LIBERTY TAX SERVICE Franchise Complaints

5,730 thoughts on “LIBERTY TAX SERVICE Franchise Complaints”

• Antonio:

  Thanks for the info on the expansion offer. This helps me understand John’s comment at the convention about growing by 1,000 stores. It’s also interesting from the prospective of why would you sell something that you place a value on of $40,000 or more for $2,500? I know the organization well enough to know it’s not for love of their franchisees. Is it a fire sale!!! Looking forward to seeing this year’s financials.

• I think you just need to look at the numbers they have already given out to see why they want these additional stores. Existing locations were basically flat this year, and have been for several years. The only way to increase revenue is by opening more stores. Even in my area, some stores were up a little, some down, but net was flat. The market is not growing. In a flat market, you grow by purchasing your competitors, and opening more outlets. Again basic marketing 101. Don’t be fooled. In a saturated market, opening stores and hoping you are going to get your competitors clients is going to force both lower fees, and higher marketing costs. That is also marketing 101. Again, John is hoping to find more suckers. This is a has been franchise that will only bankrupt you in the end.

• John’s model for new locations is also false, he bases it on the Burgerking McDonalds theory. Put one Liberty next to an H&R Block and you will make boat loads. Taxes are not as impersonal as buying a burger, not only that but how many times a year do you visit a restaurant vs. how many times per year do you get your taxes done? This is another reason not to buy this POS franchise they do nothing but deceive! Crooks and Liars!

• Get me out of liberty or give me death

• ready to sell, 1 year territory with all brand new equipment, turn key operation. will sell for 50,000.00. please bail me out.

• LTS is a sales machine. They sell franchises, period. They are expert salesman. They have years and years of practice perfecting their sales/pitch system. The McDonalds vs. Burger King, the ‘there are 3 major players in every business,’ the ‘what is easier to run, a mom and pop, or a Liberty where hundreds of people know the system…all sales lines meant to persuede you to buy. From the very first conference call to the meet and greet in Virginia, it is all carefully orchestrated to get you to buy into their system, PERIOD.

  They are good at it, how else did they become the ‘fastest growing tax business?’ They sell, a lot of them to anyone who can fork over the money…even if you lose your retirement, your home or life savings, it’s you’re fault if you fail for not following the system.

  Broke and Poor Zee, you will never sell a money pit. It is worth nothing and nobody will buy it. You may get pennies on the dollar for the equipment. Just move on, sell for anything if you can get $5000, your doing great and stop throwing money at a losing business.

  Good luck whatever you decide.

• Where are you located at broke and poor? I am looking to expand from 4 to 5 or 6 stores.

  Thanks

• Ed:

  There are no less than 1000 franchise territories for sale through Liberty, and it may be higher by now. I suggest rather than trying to identify someone and report them to Liberty for negative comments, you go buy a territory in your area. You are obviously part of the kool-aid club and need to be banished from this site.

• Broke and Poor,

  You can sell it. You don’t have to give it away.

  Hang in there.

• Broke,

  I’m located in NC. if you’re located in NC and willing to sell for a discount to the $40,000 let me know.

  Thanks

• Broke and poor,

  where you located??? I would also be interested. There a lot of opportunities to buy poorly run offices and make the profitable. Just remember 70% of the population is made up of complete morons…

• Did you see the new Territory offer with a $2500 refundable deposit? Wow what a great deal!! The royalties increase from 14% to 25% plus the additional 5% advertising royalty, I doubt there are any zees out there currently running margins greater than 30% to cover this new scheme by Liberty- I hope that most zees wont fall for this, sales must be really soft in Virginia Beach!

• Speaking of 70% of the population being made up of morons, Mike just posted…

• testaipira,

  are you calling me a moron or are you including me in the 70%. Because if you are please give me your ent # so i can personally meet you and you can tell me I am a moron to my face. in other words [redacted]

• Liberty Tax is a scam, 7 out of 10 zees don’t last over 3 seasons. Call any zee in the UFOC or for that matter go to Libertytax.com put in any zip code and call the offices and ask the owner yourself. Due diligence is best.

• Broke and Poor Zee;

  I think testaipira was referencing as morons anyone who purchased this franchise thinking it was a legitimate business opportunity. Mike has a lot of background and experience with this organization, and clearly has identified the real source of the problem. I could give you my latest chapter, but suffice it to say that this organization is so screwed up, that anyone seriously thinking of joining them should first have their head examined.

• Broke & Poor,

  I think you answered your own question. [redacted]

  Let’s keep the discourse in English and non-insulting. Thanks. ADMIN

• Mike on June 24th, 2011 6:22 pm

  Liberty Tax is a scam, 7 out of 10 zees don’t last over 3 seasons

  So you are helping me prove that 70% of people are morons. Thanks!

