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LIBERTY TAX SERVICE Franchise Success Story

August 11, 2009

LIBERTY TAX SERVICE Franchise Success Story

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

Entrepreneur magazine has ranked the Liberty Tax Services 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.  Read their comments at:  LIBERTY TAX SERVICES Franchise Complaints.

However, one commenter on the same forum claimed to be a successful and happy Liberty Tax Services franchise owner, and shared his thoughts and financial details. He rebuffed the detractors and defended the Liberty Tax franchise opportunity.

Bubba wrote:

Good grief, people, just listen to yourselves. Entrepreneur magazine, independently of any of us here and our personal axes to grind, ranks Liberty as the #3 franchise opportunity in the country. Best in their category and better than any other except Subway and MacDonald’s. So, if you don’t want to cook food for people, it’s the best franchise according to them.

Yes, there are some franchisees who don’t make it, and when they violate their contract Liberty will sue them to enforce their rights under the contract they both agree to. Yes, Liberty charges a franchise fee and royalties – just like any franchise organization. Compare their royalties to Jackson Hewitt or H&R Block for a real eye opener, folks. They’re lower.

And no, the franchise fee is not pure profit, much of it goes to their area developers who provide the franchisee with direct operational support.

Reliable managers? If you are not a good business person you may not find good people. I have good solid managers for my two Liberty locations. My revenues are up 18% right now from last year, when my profits from two stores totaled $75k. I expect profits of at least $90k this year and upwards from there. Two territories.

But yes, some people fail. Liberty can tell you what you should do, but you can decide to do it your own way. If you know better than them, then by all means do it yourself. You’re a fool to pay for someone’s brand and system and then not use it.

For a total investment of $100k I have a business that will provide me with $90k a year in income for as long as I care to do this. I could expand, and Liberty would be very happy if I did, but I don’t want to. Other do, and make more. Some cannot run one store. But whose fault is that?

WHAT DO YOU THINK?  DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE?  IS THE LIBERTY TAX SERVICE FRANCHISE A SOUND OPPORTUNITY?  WHY OR WHY NOT?

Contact UnhappyFranchisee.com

READ MORE ON LIBERTY TAX:

LIBERTY TAX SERVICE Franchise Complaints

Are LIBERTY TAX SERVICE Franchise Owners Happy?

LIBERTY TAX Leaked Email Exposes Sleazy Sales Tactics

LIBERTY TAX Fraud: Preparer Could Get Prison Time

LIBERTY TAX: Are Liberty Tax Franchise Owners Living Their Dreams?

LIBERTY TAX Scam Exposed by Franchise Owner

Comments

50 Responses to “LIBERTY TAX SERVICE Franchise Success Story”

  1. Quiet One says:

    Bubba Says “Compare their royalties to Jackson Hewitt or H&R Block for a real eye opener, folks. They’re lower.”

    Compare Liberty’s Average Unit Volume to Jackson Hewitt and H&R Block and you’ll find the real eye opener! The average Liberty location brings in a SIGNIFICANTLY lower volume than either of the other brands, as you can see in the data the IRS publishes each year.

  2. Scammed by Liberty says:

    Entrepreneur magazine most likely only spoke to franchisees that Liberty put them in contact with. The same thing Liberty did to me when I was looking at becoming a franchisee. The area developer lied repeatedly to me and would only let me speak to certain franchisees.

    As for royalities, 19% is high…extremely high when you do not get any real support. My first year with Liberty, I needed “tax support” from them. I was new to this business, went through their “tax classes” , and was told not to worry that the software would handle the rest. LIE! I called Libertys “tax Support” and was given information on how to handle a specific tax issue. Come November, the client came back with a letter from the IRS because the issue had not be handled correctly and now they owed back taxes with penalties and interest. Libertys policy is that when a mistake is made the franchisee who must pay the penalties and interest for the client. So I as a franchisee paid the $2300. Liberty’s “tax support’ was never reliable in any way. So tell me Bubba why did I have to pay for “support” they never provided?

