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H&R BLOCK Dumps EXPRESSTAX… & Franchisees?

Tax Preparation giant H&R Block (NYSE: HRB) has announced that it is discontinuing its franchised EXPRESSTAX subsidiary.  What this means for the franchise owners of 269 EXPRESSTAX locations is not quite clear.  H&R Block has stated that it will give some franchise owners the opportunity to convert to the H&R Block brand.  It did not say how many would be extended the conversion option, nor what would happen to those who weren’t.

The news comes a little over two weeks after the nation’s biggest tax preparer announced it won’t offer refund anticipation loans next tax season because the appeal of the high-cost loans is shrinking.  CEO Bill Cobb said in a statement that the company is getting rid of the brand because “it was no longer a growth driver and therefore not a good fit for our company.”

H&R Block acquired EXPRESSTAX in 2006 when it was a 300-unit chain.  According to Entrepreneur, H&R Block grew the chain to 408 locations in 2007 and to 509 EXPRESSTAX locations in 2008.  EXPRESSTAX locations then declined to 376 in 2009, and 263 in 2010.

Here is H&R Block’s 9/29/11 press release regarding EXPRESSTAX:

H&R Block to discontinue EXPRESSTAX brand

Latest move signals another step to focus efforts on client growth and brand expertise


H&R Block (NYSE: HRB) announced today it will discontinue service under its EXPRESSTAX brand. Currently, there are 269 EXPRESSTAX franchise offices, which collectively prepared nearly 100,000 tax returns and generated $3 million of royalty fees to H&R Block in fiscal 2011. As H&R Block seeks to continue growth in its franchise base and clientele, it will invite many EXPRESSTAX franchisees to join the H&R Block brand.

“This move is consistent with where we want to focus our future investments and resources,” said Bill Cobb, H&R Block CEO. “After a thorough review of the EXPRESSTAX business model and its recent performance, we concluded it was no longer a growth driver and therefore not a good fit for our company.”

In connection with this announcement, H&R Block will record a pretax charge of approximately $0.02 to $0.03 per share in the fiscal second quarter ending October 31, 2011.

H&R Block purchased EXPRESSTAX in 2006. The EXPRESSTAX brand attracted mostly early-season filers who also sought quick-paying financial products. H&R Block offered EXPRESSTAX franchises in locations where it had competitive and geographic advantages.

H&R Block is coming off one of its strongest tax seasons in recent years. In Tax Season 2011, H&R Block grew new clients by nearly 19 percent, saw client retention improve by nearly 4 percent, and gained market share in both its retail and digital tax preparation channels.

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About H&R Block

H&R Block Inc. (NYSE: HRB) has prepared more than 575 million tax returns worldwide since 1955, making it the country’s largest tax services provider. In fiscal 2011, H&R Block had annual revenues of $3.8 billion and prepared more than 24.5 million tax returns worldwide, including Canada and Australia. Tax return preparation services are provided in company-owned and franchise retail tax offices by more than 100,000 professional tax preparers, and through H&R Block At Home™ digital products. The H&R Block Bank provides affordable banking products and services, and McGladrey is a top provider of tax, accounting and wealth management services to mid-sized businesses.

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27 thoughts on “H&R BLOCK Dumps EXPRESSTAX… & Franchisees?

  • John Barilla

    This would be perfect for Mike and F&D.

  • John Barilla,

    You obviously have been in the tax industry for sometime so I am asking you a real question. What net profit margin/percentage (after royalties etc. ALL expenses) should an average Liberty Tax office make in their 1st, 3rd, and 5th year? Just a straight forward question, hopefully you can provide a straight forward answer. Thanks, and I look forward to your analysis.


  • John Barilla

    I would expect revenues of $50k year 1 and obviously a loss depending on what month you took over the lease. I would expect to have revenues of $100k in year 2 which should be near break even probably still a little loss. Year 3 is when the investment should start paying off with revenues of $140k. By Year 5 you should not be less than $200k. I would expect a profit margin of 40% at that level. Therefore $80k of profit for the rest of your life for working 90 days a year, really hard for about 30 of them. If you can somehow have 3-5 of these office you could make $300 to $400k a year.

    Now what do you two tards think? (Mike & F&D)

  • John,

    I think you are on crack pipe!! If someone could make 300-400k a year and only work 90days a year, Liberty would not be waving the $40 franchise fee, people would be lined up for this miracle! On the contrary, they wouldn’t even be selling franchises; John I Screwitt, would be pocketing that money for himself. He is not that charitable, don’t be such a fool.

