LIBERTY TAX SERVICE Franchise Complaints
UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiar
with the Liberty Tax franchise, please share a comment below.
Entrepreneur magazine has ranked the Liberty Tax Service franchise #3 behind McDonald’s & Subway. However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.
This post was originally published
BostonTax wrote:
I’m a former Liberty Tax Franchisee
I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.
Barbara Green wrote:
I too was a Liberty Tax Franchisee and I agree with everything you said.
The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.
Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.
At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.
It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE? ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY? WHY OR WHY NOT?
.
Wow! I called this morning for more info on becoming a franchise. Im sooo glad I saw this. My 2013 goal: start my own business. Thought franchise wiuld be a safety net. Is it really all franchises or is this just 1 of a handful of bad ones? Thank you all for the posts. I won’t be going with Liberty
Darlene:
Isn’t everything closed on New Year’s Day?? Besides, you’re too late for this year anyway.
PLEASE, PLEASE do yourself a huge favor………..DO NOT get involved with these rip-off artists. You will save yourself a ton of money & a ton of headaches by just doing your own thing.
TRUST me on this. We have been wrapped up in this mess for way too long and I cannot believe how much money we lost……thousands upon thousands. Mostly to lawyers.
Thanks so much to this website to tell people the REAL TRUTH about franchises like this one who pay money to have their name plastered all over Entrepreneur Magazine as a top franchise————yeah, tops in ripping people off.
i was a franchisee a few years ago. i made it one season and sold out. i was basically fully financed and after that first year, was in worse debt than when i started. i should have known it was a bad move on my part when my first conversation with the AD started with him telling me that he couldn’t “F****N believe they had approved me to buy a store since I had no skin in the game”. and it continued from there. literally, in- my- face confrontations on his site visits to pump up my staff and wavers. one was so confrontational that 3 of the wavers had to run up to us because they thought we were about to throw punches. those folks ride on Hewitt’s coat tails and aren’t shit if they didn’t work at Liberty. pierce that corporate veil and go get them.
I see that someone is opening in Atlantic City I wish them the best. Hopefully they have there e-fin in place. Wonder how there going to get qualified prepares?
No tax school up on their website. I guess you really can’t have a one week course anymore. Probably thought with all the casinos/pier and the walk that this would be a great location. The problem is there is a lot of competition and many people commute into the city and don’t stick around after work. Also Liberty has no real brand name in south jersey. The people that do know about them know them as the tax prep. service that closes after one or two years.
Minimum royalties, staff to prepare 600 returns, spend a minimum of 6000.00 on marketing, do B2B the more I think about these things I get made at myself for not having the balls to open a tax practice on my own. Biggest mistake I ever made.
Yup, same here, biggest mistake I ever made! Although, I did walk away fairly unscathed compared to some that I know lost a lot more! Lesson learned! A friend of mine keeps getting calls and postcards to become a franchisee, she asked me about and by the look on my face, she said, “I got it”!
@SanFranDan
What a great New Year’s wish – I LOVE IT!!! Have a great year!
Glad a few of you liked my New Year’s wish. We are still in the thick of things here and this company has ruined our lives completely. I will not stop or rest until justice is served and that man is locked up in jail forever.
Over the last few years we have turned away at least 50 strangers from joining this franchise and that has given us such peace and satisfaction. Hope it can be 50 more and 50 more and 50 more.
TO ANYONE READING THIS POST: PLEASE FIND ANY FRANCHISE TO BE A PART OF EXCEPT THIS ONE. THEY ARE CONIVING BASTARDS ALL OF THEM AND THEY WILL STOP AT NOTHING TO MAKE SURE YOU SQUIRM. I HOPE THEY ALL ROT IN JAIL FOR A LONG, LONG TIME.
