LIBERTY TAX SERVICE Franchise Complaints
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 Service franchise #3 behind McDonald’s & Subway. However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.
This post was originally published
BostonTax wrote:
I’m a former Liberty Tax Franchisee
I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.
Barbara Green wrote:
I too was a Liberty Tax Franchisee and I agree with everything you said.
The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.
Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.
At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.
It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE? ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY? WHY OR WHY NOT?
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Was any of you able to leave Liberty without claiming bankrupcy?
I would like to know what steps you had to take and what the final outcome was.
Unfortunately, very few leave without filing bk.
The Mutual Term, basically means that you leave on good terms and can’t sue, or talk detrimentally about Liberty. It is also important that every zee knows about this website.
I cannot believe there are so many whiners out there with nothing to do but rag on Liberty for their lack of success. I own 3 stores and they are all making a profit. Is everything perfect – hardly but if it was easy everyone would be doing it. It is easy ro blame everyone but yourself for your failure
Guest,
its really just Mike/Frustrated/Antonio, which is the same loser that keeps reposting. File bankruptcy and give it up you failure!
It is quite sad that so many feel it necessary to come on and bash everything about Liberty blaming them for all of there failure when anyone who knows anything about business knows it cannot be all true.
If I was going to start a Tax Preperation Practice today and had all the knowledge I have now would I pay 40k for a territory and pay the royalties which are 14 percent and advertising fee of 5 percent. Probably not. But if I had not purchased Liberty my knowledge would not even come close to where it is today. So if I was new to the business, not having any experience in the industry yes I would still strongly consider paying the 40k and other fees before setting out on my own.
There is no arguing with the irate ones on here determined that by being consistently negative about everything they have some sort of hope of damaging Liberty. Liberty is still a solid business model and the tax industry is a great business to be in today! Does Liberty have some issues? Of course, every franchise model does. But if I sat down and judged Liberty Tax Franchise on the facts and on the numbers the opportunity is not only valid it is great. Just because many have failed does not prove the opportunity is missing. I know for a fact and without any doubt this business when compared to many others is nothing short of amazing. And just like with almost any other franchisor, Liberty places there sucess over everything else including its franchisees. But since I know this and I know what to expect or not to expect I can live with it and move on and make some great money.
There is plenty to complain about if you are a Liberty Franchisee but allowing that to controll you and blind you from the fact that this business is a great one and the opportunity to make great money is there for anyone willing to figure it out is a tad bit foolish.
If you are considering buying any franchise and think you are getting more than just a basic track to run and a name I would caution you. Every franchisor will attempt to make you believe that there franchise is as easy as following basic instructions and riches await you! But in reality thats never true. Some will provide you more than others but in the end it will be your ability to learn business in general and then learn your industry better than anyone else that will determine your level of success or make you a failure. Do your homework and get some very solid expectations based in fact not on sales materials. Then decide do you have the patience and the business IQ to be a sucess on your own or will the track the franchisor is selling you enable you to be a sucess much quicker than doing it on your own.
Guest, sell your store and cut your losses-tell everyone you know that Liberty is a bad investment! John thinks he will be the number one in 2020, is he smoking crack? They can’t give away the territories anymore, and just wait until there aren’t anymore RAL’s, Liberty will go the way of Jackson-Hewitt.
testaipira
You really need a reality check. Just because your stores work in your area, doesn’t mean they are going to work in every area in the country, or even most. I can show you 10 stores, two of them making money, 8 of them for sale because they are not, and can also show you how they all do the same marketing. The two making money, low rent, high EIC, the rest are in mid-level neighborhoods. Go out and look for yourself sometime.
Re: testaipira
After thinking about your comments, I suggest you consider this. Most very successful franchises spend thousands of $$ and do market research the best locations for their stores. Your comment is that you can put a Liberty Tax anywhere with no research whatsoever and be successful. So McDonalds etc. spent all that money for nothing because they could have located their stores anywhere and made money. Again, it appears you don’t really understand business principles, or you have listened to JTH and as usual he is wrong about 90% of the time. Which is it ?
Do you know someone interested in controlling their own business and destiny? Do your friends and family members seek opportunities to be their own boss, work seasonally and change their future? If so, now is the time to refer them to Liberty! We’re seeking the most ambitious and dedicated people to add to our quickly growing list of franchisees.