    As for the Liberty software…it’s a joke. It’s unreliable, incorrect and not very user friendly. Liberty expects you to train a person to become a trained tax preparer in 12 weeks of classes. the classes are about 3 hours long twice a week. There is no way anyone truly understands the tax code or even simple tax returns in that amount of time. Especially considering Libertys “tax school” does not go into detail about any tax issues.

    I was a franchisee for over 4 years. And in that time I did not make a dime. I followed all of the Liberty ideas for marketing, employees, tax school ect , no matter how completely ridiculas they were.

    Plain and simple Liberty Tax Service is a scam. John Hewitt is an out and out liar. He’s running a cult with the people he keeps closest to him. If you disagree with him in private or public you are automatically fired. Check out the turn over of his closest employees.

    DO NOT INVEST A PENNY WITH LIBERTY TAX SERVCE!!.

  3. biztax says:

    Look folks, for all I know Bubba could be a Liberty plant that blogs alll these web sites. The truth of the matter is that Liberty guides perspective franchisees to favorable people who will give them a glowing report. I made money in my franchise with them, but I had absolutely no help from either a greedy corporate structure or an incompetent AD. They take your money and you get nothing back. When you want to leave they sue you. They have a friendly group of judges up there in Virginia Beach so they get away with as much abuse of their franchisees as possible. They do not like dissenters and are not open to any other ideas other than those management can invent that further soak the franchisees out of money. I was too naive when I originally signed up. Now I’m smarter in hindsight and am able to warn people not to engage into any business agreement with this group.

  4. Former FL Franchisee says:

    I too was a Liberty Tax franchisee for 3 years. They provided no support and always demanded money. They are threatening to sue me even though I opened my tax practice 27 miles away! They try to intimidate all their franchisees and do not like to be asked questions about their marketing plans. I know that Liberty does monitor these blog boards and actively try to dismiss negative activity by blogging more hits for positive notes on the search engines. Please, stay away from these people! Did you also hear that John Hewitt is in the process of rebuying the shares of his old vompany, Jackson -Hewwitt? I wonder hoe this would effect current franchise holders? I’d be upset if I were still in their system! Stay Away from these people!

  5. Guest says:

    Is Liberty a publicly traded stock or do they place any securities to the public? If so, maybe the SEC would be interested in their practices!

  6. Due DiligenceAlways says:

    When contacting these guys, all they want to do is to invite you to VA beach, VA where they are headquartered. They feed you well and then allow you to ask some questions. At one that I attended, John Hewitt was asked about the profitability of franchisees, or, more likely, the lack of profit. His answer was to emphasize the number of tax returns that are done in each store. He was also questioned about how many were required to be given away or so Called ‘free returns’ 100 was the number that he provided which he also includes in any stores return count. One of the accountatnts in the audience deduced that a free return does not bring in any revenue. Hewitt said that the free returns come back each year. When asked how many, he said about 50%. Ask current and former franchisees how many wer retained-the number is more like 3 or 5. Lets all beware of what a bunch of liars these guys are!

  7. Josephine says:

    Thanks for the info guys. My husband and I are currently retired and thought we would invest some of our current savings into Liberty Tax. We are both accountants and always wanted to own our own business. However, time, lack of money and family responsibility prevented us from doing so. Now that we have the time and the money, we thought about Liberty Tax.
    There was one thing that kept bothering me though. I kept asking my husband, why would John Hewitt open Liberty Tax to compete with the people that bought his Jackson-Hewitt franchises? Doesn’t he care about these people? It seemed unethical. Now I understand his thinking. Keep making money for himself and hell with everybody.
    I am so glad I read your blogs. Thank you!!!

  8. Roger Gingerich says:

    I have been a Liberty franchisee for 6 years and now own 7 offices with a partner There are many factors involved in the success of an office. I have some great ones and some poor ones. Joining with a franchise only increases the liklihood of success and does not guarantee it.

    Over the 6 years I have seen many come and go. The ones that have gone did not have realistic expectations and did not effectively market their business. There will always be some of these people coming into the system and they would probably fail no matter what business they were running.