ANYONE HOPING TO START A TAX SERVICE…………DO IT ON YOUR OWN! YOU WILL KEEP THE CONTROL AND THE MONEY AND HAPPY CLIENTS. THIS FRANCHISE DOES NOTHING FOR YOU. NO SUPPORT, NONE. NO ADVERTISING. NOTHING EXCEPT SENDING A BILL TO PAY ROYALTY FEES. AND THEN WHEN YOU LEAVE, THAT’S WHEN THEY REALLY COME AFTER YOU.
Look at how many lawsuits are coming out of this company. Millions! Now I see Jackson-Hewitt advertisements on tv. Why? Because JTH is no longer involved. JTH TAKES all your money and gives you nothing but lawsuits in return. Screw him.
Thank you so much again for starting this website. Just being able to voice my frustration and stress has been so helpful.
Come back, Trish!! We need you to help us all rally together! :)
SanFranDan:
My wife and I really got a kick out of your new years message. It was great. Did you know these clowns are still referring prospective franchisees to me? I got a call the last week of December from someone and gave them an earful for about 45 minutes. It was great fun and I really enjoyed myself. This person I would say will not become a franchisee. Its always great to see such results. Keep up the good work.
i have suggestion for most of the whiners on this website. Break the prozac in half…
to guest 3 – you will be doublin’ up on ur prozacs after u lose ur ass this year. c ya’ back on here in a cupla weeks and c if ur singin’ the same song.ciao
Its going to be interesting with all the delays the IRS is calling for, considering a majority of Liberty customers want their refunds yesterday! Good luck to the owners/workers at the local offices, you will be dealing with lots of unhappy customers. No matter how many times you warn them of the delays, they will quickly forget when they call nonstop for their check.
Quest3: I don’t mind anyone coming on here and offering a rebuttle to what’s being said about Liberty but your comments are just a waste of your time and this sites space. Try to do better in the future!
What will be the biggest issues for new franchisees this year, i.e. qualifed staff?
What kind of loans can JTH offer this year in place of the RAL and what states can they offer them in?
I just called two local Liberty offices and asked if they do loans, they said NO but really pushed hard on the $50, they told me that “if I file with them they will give me $50″ and I will get my refund in a few weeks” I said “that is a great deal, file with you and get $50?” “That’s better than FREE”, after many attempts to get the person to tell me that there is a fee when I get my refund, they either didn’t know or want to tell me there is a tax prep FEE!! What a scam!! TRYING TO LURE IN PEOPLE TO GET THEIR TAXES DONE AND GIVE THEM 50 AND AVOID (TO SAY THE LEAST) THAT THERE IS A FEE!! Where is AL Sharpton and Jesse Jackson, they need to put an end to this company once and for all!!
Seeing that Tax Franchises are opening and closing at a very fast pace, I don’t see any real future in these types of businesses. The real player is, and will be, HR Block. Everybody else is a wannabe. Liberty is not only a wannabe, but they are robbing their zee’s while the robbing is good! Since this business has no stamina to stay, Hewitt and his herd of robbers will continue to sell to unsuspecting people his concept of the american dream-take your money for himself and run.
This will be another tough tax season with all the new regulations and delays. You don’t need extra aggravation from the likes of Hewiitt and Liberty.
@mike – r u serious? do you think they give that stuff away for free? dude surely u dont think u cn go in and get ur taxes done and not have to pay. hek. maybe u do…
but false adver. is stretching here. and how does JJ or AS come into play? they ahve no credibility
I worked at one of the LTS franchises for 3 consecutive years (Since 2008) As a sign waiver.
I came back last week to apply for it again, because I needed some quick cash to help pay utilities, and put food on the table for me and my family. I knew some of the original people that worked there, and I liked one of them very much, she was a boss I could look up too, and was very nice to me all the time. However, she wasn’t working there this year, which was okay, but having a get together with a new boss can cause some conflict’s of interest, especially when there’s a chance that some of the employer’s will gossip and spread rumors about me. (Although I’m not saying they did, just a mere possibility from instinct)
I got fired from my sign waiving position 2 year’s ago, because I said the S word while walking out of the tax office to sign waive. It slipped out of my mind, and I should have known better to refrain from using that so called dirty language. (That is used all the time in the office behind closed doors) Anyways, I went in to apply for the job and everything went well so far. They asked me for my SSN, my Dl and asked to interview me for the sign waiving position. I don’t know why they’d ask me for a copy of my SSN and I.D, if they already had that information on file, which I’m sure they do… but I’m just speculating.