When you refer someone, you have the potential to earn $3,000 for each person who buys a franchise and successfully completes training in time for the 2012 tax season. The process is simple:
Alert sales@libtax.com with your referral’s contact information and your name, address and phone number
Liberty’s sales staff will contact your referral
When your referral buys a franchise and completes training, a reward of $3,000 will be sent to you.
There is no limit to your potential referral money so feel free to send in as many names as you’d like!
Send a referal to Librty and get a reward of $3000, and then sit back and watch your referal lose their life savings and file for bankruptcy, it’s a fantastic deal!
Don’t referral fees like that need to be disclosed in the FDD? Doesn’t that make franchisees salespeople who need to be listed as such in the disclosure documents?
Does anyone know the law on this?
If a franchisee finds out later that the franchisee who talked him into buying a franchise was getting a $3000 kickback that no one disclosed, can they sue that referring franchisee?
The FTC requires salespeople and brokers to disclose their relationship in the sales process. Wouldn’t franchisees be required to disclose that their endorsement has been bought with a $3K incentive?
That can’t be legal, can it?
I have also heard from Area Developers that Aread Developers are paid a handsome salary for attending the Meet and Greets as well, these paid Franchisees are doing the same thing as you mentioned. I heard that this is also a violation of the law that should be looked into, anyone from Liberty care to discus?
Mike,
Get a life buddy! Have you filed bankruptcy yet? Do us all a favor and hurry up an do that. You come across as not too bright with your comments, which explains your failures.
Area developers are disclosed as franchise salespeople. I don’t think that would be illegal, Mike.
If you are considering buying a Liberty franchise, call as many current zees as you can to see if they are happy! There are many unhappyfranchisees here that can attest to the poor leadership in this company, if you have questions post them before you purchase!
Stugotz:
What do I get for $40,000.00 when I buy a Liberty Tax Franchise?
1) You get one week of exclusive training at our corporate office in Virginia. Cost of travel, room and board are not included.
2) We help you design a personallized store budget which will help control your cost. (all first year budgets are based on the same 600 return count makes it easier on our trainers)
3) You get site help selection from the company. We or one of our area developers tries to locate your store as near as possible to one of the two major tax prep. services, H&R Block or Jackson Hewitt. Hopefully we can take advantage of any overflow.
4) We give you are exclusive software package. Easily a $1,200.00 dollar value
5) We give you are exclusive office design. i.e. 800 sq ft location with 4 tax prep. desk, a receiption area and a processing center. We also provide you with suppliers for you to buy the necessary furniture and equipment from.
6) We give you our exclusive 4 box system. 1 box for returns waiting to be processed, 1 box for returns that are ready for pick-up, 1 box for returns waiting for checks and 1 box for returns with errors that need to be corrected. You can buy your own boxes or we suggest using milk crates.
7) We provide you with 1st year tax prep office marketin kit which includes a Liberty Tax Costume, marketing supplies and an invoice for $1,200.00.
8) We don’t belive in wasting our money on National or Regional Advertising campaign. We believe in Guerilla Marketing. Having Liberty waivers, passing out coupons all over your territories, giving away candy and other items to help you bring business in and to help you buy the right type of items we suggest we provide you with a list of our suppliers.
9) During tax season you get to listen to our daily calls. This is where you can hear how the successful franchises are doing and what is working for them We also provide marketing tips from John’s favorite son “Danny Hewitt”. Danny tell them again how you went to the hospital dressed as lady Liberty and ran around to different nursing stations giving out donuts and coupons before security could catch you or how your rising star Anne Fuller would go to low income housing and pick-up people to bring back to her office and file their taxes.
10) We have the self-proclaimed King of the Tax Industry – John Hewitt
Bill-you nailed that one out ot the park!! Unfortunately, you failed to mention one small detail about the rising Star-Anne. Liberty paid her $350,000 to keep quiet and to go away! Imagine that, the best franchisee/AD ever and remember how we are all to do it the “ANNE WAY?” Any potential franchisees must run from this organization, just “google” Liberty Tax Scams for more info!
