LIBERTY TAX SERVICE Franchise Complaints

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

• This was posted on the everyjoe.com website 3 days ago:

  I just learned of Liberty tax services #1 Record holding, top gun most outrageous marketing queen who was super successful, taught thousands of us to do what it took to be successful is getting out. She is spreading the truth about John Hewitt and Liberty tax. DO NOT BUY, DO NOT EXPAND.

  I am a current zee who was about to open up 2 more offices and use Liberty;s financing. I now am goin to do everything I can to get away from this company after listening to Annie Fullers story of how even SHE, this most giving and positive person has been treated by John Hewitt. They lied to her, stole from her, and are now forcing her to either take Tiny Peanuts for her valueable stores (liberty says you’re always building equity, but apparently only if john hewitt agrees), or go into more debt.

  If you’ have ever read John Grishams Book “The Firm or seen the movie.. Annie Fuller is the John McDermont of Liberty tax. as the one they paraded around, used and used for her talents, which they naver even THANKED her for, sent thousands of people to shadow her every day for two years, cost her money out of her own pocket, was never paid or reimbursed.. they are now treating her like garbage and I for one find it repulsive. John Hewitt. Pay attention. I am one of MANY people who are grouping together to stand up for her. She will not stand up for herself, so we will.

  The stories on this and many other websites are true. John hewitt you need to do the right thing, you need to listen to myself and everyone else who will soon be writing all over the web.
  We are contacting the national media to give them the truth.
  Others who fail in this company are told they didn’t follow the system, they didn’t market etc etc.
  Well John, Liberty, you all can NEVER say this about Annie Fuller. She is what we ALL strived to be like.

  How DARE you treat your best people like this.. for us small time zees who aren’t Annie Fuller we have NO, ZERO hope of ever making it.. I KNOW what you all offered her. Pathetic. John you are a theif, a user, a womanizer. You took a talented girl, used her up burnt her out, and she still gave more. Now you throw her away. This impacts us all. she was and IS an inspiration to all of us and now she’s gone thanks to you’re unethical and immoral ways. Shame on you. wake up Liberty zee’s The real truth is scary. We have all been had.

  I’m getting out too Annie. I hope you read this and know you’re not alone, there are many of us here to support you and stand up for you!
  Thanks for aLL your help over the last few years, you are truly one of a kind.

• SteveG: it is obvious from your responses you are a plant from LTS. I mean to say that Annie Fuller is not/was not successful is an understatement.

  For anyone in the LTS circuit, who knows. Annie Fuller was the darling of LTS. She was paraded around as one of the successful franchisees and AD. What I know is that Annie’s stores where high RAL (just like my stores) and that as such if she took any financing from Corporate that would mean she had very little cash to go around because alot of people chose this season to have there preparation fees deducted from there refund. Especially now in this economy and I’m sure LTS withheld alot of her money and questioned them on it. She grossed over $700k in revenue not bad huh? But when LTS withholds a chunk of it and you still have to pay your bills and staff and other things, and then find out LTS won’t finance a whole lot for you anymore, you start running into cash flow problems. No one can say she didn’t follow the system, NO ONE!!! She not only followed it she perfected it!

  But as I said before and many of us here in this forum the minute you start questioning John Hewitt and his minions and their business practices, that’s it you are out… And look how quickly and quite suddently LTS turn on you, then when the true story starts to come out they start sending people like SteveG to say that nope it was the franchisee not John or his minions.

  I feel for Annie Fuller, I truly do; the fall is always harder the higher you’ve climbed and she was up there. She was on every single conference call this past tax season, speaking about how to market, when, where etc (EVERY SINGLE CONFERENCE CALL) that she is now being labled “not as successful” and “she had potential” is truly a shame. Because for 4 yrs she was labled by John and his minions as successful and not just full of potential she was the potential this is the person they (John and his minions) wanted each of us Zees to emulate. To see her start the same journey as those of former Zee’s is really truly sad. I really feel her and her family and for those remaining Zee’s that will undoubtly be shocked and suffer the loss of Annie Fuller in the LTS system.

  John and his minions are selfish and are only interested in one thing and one thing only. THEMSELVES!

• Everybody says she’s such a super marketer. What accounts for all the consumer complaints about Annie Fuller on the Internet?

  http://www.ripoffreport.com/income-tax-service/liberty-tax-annie-fu/liberty-tax-annie-fuller-ow-2d95f.htm
  http://www.ripoffreport.com/income-tax-service/liberty-tax-annie-fu/liberty-tax-annie-fuller-is-4668m.htm

  Are these her Liberty Tax locations with a BBB rating of “F”? And the same Liberty Tax location is listed on the TN state attorney generals “Buyer Beware” list?
  http://tn.gov/consumer/documents/BuyerBewareList_004.pdf
  http://www.bbb.org/chattanooga/business-reviews/tax-return-preparation/liberty-tax-service-10009-in-chattanooga-tn-40050203

  What am I missing?

• I have been out of LTS for a few years now, but the negative information posted here still rings true. All of the people who post that the failures in LTS didn’t follow the system, or weren’t good business people, or didn’t put effort in are dead wrong and full of garbage.

