LIBERTY TAX SERVICE Franchise Complaints

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

• Dave;

  None of know your situation as well as you do, so we can only guess what the best course of action will be. All I can suggest is that you are in a no win situation like I was, and walking away and starting on my own was a much better scenario all around. I have peace of mind every night, my expenses are low, I am not dealing with out of control payrolls hoping someone will walk in the door, and I have a very good client return ratio. I treat people fairly, give good service, and people appreciate it. Good luck with your decision.

• Billl, Just curious if any litigation Ex,-lawsuits etc.? John has not spouted any numbers this year in regards to % of increase very unusual. He did mumble something over 1.8% which I would say is flat my stores combined down 10%.

• Dave,

  Go to Liberty’s site, press releases. They are up 11.5% in returns and 8% in revenue. I think it was through Feb 22nd, I would have to double check. However with about 400 new offices this is bad news for Liberty. As each day goes by they should continue to give up this increase through the rest of the season. In addition, this 8% in revenue is not good news less to loan out next year!

• You are correct and the numbers now are definitely flat to low increases.

• Dave,

  Are they less than 10% yet? That is GREAT news!! By the way, sorry to hear your story. There are probably hundreds of franchisees in the system wondering how they will survive and wondering how will they get out of this nightmare.

• Mike;

  I think the numbers speak for themselves. LT increased the number of stores by 10% and taking that into account, are only up 1% in returns, and have lost in revenue, much like H&R has reported. This is a dying industry if you are banking on the EIC customer for the vast majority of your revenue. I have a suggestion to those who own LT franchisees. Close your storefront, find a visible office, go out and buy TaxAct, and concentrate on customers who appreciate quality not quantity. I see new franchisees committing to high rents, long leases and big payrolls. All I can suggest is that the tax prep industry is still out there and healthy, just not the type that LT would like you think you can make a killing at. Quality, good service, and fair prices will always trump unqualified preparers, and screwing the EIC crowd.

• Frustrated and Disqusted:

  Well said the business model has to change and for those franchisees that do change they will have to share their success with Liberty.

  I went into Liberty thinking that as the company grew it would provide me with more brand recognition then I would have with my own name. I was wrong. The Liberty name never brought a customer in the door. I will say that the waiver did get the customer’s attention but most if not all didn’t know what we were selling. It also had a negative effect with some people especially those in the middle/upper income bracks who found it un-professional. The time for gimacks should be over and now it should focus on consistent quality throughout it’s franchises by making sure they are selective in their process. But I don’t see that happening. Although with the new IRS guidelines an individual won’t be able to obtain a PTIN until they pass the test. I don’t know if Liberty will concern themselves with this based on their past assistance when it came to helping francisees obtain an efin#.

• I just had my taxes done by Liberty Tax and she didn’t do anything right. 1st she said she was going to put it on a 2 day rush that was going to be put on a card for me. That didn’t happen. Then she said it will be in 8-10 days. That really didn’t happen. Now she says it will be mailed instead of put on the card but keep the card in case. Not to mention the constent change of if the irs accepted it or not for $260 for someone to do your taxes I deserve some better answers.
  *** The lastest now is halfway in 2 next month :( I did them 1 week of March

• Re; Taxes been Hell this year

  The preparer should have told you that you would only get the 24 hour advance if your application was accepted by the bank. Obviously she either didn’t or you missed that conversation. As to why you would be receiving a check is a little unclear. Do you have past student loans or other something ? If not, you will probably receive your money from the IRS in 10-15 days. Whether it comes on the card or in a check is whether the preparer did the card correctly.

  Of course realize that McDonalds pays their people more than Liberty Tax does, so you can probably understand the quality of individual you are dealing with. What made you select Liberty Tax ? There are a ton of very qualified independent tax preparers who know what they are doing, and will in most cases charge less than the retail stores ?

• Taxes been hell.

  You really need to call 800-790-3863 Liberty corporate office, ask for John Hewitt, he is in charge of Customer Service and makes the policies at Liberty Tax. You will need to DEMAND to talk to him, since his staff normally wont put you through. Liberty has a Satisfaction Guarantee, he can assist you in getting your money back, if you aren’t satisfied. Keep us all posted and DEMAND to talk to him, he is very busy. Good luck.

• To those of you who are thinking of jettisoning Hewitt and his cast of clowns, let me suggest that if you are concerned that you will have to lower your expectations with another software package, that TaxAct is actually a step up from LibTax. It is easier, your preparers will make fewer mistakes, the business portion for LLC’s and small business is more integrated and overall less expensive. There is a client grid like LibTax and you can price by form. They have worksheets and a better help line than Liberty because you can actually get through, get an answer, talk to a person who is interested in your question, and not be talked down to like you were an idiot. I have been using it since January and extremely pleased with the result. If you are so inclined to think you still want to stay with Liberty for some strange reason, you can still use TaxAct for your business returns by separating your computer networks and loading it on one of your computers. From experience, most stores have 3-4 and use 1 or 2. I highly suggest it will be one of the smartest moves you will make.