  • johnbarilla


    They are waving the franchise fee if you pay more royalties so stop making stuff up. Also, did what i just explain seem like it would be easy. I am saying you have to invest $40k and lose money for 2 years for each location. At that pace it would take several years to make $300k. It is definetely not easy and not everyone that buys in will make it, only the good ones and obviously you were not one of them and neither is your clone over there, Frustrated. He is in year three and bankrupt. Get a life Mikey, you come across as so pathetic!!!

  • Johny,

    Then you are accusing Liberty of using deceptive advertising. Just like you, Liberty claims you can work hard for 3 months and basically semi-retire. If you are so good, tell us how many offices and returns (paid) that you completed last season and prove that Liberty is a great investment.

  • John Barilla

    You are the fool for believing it was going to be so easy to make money. Just write a check for $40k and boom you are rich. Don’t you think everyone would have done it? Tell me some better alternatives out there, because i looked at all of them and decided to go with this one.

    I have a full time job that pays the bills, as Liberty does not require that much of my time, really January and half of February are the only crazy time for me. The last 5 days of tax season are also crazy.

    I have two office and just completed year 3 with $150k in revenues in one office. The other office is in the same territory so i did not have to pay $40k again and i just completed my first year with $60k in revenues. I expect both to be at doing $200k each in their fifth year. If will need to more territories to eventually have four to six offices each doing $200k and $75k in profits, while busting my butt for six weeks a year. Yes i will still be working the rest of the year but not as hard. Assuming this all works out, (it may or may not) I will have a business that grosses $1mill and profits about $300k and probably worth $1.2mill. None of this will be easy and if i don’t make it will not while like you and the other tard on here. Any questions?

  • Thanks for proving the point that Liberty is a bad investment. You are going into your 4th season in just a few months, you still have to have a full time job because you are upside down with Liberty. Thanks for proving that Liberty is a bad investment, invest $40k, more like 65k atleast with furniture etc, and if your gamble pays off you might make some money in your 5th year. Atleast you are honest. and I respect you for that.

  • Joseph Conway

    John Barilla, what percentage of Liberty offices do you think are grossing $140k in gross receipts in their 3rd year? What percentage gross less than $80k their 3rd year? How many new Liberty offices actually complete 1000 returns by their 3rd year? You realize that if you don’t do 1000 returns by then they can cancel your franchise, right?

    Now, with regard to the folks who hate JTH, well, if you failed it is human nature to blame anyone else but yourself. I know the type. A guy spends 20 years hating the corporate world. He hates being told what to do. If he could just find a way to be his own boss, and not put up with the bs he’s had to contend with, he’ll be happy. So he gets laid off and buys a Liberty franchise. He still hates being told what to do, because he believes he’s smarter than everyone else. And so, he fails. And it is all Hewitt’s fault. Sadly, I’ve seen that kind of scenario repeated many times.

  • Joseph,

    Great questions for John, we’ll wait for his answer. In the meantime, there are approximately 3600 Liberty offices. The top 100 offices average about 1500 returns more or less, with office number 1 around 3000+ returns and office number 100 around 1100+ returns, I could be off a bit but close enough for illustration. John can give you the exact numbers. Keep in mind most of these office are probably older than 5 years and Liberty is about 14 or 15 years old. Therefore, approximately 3400 offices do less than 1000 returns and could be potentially in violation of their agreement and subject to confiscation by Hewitt. Of course, he wouldn’t do this at THIS time, but it does make duck hunting pretty easy!! Liberty is a bad investment, especially if over 90% of the offices are failing Liberty’s own requirement! Johnny, please correct my numbers and math for a more accurate picture..

  • johnbarilla

    Liberty Tax has experienced tremendous growth the last few years. More than half of its office are under three years old. The average office does about $110k in revenues but most of those are under 3 years old and will be growing to about $200k in the next 3 years or so. Some (like Mike-tard, Bill-tard and Frustrated) will quit because they did not get rich after 3 years so the average may be a little lower. You have to figure 1/3 of people are complete morons, which explains those three guys. 1/3 of people are average, and 1/3 of people are overachievers.