I went out there to work for 4 hours, and worked very hard directing individuals to the business, and I took 1 15 minute break. I came back in and they asked me if I could come in on Friday at 10:00AM, and I was happy to oblige. I arrived early and waited to work again. There was a young man waiting out front of the business in the morning, he came shortly after I did, and seemed like he was going to replace me, which I suspected from the beginning, I just didn’t say anything. I went inside and got ready for work, and the employer that worked there came up to me and told me I wasn’t going to work today, which unsettled me at the time, because I thought I was gonna work.
She told me she tried calling me, but I don’t think I received one, and I didn’t get an email from her either, which I provided to her if she needed to contact me. She said the reason why I couldn’t work that day was because the “Administration” had said I was fired before, and I told her yes, I was… but quite honestly, what does that have to do with anything? That’s simply the past, and it seems like they didn’t want me to work there ever again. They can’t give a man like me another chance because of a simple mishap that happened 2 years ago?
I find it rather unfair how they’d hire me and have me work, and then decide it’s inappropriate to hire me again. I just don’t get it…. Anyways, I feel as if someone doesn’t like me there at all, and they’d love it to see that I never work there again, and if that’s the case, I’d rather not be scorned by anyone.
I’m a very happy individual, and for someone to dislike me for some odd reason, is just ridiculous to say the least. As of today, I’m not sure if I’m “fired” or still under their investigation, but I have a hunch that they won’t hire me back, and spoil my reputation. (As if I had any to begin with) I felt like I was being treated unfairly, and quite possibly discriminated. I’m still waiting for them to call me on “Monday” for a decision, and I’m not keeping my fingers crossed on this one.
Apply at another location or go through the temporary service
Lucid” sorry to hear about your experience, don’t apply at another Liberty, rather you should call 800-790-3863 and demand talk to John Hewitt he is in charge of Human Resources and sets policy for the company. Don’t let the company mistreat you.
Guest, if Jesse Jackson and Al Sharpton have no credibility, you obviously haven’t followed Liberty and ACORN, you need to do more research. Furthermore, you need to call/shop Liberty tax offices, to find out yourself, I don’t blame the zees, they only do as told.
Mike wrote: “Lucid” sorry to hear about your experience, don’t apply at another Liberty, rather you should call 800-790-3863 and demand talk to John Hewitt he is in charge of Human Resources and sets policy for the company. Don’t let the company mistreat you.”
Mike is right. It might take a few calls, but be persistent until you get through. Mr. Hewitt is hard to get ahold of, but he is sincerely interested in holding his company to very high moral and ethical standards.
Mike, Mr. Hewitt is also the guy to call about getting your free tax return. I am sure he’ll be very very upset to hear some bad apple is trying to lure people in with $50 that they’ll have to give back (and then some!) in fees.
Mr. Hewitt will really appreciate the tip on this franchisee/bad apple and will take action immediately. He may even give you $50 cash reward for whistleblowing and allowing him to nip this behavior in the bud!
If you can’t get through by phone, consider showing up in person. But log your mileage as I’m sure he’ll want to reimburse you.
High Moral and Ethical standards???????????? I almost choked on my drink over here!!!!!!:):):) Yeah, right, we’ll go with that.
I have never known Hewitt to reimburse ANYBODY. If you keep track of your mileage to go see him, you would be the fool. He will dismiss you like he does everyone else. Good luck.