• Drake software for 1040 and corporate. 30,000 clients can’t be wrong. $1095 after tax season ends for as many computers per office. No transmit fees. And if I had a buck for every taxact turbotax etc. returns I had to fix because of carryover errors etc. urging. Btw. Up 45% in my third year on cash and I’m not a franchisee! Freedom! As Mel Gibson would cry!

• Re; Money pit;

  Drake works too. It also has an integrated book keeping package that you can use to keep your client info. I have used both. Isn’t it great to keep all of what you earn rather than sending 19% or 25% to a company that does nothing ?

• To the former franchisees, how many returns were you doing a year as a Liberty shop, and at what average net fee, and how many returns have you been doing each year as an independent, and at what average net fee? Just looking for more information on what type of volume to expect on an independent route. Thanks.

• Re: Guest;

  Comparing how many returns and net fees is only applicable if you are running the same type of business model. If I looked at only my individual returns, my net fees would be lower by about 10%. I figure that is what separates me from the retail shops with high rent and marketing costs. I will do fewer individual returns because I have concentrated on small business, LLC’s and higher level returns. If you are looking at the bottom line, I never made money as a Liberty franchisee, and running my own shop I will net between $80-90K after all expenses including all my insurance including health, software and company car which doubles as a marketing vehicle. My hours are weekdays 8-6 and saturday mornings during peak. My rent is $300 per month all inclusive, my marketing expenses will run around $4,200. I employ a part time preparer who has about 15 years of experience. These same results are very achievable by anyone who has the desire to run a similar business model. Anyone who thinks the only way to get into this business is purchasing a franchise should reconsider as I know my results are significantly better than most Liberty franchisees.

• To guest and others who read this.

  I am a Liberty Tax owner who owns 6 stores. First, if you believe you are going to go in and knock 1000 returns out your first year that is living a dream. Look at the FDD they provide. I believe it to be accurate and it states the avg first year store does somewhere around 300-350 returns I believe. You will really have to watch costs at that level to even break even. I should clear with my 6 stores this year about 175k. Keep in mind I put in 12 hour days during tax season and am the best preparer best waver etc I have.

  After tax season it’s not that bad. I do not regret going with Liberty. I can honestly say at least 1 out of 5 customers that come through my door use me because I am Liberty Tax and not Joe’s Tax Shop. It is probably more like 1 in 4 or possibly even 1 in 3. As long as this is the case, Liberty is worth it, Pay the 19% royalty (really only 18%, they give you 1% back in marketing budget) and don’t complain.

  Does Liberty have problems, sure. This year tech support has been a nightmare. I give them about a D rating. Would you have problems on your own, sure.

  Some common advice from things I learned the hard way:

  Get a territory with a low AGI, the lower the better
  do NOT overhire preparers like they say at least not your first year, get 2-3 good ones and train them well
  do NOT spend alot of money on marketing and donuts etc. Spen money on a GOOD waver. It is worth your time to train your waver, the more active the better
  Cut staff to 1 person after feb 10th and cut hours back to 10-7 if need be.
  Cut costs at all chances

  This is not going to be easy and I would say more fail than survive, but the success rate with Liberty is prob around 40% going on your own unless you have retail tax prep experience and inside knowledge of how it works success rate around 20% I’m guessing.

  Disclosure: I will most likely not expand beyond 6 offices and am actually looking to open a papa johns or Little Ceasars Pizza location to try and diversify. But I do make decent money at this.

• F&D and Franchise Owner – Thanks for your responses.

  Franchise Owner – you said that as long as Liberty is driving in 1 out of every 4 customers, I should pay my 19% and not complain. I’m don’t agree with that. For me, the number of clients that come in specifically because I’m a Liberty is very important. 1 out of 5 – 20% of revenue. 1 out of 3 – 33% (I know very simplistic view, and the cheaper returns may be more susceptible to brand rather than quality of service). But if you can’t pinpoint that amount of revenue that you derive because you’re a Liberty, then how do you know if the 19% is worthwhile or not? If I only get 1 out of 5 because of the Liberty “brand”, then is the 19% really worth it?

  I’m thinking through my steps right now. I’d love to post this on the Liberty discussion board, but we both know it would be taken down immediately. If I’m putting in all the effort to create the Liberty “brand” in my territory, and all I get from Corporate is horrible IT support, adequate tax knowledge, and a logo that may or may not have any recognizable value, is it all worth it? Some of kool aid drinkers will tell me I’m paying for “John’s Top Ten”, but let’s be honest here, it’s not the formula for Coca Cola. I don’t think it’s worth my royalties.