  I bought in and followed the system (despite my AD not doing a thing), had my waivers, did marketing constantly and even got free radio ads for my area done…lost over $250k in running the business and my initial investment over 3 years. I am currently a successful business person that runs a small company and is not afraid of hard work, so don’t give me the stuff about you can succeed if you try and follow the system.

  Sure there are a few success stories, even a blind mouse finds cheese every now and then. John made a lot of personal promises as did his AD, but when I needed help to try to make it work, his manhood seemed to escape him and I never heard from him again. His is not a man of his word and I have no respect for him.

  In the real business world, deals are made and discussions are had to benefit the whole company. LTS will throw you away as quick as possible so they can re-sell your territory to the next wide eyed person who buys the snake oil. They like to tell you in the sales pitch, work 4 months out of the year and make $100k. If you want $200k, then get two territories and so on. I knew coming in that it was a gross number and not a net number, but alot of my fellow trainees didn’t. I came in expecting to net about $25-40k per store (after two or three years, not up front) and build up a few over a 5 to 10 year period. Problem is it cost so much money to run the store, after 3 years my losses were to big to recover from, especially owning multiple territories up front (which was a big mistake I made thinking that would work).

  The only people making money off LTS are the corporate executives. Look at the past 3 years jth financials and you will see net income of over $44 million along with stock options being granted to executives. Get the picture that execs are making money off the zees backs (which is why you are responsible for marketing your own territory, no out of pocket for the corporation). You can be more successful by getting a job, working hard, and climbing the ladder the old fashioned way. If you invest your money with LTS, you will be regretting it for years to come.

• Come on “Curious” even Hewlett Packard is listed on that Buyer Beware List along with other very large and well known companies.

  In the retail tax prep business (in any business in fact) your gonna have customers complain, most of them are going to want there money back or say you didn’t disclose proper information thus wanting there money back. And most of them will want there money back after they find out that their friend got there taxes done cheaper by someone else. And personally I don’t believe in getting your money back or a free anything for all complaints. Some yes but not all especially in the tax business.

  Finally, this forum isn’t about whether or not Annie Fuller was a good franchisee, or for that matter whether any one of us was/is a good franchisee. It’s about whether or not Liberty Tax Franchisees (former and current) are happy.

  And as a former franchisee I can tell you I was never happy with Liberty Tax Service they lied from the start about everything, and then tried to say it was me that I misunderstood, well I know for a fact I didn’t misunderstand because other franchisees (current and former) have told me that they were told the same things.

  All I know is that Karma is GREAT.. She will one day appear to collect her debts. And John Hewitt and his minions have there fair share coming to them, because she (Karma) knows all they have done.

• Bankrupted:

  Did you read this complaint on Rip-off Report? It’s one of three specifically about Annie Fuller
  http://www.ripoffreport.com/liars/liberty-tax-annie-fu/liberty-tax-annie-fuller-o-26edf.htm

  The customer alleges that Annie Fuller’s Liberty Tax filed her tax return without her knowledge or signature. After she complained, a company investigator named Amy called her. The customer found out later that “Amy” was allegedly Annie Fuller posing as an investigator from corporate.

  Two others allege overcharges and deception. Check out this one because it appears she humorously (unintentionally) proves their point by posting comments as both herself and happy customers attesting to her honest character – only it appears she didn’t realize her screenname (Getyurgun) would appear on even the phony comments.
  http://www.ripoffreport.com/income-tax-service/liberty-tax-annie-fu/liberty-tax-annie-fuller-ow-2d95f.htm

  Comments under that complaint also include one from an alleged ex-employee describing how they hid deceptive acts from corporate at her direction.

  Could it be that Liberty Tax was not forcing out an innocent blue-eyed darling but was cleaning house of someone using deceptive and fraudulent practices? Just curious…

• Looks what’s happening in Pittsburgh, terrible, absolutely.

• Like most of the people on here I was envolved with Liberty Tax Service for 4 years and have had a similar experience. It was my decision to purchase the franchise and I failed to take into consideration that there was no brand recognition ( in my region), no corporate commitment to any regional or national advertising campaign, and their business model was modeled after Jackson Hewitt and better suited for the urban enviroment not for the location I was planning to open in. While my business did fail, I showed continued growth in both number of returns and net fees each year but just not enough to overcome the expenses and the built-in royalty fees associated with being a franchisee. My point on posting here is to let other potential franchisees know the truth.

  As stated, the corporate office does not believe in a national or regional advertising campain. So I find it somewhat hypecritical for the company to run ads on CNBC hawking the purchase of a tax franchises, when they where unwilling to do any advertising for their franchisees who pay them a royalty and advertising fee. The company is dependent on the sale of franchises to provide needed cash flow. evident by their financial statements.

  I don’t know if Rob, Jdogg and Dawn are company plants, but the timing of their comments and how their comments read like infomercials leaves me suspicious. Remember that during the off season is when JTX Inc. markets and sells its franchisees. Also Rob never answered the question whether he was an AD and in one of his first post states: “This site and these comments are just downright sad. For anyone looking to purchase a franchise please do not listen to these people because these same people will fail at most things they try in life.”