I will keep quiet for my $40,000 back and they can keep the territory
I will keep quiet for my $40,000 back and they can keep the territory i just want my frachisee fee back. thats all folks
Tell all zees about this website, so they can forwarn others! Duped-I don’t blame you for keeping quiet, just make sure you get all your money back, they will probably deduct $5000 for “processing” but good luck, hopefully your loss was mimimal.
Misery sure does love company, I should make a new site called profitablefranchisees.com for the people that know how to run a business.
Phil Profitable franchisee is a good idea for a website. I mean, they have websites for Bigfoot, unicorns and ufos. However, I bet Liberty Tax won’t be a big topic of discussion on profitable franchisee website.
Phil,
It is the “discussion board” on zeenet. Try posting something “questionable” ,like “what is the succesion plan if something happens to John?” see what happens to your question. I do however hope that you are profitable, and are making lots of money with Liberty-you would be one of the lucky ones.
A hungover, unemployed Liberty Tax Waver woke up early Sunday outside of the Ed Sullivan Theater after a night of binge drinking; he had trashed the landmark New York studio’s lobby after realizing he lost his cellphone, New York police say.
James Whittemore, a struggling 22-year-old Waver, spent most of the early morning hours drinking at Hurley’s Saloon, a bar a few blocks away from the historic theater where David Letterman’s “Late Show” is taped, according to the New York Post.
Whittemore, who left the bar at 5:30 a.m. and awoke around 7, was “caught on surveillance video urinating on one of the theater lobby’s glass doors” and proceeded to kick through them, police sources told the paper.
When police arrived, Whittemore was seen on the video “dropping to the ground and placing a stanchion across his throat” to appear like a victim, according to the report.
He was later treated for a “gash to the head” before police charged him with burglary and criminal mischief.
B & P -nice story about the waver, made my day, thanks.
If I am a potential franchisee reading this site, I am going to be confused. Some are saying this is a great opportunity, others are saying the opposite. Let me clarify something that I have said before, but bears repeating. Purchasing a franchise from Liberty is a real crap shoot. In some areas, where their system works, you will make money. In the areas where it fails, it fails miserably and you will fail miserably. The problem is that Liberty doesn’t know their business well enough to help their struggling franchisees, and worse yet, they have no interest in doing it. Once they have your money, the interest level to help you drops considerably. That is true from the A/D to the Help Desk, and all the way through the organization. bill talks about training, help with your budget, site selection, etc. I have been through all of it, and can tell you without hesitation that the quality of help you get is minimal. The training is done by people who have worked in corporate stores where money is available to spend pretty freely. The site selector came to my area and suggested I sign a 5 year lease on a store front. I took out a 1 year lease and thank god I did, as it turned out to be a really poor location. Most A/D’s have no clue on how many returns an area will do, so any help you get will only be a guess. As for Danny Hewitt, he couldn’t teach a Marketing 101 class. This organization is so ignorant about the business they are in, it is scary. Is that the type of organization you want to be associated with ? That is why it is a crap shoot. Go with a proven leader that has a good track record. This franchise is about as close to a do it yourself business as you can find, and in a good percentage of cases, you will probably do better as you will not be getting bad advice, nor will you be paying royalties to an organization and getting little to nothing for it. If you have questions, there are plenty of good honest and well qualified business people who respond on this site. I think you will find it is the system, not the franchisee who has failed. It is easy to point fingers and not look in the mirror.
F&D, good post, one time I aske Danny what college he graduated from, he said the “The college of John Hewitt” apple doesn’t fall far.
To potential franchisees:
The tax industry is continuously evolving. When you look at Liberty Tax Service or Jackson Hewitt you need to understand the core of their business model. This model is based on highly populated low income urban areas where most people received earned income credits and refundable child care credits. The people of these areas are underbanked and cash strapped which makes them good candidates for bank products like RAL ( a refund anticipation loan) and RACs (refund anticipation checks). These products also allow for the deduction and payment of the tax preperation fees to the tax preparation service. This bank product structure has allowed for tax prepares to charge fees higher then they could if these products didn’t exist. The goverment looks down on these products and in the past tax season took steps to eliminate the RAL. The IRS has also started a pilot program to provide irs refunds on debit cards to low and middle income taxpayers. The IRS is also taken steps to improve the turn around time for issuing refunds. These changes will have a big impact on the use of bank products.
When Jackson Hewitt first started tax software was in its infancy. Today anyone can buy a good tax preparation software that will allow you to offer the same services as the large tax prep. services.
