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?
.
I am salute and show respect to all who voice and tell the truth about LTS here (especially Mike, FD, Bill and all who post often).
I am doing pretty well with LTS (through my own effort NOT LTS) but I will still advise people to stay away from this franchise. I can’t talk too much for obvious reason. I was naive when I get involved in this business. I wish there was a website like this to inform me about the truth back then. One of the reasons I choose Liberty because I don’t know how to run a tax business even if I have the tax knowledge (or if u don’t have the knowledge). I am sure some poople who look into Liberty is in the same boat as me.
What I want to say here is there are many options out there and you don’t need Liberty (and save you the ongoing 19% royalties fee). It is easy to get in but it is hard to get out.
If you don’t know how to run a tax school or even tax business or need to train your employees, visit
http://www.theincometaxschool.com or Google People Income Tax
(Liberty Tax used their tax school materials before they have their own tax school materials)
If you need help to market or develop your tax practice, visit
http://www.newclientsinc.com or
http://www.taxmarketing.com
If you need tax support, visit
Nation Assiciation of Tax Professional
http://www.natptax.com
and use their support program or the irs website
You can do better and well spend your money on your own and use the support I listed above rather than paying $40K franchise fee and getting crappy support. The worst is you will likely file for bankruptcy like most franchisees will.
Good luck.
Nice try.
100 million get REFUNDS.
Those links do not get you paying customers. They take your cash in smaller amounts.
If you want online customers, where their are 30 million of em you need to supply online REFUNDS.
PEOPLE want cash and no IRS issues.
1-800-Mr-Refund.com does it all.
JTH,
Excellant post and VERY good advice and information. I am glad that your are doing well with Liberty, it looks like your real success was because of your hard work and that is commendable! Thanks for speaking the TRUTH, please don’t be a stranger on this board and spread the word!
I owned two territories. I took out two home equity loans, a first and a second. I put over $300,000 of my own money in and lost all of it. I sold both territories and ended up even with what I owed Liberty for off season financing. I have been a business person for thirty years. It is impossible to make money if one isn’t in a metro area or a small town where one is the only game in town. Even under those two conditions it is very difficult to turn a profit. Liberty charges 12% for the use of their money. Use their financing and owe the “company store” forever. I wish I had called former franchisees before I bought but John “snow me” Hewitt worked his magic and I BELIEVED. My bad! Just glad I’m out and not gem orating money anymore.
Tried it…
Sorry you had to go through what so many have gone through, it is horrible what has happened to you and others like you. Keep spreading the word, atleast we may help others avoid this POS!! THE TRUTH MUST BE TOLD ABOUT LIBERTY!!!
Mike and others who is reading this,
Yes, my success is through my own effort and NOT any helps from Liberty (except some tax support which save me some times to do my own research). But I still have to pay the on going 19% royalties fee even without any helps from them (what a joke!). I actually helped to build the Liberty brand in my town and they use it to sell more franchises. Good for the Corporate and I felt really bad for the other franchsees who bought into this franchise.
One of the franchisees I talked to ended up filing for Bankruptcy and lost everything after his first tax season. He told me he has followed 100% of the system but failed. He has spent over $125K in his first year.
Franchisees who fails and files for bankruptcy is not uncommon at all in Liberty. I have heard it over and over again.
The truth is it takes time to build a tax business. There is no ‘magic’ or ‘system’ that can really be offered by Liberty but to cost you minimum of $40K franchisee fee to start.
Again, if you don’t know how to run a tax business, use the websites I mentioned above to train your employees, marketing your business, tax support, etc. Make mistakes the first year and you will learn from it. You will have a better successful and surviving rate to try it that way. Remember, if you use Liberty system and fail, it will cost you ten of thousands of dollars, emotionally stress (becasue they will give you high expectations), own them money forever if you are using their financing, and file for bankruptcy eventually (unless you have 100K+ to burn and expect no profit for at least the first 3 years).
Does anyone have the current figures from item 19 on the FDD ?
Anyone who has interest in a Class Action suit against LT, please visit http://www.fortmanlaw.com and fill out the form under Tax Prep. Franchise. We all know this is a scam, let’s see if we can’t get John Hewitt to feel the pain the rest of us have had to endure.