• 70% of all taxpayers have an AGI (Adjusted gross income) less than $58,000 per year, (irs.gov). If you have an AGI less than $58,000 per year you can file for free with the IRS. Most of Liberty tax clients AGI’s fall within that range therefore Liberty will soon be obsolete especially once the RAL market vanishes. Last year Liberty charged an avg of $290.54 (tax prep and transmitter fee to clients) to bank clients, which are lower income households. RAL acceptance has very low thus a high conversion to RT’s (two week product). File for free with the IRS and get your refund just as fast, Liberty will be obsolete, don’t invest in a franchise with Liberty, buy something in a different industry!

• MIke,

  Most of HR Block, JH and Liberty’s customers don’t own a computer. If they do it is to play music and burn CDs or watch porn. They would not know how to log on the website and fill out their tax return. Instead they hire $8 an hour preparers to do it an charge them $290. Find me a better business. Please give me some suggestions. Just because you are a failure, don’t assume everyone else is one too. Again you prove you are in that 70% of morons.

• Free services are everywhere, you don’t need a computer to walk in to any of them.

• Tesaipira, by the way what is with the name calling I don’t know you and you don’t know what happened with my situation and Liberty? This site is designated to “Unhappyfranchisees” if you are happy why are you here? The site is here to allow potential zees the opportunity to have another opinion. This is the first and the last time I will acknowledge you. I am only here to provide info to potential zees, I am not here to bicker with current zees that love Liberty Tax Service, if you are successful good for you I hope you will never be one of the “unhappy franchisees” that post on this board.

• I worked this tax season (my second) for a 2nd yr tax office in WA. We offered no RALS and prepared over 700 returns. Software was about $1200 and we did our own marketing.
  My boss paid no franchise fees and he looks good to expand this coming year where I expect to be managing one of the new offices.
  Whether he did well or not is not the issue.
  The issue is he managed to be in the top Liberty offices for second year offices when he wasn’t even a Liberty brand. He did not pay the $40,000 franchise fee or ongoing royalties.
  My question to you all, especially the Liberty franchisees is:
  What is Liberty offering you for the $40,000 or the 25% + 5% advertising ?(amazingly, exactly what Block offers).
  What does the costume, logo and readily available software really worth? (I also found it available on line) $40,000 + 19%?????
  The brand is not really a brand unless you’re in the business. Before I was employed, I thought it was just a local company who had 2-3 offices.

• Very well put Kimberly, you do not need to pay Liberty Tax a penny for what you could do on your own, I hope your boss goes on to open many, many offices with your help. Good luck, thanks for the input, keep it up and most importantly, spread the word!

• Re: Mike

  testaipira is an unhappy franchisee. He wouldn’t be on here if he wasn’t. Look at Kimberly’s response above and realize LT is struggling at best just to sell franchises. Posts like her’s and others, as well as the multitude of franchisees who are bailing at alarming rates, is causing this organization to have a fire sale and looking toward their other franchisees rather than the general public to buy them. Look for LT to start being nicer in hopes of keeping some of their unhappy franchisees from bailing out completely.

• F&D, I think you are right on the money, instead of telling the world why Liberty is such a great organization with facts to counter argue the points on this board some zees would rather bash ex-zees for not continuing to patronize john.

• This entire thread is out of control and instead of being a place where the truth is being spoke of it is a place where unhappy Zs now are acting as bad as Liberty Corporate and even the unhappy Zs are doing everyting they can to make there own story as Jerry Springer as they can. Telling the truth is replaced by making everything as dramatic and embelished as possible.

  Liberty Corp structure and how they attempt to control the flow of information is quite honestly out of control and the biggest issue facing anyone who has purchased and operateds Liberty Stores. It has created so much confusion and so much distrust that unless an individual is very gifted at discerning facts vs opinions is totaly messed up. It has created a culture of mistrust and deception amongst not only Liberty and the Zs where neither trust each other, it has developed a distrust where Zs do not even trust each other and Corp employees do not trust there co workers likewise.

  Fact is this business is a gold mine. Fact is also if not executed properly it can be a huge money pit. Both of these statement are factual but because of that it is very easy to confuse an outsider and even worse than that can confuse even a talented Z.

  I am not concerned with company plants or any of the other conspiracy items being thrown out there. My concern is the question of can you make money doing this? The answer is yes! The other question is “Since the opportunity is so great, can you easily make mistakes and fail?” The answer is most definatley yes!”

  I think more time should be put into Zs speaking to each other looking for the answers on either how to suceed or how to pull oneself out of a bad situation and much less time trying to prove that LIberty is Satan himself by doing everythin possible to make the numbers work in your favor when you are arguing.