  And just so my motives are clear, I’m posting here, because Liberty does not allow an open dialogue on its intranet. I know franchisees, and more importantly Corporate, read this site. I’m coming on to voice an opinion that my royalties are only a worthwhile expense, if they are earned. And so far, I’ve come to the conclusion that they are not.

• Guest, so glad that corporate and other franchisees read this site. Tell everyone you know about this site so atleast they can read the non-kool-aid beverage. Thanks for your posting I do appreciate your honesty.

• Guest,

  You are definitely correct. Liberty definitely has some problems for sure, but every organization does as would yourself if you went it alone.
  I really do not have any hard facts about exactly how many customers I get by being a Liberty, but I feel confident saying it is at least 1 out of 5 and am almost positive it is at least 1 out of 4. Also, you must consider the repeat $$$ and referrals. Liberty is pretty well entrenched where I am at though and does have a decent brand name recognition.

  Do I like paying the royalties, heck no an I get mad every time I pay it. A few things to consider, if you know absolutly nothing about the retail tax prep business, I don’t care if you have 2 CPA certificates and can recite the US tax code backwards the odds of you making it are very very slim, Liberty does give you a decent beginning framework to start from. They have decent prop software, hopefully some brand recognition which should lead to a beginning customer base etc.

  I can see the value in throwing piles of money into advertising etc. if you have plenty of money to lose in the beginning you may eventually end up ahead by doing so, but for the other 95% of us, you better watch your costs like a hawk.

  You need to figure out how retail tax prep works. #1 is Location pay the extra rent to get a good spot it is well worth it. Walmart shopping centers are the best.
  #2 you better have at least 1 good preparer in the office (that can of course be you the owner if you choose) because if you don’t have a good preparer, no referrals repeat business etc. and you are doomed even if you did 500 returns your first year.#3 adjust quickly….once it slows cut payroll to nothing. 1 person in office from Feb 8th-April9th or so, but keep in touch, you may need another person for that last week. If you cannot send people home, you will not make anything at this. Cut your hours to 10-7 if necessary and please don’t hold a P&P. That is the biggest waste of payroll $$$ I’ve ever seen, again maybe in a perfect world where you have plenty of $$$ to throw at this, it may be beneficial, but not if you are on a tight budget. If you give me 250-300 paid returns, I will at least break even. You need to be able to do that also, if you are not doing at least 250 returns, you have problems and need to figure out why. Bad location, bad preparers, or what? You will not make any real money until you get to 400 paid returns but once you reach 400+ you should see some income flowing in, 500+ it is considered a productive office (I didn’t say you were getting rich of the one office) but keep it at that level and try to grow a little each year and possibly consider trying to get another office up and running hopefully in the same territory.
  Get enough offices doing 500+ returns and you might make something.

• What happens if your area does not have any brand recognition? What are you paying the 19% royalties for? Also I’m hard pressed to agree that doing 400 returns makes you any decent kind of money. At 400 returns, assume 15% of those are free (either due to promotion or bank product defaults) you are down to 340 paid returns. At an ANF of $230 you are at $78,200 in revenues. Factor in yor 19% royalty and your net fees are at $63K. Then if you are paying for a prime location let’s say rent is $2K/month. Now you are down to $39K AND you haven’t even paid for payroll, utilities, marketing, insurance, wavers, etc, etc, etc. At $78K in revenues, you are making very little money, if anything.

• In my post I did say 400 PAID returns so that would mean you would probably need to do at leat 450 total returns.

  But using your example: and I think $230 is a tick low in ANF but I guess thats depends alot on where you are located as well.

  78200 minus royalties =63k

  I will agree with 2k about right for any decent location

  63-24 = 39000
  doing so few returns you better keep payroll around 15k total With that number of returns, I’m sure you can staff 1 person from Feb 8th-April 9th and should cut office hours to 10-7 at a min.
  39000-15000= 24,000

  Doing that few returns I would definitely only wave during peak and would put marketers on a commission only basis (this is how I do all my marketing and it weeds out the bad ones immediately and someone decent who talks to 100+ people a day can make good money doing it this way) Also, doing that few returns I would not spend anything or very little on marketing other than your guerilla budget for all coupons etc. so lets say 3000 expense and that is generous I believe mainly for minimum wage waver hours

  24000-3000=21,000
  supplies 2000 (this is generous I believe also)
  misc & ins 1000
  utilities (mainly phone and power) 4000
  unless its making me money I would spend little to no money on anything else so………21,000-7,000 = 15k profit

  I agree this is very minimal profit and most people do not cut costs like I do so at this level you could VERY easily lose 15k instead of make anything. Again I said you could start making some money with 400 paid but this example assumes only 340 paid. This is right in line with my 250-300 paid break even mark. And again if you are not doing at least 250 paid you need to address what the problem is.

  even at 500 paid you are not getting rich which is exactly what I said in my post but if you do things right, you are making decent money for you troubles. With 500 paid you should be at least getting close to 50k profit. String 3 or 4 offices together doing 500+ paid returns and you easiyl have a 6 figure profit. In fact it actually makes it easier. with multiple offices yuo can keep more preparers that are good because you have more hours to work with. My current setup, I have several offices within 15 miles or so of each other. I mainly just “float” around and go where needed but am always just a phone call away and can usually be at that office in 10 mins or so. Staff one per office and I am on call if it gets busy.