  For anyone looking at buying a tax franchise pay attention to moneypit’s comments and analysis. He is giving you an accurate read of what is needed in terms of tax return volumn, pricing and the cost of running a seasonal tax office. If you already have the tax preparation knowledge you might ask yourself why you would need a tax franchise, if you don’t have the tax knowledge or don’t thing you have the ability to market your self then you should ask yourself which tax franchise gives me the most for my money. Who has the most brand recognition, which one is right for the demographic I’m trying to market too, Do they have any kind of regional or national marketing campaign. .

• What’s happening in Pittsburgh?

• Anyone who listened to (wish I had taped) any of the Liberty Tax conference calls with Anna Fuller speaking about marketing tactics knows she is a loss cannon. But this kind of agressive marketing behavior is encouraged by Liberty. On one such call Danny Hewitt talked about sneaking into a hospital to hand out coupons in the Liberty custom.

  When you have this type of corporate culture encouraging franchisees to challenge and even disregard rules, would it be a suprise to anyone if there is some sort of IRS investigation going on regarding her tax practice. Liberty is dumping her so they can protect themselves. Currently the laws are written to protect the franchisor from liability resulting from franchisee behavior.

• bill wrote that “Anyone who listened to (wish I had taped) any of the Liberty Tax conference calls with Anna Fuller speaking about marketing tactics knows she is a (loose) cannon. But this kind of agressive marketing behavior is encouraged by Liberty.”

  Here’s Annie Fuller explaining how she sneaks brochures into schools by acting as if she was expected:

  “My method I used successfully was to walk in looking worn out and say “I’m sorry I’m so late with these, I didn’t realize how many kids were in our neighborhood”. I then drop a stack of the well designed booklets on the counter at school, daycare, church, the Ymca, etc. They will have a bewildered look on their face and will say something about they dont know what you’re talking about. ACT SURPRISED! “Oh gosh, its a city wide contest for all children, and we promised we wouldn’t leave anyone out, I’m so sorry again for getting these to you so late I know we were suppose to have had them to your kids yesterday, last week something…” http://www.shoppfm.com/MDFA

  While this might not seem like a huge deception, where do you draw the line? When you do business as if the truth is just a tool to be bent and shaped to get a sale, doesn’t the line gets blurrier and blurrier til its impossible to find?

  Do you think Liberty Tax corporate is to blame for encouraging franchisees to do whatever it takes to get the sale? Or did Annie Fuller just take deception to the extreme beyond what LT condones (or says you can get away with)?

• La Libertad: Your questions are where the problem lays in… Liberty DOES ALLOW this behavior, otherwise she wouldn’t have been on practically all their conference calls. Now that she’s had a falling out with them over financing (money), now the Corporate plants come out that she was a deceptive marketer and this shakedown isn’t about money (but you know its always about money, ALWAYS)…

  I’m of the Common Sense philosphy, so common sense tells me this: Liberty lost there deceptive law suit in CA on or about Dec 2009, if Liberty was so concerned over deceptive marketing practices why put her in practically every conference call from January 2010 to April 2010 and then have her be a guest speaker (or so I was told) at this years’ convention? Makes you wanna go hmmm doesn’t it?

  Also, why would Annie not fight to keep her territories if all we are talking about is marketing practices, nah, this shakedown smells of money to me all the way. I don’t care what the plants say…

  For anyone wanting to buy into the Liberty Tax franchise I say WALK AWAY. Don’t listen to what they tell you, if you do I we will see you in a couple of years in this forum saying what some of us here say “They told me not to do it, I still did it, and look at me. Look at what John and his minions have done to me.”

• I too have the same issue. Pretty much bakrupt after trying to make this franchise work. I know 3 other franchisee’s in the same cituation. For years the only ones that have made money is LTS and the people I hired to work. My losses are big and I have lost all my investments.

• Annie Fuller got everything she deserves. She is fake, pretend, a scam artist, disloyal, dishonest and truly a crook. If you feel sorry for her, you are sorely mistaken.

• … and then they started to eat their own. Fact is that LIberty in its desire to sell more franchises built Annie into a great success story. She has become the face of Liberty to many franchisees- so when you speak of her you speak of yourself.

  Bottom line. This is a franchise that does not care about it’s existing franchisees. John Hewitt said towards the end of last year that he wanted to work with our existing franchisees but he has not changed anything. They still lie or mislead, still put their franchisees in a position where they have to borrow more, still won’t let franchisees out from unopened stores. He is a fraud until he convinces me otherwise and he has not done ONE THING to give us any indication otherwise. 90% of the franchisee base would likely leave if given the opportunity to recoup 50% of their investment. I know I would.

• I’m a 1st year Liberty franchisee….just finished my 1st tax season. I was laid off by my prior company after 20+ years May 2009. After realizing I couldn’t find the same type of employment in the IT world, I started investigating small business & franchise ownership. I researched 8 franchises and with the help of a franchise consultant chose Liberty Tax. Using much of my severance $$ from my prior company, I signed last September for 1 territory. I didn’t require any financial assistance from Liberty.

  Obviously, being new to the Liberty culture I can only offer a 10 month evaluation. But so far so good….. I’ve been pleased with my experience. My 1st year I will turn a very small profit with $80k net revenue and am very encouraged about next season.