    Liberty provides a tremendous level of support, however as a business owner you must be able to apply that support. Support is just that. It is not operating the business for you and the business owner must still take responsibility for the success of the business.

    With each new territory I received a list of all franchisees and contact information in the Circular. I could call any current on former franchisee of my choice.

    No system is perfect but Liberty had helped me build a succesfull and profitable business.

  9. Jardine says:

    Liberty and every other franchisor is out to maximize their revenue. That should not shock anybody. Not everybody has the temperment or aptitude to be self-employed. Liberty will still take your money and sell you a franchise. I’ve seen them sell the same territory multiple times and collect multiple franchise fees, so they get paid whether you succeed or fail. Keep that in mind too. To say they lie is a little bit exagerated, but they will certainly present everything in the best possible light and yes, their claims about the free returns are very inflated. What people need to do is figure out if they’re able to operate a business or not. Liberty won’t tell you, and if you buy the hype and get all puffed up when they tell you you’ve been “chosen” or “selected”, well, that’s how people lose money. They don’t turn people away who have money and are willing to sign a contract. Period.

  10. John says:

    Do your own maths.

    $40,000 + for franchise fee + other start up cost = $70,000 start up. Then 19% royalties fee annually.

    How many tax returns do you need to prepare just to breakeven? Average operating cost per year is $70,000 – $95,000. Say average tax prep fee is $150 per tax return, you need to prepare 466 to 633 tax returns just to breakeven. Ask Liberty Tax how many of its 3,000 + offices have prepared 650 + PAID tax returns in their first, second, and 3rd year. Don’t just listen to the top 10 franchisees.

    The top 140th office prepared about 1,000 tax returns (included free tax return). About 5% of the 3,000 offices actually breakeven or make a profit. 95% of the franchisees is losing money. What do you think is your successful rate with Liberty Tax?

    If you are willing to take huge losses for at least 3 – 5 years, pay $7 – $8 per hour to your employees and expect to have new employees almost every year, Liberty Tax will be an excellent business for you.

    What can’t you compensate your employees well? Because you have to pay 19% royalties fees. There is not much room for you.

    Do your own maths!

  11. Annie Fuller says:

    I wouuld like to address those people who are trying to support me, Thank you so much, however you are doing something very wrong by using my name and disclosing extremely personal details. This is not helping me at all. I understand your concern, trust me I do, but this is not the way to get the results you want.
    Please, Whoever has posted something ABOUT me, or posted AS me, Remove your postings now. It is your right to post what you want about your own experience but please dont post about mine, you do not have all the information.
    You’re acutally HURTING me by doing so.
    Thank you again for caring enough, I know the intentions are not to hurt me. I believe it will all work out, I’m a survivor !
    Please remove your posts so I can continue on with my life.
    Thanks, Annie

  12. Not Annie Fuller says:

    Who is Liberty Tax franchise owner Annie Fuller? Can someone explain these bizarre comments?

    I did a Google search on “Annie Fuller Liberty Tax” and found her touted as a Liberty Tax franchise success story. A day in the life article on Franchise.com said “Annie’s first office opened in December 2006. She now has six offices, and is the Area Developer for Chattanooga.”

    “joining the Liberty Tax system has changed my life, and set me free on the path of growing a business and building up equity in my future. By Tax Day 2007, my office finished first for new stores with over 1650 returns prepared. In addition to my Newberry location, I became an Area Developer for Liberty for the Chattanooga area in 2008. ” http://www.franchise.com/franchise-news/A-Day-in-the-Life-of-Liberty-Tax-Service-Franchisee-Annie-Fuller.cfm

    Then there are Ripoff reports calling her a crook:
    http://www.ripoffreport.com/income-tax-service/liberty-tax-annie-fu/liberty-tax-annie-fuller-ow-2d95f.htm
    http://www.ripoffreport.com/income-tax-service/liberty-tax-annie-fu/liberty-tax-annie-fuller-is-4668m.htm

    Then I found that the BBB gave the Liberty Tax location mentioned in the ROR as hers a rating of “F” And the same Liberty Tax location is listed on the TN state attorney generals “Buyer Beware” list
    http://tn.gov/consumer/documents/BuyerBewareList_004.pdf
    http://www.bbb.org/chattanooga/business-reviews/tax-return-preparation/liberty-tax-service-10009-in-chattanooga-tn-40050203

    What’s the story with this Liberty Tax franchise owner? Is this Liberty Tax’s idea of a franchise success story?