  Also, I love to wave thats my favorite thing to do so I usually just do that if I’m not needed etc. Also, 2 offices in one territory will help you reach your 100 free return goal so you get your bonus. I usually end up with an extra 10k a year which you have not figured in anywhere, but you also have unexpected expenses also so lets just leave that out of the equation.

  I can’t speak on the point of no brand in your area. All I can say is we have a good brand in our area and the territories are definitely worth something as few if any virgin territories exist. Liberty is defintiely growing at a decent pace so I would expect if you could weather the early years it is just a matter of time. When I got in territories were much cheaper than 40k. Personally I think 40k is a bit pricey but not complaining as the value of my territories has only increased.

  Good Luck back to waving :)

• You also need to consider the opportunity cost of opening up a new store. With franchisee fee and start up costs you are looking at $60K to start a new store. So if you want to expand, you either pay cash or take on debt. If you take on debt your profit might be OK, but your cash flow (what matters and what you take home) will be terrible.

  Also look at the Block 10-K. I believe their nationwide ANF is around $189/return. Liberty I would have to imagine is lower. So yes, maybe you think a $230 ANF is low, but on average Liberty is probably under $200, so that is what a new Zee should use when thinking about entering into the biz….

• Correct me if I’m wrong, but the 189 is the average per return INCLUDING the free returns they do. If you factor this in with my return count I’m sure my ANF per return would prob come in just south of $200 as well. Not counting free returns into the equation I usually end up around 235-240 which believe it or not is actually on the low side of my DMA.

  but again I guess this depends on the area and can only speak from my experience. Yes, the 60k startup cost is definitely something to consider especially if you have to borrow money above say 5% interest.

  I have some suggestions about that also, buy cheap cheap decent looking furniture off craigslist etc. buy used computers off ebay etc. (you do NOT need to buy a Zones computer for processing) I do NOT have any of the $700 zones computers. In fact, my computers cost on average $125 and used monitor $50-$75 used desk on average $25-$50 chairs $10-$25 but again most people are not like me. Also, I can open a new office in the same territory for around $5,000-$10,000. with biggest expense being main sign $2500-$3000. and rent deposit. try to get build out allownace or say 4 months free rent and this will help in initial year when you need it the most.

  but again everyone will not make it in this business and I suspect more fail than make it so I am not endorsing Liberty or even retail tax prep industry for that matter, but contrary to what is on this board some people actually do make money with this.

  I may not check this for several more days so if any questions or rebuttals it may be a while. Good luck all!!!

• Why are so many Zees failing year after year?

• that question is easy to answer.

  they are blowing through expenses blowing payroll and other wasted marketing efforts etc.

  If you drink all of the Liberty Koolaid you will be drunk with stupidity. That is what I am trying to get across here.

  CUT COSTS CUT COSTS CUT COSTS

  figure out how you can break even with 250 paid returns and by gosh do at least that many your first year. If you can’t do that either figure out what went wrong or get out of the business as soon as you can. The only reason you would not do at least that many first year is bad location or bad preparers or not doing returns for enough $$$

  I have talked to people losing money at 500 return counts. That is just plain silly.

  OK break over back to waving :) been a slow day so far today averaing about 2-3 returns per office so far but I have noticed it pick up just a tad this week. Get ready for one final push. I still need to gross at least another 35-40k before the end of the season.

• I just looked. Block’s ANF for franchise run stores in fiscal year 2011 was $171.86. I assume Liberty would be lower. Yes that includes free returns as you suggest, but nonetheless it drives home my point that I believe your math is wrong for the majority of folks.

• Just curious! Are any of you Franchisees who signed up through the Vetfran Program?

  Is this a Vetfran Program Opportunity?

• Just remember this, if you change your hours to only 10-7 you are in violation of the AGREMENT and can be terminated by by J T (Terminator) H. So therefore in reality cutting your hours is a risky propositon.

• Trust me when I tell you this profitable or not you do not want to do business with these people .Unless you like to work with dishonest people.(this spans clear to the top management) This is not the fun filled family first franchise they lead you to believe.You must 2nd guess any and all info they give you. Worst experience of my life, been in 6 years once your in almost no way out Liberty controls all aspects of sales etc ,you send prospective buyers for approval they sell something else .The whole pyramid structure is corrupt from top down. Heed this warning do not buy from John Hewitt.