F&D,
I am on this tomorrow!! Thanks for your continuing support and enlightenment! Everyone, we are making progress don’t give up, Liberty will fail! Just rembember this, John was FIRED by Block, FIRED by Jackson Hewitt (or atleast paid to go away, and we are FIRING Liberty everyday!! If we continue to get the word out we will keep them from having others file bk as well!!
F&D, Went on the website and completed the application /survey. If anyone else has done it give a big shout out!
Anyone considering working for or owning – reconsider. I have a horrible experience involving Maribel Rodriqguez of the Belmont Ave/Dickinson Street Springfield MA location. She “stole” my investment money and is still in business!! She has slandered my name with the attorneys located in the same building while she herself was housing an elligle alien from Mexico and working under the table without paying taxes!!! – Go figure and the clown attorneys representing her/him are slandering ME!!!. I am out several thousands of dollars and Liberty Tax corporate “clowns” gave me the finger.
I am also on the inside regarding how they handle thier seasonal employees – again be careful about the “bonuses” they promise. Make sure to read the “fine print” There is a general practice to “lay-off” their “employees” prior to the end of the season thus eliminating thier responsibilities to pay the promised bonuses.
She “Maribel” is a bad person – be careful. I am out more than $5,000.00 dollars.
I have an accounting practice and we prepare on average 1000 tax returns a year. We did not go through a franchise and we won’t. At least once a week we are asked to sell to either H&R Block, Jackson Hewitt, or Liberty. These franchises are built on the Refund Anticipated Loans, which are a thing of the past. Their models will not work without this product. Anyone starting a personal service company needs to remeber you are working for a person or business who is your client and they expect you to personally serve them.Jackson, Liberty and H&R lost sight of that many years ago.
Trust your ability, trust the people you hire, and never forget the golden rule.
Travis,
What is your average fee for a 1040? What kind of profit margin do you make from your practice?
How would knowing the average net fee be of any value at all. Knowing his bottom line margin may give some insight into his business, but if you are implying a franchise is somehow able to charge a higher net fee, I would suggest you are totally wrong. What someone charges is based on too many factors to compare.
F&D, as usual you show how great of business mind you do have…. How does knowing how many returns he does give you any value? Whether he did 1000 and charged $75 each and grossed $75k or charged $300 per return and grossed $300k is a little important to me, maybe not to you.
John Barilla:
There is only one number that is important, it’s net income. And Travis Starbuck already has an advantage over you because he is not paying John Hewitt 19% of his gross income and getting virtually nothing for it. Again, make a serious attempt to justify that royalty. My guess is that you will again ignore the question because there is no justifiable answer.
F&D,
I know that i did get a bunch of customers my first year just for being Liberty Tax. As much as you hate to admit it, Liberty Tax is well known. I also know that being a reputable national company gives me credibility and I am easily able to charge the 14% more than I would be able to had I been F&D Tax service.
2 Liberty Tax franchise territories for sale by owner:
LIBERTY TAX Franchise for Sale – Raleigh, North Carolina – 2 Territories
For more information on this opportunity or if you’d like to list your franchise for sale, email UnhappyFranchisee[at]gmail.com.
Thanks. ADMIN
A very big warning to those interested in buying into a Liberty Tax Franchise…….
DON’T DO IT!!!!!!!!!!!!!!!!
It has been the biggest mistake of our lives. Thank goodness, almighty, we are FREE AT LAST!!!!!
This company is the biggest shlock operation going. The man at the helm of it all is a rip-off artist at it’s best. We can’t wait for him to come full circle and get a piece of what he’s given to everyone else. We will watch him come crashing down, sooner than later.
We know there are decent franchises out there, who care about the success of their franchisees………..this is NOT one of them.
RUN, don’t walk, as far away from this as possible. DO NOT sign a contract or you will have tightened a noose around your neck.
The fact that Liberty is based in Virginia says it all. You cannot get any Judge there to give you a fair trial. They are all working together with Hewitt.
DO NOT, I repeat, DO NOT sign on to be a Liberty Tax Franchisee. The 900+ comments on this board should be enough to convince anyone out there to run in the other direction.