  13. Annie Fuller says:

    In response to the Above:
    The ripoff report is very simple, a client did not receive their tax refund due to their own personal issues, obviously the “rip off report” is a for hire company that allows a consumer to report something bad about a person or company and then “allow” that person or company to PAY them in order to have the negative comment retracted. Out of thousands of clients, thousands… there are always going to be a few that you or I or anyone can ever make happy.
    I do wish people would read in full the details about the company, all about the industry and anyone is more than welcome to contact me and I’ll be happy to share my experience from day one through to today.

    companies like the BBB or rip off report etc, are ALL private for profit companies that force business owners etc to pay them to remove negative comments founded or not.
    in their eyes (and therefor the public eyes) you are guilty until you pay for your innocence. Some of us choose not to give in to this unethical practice.

    There is a reason I have been so successful., I work hard, worked harder and worked some more… I Treat people right, I’m fair and ethical.
    I’m human and do my very best to correct mistakes, please use your better judgment, read all the information given and not just the parts that support what you want to believe , be it good or bad.

    email me anytime I am not hard to find.
    A

  14. Not Annie Fuller says:

    Annie Fuller:

    Is it true that you posted fake comments under different names on Ripoff report, posing as happy customers praising you? Not knowing that they would still show your screenname “getyurgun”?

    So you’ll give in to SOME unethical practices but not others?

  15. Annie Fuller says:

    No Its not true, Anyone can log in using any email address, everyone knows mine.
    Like I said, It would be prudent to read ALL the information, do real due dilligence and learn the full truth.

    I have nothing to hide, no one is perfect or ever will be.
    As a single mother of two, I have worked as hard as I ever thought I could to be successful. From near pennyless I changed my life through this hard work, gave my everything to this company including all those who are associated with it.

    Now, If instead of hiding under the name “not Annie Fuller” if you would like to do as I am and come out from hiding, speak clearly, honestly, and openly I’ll be happy to answer any questions to anyone who asks.

    call any number of the hundreds of franchisees, clients media etc and see just what kind of person I am.

    It hurts beyond belief that so few people can take what I give so freely, and turn it into trash.

    People love scandals, and to those of you who continue to support me, email me and let me know that my help made a difference in your business or inspired your life I appreciate you more than I could say now. I promise you I’ll survive no matter what happens. Lemons to Lemonade…!
    To those of you who are offended or feel I did not do enough for you, I’m sorry for my shortcomings.
    My efforts are seen and appreciated by those who matter.

  16. Tell the truth Annie Fuller says:

    Annie, the thing about lying is that it becomes such a habit that you forget you’re doing it. But on the Internet there’s a record of what you write so when it’s disproven later you look like a liar.

    Like your statement “As a single mother of two…” Do you want to stick with that? Really? Cross your heart, hope to die?

    Also, do you think people really believe that someone signed on using your name and email address in order to defend you and write nice things about you?

    Seriously, Annie, how gullible do you think people are?

  17. No longer LTS zee right Annie says:

    Interestingly, according to other websites, that last comment allegedly by the real Annie Fuller Liberty heroine was her last because, once again, allegedly, Liberty Tax has bought back Annie Fuller’s franchises and she is no longer associated with the firm.

    Would love to hear what you have to say about these rumors Annie.

  18. Tell the truth Annie Fuller says:

    Is Annie Fuller married now?

    Searching her name turned up an obit from January that referred to “Annie Fuller of Chattanooga” as the fiance of Gregory S. Christol.
    http://www.hometowntimes.com/hometowncherokee/news50000/obituaries/kenneth-l-christol.shtml

    Gregory S. Christol has an interesting past.