The taxpayers in the above core business model have many more options today. The IRS offers free file for individuals below $50,000 in income. There are organizations like AARP, IRS and ACORN that will assist low income individuals in filing their returns. Also, thanks to cell phone technology individuals no longer need a computer and an internet connection to file their tax returns.
The IRS now requires all paid prepares to register and is in the process of developing a test that prepares will be required to take and pass in order to prepare returns. These changes should benefit the tax preparation industry over all.
In today’s tax preparation industry between 75-80% of returns prepared are done by CPA’s or Mom & Pop operations. Of the remaining 20-25% HR Block is responsible for 15.5%.
You need to look at these things and see how a Liberty Tax franchise addresses this changing enviroment. Have they been innovative? What have they done to brand themselves? Do they have a national or regional advertising campaign. Is their system best suited for what I want to do? Would I be in a better financial position with or without a $40,000 franchise fee and minimum royalties of 5,000 the 1st year, 8,000 the 2nd year and 11,000 each year after? If I don’t have the tax skills necessary do they provide me with the training and support that I need?
Wikipedia gives a good history on Jackson Hewitt and how it came to be the 2nd largest tax prep. service. It will provide you with some insight on the founder of Liberty Tax Service.
Buyer beware!
This site has been quiet for awhile, so it is time to stir it up again. The next time you pay your 19% royalty, ask JTH how much their in-house lawyers and the lawsuits are costing you. I have been told by someone with pretty good knowledge of the situation that the cost is staggering. Treat your franchisees right, and much of this cost would disappear. Again, would this money be better spent on marketing, or paying off disgruntled franchisees.
Frustrated,
It has been quiet since you obviously were not on there logging in as Antonio/Mike/Frustrated and just whining….
Love to see the saga continues. Ass the ZEE turns. HAHAHAH No luck trying to sell my territory, the most i have been offered is 15,000.00 They keep telling me thats all its worth because you basically keep paying a franchisee fee every year for nothing the 19% I gues they make sense. They says also that if you purchase a new territory withing 5 years betweens franchisee and royalties you have given liberty about 90,000.00 and thats to much money for a dancing waver
Maybe it’s because your sales and expenses dictate the low valuation? What were your sales for the 2011 season?
It is our duty to forwarn anyone that is either considering buying a Liberty and going to Liberty to get their taxes done. Run from these SOB’s!!
Broke and Poor Zee:
If I were you, take the 15K and run if it gets you away from these crooks. I wish someone would offer me that for mine. To date there have been no offers whatsoever. That tells you the real value of what these people are offering. This organization is corrupt and getting worse by the day.
I have been a franchisee for 2 years. I bought an existing office from corporate and bought into the “dream” that they sell you at orientation. Yes, many of us who buy in are first time business owners who bought their franchise because of that. A franchise is based on the concept that you are buying a tried and proven system. This is clearly not the case. When I bought my office it had done 510 returns the previous year. This past tax season we did 843 returns. Sounds great right? I was put on 100% fee intercept which basically means they take all of my operating capital to pay off debt I incurred during the off season to pay my off season expenses. With that much of an increase in returns one would think I would have something to show for my hard work. I have nothing but more debts. The past posts are very accurate in the fact that as a franchisee we pay a lot of money for absolutely no support from corporate. Liberty had a chance to knock Jackson Hewitt out of the game last year but did nothing on a national level to take them out. Instead we as franchisees were instructed to make home made signs and put them in our windows or have our wavers hold them. It makes me wonder if JH is still in bed with Jackson Hewitt. Most of us hang in there because we have a lot of money invested and refuse to give up on our dream of business ownership. If you are considering becoming a Liberty franchise owner please, please, please do your homework. Most of the successful people represented at the open houses are the same people. Liberty is turning out more failures than successes. Far more.
Is there anything we could do if say 150 disgruntled zee banded together. There has to be, we could turn it into david and goliath.
If you are doing 843 returns and not making ALOT of money, you are a horrible mangaer/owner. I would look at the office manager/employees as someone must be robbing you blind. I assume you are paying less than $3000/mo rent. If so, you should easily be making $100k+ operating with that return count.