Until April 2012 I had been a LIBERTY TAX Franchisee for over 10 years. This last tax year (2012) the tax software was the worst LTS ever distributed. The tax support was even worst.. I received a new Agreement in April for the next 5 years. In this agreement LTS stated they could change to aggreement any time they wanted for the next 5 years adding requirement..or whatever without my knowledge or approval. I decide to terminate my agreement with LTS. Offered to sell it to them. They wanted me to just walk away and leave everything to them. I have between 1225 and 1335 tax returns last year. Business was good. Software and support were bad. At one time I was indstucted to audit 1300 tax returns for tax payer who used the same residence in doing there tax. Told LTS it would take too long they can use a software pgm to complete. They ordered me to do the audit and the ol CURE or terminate came out. Told them it was time for me to leave LTS as I was NOT AN EMPLOYEE of LTS. Sold by business to another individual.. LTS was mad.. now trying to make out that I am using their LOGOs foe business. LTS wants me to give them all the data on file.. I agreed as long as LTS paid the handling and material charge. It gets worst…
If you want more than call [redacted]
Watch out, John Callahan……..fasten your seatbelt, you’re in for a bumpy ride. I was there for only one 5 year contract and I cannot wait to tell my story of how LTS abused me. It’s still going on, several years later.
There was No support, No advertising, NO nothing. Except, pay us what you owe us, period. Gimme, gimme, gimme.
Those Lawyers are working their butts off for him. He is the complete example of how NOT to act toward franchisees. From day one and certainly by the end of year one I knew I had made a grave mistake and I have been paying for that mistake in every possible way ever since.
An old saying of what goes around comes around and I am waiting with baited breath for him to come crashing down. Will do the happy dance. He is dispicable and that’s the nicest adjective I can say in a public forum.
John Callahan:
I feel your pain. You sound like you are in a similar situation as I. I can believe that you have more to tell, as we all do. Expect now, if it already hasn’t happened, to get sued by Liberty. After they win, which they will in VA, expect to have to pay some sort of large judgement. If you can get your case moved to another state, you would have more of a chance, but I’m not too optimistic about that. You might want to talk to Trish about this. She could help in getting in contact with other Ex Zees. Your legal troubles are just beginning, unfortunately.
My advice would be to inform your clients as to what is going on, use an address that is 25 miles away from your old territory to service them and keep a low profile. Liberty will check on you. They will try to turn your clients to another Liberty location saying that you left town or died or whatever they can make up.
When I first started posting on this site most of the comments came from people who didn’t succeed and where posting to tell people to beware. Now there are people posting who had success with the company but the cost of being involved with Liberty is not justified by what Liberty provides. However, Liberty has them trapped by the agreement that they signed. Buyer Beware!!!
ABSOLUTELY RIGHT, BILL!!!
I have been trying to leave my 5 year contract that ended several years ago, but LTS keeps pulling me back in.
HORRIBLE COMPANY, HORRIBLE EXPERIENCE AND THE MOST HORRIBLE MAN AT THE HELM………VICIOUS, VINDICTIVE AND SOOOOO ADEPT AT RIPPING PEOPLE OFF.
John Callahan,
This will be a very tough fight. Are you the UFO expert? If so I would call in some your UFO friends and let them just beam up John Hewiit with all of his inner circle. Good luck, I too had been with Liberty for 5 years and the exit was pretty ugly.
IF YOUR ARE CONSIDERING BUYING A LIBERTY FRANCHISE AND THESE POSTS ARE NOT ENOUGH, then call all your local offices and talk to them directly–LET THE RESPONSES ENLIGHTEN YOU!
All I can say is that I hope anyone reading this that has been thinking about buying an LT franchise, you won’t.
Save your money and your sanity and do it on your own or try something else. The more people I can turn away from this god awful franchise, the better. Don’t believe anything you read about them being one of the top franchises…….it’s all a bunch of hot air paid with the money that he stole from existing franchisees.
Thank you for the few that have read this and let us know they planned on NOT buying a franchise. That really is music to my ears. Keep the momentum going! Hope to put them out of business in the not too distant future. Of course he will probably escape to that private island where he just bought an offshore bank. With our money.