  Some observations:
  1) Research, research, research your territory / store location. The #1 success factor in my opinion. Understand your demographics backwards & forwards. I spent 3 months & drove over 2000 miles (seriously) before deciding on the right territory & location. I know a couple of new franchishees who did not fair quite as well their 1st season & believe it may be due to their location not their abilities.
  2) Attach yourself to the top franchisees and become a sponge. Every top franchisee I spoke to was ALWAYS willing to share their successes and help me succeed. I called a couple more than I should’ve especially during tax season.
  3) Follow the system. It sounds cliche but utilize your AD, the corporate manuals, conference calls, processes, intranet, etc… I didn’t know any better, so I tried my best to do exactly what I was instructed to do.
  4) Hire strong people. I was a manager in my previous life and building a strong team of preparers, marketers & wavers was crucial.
  5) Embrace the costume. There is strong brand with the statue of liberty costume at least in my territory. I often wear the costume and sets the tone in the office….not only with my employees, but with my customers as well.

  Overall I’m hoping to expand after next season. We’ll see. I may be naive and impending doom is ahead. All I can say is that I don’t see the stormy skies yet and will head down this path as long as possible.

• To Rob et al;

  I currently own a franchise territory in a major city in the south. I went into this with a wealth of experience in marketing and sales, including real estate. I too got laid off, and decided to be my own boss.

  Here is what I experienced. Hopefully it will give better insight into why some fail and others don’t. In the city where I am located, you can get to any of 5 other Liberty stores within a 10 minute drive. The rents are between $2500 and $3000 per month for store front locations. The average # of returns for the Liberty offices in this area is around 300 with the average fee at $210. Figure it out for yourself. $60K in net revenue, less $15K for wages, less $15K for marketing, less $30-36K for a location. Liberty’s answer is to resell the territories to someone else. The fact is, as Liberty has added new locations, the number of returns has not increased, essentially dividing the pie into more pieces. There were stores doing 900-1000 several years ago, and those same stores have dropped to the average 300 level.

  If that sounds like viable business to you, I have a territory that you are welcome to purchase. I suggest that there are significant management issues in this organization, the first being that they have allowed their Area Developers to get too big and are afraid to challenge them. Second, the customer base that their advertising appeals to which is the EIC customer, is also being hit from all sides by a ton of competitors making it difficult to get the message out. The third is that they consider their franchisees a curse rather than embrace them and help them grow. I think with proper management, this organization could grow and succeed, but it will not happen with the current regime.

• Just finished my 4th tax season with Liberty, 5 stores all profitable. I am starting to see that some new Zees took financing to buy multiple territories right from the get go then had to make huge interest and principal payments over the years. If that’s true then how can you blame LTS for that terrible financial decision.

  I bought one territory and built up from there, only using financing for short term gaps in cash flow.

  I hope that if you are paying 2500-3000/mo for rent the store front location you are in is A+ in terms of parking, location, and visibility because if not you made a poor decision in renting it.

  The other funny thing I read was how people are mad Liberty corporate doesn’t kick in more advertising money, find me a franchise out there that the franchisor puts money in the advertising fund.

  All the advertising you see from the big franchises are contributed from the franchisees, I can tell you for a fact Subway doesn’t contribute a nickle to help build awareness or drive customers to their doors, its the franchisee’s money.

  And lastly, Liberty Tax is what you make of it. I have on multiple occassions bought out an existing franchisee, stayed in the same location or moved within the territory and had results of +101% and +42% respectively. Obviously there were some flaws in the previous Zee’s methods.

• To NJ Zee: you must be one of the lucky ones in NJ. Much luckier then the two franchisees who’s territories you took over. .

  Your comments:
  ;”I am starting to see that some new Zees took financing to buy multiple territories right from the get go then had to make huge interest and principal payments over the years. If that’s true then how can you blame LTS for that terrible financial decision.” and “I hope that if you are paying 2500-3000/mo for rent the store front location you are in is A+ in terms of parking, location, and visibility because if not you made a poor decision in renting it.”

  The idea that LTS would sell someone more territories then they can financial afford, speaks to the fact that Liberty is in the business of selling franchises and doesn’t have the franchisees best interest at heart . The comment about store location, isn’t your Area Developer suppose to guide you with your site selection? Unfortunately the support from the AD is non-existent with the exception of trying to get a location near an H&R Block or Jackson Hewitt Franchise and to tell you how your not following the system.

• All these franchise owners that say LIberty has been good to them or it’s a great franchise are all liberty employess people!! liberty is a bunch of bull! they lie to you at the convention to make you think this is great! What about gorilla marketing? bunch of bs! Rob telling everyone it’s great! yeah right! they say you’ll make a fortune.. after all the expenses and obligations your left with squat! don’t do it! I wouldn’t recommend it to anyone!!! the worse franchising company in history! charging you marketing fees? FOR WHAT? I HAVENT SEEN THEM IN ONE NEWS PAPER OR TV AD OR EVEN RADIO! HR BLOCK AND JACKSON HEWITT DOES IT! #3 BEHIND MCDONALDS BECAUSE OF SWINDELING PEOPLE INTO SIGNING UP AND GIVING THEM WISHCOME! (NOT REAL INCOME) THEY SHOULD BE CALLED SCAMSATIONAL TAX SERVICE!