My most profitable office did around 550 returns and I cleard about 55k profit after all expenses just to put it in perspective. Another 300 returns would have easily pushed me well over 100k profit. I’m paying 2000/mo rent for the office I am commenting on.
If you have an avg net fee well into the 250+ range you might make some money with a 500+ plus return count assuming you watch your payroll. However with a very high avg. net fee and Liberty’s business model probably means that alot of RALS or atleast RAL offerings were done, however going forward, these clients will be gone since bank products are basically dead and those low income EIC clients will be going to the free places since they only go to the tax office that can get the “refund’ fastest, without that your clients will be gone and you will still owe John Hewitt royalties!!
The customers will never be gone. If so, H&R would not have survived ‘no RALS’.
843 returns is trying to tell us they paid too much for the store or the expenses are too high. With 843 returns it’s worth saving.
843 returns can lose money if your fees are too low and expenses too high.
Beware, beware, beware………….
Every time you see a positive comment about LT, it is always from someone who faults the franchisee for not being able to make money. Ed, with absolutely no knowledge of Rich in CT’s situation can from wherever he is, criticize someone else’s store management policies. I can assure you Ed has close ties to JTH, and feels the need to tow the company line. He either works for Liberty or is a worthless A/D. I can also suggest as I have before, that the numbers that are being quoted by the kool-aid crowd, are usually spreadsheet numbers, not real operating results. ie; they take the excel spreadsheet that Liberty puts out and base results on those projections, not real operating results. I know several franchisees who are doing 500+ returns that are either breaking even or losing money. A couple are in financial management positions with major US corporations. Tough to tell me they don’t know their way around a balance sheet and income statement. Again, there are great opportunities without investing with this POS. If interested, look for closed Jackson Hewitt stores and open up a privately owned store. I guarantee you will have better results than investing with Liberty Tax.
Liberty Tax demographics: predominantly low income high bank product take rates. JH (nearly out of business) demographics same as Liberty. H&R Block-diverse demographics (H&R Block Premium) End result, Liberty follows down the JH path, Block regroups and maintains. John Hewitt, never will be the Largest Tax Prep company in the Universe!! Don’t buy the garbage from this POS!
More than 90% of the comments here are complaints.
The website page is “LIBERTY TAX SERVICE Franchise Complaints”
With the exception of the usually moronic comments supported by nada by “Ed”, “Phil”, “stugotz”, “testapuira”, Savich, John Barilla, to name a few.
I was a Top Gun zee and with 850 returns after by my second year of which 110 were free with rent about $2000 I was struggling. ANF of $190 but with the marketing demands of Liberty I couldn’t keep up.
Here’s why and anyone who disagrees is clearly not good at math and should NOT be in the TAX business.
QUOTE (by Ed):
If you are doing 843 returns and not making ALOT of money, you are a horrible mangaer/owner. I would look at the office manager/employees as someone must be robbing you blind. I assume you are paying less than $3000/mo rent. If so, you should easily be making $100k+ operating with that return count.”
Let’s consider this – and in honesty reduce that number by 100 returns to allow for the REQUIRED FREE returns – so we have 743 PAID returns):
$141,000- 743 paid returns at $190 per return
$27,000 – franchisee and advertising royalties
$12,000 – Wavers every hour + extras during peak for 14 weeks
$500 – Insurance
$3000 – Marketers (not waving) dressed in costume with me for 20 hrs per week)
$22,000 – preparer payroll at $10 per hr. Min 2 preparers every hour for safety
$7,000 – preparer bonuses (5%)
$4,000 – additional preparers during peak
$30,000 – rent (NOT $3000 only $2500 per month)
$5000 – Advertising (valpak, direct mail, coupons etc..)
$3000 – Dept of Revenue
$1000 – copy paper, printer cartidges
$1000 – color folders envelopes
$2000 – donuts ($500 alone), cookies, popcorn, coffee, cups, water bottles, coloring books
$4000 – utilities
$1500 – flights and accommodation for convention
$500 – tax school books and instructor
$2500 – receptionist during early and late peaks – three weeks each at 40 hrs
$500 – RAL banners
$500 – marketing materials from Potato head signs etc..