I’m sorry to hear all the bad experiences listed here. I have been with Liberty for over 6 years now and have not had any of the experiences mentioned here. The franchise system is fantastic, IF you listen to what you are taught in training and through your area developer and implement it following the road map you are given…you will succeed. If you think you can re-invent the wheel and do it your own way completely aside from the years of experienced advice you receive, then yes you will fail and get upset and blame it on the organization. When in reality the blame should be pointed in a different direction.
The corporate office provides immense support, yes there are times when it may seem like forever to you to get a response especially in busy times, you have to remember there are 4000+ offices who might have the same questions that you are having also. But help is there and is available and does have you at priority one.
So if you have the drive to succeed, and you are willing to try new things like marketing business to business, having wavers on the street, paying out $50 cash to your early season filers before you get paid, and having a progressive and outgoing mentality where you may have to change and adapt on the fly, try Liberty. If you just think you are going to start a business for yourself, wait for your franchise to do the work for you, and reap the rewards…then stay away from Liberty…or any other franchise system. If this is your mentality, you are not ready to own your own business and you WILL fail.
Ron- You speak of success that is not possible under the Liberty system. This is a franchise system that is ‘fantastic’ for the franchiser, not the franchisee. If you listen to what the training is really about, any reasonable person will realize its a sham. Unfortunately, the road map we are given is filled with detours, blind roads and lots of potholes that need immediate repair. Since your Area developer’s only qualification is that they have money and are duped by John Hewitt et al., they are hardly qualified to provide you with the real world guidance you need for this business. They are essentially selling you a system from the 1990’s which, last time I looked, was in the last century.My experience demonstrated that there was no deep experience within the organization and, especially with, the corporate office. They are experienced in siphoning as much money from you as possible. Support is a relative thing, but ZERO is still ZERO. It took many days, not hours to get a response from corporate on any issues and the AD’s had no clue as to help you. These are the facts as collaborated by most people who have taken the time to educate potential buyers of this system on this particular site. Paying out $50 to people you will not see next year to do their taxes that are suspect to begin with, is not a sound business model. As for a progressive attitude by Liberty that you mention, I did not have that experience. On the contrary, I was shown time and again of their inflexible methods in trying to reach potential customers. The problem is that Liberty presents you with a way NOT to work so hard by following their so-called system. The only ‘progressive’ thinking that Liberty ever demonstrated was their ability to extract more money out of the franchisee’s by keeping kickbacks from the banks, fee intercepts and high interest (14%) cash flow loans on your own money that they took. With friend like this, who needs enemies?
To Ron:
I don’t think you are a franchisee. Any single individual who has been involved with Liberty Tax will know you are not telling the truth. I was I the DFW DMA and not a single individual succeeded. The franchisee’s stucked in there cannot leave because they owe John Hewitt.
Liberty Tax is a scam. How on earth will they take their royalties before your expenses. After a franchisee take their expenses, they are left with nothing. LT does not advertise for you and you have to use your own money todo that. It is a scam. This company has ruined many people of their lives. Please stay away from them.
Corporate SUPPORT, DID YOU HAVE A CONVICTED FELON BEING YOUR AREA DEVELOPER?????~~~OH WAIT, IS IT TRUE THAT LIBERTY WOULD HAVE AN AREA DEVELOPER THAT WENT TO OFFICES THAT DID TIME IN THE POKEY??????? AND IT WASNT a DUI, CALL 800-790-3863 AND ASK JOHN HEWITT,
Ron. Ron. Ron. All I can say is WOW. I promised myself not to say anything disrespectful to another poster on this thread, but I do have to say you are a bit naive, misinformed and ignorant.
I don’t even know where to start. My first encounter with the so-called Corporate “support” was when they sent out a site selector to help me choose a site for my franchise. No one knew the area more than me since I had grown up here. He proceeded to tell me what a lousy site I had chosen. Of course I opened it up where I thought was best. Do you know why? Because LTS had NOTHING to do with my site or my success. It was all me! It was a perfect location, and I’m so glad I followed my own instincts.