• I agree, change your hours and you’ll get a nasty Notice to Cure letter. I do agree that you need to cut expenses, especially payroll. The Liberty projections are always way too high and the returns usually start coming a few days later than they project…..and that alone will cost you a lot of money.

• Guest 1 – Love the tenacity in getting across you points.

  Franchise Owner – I have to agree with Guest 1, that I think your numbers are a little off. It all depends what part of the country you live. Maybe Liberty does have great brand recognition in your area. It clearly does in LA. But if there is no brand in your area (like mine) then Liberty expects me to build it for them. With regard to your cost structure, I cannot see a situation where you’re paying $15K in salary. I do not overpay, and agree on cutting to one tax preparer, when volume dictates it. However, I’m pretty good at analysis and numbers, and on the face, I question yours. However, maybe you’re much more charming than me and can get a great staff at very low wages…if so, good for you. However, I believe under most scenarios, a $75K or 350 return count at an ANF of $200 is break-even, and one that people should budget. Just to disclose my situation; I exceed those, but I question what am I getting for my 19%.

  My point here is not to excoriate Liberty. I’ve had great dealings with many at Corporate, and find the people I’ve dealt with to be people of great integrity. I disagree with the majority of opinions expressed here that this franchise is some fraud or scam. I’m an adult, and I agreed to enter into a contract with them. If, at the end, I determine it was a bad deal, then it is my mistake.

  My point is that Liberty Tax needs to increase its brand. As a franchisee, in ANY business (whether Subway, McDonald’s, or Liberty Tax), it should be easier/cheaper for me to acquire a new customer, because I am part of that franchise. The potential customer will already have a comfort level with me, because they’re aware of us. [Obvious statement: You cannot use a business if you do not know who they are or what they do.] It is my job to retain my customers and deliver great tax expertise and service. But if I’m to pay the level of royalties that Liberty has me pay, their answer to how to market/advertise/gain new customers should not be suggestions on how I can spend more of my own money.

  I want this brand to be a success. I want to see my investment work. I am writing this to make my opinion clear that we, as franchisees, need to challenge Corporate to earn the royalties they derive from us. Good luck the rest of the season.

• Ok,

  Quick response back to all and then I got to run.

  First addressing the ANF question. I believe it is pretty much understood Liberty is slightly higher than Block and slightly lower than Jackson Hewitt. I am going to run my bare minimum scenario of 250 paid returns is break even. I am assuming 250 paid at $235 ANF (when you run the numbers at 300 total returns (50 free/not paid on) the ANF comes to $195 which is fairly close to Block and probably lower than JH. For all those thinking thats to high, look at performance DMA report almost everyone has equal to or higher than $230 some in the 300’s. Now I do think that is too high but in no way do I think my fees are to high like I said earlier I am one of the lowest in my DMA with ANF, but I guess in some parts of the country it might be but I would hope you could maybe get rent for 1000/mo if cost of living is lower also etc. and again I am just speaking from my experience. Block also has more established customers. Generally late season doesn’t pay as much as early season and also they have some customers for 10 years or more who are probably “locked in” at a much lower price than the market dictates. I just guessing on this though, no actual proof but I bet I’m right.

  Regarding reducing hours to 10-7 don’t broadcast it to Liberty just do it, who cares if they send you notice to cure anyway. Don’t let them bully you no more than they already do it’s your business. It is also against rules to not have P&P and not have processor from Zones but I do that also.

  Specifically addressing payroll at 15k

  You have about 90 days to staff for (Jan 10th-April 15th) Sundays closed of course If only doing 250-300 returns the most I would have in the office is 2 people even on the busiest day becuase you are not doing over 10 returns even on your busiest day. SO 1 person Jan 10th-Jan 25th $10/hr @ 12hrs/day for 13days $1560 Jan 26th – Feb 5th 1 person $10/hr @ 12hrs/day and 1 person $10/hr at 8hrs/day = 9 days @ 20hrs/day $2160 Feb 6th – Feb 15th 1 person $10hr/ @ 12hrs/day for 8 days = $960 Then 1 person @9 hrs/day for 60 days Feb 16th – Apr 15th = 9*10*60 = 5400 SO…………..Total equals $10,080. Now I know you will have some overlapping on shift change etc and will possibly need a bump in hours and staff the last week, but you still have a generous 5k to play with to fill in gaps. Please bear in mind this is worse case scenario and I’m not saying you can run an office pumping out 500+ returns like this but one only doing 250 returns you definitely can. The secret to this business is easy to figure out CUT COSTS CUT COSTS mainly payroll. Do normal people run it like me no thats why they fail.