  Good luck to those who have purcahsed and are struggling to learn from there own mistakes and searching out those Zs who are willing to share how they pullted themselves out.

  I know I iwll get attacked by saying this because I am not on the atttack wagon and probably get attacked by the other side because I have not drank the Kool-Aid. But take a look at your motives and what will help the person you are speaking to and judge the situation and see what you are realy doing!

  Good Luck to All.

  As far as the comment that most JTH, JTX, and Block clients do not own computers just shows we have many commenting that do not even understand there own business. You need to learn your own business and hopefully you can judge your character and honesty and help your fellow Z.

• honestly:

  Please help me understand what value there is paying $40K and 19% for this franchise vs. opening up and office, hiring tax preparers, putting an Uncle Sam costume on someone to wave at people and a sales person to do some marketing.

• Frustrated wrote “Please help me understand what value there is paying $40K and 19% for this franchise vs. opening up and office”

  Hmmm… Since you made the decision to join LT instead of going on your own, why don’t you answer?

  Honestly makes some good points. It’s amazing that people like frustrated join liberty tax because they don’t know how to run a tax business, they fail and are suddenly experts. Explain that too.

• “I think more time should be put into Zs speaking to each other looking for the answers on either how to suceed or how to pull oneself out of a bad situation and much less time trying to prove that LIberty is Satan himself”

  ignore the attackers. people who have already failed or have given up just want justification that no one can succeed so their failure was not their fault. who cares? whats done is done. they don’t care about those who may be struggling but are here looking for ways to turn things around and succeed. The whole “warning others” mission is nonsense because if they don’t care about fellow zs they certainly don’t care about strangers. They just want someone to blame. grow up.

  honestly, you make some a great point. pls continue. What do you think are the mistakes that make the difference between success and failure with Liberty Tax? What advice do you have to pull oneself out of a bad situation?

  Thanks for your rational and therefore unpopular comments

• Anon:

  As I stated in the past a “Liberty Tax Franchise” is risky business for the following reasons:

  Business model is not right for ever location, best suited for well populated poor urban areas. This business model is understress due to changes in the banking industry and high unemployement in poor neighborhoods.

  Taxes are more difficult then Liberty leads people to believe and does not provide enough real training for the start-up business.

  Liberty receives a percentage of the merchandise it requries franchisees to purchase but doesn’t disclose that. Makes franchisee’s buy unnecessary
  amount of product. For 1st year zees this just means more cost.

  Has limited brand name – any person considering buying this franchise should randomly ask 10 people to name a tax prep. service. You will likely hear H&R Block or Jackson Hewitt. Occassionaly Liberty but not if your located in NJ. No real presents here.

  No national or regional advertising campaign. Why would a company that want’s to “overtake H&R Block” not advertise. The reason is their in the business of selling tax franchises not tax preparation. 5% advertising fee for what?

  Poor management and Area Developers. I opened in NJ and the guys who bought the area had no clue about taxes. The only thing they knew was to open in a high EIC area near an H&R Block. The group was so bad that the next season Liberty Tax Sent in one of their people. She was a Liberty puppet but at least she had a clue about the business.

  My recommendation to anyone who has tax knowledge and wants to open a tax prep. location, invest the $40,000 in yourself not liberty.

• Call any corporate Libererty Tax office and ask how long the manager has been with Liberty, the answer will surprise you, most less than a year. If Liberty can’t run thier own offices with “unlimited” funds do you think their “system” will ensure that you are successful with your “limited” funds? Don’t buy this scam.

• Bill,

  I was thinking of buying a franchise and I live in NJ. What areas was your store(s) located?

• As expected, no on can answer the question, why pay $40K plus 19%. Here is the truth. If I am a business person, I am going to either buy inventory which I can add value to and mark up, or a service that helps my business grow or reduces my costs. This organization was built on the JH model which is umteen million years old, prior to the advent of personal computer tax programs, and free returns. People would flock to JH and HR as they wanted to “let someone else take care of the headaches”. In comes TurboTax and other online softwares, as well as free returns from the IRS, lowering the return count at most of the tax prep companies. Now the only people who come in are those who either don’t care what it costs to do their taxes because they are getting EIC benefits, or those who have complicated taxes. Most of those go to a CPA or an accountant, not a retail tax prep organization. Hence you have Liberty who is trying to fund software for 3000 tax prep offices vs. TaxAct who does thousands, and also funds a Tech Support organization and a flimsy marketing program. Quite simply, the Liberty program is too expensive for the small amount of offices they have. To grow, JH has to add offices because the existing offices are not growing, nor is the amount of returns at a high enough rate to keep up with the cost of running the business. Liberty is an inefficient business model, and cannot sustain itself unless it starts using some of the proceeds to bring in customers. Right now, franchisees are forced to pay 19% for software that they can purchase for $1000-1500. Liberty’s minimum royalties start at $5K and increase yearly.