• To NJ Zee:

  It is good to see someone who has done well. Fact is, LT has a huge franchisee fallout. Right now they are offering an $18,000 referral bonus. That tells me they are struggling, and for good reason. They are an immoral organization. John Hewitt wants to be #1, and is willing take any or all of his franchisees to the cleaners to get there. Read your franchise agreement. LT can suck you dry, and owe you nothing. You are required to be open their defined hours even if no one comes in, you cannot close a location even if it is losing money, you are required to pay their minimum royalties, even if you have to move a location and start over, you are required to pay IRS fines and penalties even if they were created by a former franchisee owner. If you finance through them and fail, they will come and take everything you have even if you declare bankruptcy. This is a one sided agreement that has no upside. As others have said, this is not a good organization to be connected with.

• All franchise agreements are one-sided.

  The referral fee is $3000 for referring someone who becomes a franchisee. Where do you get your facts from?

• 
  

• The problem is that every year more people do their taxes with TurboxTax and other online software so the retail offices are competing for a shrinking pool of customers

• Sure some have went to Intuit or free file programs but there is no mass rush where the paid return market is shrinking where it is going to put all tax preparers out of business. The industry is changing but with change also come opportunities.

  Depending on the tax code and current IRS conditions along with economic conditions will affect these trends and they will go both way. If you are operating a strong tax office and providing professional services these ups and downs in the industry will not affect you or if it does it will not be to the point of putting you out of business. But if you have depended on nothing but gimmicks and lets take JTX as an example put all your eggs in one basket and depend on “Money Now” products and not professional tax preparation than you set yourself up to be impacted much more.

  Also as regulation comes into the tax preparation business their will also be consolidation and a shrinking number of preparers so anyone who is able to offer their services and provide the right value proposition to their clients will be able to not only make it but will be able to excel.

• NJ Zee;

  I have an email in my inbox that shows that you will receive $18,000 if you get someone to purchase new not existing territory.

  Rob:

  The fact remains, you are being robbed by an organization that is doing nothing for you. The software is difficult to use and prone to preparers making mistakes, technical support is tasked with getting rid of questions rather than answering them, the one size fits all marketing program is good for very small segment of the population, and there is no support in your local area for anything. And for that you pay 19% of your gross, not to mention if you finance with Liberty, they charge you 12% interest. And you call that a quality organization that is looking out for their franchisees, you must be kidding.

• Why do people continue to see the need to blame Liberty? Doesn’t each person make a decision prior to paying Liberty a dollar whether or not they want to open their franchise? Everyone (prior to signing the agreement) is aware of the 19% royalties, so why do people choose to complain about them after opening their store? The same is true for the 12% financing fees. I am going into my third season next year and am going to operate at a 30% profit margin. To me, that is a pretty succesful operation and I am certainly not losing money. I believe there are over 3,000 Liberty stores in the United States. If people weren’t making money, there wouldn’t be that many stores!

• You know Mike trying to point out the obvious here and trying to speak and be a voice of reason is not what some of the people who are complaining wants to hear. They want justification that it was not their fault they failed and they do not want any kind of evidence anyone has succeeded because it ruins their conspiracy theories. Yes their are some who failed and they are truly seeking answers but others just want to drag as many down as they can.

  NJ Zee has laid down the facts that I am a victim and I am getting ripped off…lol…yet very few complaining here have taken the time that those of us who have made it took to actually learn this business.

  This business is getting ready to enter one of the most exiting times since the Block brothers started doing taxes!!! Yes I pay 14 percent royalties and yes I pay 5 percent Advertising Fee and I am not complaining even a little and paying them does not stop anyone from attaining 30 percent to 40 percent profit margins. It is a business and as with any and especially with ones that grow quickly some will fail and some will excel. But anyone here can attack me if they want and honestly I am used to it. I have never received a paycheck as an employee or contractor from Liberty Corp. and I have been there for almost any Z who has came to me for help and a great many I have supported throughout the year are well on their way to being a huge success!!! I helped them because that is the culture I believe in and a culture that a ton of other Zs believe in.

  Mikes post is dead on and he is as honest of a guy as your going to find!!!

• Let’s be REALLY honest here.
  1. When you sign up as a franchisee you virtually don’t hear from Liberty!
  The sales people have done their job and now you have to wait for Liberty. Calls to them or your AD’s will cast you as a troublemaker. Let’s face it. You signed the paperwork and now you have little recourse. If it wasn’t for the help of several other nearby franchisees I would have been toast!
  2. Rob and Mike are lovers.

• Rob:

  Are you telling Mike you don’t want suggestions, just a BITCH session. That’s what I’m hearing and that’s why I put the site to my SPAM. (I can monitor the situation, but I’m checking it less & less often). A Victim…wow., are you like a
  “mooney” that blindly followed some wayward evangelist? Really? At what point did you become unable to chart your own destiny? That would be helpful to me. I’m a new zee. I haven’t officially chosen my territory, just got back from EOT.

