my desk within the hour, but, since I had bills to pay, checks to write and various sundry paperwork to complete and comply with, I have to live in the real world which requires me to maintain a roof over my head and provide for my family.

    I was in the trenches with Liberty and was duped, lied to and taught what rules were meant to be broken according to them. I’m glad you did not have this experience, but I certainly did. There is enough evidence out there to support my claims. That is why I post here as a warning to other potential buyers to stay away from these screwballs. I can personally count on 22 people that have directly contacted me and have saved them from the heartache that I have endured and continue to do so. I hope not to stop at 22. That, at least, gives me solace in what happened to me and how to prevent this nonsense in the future.

  15. mike says:

    Good points Texas,

    One only needs to call low income area offices that offer Cash in a flash, see what the responses are for yourself. I know for a fact that atleast one client thought that they were actually getting PAID to file their returns at a Liberty office, sadly these clients are easily fooled. Like I said all you have to do is call the offices in your area and see what the actual response is, more importantly PRETEND YOU ARE A CLIENT!! YOU WILL BE AMAZED! LIke Tex said, when you are BROKE trying to make it sometimes marketing tactics might be a bit stretched.

  16. Franchizee says:

    The top gun franchisees in my area practiced very “liberal” tax returns. They would look the other way in order to write a return. People would come to me first and if I would not take their word on a schedule c without documentation and kids with different last names and no proof of residency, I would shoo them on there way. They would march down to one of the large franchisees in our area and write the same return.

    Also, if I would write someone that was a little sketchy, and they in turn would send in more and more people. Pretty soon, the sketchy one, possibly could of been a fraud because all of their friends are frauds. Eventually, you quit writing any of the frauds or call them out and word gets out on the street to shun your store, you are toast. Being ethical with LTS was very hard because someone else would write that return for $400 or more in fees. It was a fraud return.

    So, it does happen that fraud is written either knowingly or without looking very close at the return and putting two and two together. Especially, when you get the same address for 20 plus people at the same apt number, gee doesn’t take a rocket scientist to figure out that is all bogus and everyone is a head of household. But at the larger stores, who would know??? They are doing a thousand or more during a two week period. I guarantee there is no “quality control” on those files. They are all flying by the seats of their pants. No wonder they are open multiple days per week to fix the returns that were not even looked at in the very beginning.

  17. Franchizee says:

    Also, I noticed that “frauds” want to go to the bigger offices, because they are a number not a person. They feel, they can just go unnoticed. They know if it is too busy, no one will look very hard at the return or ask too many questions, because the bigger stores are on speed. In and out! They are on a mission to write as much business as possible, so a fraud will sit for hours and hours just to write a tax return than been questioned by a small store.

    Also the larger stores give away more food, products and have way more hype than a regular tax office.

  18. bill says:

    Franchizee: As you pointed out there are culture differences in all social economic areas of this country but one common thread is people hate to pay taxes. John Hewitt is well aware of that and built his business model (first with Jackson Hewitt and now Liberty tax) on targeting the lower income areas where there is a high level of turnover, technology can offset the need for seasoned tax prepares, large refunds due to the benefit of tax credits specifically the earned income credit, the use of bank products to finance their high fees, and most of all the IRS’s inability to effectively enforce compliance. In 2013 the IRS estimated that 22 – 26% of EIC’s where fraudulent.

    For any potential franchisee, regardless of the demographics you will be focusing on, this company is not worth your time and effort! Remember “If something is to good to be true, it probably is”.

    Buyer Beware!!!

  19. SanFranDan says:

    Prospective franchisees:

    Please do your homework. Ask lots of questions and do lots of research. This is not an ethical company. They will run over you and mow you down at first opportunity. They need to be stopped and held accountable. This will only happen when enough ex-franchisees come on to report their experiences.

    Yeah SaraEA: I’m trying to back away from this site. This has been a nightmare of huge proportions and I’m just trying to warn others not to join and make the same mistakes. I hope to post less & less often and move on with my life.