The AD was absolutely clueless. If you think Corporate was an immense help to you, then why have so many posters on this site said otherwise?
The drive to succeed is all individual. I cannot tell you how I tried with door hangers, flyers, free stuff, bar-b-ques, bowls of candy, wavers, etc.,etc.,etc. and it was successful because OF ME AND MY EFFORTS! Not Liberty’s.
I had the most disgusting time waiting on the phone for literally hours on end trying to get support! Any kind of support! Software was a joke. I am a patient person and this company gets a failing grade.
ANY success from my efforts was MY efforts. Not LTS by any stretch of the imagination. Why pay 19 percent royalties to a company that didn’t help me at all but just took the money that I worked hard to achieve?? NO national advertising, NO yellow pages advertising at the time, No marketing that didn’t cost me more $$, NO phone support……….I ran that office perfectly, but instead of thanking me for all my hard earned effort which THEY all benefitted from financially, they would send me a notice to cure on the most small, mundane things, like forgetting to dot my I and cross my T.
I definitely knew more then they did on how to run this business and if I were on my own and not a franchisee, I would have continued to be successful. But I got caught up with this incredibly dysfuntional franchise and the man at the top who is the world’s most professional scam artist and so as a result, I am still fighting them even after leaving my one 5 year contract several years ago! Any one that has a brain can see that this company has been built on unfulfilled promises, and slick marketing schemes to have you hand your money over.
Good luck to you, Ron. If you feel that this franchise is so wonderful, good for you. But the majority of posters here and so many others that I have talked to have had horrible, incredibly destructive experiences…………
All I ask is that this man somehow, some way gets stopped. He is stealing everyone’s money and robbing people blind. The “Corportion” is filled with Lawyers, so once you sign your name you have signed away any rights to anything in the future.
THE MORE THAT PEOPLE READ THROUGH ALL THESE POSTS THE MORE YOU WILL SEE HOW UNHAPPY MANY EX-FRANCHISEES ARE AND HOPE THAT YOU SAVE YOUR MONEY AND GO ELSEWHERE. THIS COMPANY WAS A NIGHTMARE TO WORK WITH AND HAS BEEN A NIGHTMARE IN JUST TRYING TO LEAVE A 5 YEAR CONTRACT.
Good luck to you, Rob. Hope you don’t lose your shirt when you decide to exit as well.
Just signed on to read your post again…..and I see your name is Ron. Sorry for calling you Rob.
SanFranDan: your experince just remined me of mine. I was involved with a group and the territory we bought was in Somers Point NJ. The Location I choice was on shore road, in front of a bus stop, 4 doors away from a laundry mat and was near an apartment complex and a popular bar. Distance wise it was withing the required limits of HRB and Jackson Hewitt. However, the AD would not approve it and would not approve any location within the territory. Now filled with anticipation and wanting to open for the upcoming tax season we reluctantly accepted the offer to move the territory. Good franchisors know the locations that they want and would not sell a territory that didn’t fit their model. i.e. McDonalds. However, Liberty is not about sustainability they knew all along that certain territories don’t fit their business model but they take your money and either allow you to fail or in this case the ad (who is no longer involved with liberty) tries to move you to a location they believe will work. In addition to being disappointed that we joined Liberty I’m also disapointed in myself that I let them convince me to move the territory vs. staying put or getting out all together.
Liberty looks like they will have some type of loan product. JH is talking about how the IRS delay for following returns until 1/30/13 will effect the average taxpayer, but the reality is Liberty needs the revenue from early returns for fee intercept so they can get back the operating loans from their franchisees as well as royalties. This is a business built on high fees and bank products. Without the fee intercept he loses control over his indebited franchisees. It would only take an Elizabeth Warren and the consumer protection agency to shut down this abusive product.