  So Rob, please, in this unhappyfranchisee.com website, explain to me what you believe was wrong with the system and how it can be improved. Please admit your shortcomings and teach me, if you want to make this a reputable site. I truly am only gaining info. I am not judging you for your failures, simply seeking information. I wish you success in life and in the future too.

  Thanks,
  LLM

• Frustrated and Disgusted:

  Wow, that’s a horrible story. And you were in the biz for some time. Share with me your suggestions about B2B and your experiences. Seems you have alot of experience. I would love to hear your ideas of the best of Liberty, along with what appears to be the worst.

  Thanks,
  LLM

• LLM, I am completely lost at what your question is and what you think Mike or I was speaking of? Both Mike and I are very succesfull Zs and your attack on us on what you think your reading is quite funny yet still scary. I was rebutting NJ Zee statement that I was being ripped off and was not agreeing at all. Hint….Not everyone posting here is unhappy some are attempting to get the truth out….Light Bulb Moment? Where did I give you the idea I failed? Someone forgot to tell me? If I had knew I failed I wouldn’t be expanding…..Trust me Ive made a ton of mistakes and I take full responsibility for my mistakes and furthermore my mistakes have gave me the ability to be succesfull in this company.

  I suggest you go back and read my previous posts and if Mike had posted any other. I am guessing you have misread or misunderstood both posts and are attacking us for misguided thoughts and because of a lack of understanding of what is being said. Trust me LLM, Mike is not a follower and neither am I and I suggest you need to work on understanding and putting post in contexts before attacking people, especialy ones who are as pro Liberty as they come!!

• Rob,

  Can you please read my post and point out where I said you were being ripped off. In fact I wrote my post about the success I have with Liberty and about the realization that some people make terrible choices and then blame LTS.

  Rob I think you wanted to rebutt Frustrated and Disgusted and mistook his post for mine. Please refrain in the future from lumping me in with the people who post their failures on here. Truth is I don’t care if any new Zees ever join Liberty, I am growing my business one new office at a time.

• LLM, ok I re read your post a couple more times and I now understand that you thought I was disagreeing with Mike….LMAO….The first two paragraphs of my response was sarcasim!!! Mike understands very well what I meant and Mike and I are completely on the same side. And no I did not fail..lol…and no I am in no way a unhappy Z, I am one Z who thinks this industry is going through the most exiting time ever.

• NJ Zee you are correct and I misread because of the way the post read. That is my bad and I do appoligize. Frustrated had responded to both of us and I mistook it to be your post. My Bad.

• Rob,

  You have been forgiven.

• Thanks Rob.

• People trust you guys to do their taxes? Seriously?

• LLM:

  It has been pointed out to me several times that Liberty is not interested in changing their way of doing business. It works for enough franchisees, that they have no interest in other points of view. Unfortunately Liberty will continue to see fallout in many areas because they are not willing to adapt to changing conditions, or other types of areas that do not fit their “mold”, so you will continue to see the postings like the ones above. All I can say is you can either go to Vegas, or buy a Liberty franchise, as your odds are about the same.

• Tony – To be honest I would certainly have to disagree with you on Point # 2 as it doesn’t even make any sense. As to Point # 1 part of the reason that I have been successful is the fact that I have met may great Zees that have been willing to help me along the way. I wouldn’t have received that support if I opened up an independent shop and to me the network I have developed with other Zees is invaluable to me. As to your comment that Liberty Corporate provides no support I would have to disagree with that as well. In fact, I have had multiple dinners with John Hewitt (the CEO) and I only own one store at this time. People at Corporate are responsive, you just need to know the right ones to reach out to.

  As far as other comments about Liberty being like going to Vegas I would again respectfully disagree. Too many people want to blame Corporate for their failures and fail to take their own responsibility to not performing well. Rather than complaining about how you have not yet succeeded I suggest you spend some time focusing on your business.

• Troy:

  We need to stick to the point here. Are there successful LT’s out there? The answer is yes. But there are a ton that have failed. If you are reading this and thinking about investing in either LT or some other franchise, what are your chances of success ? Not high. The idea behind franchsing is to lessen the chance of failure. LT’s philosophy is like yours, you must not have followed the plan. Well I can show you four stores, owned by four different franchisees that are for sale because they cannot get enough business to continue. Are you going to suggest that none of them followed the plan? I can also show you failed stores that were owned by Top Guns who couldn’t make it. Are you going to tell me they too did not follow the plan? The issue or point here is that too many fail, and all LT does is resell the territory. The next franchisee fails and they sell it again. Does LT do a good job of understanding why, NO. There are some very fundamental issues that need to be addressed at LT to make this a good investment. Right now it is not. They understate the start-up costs, they overstate the number of returns to expect,, and give little to no support from corporate or otherwise. Look through these postings and read the thousands of $$ that have been lost by people trying to run these businesses. The losses are staggering. Are you going to tell me none of them followed the plan or were all poor business people ? Give me a break. Stop drinking the kool-aid and the next time you have lunch with JH, ask hiim why LT is not addressing the high failure rate of their franchises. His answer will be they didn’t follow the plan. Well I can suggest that there is a lot more to it than that.