  Again, someone please justify the LT $40K and 19%. If there are LT people monitoring this, please give us your input.

• I am not here to debate whether the tax industry is a good investment or not, I am here simply to tell everyone what Liberty Tax is all about, plain and simple. I am not here to give advice on how Liberty can improve or the tax industry is a good or bad investment. I am here, and will continually be here to tell anyone both here and as many places as I can that Liberty Tax is a rip off!!

• If anyone is interested in advertising their franchise or equipment for sale by owner, please email the site ADMIN at UnhappyFranchisee[at]gmail.com. We may add some classified options if there is sufficient interest.

• Mike,

  You have proven that you are just a little cry baby that angry that he lost his money for being a poor business man.

• Mr. Allen,

  I was located outside of Atlantic City. No store has been successful in Atlantic or Cape May Counties. [contact info withheld] I will gladly answer any of your questions and can provide you with some information on what you need to start a tax prep. service similar to Liberty.

• Admin – I think it’s a great idea to ad a classified section to the website.

  It could help the franchisee trying to sell and it could help someone
  looking to purchase get the best price.

  Separate from the bickering, this website provides good information
  for those of us trying to run a small business

• Liberty Tax is a poor investment, the tax industry has changed significantly over the last several years, buy into a different industry, tax prep is dead. Don’t waste your time and money with these used car sales people!

• Mike,

  HR block is a Fortune 500 company and does $4bill in revenues… The tax industry is dead? Seriously dude, get lost…..

• Do your taxes or free at any VITA or IRS if you have an AGI less than $58,000 the tax industry has more “free” locations every year, the PAID market is DECLINING!!! Liberty “makes” you prepare 200 free tax returns your first year and if you don’t hit that “free” return count you are frowned upon, don’t buy into this deception!

• Liberty is no H & R Block….funny.

• Also, Buffet bailed out of Block because the tax industry is dying!

• I again ask anyone who supports this organization in any way to justify the $40K investment and 19% royalty. To date, absolutely no one has come forward and said, Wow, what a bargain. I, like Mike suggest Liberty Tax isn’t even in the same league as H&R or Jackson Hewitt and is doing nothing but collecting franchise fees, and providing no support to their franchisees. You can do a lot better on your own.

• Mr. Allen

  they removed my post because I included my e-mail address. My store was located outside of Atlantic City. There have been 5 territories opened in Atlantic/Cape May County. 4 have failed with one of the 4, the Mays Landing territory being run by corp. Corp. took over the store because it did 475 returns. The Mays Landing store was later sold to another franchisee. The newest territory opened last year in Egg Harbor Twp. and they are struggling sowe will see if they open for the upcoming tax season.

  As I have stated in the past there are two major tax prep. services; H&R Block and Jackson Hewitt. Liberty is a distant 3rd. Outside of people in the tax prep. industry, Liberty has very little name brand recognition.

  Liberty has no national or regional tv advertising plans to help change this position. They expect to build a client base on the backs of the franchisees while they collect a 5% marketing fee from them.

  The reason Liberty is able to sell the franchises is based in part on John Hewitts success with Jackson Hewitt, The other parts are the initial price is low in terms of other franchises and that people by their nature like the idea that they can make a living only working 4 months a year. It’s the last part that we want to believe so badly that we ignore the facts. The same reason intelligent investors didn’t question Madoff about how they could be earning such a high return on their investment.

• I will really appreciate someone’s help.
  We have completed two seasons with losses and do not want to open for 3rd season ans so forth.
  What are my cost?
  Can I default on future minimum Royalties ?
  Can they go after me?
  Is there a program to give the territory back to LTS?
  If there is another Zee interested in buying my Territory for $30k, can LTS stop that or create any issues?

• How much debt do you owe Liberty? If it’s not too much I would be willing to take the territorty and the debt over for you since you don’t want to operate anymore.

  Also where is it located?

• Guest,

  I believe you can “sell” your territory back to Liberty for a reduced rate. What about your lease, are you out of it? LTS has the ability to stop your sale to another party, they are the ones to approve the person. Just do what you can to minimize any future losses and get out. Also, don’t sign you MUTUAL TERMINATION AGREEMENT!

• Guest
  Thanks for asking some questions that I needed to know. I am in exactly the same position that you are. Two years and no profits and yes I followed their system to the t.
  Mike ,
  What is the deal with the Mutual Termination Agreement what is the problem with signing it?
  Bill,
  I’m in the New Orleans area if your interested in my 2 franchises. My AD had 9 stores they are all owned by corporate now after his 2 years of trying to make a profit,