This would not be the first time John gambled and lost, in the 90s he had to be bailed out to keep Jackson Hewitt from going under. I see a common thread here.
Buyer Beware
Looks like Hewitt is trying to pull a ponzi scheme just like Bernie Madoff. What a vicious cycle it is to be indebted to liberty, pay them before anyone else through their fee intercept system, then you have no money to operate and have to borrow from, you guessed it, Liberty again. At some point, the government might get wise to the franchise model made by Hewitt and other unscrupulous operators and finally protect some consumers for a change.
I noticed that most banks are getting out of the tax refund loan business simply because even they are uncomfortable with the business practices employed by the preparers. Seems like Hewitt is still practicing the sham he started with HRB and especially, Jackson-Hewitt.
Has anyone noticed that Jackson Hewitt has started TV commercials? We know Liberty won’t because his highness doesn’t believe in TV advertising. TV advertising takes away from all the profits he can squeeze out of his franchisees.
SOOOO I guess there is no way out of this
If there is anyone out there that has advice on exiting I would appreciate any input
How much longer do you have on your agreement? You can put your territory up for sale, but be prepared to find your own buyer and to take a bottom dollar number, you will get very little assistance from Liberty. They would rather sell a corporate or undeveloped territory or wait for your term to expire then take all the money when they sell your territory. You can approach your AD about a mutual termination agreement, but odds are, it will not go through during tax season, you are probably stuck until at least October, they will not term your contract in May and assume all the off-season expense when they can leave it on you and terminate just as the season is getting ready to start.
My 5 years are up in Dec so I have to notify them in june if I am not going to renew ( I won’t) I think an adjacent zee might be interested in the territories but I am sure Liberty will not let that happen
Please post if you sell. Brokers seem to be selling accounting and tax practices. Please post if you end up trying a broker. This would be good information to have. The real problem is financing. Bankers don’t understand the interest you might be paying and low profitability, which makes it difficult to find a buyer because they have to find the financing.
I would be willing to hold the note but doubt that Liberty would do that since they could sell and get the interest
File bankruptcy, cut your losses and move on. Nobody will ever buy your store or territory, it’s worthless, even less than worthless. Sad, but its the truth. Good luck.
The stores can be sold. Explore all of your options. Good luck. Bankruptcy follows you for 7 to 12 years and is not a good move.
Current Zee,
It”s over, the best you can do is open another office outside your 25 mile radius. Take all the furniture, signs etc, etc. and open an office in a good location, rents are cheap now, and start building your new business right now, tell your clients your are leaving and tell them what is happening between you and Liberty. Good luck.
You may be able to sell it, but you probably wont get what you think its worth. Liberty will price it with some ridiculous number, but there is no way it will sell for their selling price. You should have put it on Commission Agreement a long time ago, you will have a hard time selling in by June and like I said in my other post, you will get little help from Liberty. Even worse that your contract is almost up, like another poster said, they will wait for you to walk, then they will sell it and keep all the money! Its always a win/win for Liberty. Hopefully you at least walk away with a little bit of cash. :-)
A couple of things that I experienced:
1. Liberty will chase you 25 or 250 miles away, so be careful!
2. Bankruptcy usually lasts about 3 years, depending on your state and lawyer.
3. Your clients will stay with you as long as you have treated them fairly.
4. Liberty will market to your existing clients and spread all sorts of rumors as to where you went. They will direct mail them and say that you are no longer in business. You must direct mail your clients and let them know what is going on between you and Liberty.
Yes, it is difficult to get away from these crooks, but you will be so much better off when you do. If you had clients before your association with Liberty, you will be able to keep them, no matter what Liberty will claim.
Sadly, there is litigation in your future no matter how you separate from Liberty. They put a lot of clauses in that franchise agreement that effectively puts your soul into slavery with them. If enough Zees do go the route of leaving the system, it would be difficult even for them to hire enough lawyers to chase everyone. Learn from all our experiences!