• You need to put things into perspective. The failure rate on small business owners in general is extremely high. When someone opens up a business there are clearly risks involved in it, whether it is a franchise or not. The bottom line though is that the business owner chose to open up his/her business. Nobody forced their hand to open their business. Just because you open up a franchise does not mean that you won’t fail – like any other business you are responsible for achieving success with that business. The same goes with Liberty. As it relates to Liberty it also depends on where the owner decides to open up their store which encompasses many factors (demographic opened up in, proximity to other tax stores, visibility of the store, etc). In addition to these variables however is the owner himself. Can the owner deliver exceptional customer service, did the owner hire the appropriate staff, is the owner properly executing the marketing plan. To single Liberty out doesn’t make alot of sense as their are failures every single day for all small business owners including franchisees. People need to take responsibility for their actions and stop blaming Liberty for their own failures and shortcomings.

• Mike, You are missing the most critical element in your comment.
  Small business owners open an independent nail salon, hardware or tanning salon. Sure they risk it all but those of us ALSO paid a franchise fee up to $40,000 ON TOP of our set up fees to receive the support and expertise to be successful. In addition to that we also pay 19 percent in royalties. That’s a BIG chunk of change that should at least ensure some high level of support. 19% DOES NOT PAY FOR THE BRAND NAME of LIBERTY. Which in itself is higher than most franchise fees. Please don’t compare to HRB or JH or Instant Tax as franchisee fees are based purely on the franchisor and clearly there is a sense of collusion here.
  If my office makes $200,000 (making my one of the best offices in the country then I pay $28,000 in franchise fees to Liberty …. FOR WHAT?!! The software? Buy it direct for $1200-1900 for as many computers as you like. Apply direct to River. Chase etc.. for bank products.
  5% for advertising? What frikkin advertising? Most pays for the marketing team at Liberty or Valpak/Advo which is just as cheap if you advertise with them yourself! I did!
  What this forum is about is the INTELLIGENT decisions made by prospective franchisees to purchase a Liberty Tax territory. Both sides have to agree to that.
  The following two tax season determine if that decision was a GOOD one or a DISASTROUS one. Hence the two sides to the argument.
  Liberty can help you sell your business for a premium. Then there’s the transfer fee of $5000 per territory in addition if you sell.
  If you have seen (as I have) how many territories are listed for sale with Liberty, you would be alarmed as at my last viewing I saw at least 200. And that was when there were less than 2400 stores. Says something don’t you think.

• Right buy you were aware of the $40K prior to purchasing the franchise correct and you were aware of the royalty percentages correct? So why did you choose Liberty over opening up an independent store then?

• So as long as this site stays completely negative and suits your special interest, you are agreeable, Mike. You certainly do not appear open to discussion, which I thought this site might be. Mike, Liberty sucks and anyone who invests are being foolish with their funds. There is no way to make it and it’s truly a waste of time. Thanks for the advice. Have a great life! I’m opening Newbee Tax Service next week with a BEE costume in a strip mall next to WalMart and across from HRB. Thanks for the great advice….Mike. This site rocks!

• Some people are hopeless, I would HOPE that before any of you bought into this business that you did some analysis using Excel to get an idea of what volume is needed to break even and eventually turn a profit.

  Here is some figures so you can wrap your head around how to make money in the tax business:

  Stan Malizewski
  2010-08-11T02:10:12Z
  2010-08-11T02:32:20Z
  The Briad Group
  11.5606

  YEAR 2
  Paid Returns 330
  Avg Fee 245

  INCOME $80,850.00
  Guerilla Marketing $650.00

  Expenses

  Preparer Wage + Tax $17,143.70
  95 days of 18 hours coverage @ 10 & 9 per hour + Payroll Tax
  TP Bonus + Tax $2,710.50
  3% + Payroll Tax

  Waver + PR Tax
  $6,794.40
  95 days of waving @ 8/hr 8 hours a day

  Utiltities $2,400.00
  More during the season way less in off season

  Phone & Internet
  $1,320.00

  Comcast Phone & Internet @ $110/mo

  Office Supplies $445.00
  Customer Envelopes, Customer Folders, Paper, Toner

  Postage $88.00
  200 stamps used

  Insurance $350.00
  State Farm

  LTS Royalty $11,319.00
  14% Royalty

  LTS Advertising $4,042.50
  5% Advertising

  Local Advertising $650.00
  Misc flyers, coupons, candy, soda, water

  Marketing Supplies $650.00

  Direct Mailing $1,400.00
  8.5×5.5 Early Season Postcard mailing 5000 @ .28 each

  Rent $18,000.00
  1500 a month Rent

  TOTAL EXPENSES $67,313.10

  NET INCOME $14,186.90

  % Profit 17.55%

  YEAR 1

  Paid Returns 301
  Avg Fee 200

  INCOME $60,200.00

  Guerilla Marketing $650.00

  Expenses

  Preparer Wag + Tax $15,221.85
  95 days of 16 hours coverage @ 10 & 9 per hour + Payroll Tax

  TP Bonus + Tax $2,018.21
  3% + Payroll Tax
  Waver + PR Tax $6,794.40
  95 days of waving @ 8/hr 8 hours a day