    All I can say is that I hope they get what’s coming to them in my lifetime. I hope to experince the joy of seeing the company fall and the CEO locked away. Nothing could make me happier. Their stock is manipulated and they have fooled the public for years. It’s time for their day of reckoning. Can’t wait.

  20. SaraEA says:

    SanFranDan, you’re doing good! Just promise that you’re not just posting less often but logging into this site less often. Try to log in once a week if you have to, and work your way down to once a month. Post once a month. That way you won’t be pouring more anger and hatred into your soul and spewing out the same. Is it helping so far?

  21. Bill says:

    SareEa: This is a site specifically for and about Unhappy Franchisees. In my view if you’re not a former franchisee, a current franchisee, or someone considering to be a franchisee, which I believe your are none, I don’t understand why you post here. That said I can except your post about your own tax experiences and the complexities that come with preparing taxes because they offer validation that tax preparation is much more difficult then Liberty Tax suggest. However, if you want to personally help San Fran Dan you should ask admin to provide you with a way to contact each other.

    For many of us who have been on this site it may become redundant but the reality of our message is very relevant to those individuals who haven’t become franchisees. For those looking at purchasing a franchise if it was that easy to make “money” on their business model why do they need you????

    Buyer Beware!!!

  22. Sad but true says:

    The only thing necessary for the triumph of evil is for good men to do nothing.

    Edmund Burke

    Never, never, never…stop fighting the good fight to let others know that entering into a contract for a franchise with Liberty Tax will probably be a big mistake for them.

    Does Liberty try to do things legally – they have to. Is what is legal always ethical? No! Guess who plays by their rules, most of the time legally, but are they being ethical? Liberty, that is.

    Example 1 – Territories go for $40K – Liberty will not tell you if they think your territory is a “dog” – never going to make it profitable – never – but they will sell you that territory for the $40K and sell you the hooey that you will be rich someday – just follow the “plan”

    Example 2 – 5% Advertising charged the franchisee – you agreed to it when you signed the contract, but are you getting your 5% back in National TV, Radio, mailing advertising? No!

    Example 3 – A lack of professional, common sense approach to making your territory a success. Why not a reduced franchise fee for weaker territories? Why not reduced royalties for this territory? Why not actual advertising fees for actual advertising you get from Liberty instead of a flat 5%?

    Example 4 – Do free returns to “get new and future customers and their friends” – WHAT? FREE? Who does that? This is suggested to inflate number of returns to impress investors and potential franchise buyers. “Wow, look how our # of returns is growing” Liberty says – yes, maybe, but at whose expense? – the franchisee that follows the “system”

    I want to be clear that I am not sure greed can be classified as evil. Some may say it is. Liberty is definitely greedy in taking from their franchisee’s and giving little in return. The quote I used to start my comment is emphasizing that doing nothing is not an option if you do not want evil to triumph. So, let me just say that the only thing necessary for more potential Liberty franchisee’s to get duped, is for former and current franchisee’s to do nothing to inform the public of the problems with this business model.

    Keep up the good fight! Never quit! Good will triumph in the end!

  23. John Barilla says:

    Bill,

    Who made you in charge of this website? Obviously, SanFran is disturbed and i a feel the same about you. If Sara is willing to help her the only question I have is why not help Bill too. The guy posts one here like there is no tomorrow….

  24. SanFranDan says:

    ^^He’s baaacckk…………oh joy :(

    You are right, Barf villa. I am disturbed by my many years of association with this bully & predatory franchise.

    Good luck to you, you’re gonna need it.

  25. SanFranDan says:

    Actually, since you are predatory and a bully yourself, you will probably be one of the few to continue to fit in to their culture very nicely.

  26. Franchizee says:

    Sad but True makes great points. My dog of a territory is going up for sale because LTS just sent me a flyer to call them to see the “great territories” available.

    It is true, LTS will not give back any form of money for a “half” of territory, one that does not even nor ever come close to the 600 returns. A good year and lots of credits from the government, you may get 250 – 275 for a “half” territory. Most of the territories available now would be considered “half” territories.