  I am not defending Liberty they have royally ticked me off this year. I am not a huge franchisee but am a blip on the map I guess. Also, if you have multiple offices per territory you can cut the least performing one to 10-7 and not be in violation anyway. If you do 250 paid returns no excuse for not breaking even if you can’t do that get out ASAP and let someone who can run it. Sorry to be so blunt but I am just telling you my situation that I believe anyone can get to 250 paid returns 1st year and can build on that. Again this should not be your goal but I talk to so many I ask how many returns are you doing they say 400-500 range and they are losing money. Some have said for security reasons they keep 2 preparers in office at all times. That is horrible even the convenience store on stripper corner at 12am only has 1 person working it.

  I’m all about being safe but if you are not in it for a profit get out. I’m sure someone will say I question your math etc and you have every right to but I have opened up and tried to be as truthful as possible. I DO make good money at this. NO I am not a Liberty plant I really don’t like them all that much, but if you want in the retail tax business they are about the only way to go. The good does still outweigh the bad. Get an office doing 500+ returns and then open up another and repeat hopefully in the same territory. Actually the more ofices you get the easier it is for payroll to keep quality people and you can just “float” around all day and fill in the gaps. If you only have 1 office it needs to do 800 returns to make any meaningful money with just 1 office which can be hard to ever reach.

• What about payroll taxes? What about bonuses to your preparers? Do you think you can create a good staff year after year paying $10/hr with no bonus. I would go on and on about your logic but it’s not worth my effort.

• I could go on and on about responding to you but it’s not worth my effort either.

  I usually pay around $8-$9 hr for first year preparers. I tell all my preparers upfront I am in this to make money and the more I make the more you make etc. I tell them my bare minimum passing number for a brand new first year office this would be 275 paid returns. I tell them if we do worse than that I didn’t make a dime and maybe even lost money so don’t expect much of a bonus. After that the more I make the more you make etc. I have never had even a first year office do under 350 returns so bonus has not been a problem for me. Also, I have had no problems getting at least 1 returning preparer per office back every year. It is a cut throat business I will admit. Staffing is hard but losing money is harder.

  I am finished defending myself. Like I said earlier most people do NOT run it as lean as me and even if you do 600 returns you can find a way to lost money if you try. The scenario above is doomsday scenario. Once you get to 400 paid returns you can start to “lighten up” a little on cutting costs to the penny.

  Let me guess you are doing 500 returns and losing money? Perhaps it’s your logic that is backwards? But I guess I am the village idiot actually working hard and getting ahead. I have made up my mind I will NOT have any office that loses money and so far I have not had any problem achieving this goal.

  Liberty has ALOT of things wrong with it, but if they have a brand presence in your area, they are the best choice for retail tax prep period. I did a return yesterday from a coulpe that used Liberty in Ohio last year and have relocated. I may not know much but I’m thiking they used me because I’m a Liberty and not Joe’s Tax Shop. Quit whining and figure out to make it work for your situation OR get out ASAP if you have to give the thing back to Liberty or if you own territory free and clear sell it for 20k and go back to the rat race.

• You are dead wrong on me bud. I have a full-time job where I make well into the six figures. In addition, I own a couple of stores that each do well over $100K in revenues. My guess is that my “rat race” is better than yours.

• Before taxes I clear 200k/yr As you may have guessed by the way I run and furnish my office I live a very modest lifestyle I drive an old beat up car and don’t have the newest cell phone or clothes. I could live comfortably on half of what I make/yr.

  I could care less who’s stick is bigger and am happy for you if you are doing well. If you are doing that good, why are you complaining? This is the reason I don’t respond to these sites because it always turns into a big stick contest. I will not respond anymore to this issue so say whatever you want. Say I am an idiot and no way you can run an office for les than 50k payroll/yr

  I am only trying to help someone who is struggling. Cut costs and ask your customers for referrals until their ears bleed is my advice to anyone who is struggling. Also, pay the extra 500-1000k/mo for Grade A location it is worth it.

  Good Day!

• The origin of this post was what are we getting from Liberty for our 19% royalties and is it worth paying for the Liberty brand or would it be better off to hang your own hat and go the Mom & Pop route. With a developed brand, how am I/you benefitting from the 19%…..

• Fine, name calling aside I agree Liberty did not “earn” the 19% this year.

  The little birdie told me they did not even begin testing software syncing up to esig pads and bank product forms until mid December. How can a company this size do this? We were mere days away from a huge disaster. The software/printers/esig pads have been horrible this year and literally a day or so before it got too busy to handle they got it somewhat fixed to where it only took 5 mins to print out (which is silly by the way) We were doing returns during peak in 10 mins and taking 10 mins to print and esign sign to finish up. It was taking longer to finsish up paperwork/printing than doing return.