    “Another jailed in family’s gun ring”
    http://www.romenews-tribune.com/view/full_story/3388159/article-Another-jailed-in-family%E2%80%99s-gun-rin—Local-New

    Annie got her gun allright

  19. Sherry says:

    I was a Liberty Franchisee for 6 years and while it was very tough going I can HONESTLY say that Liberty Tax Service treated me fairly, provided me with unbelievable support and gave me all the tools to succeed. I made some serious errors from the beginning with regards to having enough money to actually start a business and this was NOT Liberty’s fault. The Central NY area has seen many, many Liberty Tax offices come and go. It’s a very strange area, filled with a plethera of Jackson Hewitt’s and HR Blocks.
    The Liberty System is good, it works but it’s truly a numbers game. My one little office was just never going to cut it and I didn’t have the money to purchase another territory. But when I decided to throw in the towel, Liberty did NOT sue me, they allowed to get out of the franchise without any serious repercusions. I truly believe that for the right person, with the right money to operate a business the Liberty System is incredible. John Hewitt impresses me as a man of great kindness and integrity. I loved my time with Liberty Tax Service and I am proud to be a former franchisee. The memories, friends and experiences are all so very special to me. I believe Entrepeneur Magazine has it right. If you look at the number of franchisees compared to the number of complainers – you will see that they are a small, small fraction of a percent of the whole. If you’re looking for a franchise it is still one of the best to consider in my honest opinion.

  20. lani says:

    Sherry, so when u are a liberty tax franchisee, u can’t get out of of the contract and start your own individual tax prep company?

  21. Sherry says:

    No Lani, you just have to meet certain criteria, I am not sure if it’s the same for everyone, but you cannot do business within 25 miles of your territory or you have to wait for two years – at least in my case. I believe it’s a pretty standard non-compete clause. Most businesses use them when they have trained someone in a specific industry and that person has the potential to use that knowledge to leave and start up their own business. I don’t feel that it’s unusual, out of the ordinary or unfair. Plus, I now live 1300 miles from where my territory was, so I don’t really have any concerns with it, personally speaking.

  22. J Dunn says:

    I am a current LTS zee, this will be my second year and I have gone “all in” so to speak. I originally purchased 2 territories, only opening one with intention to open the 2nd this year. Well I lost my ass, I didn’t do nearly as many returns as I HAD hoped, and I even paid extra for a marketing specialist to come out and help. Key in that last statement is “as many returns as I HAD hoped” LTS will let you grasp at straws letting you believe you can do as many returns as you think possible, that part is BS, but live and learn I say, I just hope to continue living. However, with all that said, I also believe in “Go Big or Go Home” so this year I bought 2 more existing franchises and plan to open the 2nd of the original territories I bought, total of 4 now. To do this I borrowed from LTS, I have nothing to lose at this point, I have no kids, no house, and no family to fall back on and I owe a very significant amount of $$$ now… can you read between the lines? We’ll see if LTS contacts me about this blog, I never read anywhere in my contract that said I couldn’t discuss my personal business with the world. Why did I buy in even more?? Simple, I want to make a load of $$, the only way to do that is self-employment, I didn’t have a Million $ idea or a degree from Harvard, just the ability to work hard. My territories are in small towns out west and I knew hard work was key. Harder than I thought? A little, but I know it’s going to work out because I kick ass!
    Now, any of you DB’s out there that think this isn’t an honest post, you need to just forget about franchising, or whatever your goal, and seek a job with your local waste management. JD out

  23. Bill says:

    J Dunn:

    Nice rant! I’m not sure what your message is but it dosen’t sound like a ringing endorsement of Liberty. I

  24. HR Schmuck says:

    Contact John Palmer if you want to know the real deal about Liberty. He was most helpful and gave me a list of people to contact. A phone call is a small investment to make.