    ***LTS knows everything up for sale are just half territories*** Like others have pointed out, you will have a minimum royalty, because if they charged the flat 19% royalty, they would go belly up. So on my “half” territory (or dog territory), the most in royalties that LTS would of received = $7,700. plus 5% $2,750. with a total of $10,450, but they got $11,000 plus the $2,750 – Total of $13,750. That was on my best year. The rest of years were between – $3500 plus $1,250 (which they got $5,000) plus the $1,250 – My last year should of been = $4,662 in actual money earned, however plus another 5% = $1,650 with a total of $5,912, but they got $11,000 plus the $1,650. So it goes to show that they are selling territories that can’t make any money for the franchisee, but they are guaranteed to make a killing. They are totally misrepresenting their “name branding” which does not bring in anymore people than going out on your own with some target advertising.

    I sure someone will try and mess with my numbers, but they are on a federal tax return, so whatever!

    Potential buyers, need to understand everything is a dog and they over sell the areas to line their pockets. They are not worried if you can’t make a living they just want to you to fund their lavish lifestyle.

  27. texastee says:

    A comment on resale of territories: The marketplace cannot support the conventional financing of such terrible businesses. The minimum royalty amounts take away most profitability that you can make. When selling a territory, anyone looking from outside will know that this is a bum deal. You can’t even give them away. So, this leaves Liberty to sell existing markets in unconventional ways such as stating the number of total returns, mentioning the average paid return price and having the prospective franchisee multiply these 2 unrelated numbers. Remember, the number of tax returns processed includes all , even the free ones. The average paid return price does not factor in the free returns. Another unconventional way of selling a territory is to offer liberal financing of territories at 12%. We all know that that is about the rate of a loan shark, which is essentially what these people are.The buying of a new or pre existing franchise territory makes little or no sense. What Liberty presents to the franchisee is what he/she wants to believe. Read between the lines!

  28. Franchizee says:

    Good point Texastee. Also keep in mind when you read a LTS contract to accept and pay for the “territory”, you still cannot see the whole picture of how this company is run, nor can you understand the little (meaning 100’s ) of extras you are expected to preform in order to keep your “1/2 territory”. Paying the territory is only the BEGINNING, now your life as you know it becomes John Hewitt’s and his crony’s ways of sucking time, money and talent out of your life.

    When he states, you are building “your” business – False – You are building his brand name, namely Liberty Tax Service

    When he states, you are the CEO of your business and we are your support – False – You are the CEO who takes all the time, money and risks and gives him “your paycheck” for being part of this great organization. Remember, you are funding the Hewitt’s lifestyle.

    When he states, you only need to work 3.5 months and you have 8 months off – False – That would be great, however, you must do a GRR – Gross Receipt Report by the 5th of each month and have it paid by that day. You must be open at least 8 hours a week per territory. You must have a tax school (which by the way is not in any first time agreement), being at least 6 week school up to 20 week or so school, can’t remember, because I did not do them.

    When he says, we are your support – False – All they do is hound people for payment and don’t help very little with tech support. There are great people in the lower levels of this company, but they have no say in anything.

    So, when you read the first agreement, there is much more than meet the eyes and it is truly false advertisement. Maybe they have a better agreement with more info, but I doubt it.

  29. bill says:

    For anyone considering a franchise any franchise here is an excerpt from
    an article from the site Living Stingy titled Should you Buy a Franchise by Robert Platt Bell

    “Does this mean all Franchises are a raw deal? No. Just that the real ones are real businesses, and if you have no business skills, you won’t succeed at them. In fact, one way to tell a real Franchise from a phony one is that real Franchises don’t accept everyone as Franchisees. McDonald’s isn’t going to grant you a Franchise just because you pony up the dough – they want to see some business experience and know-how. Otherwise you will fail, and they won’t make money and their reputation will be damaged.