There is NOTHING at all that I can think of that was positive about our Liberty Tax experience, except, of course, we are no longer a part of it and are FREE AT LAST!!!!!
Free at Last I know how you feel. I just seperated from them after 2 years. Just signed paperwork. I hated to loose the 90,000 I had invested but wasn’t getting any support at all from corporate. They are a joke. Everyone on this sight needs to file a class action law suit against John Hewitt the lying piece of sh”’. He needs to have his day and I hope it’s not too far away.
The thing that really po’d me is that you can not even sell out if you want to because Liberty is devalueing the franchises by letting others try the franchise for a deposit and they get to walk away if they are not successful. Why would anyone buy a franchise up front now. That’s another way that corporate screwed their franchisees. They just don’t care about the people out in the field as long as they get what they want. Fair warning folks if they gave you the franchise stay away from it. It’s not worth anything. Every year I sat there watching all the H&R advertising on tv and never once in 2 years did I see a ad from Liberty on any media. Name recognition my as’!!!
My experience with Liberty Tax and JTH has shown me that there are definately businesses out there that are still preying on thedreams of people who want to own their own business. JTH and LT are amongst the leaders of this depicable conglomerate of scammers and fraudulent flim-flamers!
I have been sued several time by JTH with the court always finding in favor of JTH. In fact, the court system in VA habitually ignores any testimony or commentary by the former franchisees when you actually do go to court if you can find a lawyer to represent you there. Please look at the list of lawsuits theat JTH Tax Inc. has initiated against former franchisees. It is a long list, certainly longer than the more reputable franchises like Mc Donalds or Dunkin’ Donuts. Also remember there is no Federal legal protection for a franchisee. The franchise agreement also bars you as a franchisee from joining any class action group of litigants against the franchise. They also forbid you to “disparage” them which, I believe is a violation of the constitution’s right to free speech
The happiest day of my life is when I got out of this franchise. They had a complete lack of competency and support for their franchisees. Read these posts-you will see there are a lot of disgruntled franchisees. They took my money and gave me no support. Their AD’s are not much more than a harrassment vehicle if they are even bright enough to do that!
Do yourself a favor, listen to and study the comments made here and take the advice of 95% of the postings: RUN AWAY FROM THESE CROOKS!
Free at Last/Richie B: Thank you for your comments. It is important for us to continue this campaign to explain to potential franchisees the problems with this organization. Many of us on this board went into this business with a desire to succeed. We put our money up and did follow the so called system only to find we made a bad business investment.
Very true, Bill C.
John Hewitt and the rest of the people at Liberty are great SALESPEOPLE. They sell franchises and don’t care about telling the truth. Like any good salesperson, they paint a rosie pictures, have you talk to ‘top guns’ and over project the amount of returns you will do and thus, the money you will make….
It’s really sad to think there are so many new Zee’s this Christmas who are comitted financially and emotionally at this point, and they don’t realize how their lives are going to change for the worse in a hurry very soon. Bankruptcies, finanacial strain, anxiety about the future, etc, etc…..it’s going to hit them soon, I just wish them well at this point.
Dont Be Fooled,
Very well put, there are many new zees celebrating the holidays and thinking how wonderful and prosperous the New Year will be, I can only say that I wish them and all on this board a very Merry Christmas and prayers are with you all especially the new zees.
People need to realize the pitfalls of this organization. I have wanted to rid myself of these thieves for over a year. In good faith, I purchased territories with the idea of earning a living after losing my job. I went to Virginia Beach, talked to the LT folks and trusted that they were people who cared about me, and wanted to help me build a business. They had all the answers; we’ll be there when you need us, we can help, we understand this business and can make you successful. I signed the franchise agreement, came home and called my Area Developer and asked for help finding locations. I called several times with no answer, and no response. Finally I called someone at Liberty and asked for help. They promised to have someone call me. Again, no response. Finally went out on my own, found locations and sent them to Liberty. They approved them and I signed the leases after 4 months of waiting for approvals. Started advertising, marketing etc. First weeks were slow, so I asked for help. They asked me what I had spent on marketing and I told them. They said it was too little. Continued my marketing through March like they advised. Still very few customers. Started to slow down my marketing as I was running out of money. Ended the tax season with 1/3 the customers I projected, in serious debt, and frustrated because I had no idea what I did wrong. While I understand a lot more than I did then, had someone at Liberty spent the time to analyze the situation, I may have been able to salvage a bad situation. Everything is communicated through emails, and the answer was always spend more money. This organization is not interested in your success. Through the next two years I tried to make it, only to lose more and more money. They kept saying that the debt was small and that I would make it up. What a bunch of BS. Please read Free at Last, he is telling the truth. This organization is a scam. Do not be fooled, do not be fooled. I am slowly getting my life back, but it has cost me $175,000 to do it. All of my savings and most of my retirement are gone. Not sure if I was lucky staying out of bankruptcy or not. I have my life and health, but that’s about it. I still get bills. I tell them I have no money, some go away, the others don’t. Please, please, please stay away from this organization. I cannot stress the pain you will go through when you fail, and you will. I pray that no one has to go through what I did.