$500 – local marketing/costumed wavers in parade during summer
$3000 – Miscellaneous
$2000 – unfunded bank products (2%)
Total income – $141,000
Total Expenses – $132,500
NET profit BEFORE TAXES – $8,500
QUOTE (Ed again):
If you are doing 843 returns and not making ALOT of money, you are a horrible mangaer(sic)/owner. I would look at the office manager/employees as someone must be robbing you blind. I assume you are paying less than $3000/mo rent. If so, you should easily be making $100k+ operating with that return count.
My most profitable office did around 550 returns and I cleard about 55k profit after all expenses just to put it in perspective. Another 300 returns would have easily pushed me well over 100k profit. I’m paying 2000/mo rent for the office I am commenting on.
You are such a liar… 500 paid returns at $200 (not following the plan – less than 100 free returns) = $100,000 of revenue
less franchise fees – $19,000
payroll and bonuses = $25,000
rents – $24000
utilities – $3000
advertising/marketing – $3000
office supplies – $2000
that leaves you $24000 BEFORE taxes and miscellaneous which I have not mentions – insurances, etc…
You’re a liar and will be ignored by those of us accountants who CAN add and are very good managers and have years of management experience.
It is the expectation of returns that FAILS TO DELIVER.
Anyone remember being taken to an office in VA which did over 2000 returns……. it was a set up… YOU CAN DO THIS AND BETTER!
You might want to consider not spending all that money on payroll. Do you plan to operate the same way this year? If you are not happy sell me the store since it’s obviously not working out for you. Since you only made 8000 for the year give me a fair selling price and you can put liberty behind you forever.
My AD says I was understaffed. Two nearby sees doing $170000+ had payrolls over $45000 including bonuses. So what so u know? Lol liberty’s no wait policy means you can’t have only one preparer and those numbers were an example. Third year I prepared 1200 returns. Don’t think u came anywhere near me!
Liberty suggests trying to get 30% net profit from a matured office. How u think u can make $55000 from 550 returns means your and was $300. Check the top 100 entities. Most are under $300. You probably are struggling yourself. Just start a busy bee tax service. Get someone to wave in a new costume then I can see you making $50000 from 550 returns but NEVER as a liberty franchisee
You are supposed to drink half of the kool-aid, not all of it.
There is no way anyone but Danny Blewitt and John Screwsitt will make any money from this POS, they paid their best franchisee Annie Fuller over $300,000 in a gag order, look it up. I heard that they even have had convicted felons working as Area Developers, don’t buy this POS that they peddle!!!
I will be as open as possible as it doesn’t matter to me either way if you believe me or not. I’m sure if you tried hard enough, you could lose money doing 2000 returns. Use Liberty’s system as a base starting point, but at the end of the day you better find a way to make a profit or at least break even. Typically I can break even with 250-300 paid returns depending on rent etc.
For example, I don’t do a paid policies & procedures class I see this as a big waste of payroll when you need money the most. My office manager gets $10/hr with 1%bonus. wavers min wage preparers 8-9/hr with 1%bonus. Marketers primarily commission only $25 referral per return
My avg net fee in that office was $220-$230 and I did just under 50 free returns counting unpaids.
$115,000 net
$20,000 (adv/royalty) You normally get 1.5-2% back in December to buy supplies so I always multiply number by .17 or so to get true exp. may even should be less than that when you factor in adv value for DMA adv but not worried about that.
$24,000 2000/mo rent
$3,500 utilities (phone, internet, water, power) on avg all runs about 300/mo more during tax season less the other 8 mos
$15,000 total payroll for that office including all preparers and wavers
$5,000 misc (no way it is this much but I always plug this number in as 5k per office to cover anything I miss)
+$3,600 rebates
+$3,000 ext return/addl returns income for the rest of the year
All my marketing supplies are covered by adv money in Dec. I didn’t put it as expense because I didn’t count as income.
Tax school usually makes a small profit but not counting anything on that if it breaks even I’m happy.
If anyone wants to discuss or needs help I will be more than happy to help anyone.
The royalty is 19%, not 17%. You can’t not count that additional 2% because you didn’t include that money in your expense. Also what about paying out errors on tax returns, I assume that paying minimum wage your preparers make some mistakes and you must refund clients some money. Also what about Send-A-Friend expense? You don’t pay Send-A-Friends? And it is uknown what you are getting for bank rebates this year correcT? What about business insurance? You seem to be avoiding many expenses….