  I am very unhappy with Liberty and let them and my DMA have it but what do you do about it. I have already made plans to have 3rd party software installed on all my computers next year and if they give me grief or can’t provide me with an acceptable software to use, I’ll cut them out of the picture.

  But still with all that said Liberty has been good to me and hopefully they have learned something this year about how to operate better next year. I would like to see more pressure put on them to get somewhat of a national advertising campaign going and to have better setup next year etc.

• PS it is a scam the way they do not count fully discounted as free returns anymore for your bonus.

  If these ain’t “free” returns than what are they? Did you know Block actually pays franchisees a small amount for every fully discounted return they eat? How nice woudl that be?

  Liberty is greedy though and doesn’t want to pay you out any bonus. They have convinced me not to expand anymore right now.

• Love all the discussions, so not following the system is the way to go? That’s a pretty crappy system then:) As far as the brand goes, I for one can’t wait until it is GONE! Have you ever seen John in a Liberty costume, even he is to embarrased to be seen with it, but let the zees look like morons?

• Wow. This is an eye-opener.
  I had almost made my mind to buy this franchise, until now.

  To everyone,
  I have a few questions:

  1. LTS manifests that their “system” works. What were the 3 major faults in their system according to you?

  2. Did you follow the “system”? Their marketing strategies, the weekly goals assigned to a franchisee, the business to business communication, etc?

  3. Why didn’t their guidance work for you?

  And last, but not the least,
  4. Before leaving the franchise, did you try to meet the people above your district manager to discuss with them what was going wrong or not working?

  I appreciate your responses.

• sri :Here is response 1) avg 1st year store numbers around 300 returns ,hard to attract more than this even doing all they suggest, support is less than adequate 1st year if no technology or tax experience, Deception in expectations 1st year you learn Liberty will say or do whatever to further the brand at your exspense. 2) Yes I followed the systym .But keep in mind according to John noone follows the systym. It is virtually impossible to do all offered strategies due to the cost and staffing required. 3) Their guidance is very weak and when all is not going well just look in mirror you should be doing all tasks because after all you can do it better. 4 ) I am still a franchise owner 6 years I have emailed John myself regarding certain unbelievable situations and have gotten no response . This machine is all geared to sell franchises after you buy watch your back any plans of expansion etc must go thru AD or corporate all have vested interest in selling ,if your plans get in the way of their plans they will steal your plan and employees and sell to someone else.

• Sri;

  Please read through all of the posts on this board. You will find that everyone did what they could to establish and build their business. When you buy this franchise, what you will learn in the first few weeks of business is that you were scammed by all the promises of help and support. Don’t believe a word. My suggestion, go back and read my most recent postings. I am making more with less headaches than I ever forecasted with Liberty. Find a good visible location where you can have good signage and your company vehicle that has a good logo on it, go on the internet and purchase a good brand of tax software, read the book Guerilla Marketing, and you will have everything Liberty would have given you without the cost. At the end of the season, if you don’t like it, close up and get out at minimal cost. If rent in your area is high, find another business like payday loans or bill pay to go in with you. You can always go with Liberty later if you think it necessary, but can suggest most people who buy franchises find that they know enough after a few months about the business, the franchise is not necessary. There are a few franchises that do a good job of promoting their brand, and so walk in trade is very large. Liberty does no advertising, so your walk in trade is almost non-existent. You will be thankful in the end that you didn’t spend thousands for nothing.

• Hello, franchisees-

  A lot of you seem, understandably, sickened by this buisness model.
  I am not a franchisee, but rather one of your underlings.

  Yes- I am that faithful employee, the one that comes in early, stays late then cleans the office for you every night.
  I’m the one processing hundreds of returns for you between January and April.
  I’m also the one getting shielded at because we couldn’t offer an accurate quote over the phone.

  I’m not getting on here to write a rant, or post about how much I hate all of you. Because I don’t.
  I love(d) my job…at first.

  This being my first year doing taxes, and a college student I remember the day I walked in to apply for any position available in my local liberty tax.
  It was pretty interesting sitting through all the classes being lectured on everything from the importance of providing free snacks, to the recriprocal force behind a bag of chips.

  I’m really writing this just to give you an insight about how embarrassing it is to tell your clients that their fees will be 2-300 dollars, just to file a simple tax return.
  A lot of you will never truly grasp the audacity of asking such large sums to preform such simple work. I’m not saying that you do not posses the capacity to understand- but lets face it, who owns the franchise?

  Truth be told, almost all of your clients do not need any person with a ptin to file their taxes. Simple 1040-EZ’s , which would take them a maximum of an hour to file by themselves in exchange for a $50 bill and a free soda to me is taking advantage of people.

  Yes, I said taking advantage of people.