Yesterday I turned on the television to see H&R Block halftime show on ESPN. Today I googled information on Jackson Hewitt and see they will have 2800 stores in Wal-Mart and increase of 40%. I then googled Liberty Tax Service and the big story is the free tax classes that their doing in January. This is the best Liberty can do! It’s the same old store. Right after tax season John Hewitt tries for some free press by making some outlandish announcements. This year is Liberty is going public, last year he was offerring to merge with H&R Block, the year before he was going to take over Jackson Hewitt. The reality is this one trick pony is starting to run out of gas. By this time next year Liberty will start to show some cracks. They will try to go public but their offering will be marginally successfull and they company will need to start taking on debt. For all those potenial franchises remember there is no “paid advertising” by this company. They can talk all they want about the benefit of querilla marketing but name me any national company that doesn’t advertise and is successful. “Buyer Beware”.
Some of these posts are just funny. I own multiple offices, I am working in one now and I am fine with Liberty not spending the money on TV. Do you think Blocks success is because of the amount of TV advertising they do? Because if thats what you think it is no wonder your unhappy! If TV is the answer why has Block been struggling the past few years? They have spent millions upon millions every season?
Ok, for those who are truly interested in building a Tax Office not just complaining about how you were tricked or wronged. Lack of understanding on why clients choose there tax preparer is a big reason people fail in this industry. Add to that the inability to demonstrate value, inability to hire the right staff, and finally the inability to understand how any business makes money and it is no wonder so many are unhappy and looking for someone to blame.
Block is successful because they figured out how to hire, train, and retain good preparers. But that was just the beginning, and it was before the first TV ad ran I might add. They also understood how to build value and how to grow an organization and during that there were many bumps in the road. Too much to explain in this short post. But TV would be way down on the list on why Block has been a success. I have spent years studying Block.
Liberty is a viable opportunity with a ton of upside. Sure there will be some down sides as there is with any company. Can you make great money owning a Liberty Tax Franchise? YES!! Can you do it by just buying a Franchise and following a checklist…NO!! Liberty has one of the greatest systems out there but even with it being so good it is not idiot proof. You have to do your homework and you have to understand how everything works together or you will either luck into profit or loose money. If you sit down and understand the business side of Liberty and on top of that understand what it takes to build a successful practice you will be thrilled with your decision to buy.
I have not a single issue with paying royalties and advertising fees because I will still have a better profit margin than 95 percent of the small business out there today. The tax industry is at the beginning of a huge boom that those who are prepared will be rewarded very nicely. There will be bumps in the road and the industry will go through some major changes, it has already started, but in the end those who stuck it out and figured it out will be thrilled with the results!!
Don’t buy anything because the sales pitch sounds good. Do your homework and if you do not understand how you will make money your not ready to buy yet! If you think running a bunch of TV ads will make you huge in this industry you are not ready to buy yet and would beg you to save your money!! I have no issue with someone stating they cannot figure out how they are going to be able to make money and decides not to buy!!! But if you can see the opportunity do not let the same couple people on here make you second guess yourself. Go out and visit the Liberty Franchisees that are struggling and see what you learn but then go out and find the ones who have figured this out and then compare and make your choice. It will not affect my bottom line a penny if you buy or don’t buy. But dont just decide based off the few here that are determined to make themselves feel better by blasting a company they failed with.