  25. Texas preparer says:

    I own a small tax practice in east texas and I am flooded by Liberty tax, Jackson-Hewitt, and H&R Block. These places cant hold a candle stick to me and my practice cause like many people have said all the franchise wants is profit. Well I produce 1200 e-file(not including paper) tax returns a year many of which are sch c returns, and the best thing is is that I have no francise fees nor royalty fees, so while all these little places are poping up one year and leaving the next I just sit here and take all of there customers. I cant understand why anybody would want to open a franchise like LTS cause while you may make a little money you will not make the amount you would if you just opened your own with your name on it. After all why pay somebody to tell you what you can do yourself, just answer me this. How much does Liberty Tax or any other tax franchise actually help for your $50,000++ investment PER YEAR?? I would just get a partner who knows how to run a tax office and give the money to him instead of the ONE guy who opened all the franchises? I can tell you one thing I have learned from all of these places trying to buy me out (and believe me they ALL have at one time) and that is nothing competes with the REAL owner standing there welcoming in the customers and thanking them for there business. Better than a guy renting the name Liberty Tax and never being there cause he has to own 5 stores to make a good living. I’ll just stick to my one office which produces more than any literty, jackson hewitt, and H&R Block combined in my closest 50 miles. My customer know my name not from the sign out front which dosent have my name but by talking to me personally and that my friends is why these places will continue to fail.

  26. Moe Sayyed says:

    @Texas: This is exactly my thoughts. Why pay $50K to someone to get their expertise while I could use those $50K as my 2 years of expense to start my own NO NAME Brand.

    Liberty tried their best to sign me up. They booked me for their session but one visit to their local store gave me the entire picture. Local Store owner owns three stores with another partner. Both works at the stores as Manager and draw $15-$18/hour (local manufacturing plants pay similar rates for not using brain…) She also told me that she take “some” money out at the end of the year as a profit. Which I figured was not huge. So I figured if I want to quit what I do today for living and go in this franchise business I need to own 5 stores to quit my day job!!!

    Do, I need such headache or I start my own 2in1 Business. I am thinking Computer Shop at Front and Tax Business at the back with Money Transfer facility. Opps did I give a million dollar idea for free :)

  27. Fernando Mejia says:

    I have read all the negative comments and from it sound like most of you have never operated your own business in a corporate level. I do not have Libert Tax Locations, but am currently researching . I currently operate 9 franchise locations from a different industry and am doing very well. I have seen many people fail. There are no gaurantees and yes you will not make a intial start up cost the first year… thats not the point. Google, Apple, etc still have debt they are paying off. You pay $40,000 to learn how to fish and you eat for a life time.If you are looking to get rich the first year on any business you are kidding yourselves. keep working for someelse or be famous and rich those are you other 2 options. Thats why our goverment allows small businesses to take a loss for at least 5 years.That is your cushion…by the way the only reason I am looking for a different franchise oppurtunity is because working for 5 months instead of 12months and I do not have to worry about employees stealing, to me that is priceless. good luck with the computer shop and money transfer and

    and making your business to a household name. That alone will cost you $100k in the next 3 years.You will be paying a franchise fee without even knowing.
    mkaing your business to

  28. Guest 2 says:

    There are all sorts of ways to steal in a tax business. You definitely have to worry about employees stealing.

  29. Frustrated and Disgusted says:

    To all:

    There are over 700+ negative comments about this franchise on this site. They range from bad to horrible. You give Liberty 19% of your gross, 5% of which is supposedly for advertising, and spend another 15% of your gross to advertise your business. That combined with the high rent for storefronts, and preparer wages, you are lucky to come out with a profit. Most franchisees don’t make a profit their 4th or 5th year let alone 1st or 2nd. Yes, there are the exceptions. Some have low income territories, and can find low rent store fronts on major intersections. That is the exception, not the norm. My advice, stay away or start your own. It is not that hard, and well worth it in the end.

  30. Observer says:

    There is a reason for all the negative publicity associated with Hewitt and the Liberty Tax Circus. This company is primarily interested in selling you a franchise-that is it. No support. No Advertising. No knowledge. Lousy computer software. I am a former franchisee and speak from experience. I succumbed to their presentation of falsehood that I could grow my established tax practice. Yes, I have experience running my own tax practice and yes, it was successful. Successful until I stupidly signed the franchise agreement. It has been a money losing proposition ever since. The only thing I did wisely was to retain my preexisting customers and specifically excluded them from the Liberty system. Liberty did indeed try to steal these customers, but were not successful-Thank Goodness! As a result, I’m broke and disillusioned by all franchises and I can’t even open up an office close by to my customers because of a non-compete clause in the franchise agreement.

