LIBERTY TAX SERVICE Franchise Success Story
August 11, 2009
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?
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.
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!!.
[...] LIBERTY TAX SERVICE Franchise Success Story [...]
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.
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!
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!
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!
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!!!
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.
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.
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!
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
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?
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
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?
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.
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?
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.
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