  Utiltities $2,400.00
  More during the season
  way less in off season

  Phone & Internet $1,320.00
  Comcast Phone & Internet @ $110/mo

  Office Supplies $445.00
  Customer Envelopes, Customer Folders, Paper, Toner

  Postage $88.00
  200 stamps used

  Insurance $350.00
  State Farm

  LTS Royalty $8,428.00
  14% Royalty

  LTS Advertising $3,010.00
  5% Advertising

  Local Advertising $650.00
  Misc flyers, coupons, candy, soda, water

  Marketing Supplies $650.00
  Direct Mailing $1,400.00
  8.5×5.5 Early Season Postcard mailing 5000 @ .28 each

  Rent $18,000.00
  1500 a month Rent

  TOTAL EXPENSES $60,775.46
  NET INCOME $74.54

  % Profit 0.12%

• You know everybody says they want discussions which means they are allowed to spew statements with no facts to back them up. I sold one of my offices to a fellow that paid the full price for the office and he was financed 100 percent over 4 years at Libertys current interest rate, paid all the royalties, paid all the advertising fees, was completely current on his debt, royalties, and Advertising fee, plus prepayed rent all the way through Feb on his store at the end of the season and put approx 40k in his pocket. Now if all the items that everyone tries to lay the blame on was factual then their was not way for him to do that. For some of the failed Zs or even better struggling Zs lets take a look at the last Profit and Loss or the past couple years and see where the real problem is. Thats not being nasty, thats not putting anyone down. If the true existence for a discussion board like this is to spread truth so people can make an educated choice when purchasing then I think the truth should be analyzed and then all the insults and nasty comments can end and we will only deal with facts.

  And I am 100 percent serious about it not being about pointing fingers or making anyone look bad , thats not what I am about, I just want a factual look to answer why some make it and others fail. If it is impossible to succeed then simply analyzing Profit and Loss statements will clearly show your point. Unless facts are going to be intelligently discussed without the hatred and damaged egos this board will be nothing but “Jerry Springer”. I know for a fact that several of you are not like that but having discussions based on opinions or on limited amount of facts is useless. I also understand anyones reluctance to risk having flaws exposed and I really do not like that word but could not think of another. Unfortunately doing this in a venue like this is not feasible but I would love to see what the results would be.

  Yes you can be profitable and obtain positive cash flow owning Liberty Offices. Does it take super human powers, does it take that special person that only 1 in a million would fit, and the answer to all of those questions is no. It can be done by anyone and has been done by quite a few and the talent level between all of the successful ones is quite different.

• Rob:

  I think Stan’s numbers give a great basis for discussion, but Stan did not follow the Liberty plan, plus he has not factored in anything for his time or investment. He would have been just as well off working for McDonalds than owning a Liberty Tax franchise, worked less hours, and with half of the headaches.

• Sorry for the spew of numbers it looks prettier in Excel. I think the comment about my time and working for McDonalds is a bit far fetched. Each year my numbers and profit grow, I made sure of it before I expanded and invested any more time and money after year one.

  I suppose you’re right in that I didn’t follow the system 100% in the beginnning, each season I make adjustments and try to execute better. I do know for a fact that my first store I opened I did terrible in year 1, 30k in net fees, didn’t wave, terrible b2b marketing, no parking (downtown location). Year 2, No waving, no marketing, did 36k in fees Woohoo. Finally in year 3 got my head out of my ass and moved the store to a small strip center 1 mile away on a secondary highway (7-14k cars daily) and made the committment to have wavers every day and do couponing and did 76k net fees.

  Obviosuly doing 76k in net is not going to make me a milionaire but at $900/mo rent and 4 months of a season it does just fine.

  I don’t want to give my whole LTS life story today but I will also add:

  I took over 2 existing franchisee’s offices throught my 4 season history and these are the results from me owning it controlling costs, spending on valuable marketing, waving consistently etc..

  Store 1:
  I took over for the 3rd tax season, previous owner did 88k fees. Very busy highway location. I took over December before the season, $135k net fees about a 40% jump. It was simple really the previous owner couldn’t get out of his own way, slashing prices, playing lets make a deal, etc.

  Store 2:
  5th Year store I took over from the 2nd owner who was getting destroyed, I’m surprised he’s not on here telling the world how much money he was losing. It’s pretty bad when you only do 23k in fees and your rent for the year is over 24k.
  But I digress, took it over did the marketing and got the fees to 52k for the year then pulled the store out of the current horrible location and I am relocating to the main highway about 1 mile away and will end up paying less rent for more exposure.

  Being sucessful and making money with Liberty is just about handing out doughnuts or throwing a party in your parking lot. Yes follow the system/plan I agree but there are managerial and bigger decisions that get made over the course of the years that will ultimately affect if someone makes it or loses it. I takes calculated risks in buying new territories or buying out existing franchisees, I make models in Excel to make sure I can make the numbers work before any money is invested.

  Any of the naysayers are welcome to come by NJ and take a tour of the operation and see for yourself how you run multiple offices at a profit.

• “Sorry for the spew of numbers it looks prettier in Excel.”
  You should’ve seen it before I cleaned it up. :)

  If you paste it first into a text editor like Notepad or WordPad you can format better before you paste it in.

  Thanks for the numbers.