    If this doesn’t persuade you to steer clear of this organization, I don’t know what will. If that is the case, I guess you deserve each other. Don’t say you haven’t been warned.

  31. stugotz says:

    Observer, could you be Mike and/or Frustrated with a new Alias?

  32. Sean says:

    Observer,

    Thanks for the insight into this losing proposition. It is just as I suspected based on my research/DD. LT has a churn and burn towards franchises. It will get worse for them in 2012 due to new IRS compliance requirements for certified tax preparers and continuing professional education.

    Texas,

    You are right on. LT can’t compete with goodwill and the referrals that come from that.

  33. John says:

    We owned Jackson Hewitt’s. Looked at Liberty, but never trusted their sale pitch. Had heard john Hewitt called a “snake oil salesman”. JH wasn’t much better. Looks like both are failing now. I’ve opened my own practice, have my own software, undercut their fees, have lower overhead (not having to feed them) and am growing very well. I use ValPak solely to market. 50,000 coupons in January. I want simple returns, not the April 15 problems.

    Do yourself a favor, find an area outside the franchise area and start there.

  34. guest2 says:

    What kind of success rate with the 50,000 valpak coups. Cost about $1,500?

    Thanks

  35. Joey Black says:

    Liberty is failing? They are growing phenomenally and are about to go public with an IPO. They are anything but failing. And if their franchisees were mostly failing, they would certainly not be able to conduct a successful public offering. The investment banks who underwrite these deals check those kinds of things out carefully.

  36. Investment people get a commission not an equity stake.

  37. John Barilla says:

    Failing??? haha…Two years ago 3200 office now probably 4300 office this tax season…. Mike & F&D are failures but the majority of franchisees are adding more offices. I don’t think you would expect a 100% success rate for any franchise so Mike and F&D do fall in the failure category….

  38. mike says:

    If Liberty has opened 1100 new offices over the last 2 years that means that nearly 500 of those offices didn’t make it to their second tax season….That’s not a recipe for success!! Therefore, IF YOU ARE A POTENTIAL FRANCHISEE THAT IS CONSIDERING BUYING A LIBERTY TAX SERVICE, CALL ALL OF THE FRANCHISEES IN YOUR CITY AND LEARN THE TRUTH!!

  39. testaipira says:

    Mike,

    You don’t make any sense. According to your fuzzy math, if 50% close down, Liberty opened 2200 stores in the last two years since it had a net increase of 1100. I don’t think so. Some stores did close down but not 1100 stores so basically you are just making your stuff up, but i doubt anyone is listening to you. Please break the prozac in half buddy.

  40. mike says:

    Testiclepirate: Now you are showing your intellect, I think Barilla is a lot smarter than you, atleast he has half a brain. By the way, you are listening to me, and I love it!!

    IF YOU ARE A POTENTIAL FRANCHISEE WELCOME! READ THE MEMO’S ABOVE AND YOU WILL COME TO THE RIGHT CONCLUSION, FIND THE TRUTH BEFORE YOU BUY!

  41. Carl says:

    I am someone who answered an ad for the ten week tax school. He asked for 40 people, ended up with about 15-18. Half of which dropped because of the incompetant instructor. Her only experience was the year before, when she had gone to his “tax school” and worked for him. There are 19 chapters in tose books, and one book with just forms. Then he started a 6 week class which had me scratching my head. I’m going for 10 weeks, how can the people in the 6 week school be as qualified. Then I see these Liberty offices around Atlanta running 7 day, or even 5 day classes, presumably to do the same job as I was going to do. I spent $179, plus $64 for the PTIN. I ended up with barely three hours, that’s 3 hours on the software which is not user friendly. When I started question this man he was very angry. These different lengths of school appear to me as money making scams for the owner. (is the company complicit?) Because I don’t know of any of the people who were in my class and paid the $179, who are going to work for this man. Now today, the 2nd of Jan, he has a brand new ad for a school beginning the 3rd and ending the7th or 8th. WTF????