By the way you asked for “any” national company that does not advertise and are succesfull? Here are just a few. Kirby, RC Cola, Costco!! OOPs guess you should know the answers before spouting off questions!
Laughable,
What is this “beginning of a a huge boom” that is comming? What in your opinion makes this industry worth the investment? RALS are done after this season, compliance testing is expensive, VITA and every other “free” organization is growing exponentially, Block is declining, JH is on the ropes, Liberty is growing because of the hard work and investment of the franchisees (name one Liberty corporate store that continues to grow?) this is a declining industry. Please advise as to why this industry is worth the investment? Please don’t just add that the paid preparer market is up X percent, because that includes the free places, but tell us how and why you would sell a territory/Liberty to your mother or father and give us the details. Thanks
i have never seen a Chick-Fil-A commercial but they seem pretty successful….
To Laughable;
As usual, you get someone like yourself who drinks the John Hewitt kool-aid and comes on this website to give us your view of the world. Funny how I see more Liberty Tax locations going out of business than starting. I know of no Liberty Franchise owner that can even make enough not to have a regular job besides their tax business, and I know an awful lot of them. Most owners are taking business losses. You are welcome to your opinion, but I will again suggest that anyone even thinking about this scam, run away as fast as you can, unless you want to lose it all.
Laughable, trying to find successful Liberty owners is very difficult, if not impossible. And if you call or meet owners in person, they won’t give you any real numbers, they are embarrassed by their failure and the huge amounts of money they have lost. And to top it off, they are afraid to talk bad about Liberty and the company for fear of reprisal from corporate.
And John Barilla….if you have not seen a Chik-Fil-A commercial, you really need to open your eyes. The Peach Bowl was renamed The Chick-Fil-A Bowl, they have huge billboards in every major market (Eat Mor Chikin–does that ring a bell?), and run commercials during prime time on network TV. Just one reason Chick-Fil-A is successful and Liberty is NOT. I’m curious, where do your advertising dollars get spent? An obsolete Yellow Page ad, a big liberty costume, Val-Pak? Where?
Again, way more money losers in the Liberty system than there are winners.
No chick-fil-a comercials wow the guy lives in a cave.
john barilla writes “i have never seen a Chick-Fil-A commercial but they seem pretty successful….”
Yes, Chick-fil-A only spends $27 million on advertising media, which is considered pretty tiny. It is, however, about $27M more than Liberty Tax.
From a 2010 article:
“The chicken chain spends $27 million a year on advertising media…
“One of Chick-fil-A’s biggest marketing successes was conceived for a billboard campaign during the 1996 Summer Olympics in the restaurant chain’s home city of Atlanta, Georgia. One billboards featured Holstein cows with their message: “Eat Mor Chiken.” The cows, an instant hit, remain to this day in the advertising campaign.
“The company also bought the rights to a college football play-off game, the former Peach Bowl, now known as the Chick-fil-A Bowl. “That became one of our media pushes,” Bradford said. “We actually bought it to activate marketing events at the game because we couldn’t afford a lot of other media.”
http://www.chicagobooth.edu/news/2010-10-13-chick-fil-a.aspx
Someone explain to Mr. Barilla what YouTube is.
Try searching Chik-Fil-A Commercial on YouTube. Some of the creative spots have more than 100,000 hits.
Do the same for Liberty Tax. Jeez. Even if they only did some commercials for the Internet it would be an improvement.
Dressing up homeless guys as Lady Liberty as your sole marketing campaign? Seriously?
As I stated on here previously my purpose is to provide relevant/factual information to potential new franchises. Liberty does charge a 5% advertising royality and I want to make sure potential franchises understand that none of this money goes to any regional or national television advertising. I personally believe this is a mistake and point out that most national brands do advertise. I would also like to point out that Liberty tax service is not really a “national brand” and this can be proven just by asking 10 random people to name a national tax preparation business.