    You won’t see the legitimate companies advertise for Franchisees. You won’t see them at Expos or Fairs. You won’t see them use high-pressure sales tactics to convince you to become a Franchisee. If you want to be their Franchisee, you have to approach them and convince them you are worthy of a Franchise.

    The con-job Franchises accept everyone who can pony up the dough, and they promise you unrealistic riches, without work, and use high-pressure sales tactics, usually at an Expo, Fair, or sales meeting, to convince you to buy a franchise like it was a time-share. And here’s a hint: Time-Shares are an utter rip-off.

    The shame of the matter is this: Many folks spend tens of thousands of dollars on these types of scams, and end up broke and destitute as a result. They hope to strike it rich, when they could have, if they had saved their money, merely struck it middle-class. Which ain’t so bad, really, is it?”

    Does this sound like a Liberty Tax Franchise?

    Buyer Beware!!!

  30. Mike says:

    Danny actually has a book coming out next week. Titled this is How We Hewitt interesting. ….do you think it mentions how much money you owe when you buy a new territory? I actually like danny I hope that he is a better person than his POS father.

  31. backingaway says:

    I have been reading this blog for a few months now and I am glad to say you all saved me a ton of money. I thank you all for showing me what a rip off this company is. I encourage others to do the same before plunking down any money. Thanks all!

  32. Out and Glad says:

    Mike,

    I hate to say it, but this is the IM he sent out today on facebook. I did not add the part of the post that gave his book. In one way he does sound like his dad.

    My book just came out today in digital format!!! Please Share and Review!!! Exciting day to be a Hewitt!!!

  33. balancetrend says:

    Yeah, $0.99, thats about right. Save yourself the $39,999.01, this 83 pages is technically what you are paying for. Learn to dance around like an idiot and see what type of clients it will attract to a ‘professional’ business!

  34. bill says:

    Potential franchisees: As September comes to an end Liberty Tax will be pulling out all the stops to recruit potential franchisees. Based on their last quarter numbers Liberty is already offering more financing than in the past. For those who are considering this option please speak with an attorney. The paperwork you are signing obligates you to minimum franchisee fees for the next 5 years on top of the money that the company is financing you. If you sign you will be contractually obligated to them for the next 5 years.

    If you already have experience as a tax preparer, have a ptin number and only need an efin number and are seriously considering setting out on your own I will gladly provide you with advice about setting up a tax retail practice.
    Just ask admin to provide you with my contact information.

    If you on the other hand are looking for a career change and don’t have tax experience. Please believe me when I tell you taxes are way more complicated then most people think. There is no way Liberty can adequately prepare you to run a tax practice.

    Liberty is a churn and burn operation. They let you buy the site, pump your money into the business and if your successful good for you and them, if your not successful no big deal they charge you the minimum royalty, take back your territory and re-sell it.

    Buyer Beware!!!

  35. balancetrend says:

    Good Post Bill.

    I was also a South Jersey franchisee and have been back on my own for a few years now, its 10X better! I do not rent a physical office, work 100% paperless and have expenses of less than $3k per year!

    I would also be happy to provide advice if you have tax experience and want to go on your own. I’ve created a very low cost business model and it seems to be working out quite well! Contact the admin for my email address.

  36. SanFranDan says:

    ^^backingaway:

    Excellent news! Thanks for sharing! I am SO glad that you “backed away” before signing on with these goons, crooks, ripoff artists, fill in the blank.

    Thank you for letting us know! :) Anyone else out there who has benefitted by this forum, please also let us know! Awesome!

    It is people like me that has lost so much that is posting on here to help people like you save your $$ and your sanity. I like your name: Just back away! Everyone! :)

  37. Franchizee says:

    Has any current franchisees with LTS received their 5 year renewal contract? There is a possible scuttle butt, that signing the renewal contract, you as an individual would not be able to do any taxes, anywhere for 2 years. Can anyone confirm? No more 25 mile radius.

    It would be interesting to see how many offices will be shut down this tax season.

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