  Because this is what this franchisee does. It exploits those whom are frightened of doing their own taxes. It is no a service worth offering.
  Sure, we have posters hung on the walls, singing of the professional service offered with men and women waving at the general public, how professional can we be?

  I’d like to say liberty tax is the underdog in this fight, championing the idea of close and locally sourced labor put to use, the somewhat educated earning certifications two weeks prior to professionally preparing taxes and advertising localy.
  But the owners here know that’s not the truth.
  You wish it could be but in all reality, all we do is charge exorbitant fees for a simple and what should be; a reasonably priced service.

  I do apologize for any grammatical errors, as I wrote this from a tablet computer- not known for their word processing.

• I currently have a franchise with LT and worked for other franchisees and corporate for 13 years. I bought a brand new territory and was told by all demographics, surveys, and ploys it would be successful. This year we hit the grand mark of 100 returns (87 paid). Just received notice to pay royalties…HAHAHA!!!!

  I will not stand by them when we constantly emailed corporate and the AD for help. All we were constantly asked is are you following the plan?! Yes I was open 7am-9pm, I did the CIF, I went B2B in costume, I called clients asking for referrals,Had a waver out all hours we were open, and I got no support. The AD came to the office once and said try harder. When he was in the office someone walked into the store to ask questions and after they were answered we asked if she would like to make an appointment to file. she sais “No I want to see if you will be here next year before I trust you with my taxes” And the AD left, now he is also trying to get out!

  I am getting out before this affects me anymore, I have already told them I am filing bankruptcy and so far they have stepped back but after 13 years of loyalty I am at a lost for words.

  DO NOT BUY A FRANCHISE!!!!

• I finished my second year with 182 returns and 8 free ones. I kept dumping my paycheck from my real job into this money pit again, but it doesnt work. Now I owe them minimum royalty fees, all i can say is f&*k them. I am going to try it one more season next year but i am getting my own software and they can kiss my arss. i am going to have wavers so they think its a liberty store and they wont know the difference. hahahahahaah screw corporate

• Good luck with that! I was in the same boat my first year and told my AD that I refused to put another dollar of my regular pay check in to this money pit. So the last few years I cut out B2B, Mailers, waver hours and prep hours. I was able to make it, but just barely! Wait until next year when the min royalty is $11K (not including advertising)!!!!

• 3 POST IN A ROW = STRIKE 3 YOUR OUT.

  HOPEFULLY POTENTIAL FRANCHISEES WILL COME TO THIS SITE BEFORE THEY BUY.

  BUYER BEWARE!!!!

• Tell EVERYONE about this site, especially current franchisees! Keep sharing the horror stories!

• Liberty Tax’s Preliminary Tax Season Results Show a Competitive Industry Edge
  Body The following press release was released today:

  VIRGINIA BEACH, Va., Apr 20, 2012 (BUSINESS WIRE) — Liberty Tax Service continued its growth in key areas during the just-completed tax season, and successfully addressed major industry changes in its operations. Throughout this decade, Liberty Tax Service has demonstrated significant gains in an industry formerly dominated by tax giant H&R Block and, during the 21st century, Liberty has grown by more tax returns than both Jackson Hewitt (JHTXQ.PK) and H&R Block combined.
  Liberty Tax Service prepared 7.9% more returns through April 18, 2012, compared to the same time period in 2011. Systemwide revenues increased 4.7% over the same periods. In 2012, significant IRS delays in return processing posed customer service challenges for the tax preparation industry. The reduced importance of refund anticipation loans and ability to offer financial products also were issues for the major tax players. However, the Company continued to offer competitive choices, allowing its growing customer base to choose between professional services in brick-and-mortar locations, and do-it-yourself online tax preparation with its eSmart Tax product at http://www.esmarttax.com.

  In addition, this year the IRS officially started its tax preparer oversight programs, and a further requirement that preparers pass a competency test is on the horizon. As noted by Liberty Tax Service Founder and CEO, John Hewitt, Liberty has been well-prepared for these changes:

  “Each tax season is unique for its challenges. Our company’s success in triumphing over adversity in some tough years demonstrates our ability to continue to climb to the pinnacle of this industry. With an internal tax preparer certification process in place for 5 years, we are embracing the IRS requirements and applaud the positive effect these changes are having. Our ability to strategize, prepare and respond quickly is a true to the ability of our entire Liberty team,” Hewitt reflected.

  Aggressive marketing coupled with a strong commitment to customer service have been key factors in building a successful brand in fourteen years. Since 1997, the Company has grown from 119 offices located in Canada, to over 4,200 offices throughout the U.S. and Canada today.

  About Liberty Tax Service

  Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 10,000,000 individual income tax returns. With 43 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service. Liberty Tax Service is the only tax franchise on the recently released Forbes “Top 20 Franchises for the Buck.”