I agree with Laughable’s statement “that Block is successful because they figured out how to hire, train, and retain good preparers. But that was just the beginning, and it was before the first TV ad ran I might add. They also understood how to build value and how to grow an organization and during that there were many bumps in the road. Too much to explain in this short post. But TV would be way down on the list on why Block has been a success. I have spent years studying Block.” I don’t see the same quality in Liberty. There is no corporate oversight, the ADs are poorly trained, franchisees are not vetted for qualifications other then the ability to buy a franchise and there is a corporate mentality of berating anyone who questions their methology.
Bill,
I am not here to defend Libertys sales techniques or to defend the way franchisees are either supported or not supported. You will never hear me state that Liberty is a perfect company without any issues. If you expect to purchase and expect Liberty to hold your hand and poof your a success “DONT BUY”. There has been a change, “very recent” in the quality of Franchisees coming into the system. I am not sure if that is Liberty or that people with some business and tax background have just started to see how big the opportunity is.
I am here to tell anyone thinking about it to do there homework and look very closely. There is serious money to be made in this industry and there is not another Tax Preperation Franchise out there that I think is more prepared to capitalize on that success than Liberty. It is not because Corporate Employees or Leadership gives me warm fuzzy feelings because they don’t. It’s because numbers do not lie and if you are talented enough to see through the hype and to figure this rather simple business out, which most do not, you can make a very nice living and yes become wealthy if you desire.
To answer the gentleman or lady who asked what makes me think this business is booming, the answer is too long. But I will state this, regulating any industry has not hurt the good individuals in that industry. Yes it makes operating in that industry tougher but it shrinks the competition and raises prices. As far as VITA, I say great, let them compete. I have VITA sites all around and have not seen it bite into my business at all. Sure people may try them once, but thats usually it and then they come back. Increased IRS regulation and enforcement along with an ever increasing complication of the tax code will keep this industry very safe. So, no it may not be a boom for all but it will be a boom for those who understand and operate accordingly.
For this argument that Liberty is no good because they do not nationally advertise I think that this shows many do not understands what it takes to build a successful office. TV does not have the same effect it did in the 70s and 80s when the majority of America had 4 stations. Is there a time in the near future Liberty will throw money at national advertising? Probably. But for the past 10 years it has been one of the wisest things they have done not messing with TV.
Every year I see people listen to the Laughable’s of the world and purchase Liberty Tax franchises. I make it a point to go visit them after two years. Most have either gone out of business, or have used up their home equity and will be gone after the third. Only those stores in heavy minority neighborhoods with low income poorly educated people survive. Let’s all be honest here, Liberty is a franchise based on bilking the poor uneducated minorities out of hundreds of dollars to do their taxes. Otherwise they cannot survive.And that is what Laughable is promoting.
It is the REFUND people.
EITC is for folks who have income and kids not a mortgage.
Once you folks realize you are in the REFUND business, you will EXPLODE and not go bankrupt like Jackson Hewitt.
IRS is owed $300 billion in back taxes now from 25 million. So go do all the TAXES you want cause those that owe do not do not pay a preparer either says MR REFUND.
F&D,
Liberty franchisees unfortunately (as witnessed by Laughable) don’t seem to realize that RAL’s are over after this season. Probably 70-80% of their offices are in lower income areas, when the RAL’s are done, so are THEY!! Liberty has one more season before the house of cards gets hit by the wind!
Frustrated, It is sad that you do not have a better understanding of this business or maybe it is because you choose only to do whatever it takes to damage “Liberty” and not give the full picture as it is. RALS as they were known are changing. They will be called something else with a different name and different features. Add to that the desire for RALS has been dropping year after year and are not necessary for Liberty or anyone else to survive providing they have an understanding of how to grow a tax office.
The tax industry is changing and it is my belief that offices that only focus on Bank Driven Clientele will struggle. Offices that are committed to professionalism and developing there staffs in addition to developing client relationships will flourish in the regulatory era we are entering. There are many offices inside of Liberty and out that have figured this out just as there are many that have not.
I understand that it is not your goal to explain the tax industry for what it is but to explain it in a matter that produces your pre determined desired effect and that is to damage “Liberty” at all costs and to steer anyone and everyone away. That is your right and I am not going to try to convince you otherwise because it would be futile. But anyone interested in the tax industry needs to investigate the real business side even before deciding if they want to buy a franchise or not.