  42. mike says:

    Carl,

    WTF….is right, what kind of returns can a five class preparer do?

  43. Carl says:

    Right. I studied and applied myself, because of the opportunity to be a bit independent of the people who are prejudiced against a 64 year old, and one who has been unemployed for two years. I know that with the insignificant amount of time on that software that I would not feel competent meeting customers who expect tax professionals.

  44. jason says:

    Believe none of what you read and only half of what you see. Some peoples storeis are true. Everybody that has money wont make it. Everybidy cant do every thing. I am closing out my first tax season with liberty tax and I happen to be very happy with the results. one thing in business is every one can not be happy you will always have the people who fail.

    Some AD’s do suck and some are very helpful i happen to be blessed with a great 2 great ADs. royalties are very high this is true. Although this franchisee is ranked with mc Donalds it is not mcdonalds. There are plenty of other franchises with high royalties too. Like meinekee which a friend of mines owns, but you have to have to have 300k to a million dollars to start some of these business. My first year i spent about 60k i mad about 90k. I signed up in December its now may. im getting another location next year ill be sure to over 200. That was 3 months of hard work and 3 months of easy work. and now I have 6 months off.

    You ever see a kid growing up with all the opportunity in the world, 100% from both parents and financial backing for whatever positive ideas he could think of. Its horrible when you seem the same kid result to selling using or surround themselves with the wrong crowd. He was given everything but did nothing.

  45. mike says:

    Jason,

    You signed up last December and are expanding right away. Glad to hear your success, Keep in mind, it is a long way to next tax season and there is a lot of rent to be paid between now and your first RT/ERC check in January. I hope your expansion comes without borrowing any money from John Hew twit. He charges a VERY high interest rate. BE CAREFUL, or you will just be growing returns for returns sake, remember NOBODY cares if you make money, only how many returns you complete.

  46. Chari Davis/South Carolina says:

    Annie not only took advantage of Liberty Tax, she left her two parrots with me to board, ran up a tab of almost$1000.00 then had the local police dept come take her birds from me without her paying me. Court? yep, been there, files and files and files of court documents to get my money she owed and still owes me. She would move her residence as to avoid me and the judgement which ruled in my favor. Annie is definately a crook!

  47. CurrentUnhappyZee says:

    Read this article for information on Liberty store failure rates and loans to John Hewitt.
    http://www.franchisepublicity.com/liberty-tax-service-fiscal-2013-first-quarter-results/
    Liberty Tax franchise sales activity is up 27%
    The Company reported that its franchise sales season is off to a good start with leads, conference call attendance and seminar visits all up by more than 27% from fiscal 2012. During the previous two years, approximately 10% of the Company’s yearly territory sales and new franchisees closed during the first quarter. “Although the economic climate has reduced the amount of available investment capital for new and existing franchisees, I am very pleased with the interest levels shown during the first quarter by potential new franchisees and the eagerness of our existing franchisees to consider expanding,” said Mr. Hewitt.
    JTH Holding lent franchisees $68M at 12% interest, John Hewitt $750,000 at 4.5%
    According to UnhappyFranchisee.com commenter Bill:
    Looking over the 10K and you see that Liberty tax lent John 750,000 at 4.5% meanwhile they sock it to the franchisees at 12%.
    341 Liberty Tax locations (8.8%) closed in 2011
    Bill states:
    The 10K will also show you the 341 stores closed in 2011 a failure rate of 8.8% based on number of stores open in 2011. 2012 results show the average store did 523 returns. The net average fee was $173.00. The average store revenue was $85,847. These figures are an average. A new store is more likely to have a return count of around 150 to 200 and grow around 15% per year over the next couple of years. For people that already have the tax knowledge, the purchase of any franchise doesn’t make sense if that is the kind of return volume you are going to do.

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