  • John Barilla,

    If you are either in John’s first two catagories you definitely should not buy into a Liberty Tax Business and if your in the third catagory Liberty needs you, you don’t need Liberty. Keep the $40,000 in your pocket and if you have the tax knowledge go into business for yourself. It will take you on average 3 years to build up to between 300 to 400 returns. That $40,000 along with not having to pay royalty and advertising fees will help you when cash flow is the tightest. There is a great book titled starting your own accounting practice. It gives you ideas on marketing your tax knowledge to established accounting firms and doing some per diem work for them.

  • johnbarilla


    I agree with you 100%. If you fall in the first two categories (Complete moron like Mike-tard, Frustrated and Bill-tard) and just average you should not buy this or any franchise. You should not start your own business because it is really hard to make money on your own. If you are an overachiever you will probably do well on your own but can also do just as well with Liberty. However, there is something to be said for going at it alone or having a strong network around you. You pay for it but it pays for itself.

  • Bill,

    Jonny is in a class by herself. He invested tens of thousands of dollars into Liberty, he should have waited. Did you get your email from Liberty? They are waving the franchise fee, that’s how desperate they are, nobody is buying the SCAM! Jonny works a full time job and he invested (wasted) his money buying a Liberty, and he is going into his fourth (did I really say FOURTH?) tax season and has yet to make a DIME!!! HMMMM, that must explain why Liberty is giving away the farm! Great investment JONNY, (chuckle, chuckle)!!

  • John Barilla


    Whatever makes you feel better….

  • John:

    Are you going into your 4th season and do you work a full-time job?

  • Bill,

    See John’s statements on Oct. 5th. 10:41 am second paragraph. “I have a full time job that pays the bills” Liberty is a BAD INVESTMENT, 4 tax seasons and he still has to have a full time job? DON’T BUY A LIBERTY FRANCHISE!!!

  • johnbarilla


    Did you ever consider my other job might be something i enjoy doing? Did you not realize that fact that my Liberty Tax office makes money and i only work 3 weeks out of the year? Once again, you prove you rode the short bus to school…

  • Jonn-turd,

    HAHAHAHAHAH, now you only work 3 weeks out of the year????!! You are killin’ me with your intellect! Once again, to any potential Franchisees, Liberty is a BAD, BAD, BAD investment!! Stay away from this organization, buy an H&R Block, Jackson Hewitt or start your own tax office. JUST STAY AWAY from this organization, do your homework and call all offices within a 100 mile radius of you and you will see that it is a failing entity.

  • Guys: Can you please stop the name-calling and insult slinging. It’s a bit juvenile and takes away from the important issues people are coming here to research. Thanks.

  • John Barilla


    If you followed the system at all you would know that peak is 3 weeks out of the year. If i have a full time job how do you expect me to work any longer. I work weekends for like six weeks between Jan 8 and February 20th. Do the math, how many hours could i possibly be working. During that time i just supervise my marketing manager and store manager.

  • testaipira

    Liberty Tax is about to go public and is on target to be the larger than HR Block in a few years. If considering a good franchise, this is the time to get in!

  • Liberty Tax, is a RIP off.

  • testaipira:

    With the current state of the market I wonder when/if the IPO goes off. When I look at the financial statements you can see that Liberty will need this to happen or have to borrow from their line of credit in order to provide operating loans to their franchisees after the 2012 tax season. I also imagine that some current shareholders want to cash out. I believe the IPO states they want to raise $90,000,000 and share price would be $10.00. Based on H&R Block’s stock price I would think they wouldn’t be able to go much higher then $12.00.

  • thetruth

    I read the question on how much you can make and wanted to answer it. It realy all depends on how you run your operation. If you run things properly and understand the tax industry and where it is going you can make some very nice money. There are so many variables that can affect your profit margin it is very difficult to say a solid number but if you keep all of your expenses in line and for example do 1000 returns hitting a 30 to 35 percent profit margin is not unreasonable and it can actualy be higher than that. On the downside you can also run a very low profit margin by not understanding your business, charging to little, expenses too high, expanding your operations to quickly amongst some other things. Do your homework, this is an exciting industry getting ready to go through some very exciting times! It won’t all be positive but if you can surivive you can come out very very well off.

    HRB selling Express Tax should give a big clue to many. The days of just depending on the early season RAL clients is coming to an end. The tax code itself along with stricter enforcment is driving people to professionals.

  • Dennis

    John h would have to pays me $40,000 to run one of his franchises, and waive all royalities fee until my office did 800 returns.

  • Entertaining and informative Ex- Express Tax Franchisee. ALL TAX MATTERS LLC
    Started my own after H& R bought us out.

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