Laughable;
This forum is Liberty Tax Franchise complaints, not the Readers Digest version of how to run a tax business. I agree with you fully that the tax business should and will be driven by developing professionalism and treating people right so they will return. That is what every business should be, H&R figured that out a long time ago. I commend you if that is the way you are running your business. I plan on doing the same in the future. Fortunately you can do all of that without paying $40K and 19% of your gross. In this “new era” as you call it, you will be competing with Mom and Pop and others who have been developing their business for years. I have and continue to suggest that staying away from Liberty Tax to get into this business is the best thing you can do. If anything, they will do more to harm your opportunity than help it. Go out, educate yourself on the tax laws, buy software from a reputable company, hang out your shingle and advertise like crazy. If and when you figure out that it is not for you, hang it up, and close the doors. You may owe a few $$, but not 10’s of thousands for years to a franchise company that has done nothing but collect royalties and offer nothing in return.
F&D,
Exactly, these Liberty tools, think this is a discussion board it’s a FORWARNING BOARD!!!
Happy New Year!
Time to REFUND 100 million Billions
Happy New Year, everyone.
FYI Liberty Tax ranked high in the December, 2011 UNHAPPY FRANCHISEE 25 ranking both in terms of readership and comments.
Congratulations, and thanks for commenting.
See December’s rankings here:
UNHAPPY FRANCHISEE 25 – December 2011
I’ve read the complaints. If a group is unable to file class action lawsuits against LT, can lawsuits be filed against individual persons with whom a zee may have disagreements with that would constitute illegal in some form? Harassment, discrimination? And if so, any attorney worth calling to help persue these complaints?
So what happens if you decide to walk away and not open-
Steve:
For any franchisee who want’s to break their agreement they should seek the advice of a franchise lawyer. Prior to the signing of the mutual termination agreement I spoke with an Attorney who explained that it is easier for a new franchisee to terminate an agreement because there may be things in the franchise agreement that the franchisor failed to provide i.e. support/training. Since I had been with Liberty for 4 seasons this wasn’t an option. My only option was to basically to say either we have a termination or I will need to file for bankrupcy. From what I understand once you file bankruptcy the franchise is considered your asset and the courts won’t release it back to the franchisor until the bankruptcy is over. But I’m not an attorney.
I didn’t have to file bankruptcy because Liberty did eventually offer a mutual termination agreement where I gave them back the franchise in lieu of the fees I owed. Not sure why they changed their mines just glad I’m done with them.
Steve;
Whether mutual or unilateral, you are terminated. You owe Liberty what is on the front page of ZeeNet under Financial. If you have outstanding royalties or notes, you are responsible for them. Not a lot of room to argue. You can declare bankruptcy and as Bill says, the assets (territories) are held until the bankruptcy is finalized. Again,not a lot of room to argue.
As to the previous poster who asked if there was a way to go after others rather than Liberty, here is the problem. The contract is written in such a way that Liberty is ONLY responsible for providing tax software and their name. Beyond that, they have no responsibility to provide a franchisee with anything. The agreement has a paragraph that discusses providing support for budgets, locations, etc. Good Luck ! That is an uninforceable statement and people need to realize that once they sign the franchise agreement, they have bought a business in a box, and the rest of their responsibility. Your A/D has no responsibility to answer his phone, technical support has no responsibility to give correct answers, and if you run into issues, you cannot sue them because you signed away your right to trial. Hence you are screwed in every way. I really hope people take the time to realize what they are getting into before they sign their franchise agreement. These people are sharks, and in the end you will pay. It’s whether you get taken apart limb by limb, or swallowed whole is the only question.
Steve, If you walk away and not open, you will most likely save thousands and thousands of dollars and much heart-ache.
It would be difficult to not open, especially if you are a first year Zee, due to the great anticipation of the debut of your new business, but I would advise walking away, paying what you owe Liberty (hopefully not much) and get on with your life. Otherwise, you will be forced to do the same at a later date, but you will have spent and borrowed untold thousands of dollars and be out even more money at a later date. Walk away if you can.
I am (1000) maybe. So let me say this DON’T BE FOOLED. CALL ANYONE IN YOUR CITY AND GET A TRUE RESPONSE OF WHAT IT IS LIKE TO OWN A LIBERTY!!