LIBERTY TAX SERVICE Franchise Complaints

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

• Money Pit,

  You must be a Sarah Palin supporter, because you are just not too bright… I don’t think you quite make it to the 2nd floor….

• Unfortunately this discussion has gotten off track. The question is, whether this is a good investment, ie; I will purchase a territory and be able to not only pay back my investment, but also make a profit and sell my territories if I so desire for what I have invested, or potentially a profit. I will give you a fact that is unfortunate but true for where I currenly have my franchise. All but 3 of the many franchises in this area are for sale. All are hoping to get their $40K investment if they are lucky. Most are willing to take whatever they can get. Most will have to open again this season, as there are no buyers for these territories. All did less than 300 returns even after being open for 2-5 years. The area has been oversold, Liberty is unwilling to admit they oversold the potential. There are even unsold territories that Liberty is peddling that will further put pressure on the already low volumes that are being experienced. H&R has announced that they are closing 400 stores. Liberty has announced that they want to open one store per day, or 365 stores this year. Why shouldn’t they. There is no downside for Liberty. If you fail, they take your house, your car and all of your belongings. If you win, they take their 19%. Had most people realized this, why would anyone want to buy from these crooks.

• FACT: During tax season, Liberty Tax Service advertises their expertise with homeless people dressed up in Statue of Liberty costumes. The welcoming Lady Liberty look-a-likes listen to their iPods while dancing around with signs reading “Have Fun & Get Your Taxes Done” and “Fast Accurate Professional.”

• James on October 7th, 2010 12:31 am

  “FACT: During tax season, Liberty Tax Service advertises their expertise with homeless ”

  Are you mad because it works and you did not think of it?

• John B.,

  Quote:
  “FACT: During tax season, Liberty Tax Service advertises their expertise with homeless ” Are you mad because it works and you did not think of it?

  Advertising Liberty’s “expertise” to the homeless exemplifies what Liberty is all about. WTF??!

  REAL FACTS:
  1. Target lowest demographic (people without computers or unintelligent enough to tackle basic tax return).
  2. Exploit those with little alternative – homeless, single parents.
  3. Exhaust guerilla marketing tactics on local businesses until they kick you out.
  4. Poach competitor clients through devious (storefront and in-store waiting areas) coupon hand outs rather than preaching the benefits of the franchise.
  5. Remove competitor coupons from all local business notice boards and waiting areas.
  6. Display “Free Food” signs. Just nonsensical.

  Many Liberty franchisees are honest business people who promote their businesses by offering discounts of various amounts and have quality preparers who encourage repeat business.

  Regrettably, the retention rate for Liberty is probably the lowest in the business. At 60%+ I was informed my offices were ranked in the top 10%. And I was disturbed because I wanted 75%+

  A local franchisee who is in his seventh season, acknowledges he uses unconventional methods to achieve 1000+ returns a season with a retention rate of less than 40%. His ANF is way higher than mine and yet he doesn’t care about his retention…just his net fees. And he’s a Top Gun Zee.

  COMPARATIVE FACT:
  NetFlix (online) have grown from 1997 to a $1.06Bn business. Blockbuster have dropped from $6Bn to $4Bn these last four years.
  See a trend? With the closure of so many HRB’s this year and Jackson Hewitt potentially falling over, the future for Liberty as a “How to Win Friends and Influence People” business rather than a “7 Habits of Highly Effective People” model, growth should halt very soon and volumes drop rapidly in the next couple of years. Add to that the Debit indicator having gone and many banks no longer offering RALS, the end demise is obvious.

  But to you JB, it’s still such an exciting and lucrative opportunity… yes?

• Money Pit,

  You really should split the Prozacs in half!!!

• “FACT: During tax season, Liberty Tax Service advertises their expertise with homeless ”
  Are you mad because it works and you did not think of it?

  I don’t think Liberty Tax can take credit for inventing the exploitation of the down-and-out. In fact there was already a term for it: Bumvertising. You all just brought it to a new low by dressing up homeless people in humiliating costumes.

  Seriously, doesn’t Liberty have ANY guidelines for who you dress up to represent your company? Do you hold job fairs on Skid Row? Or is this some kind of ironic statement or performance art: dressing up the tired, poor & wretched in a sad, silly Statue of Liberty costume.

  Or are those actually ex-franchisees who lost their homes after investing with Liberty Tax?

• Money Pit:

  I was just reading about these TimeShare scams on the news. Lets start a business where we charge a couple of thousand $$ to sell Liberty Tax franchises by telling the seller we have an immediate buyer. Six months or a year later when they figure out we are a scam, we have already collected the money and gone out of business, much like many of the franchisees have. I figure if JTH can do it, why not us.

• F&D, you read my mind. But I think a better idea would be for Barilla to buy a Liberty Territory from us, let him open a store and six months later he discovers it was actually a Jackson Hewitt. He gets sued by Jackson Hewitt for being an idiot and Liberty breaches him on his franchise agreement. We then take back his territory and charge him $5000 to transfer the territory back to us.
  I suspect with his poor command of the English language and general lack of intellect and using a Liberty tactic to repeatedly sell an existing territory to individuals without a clue, we could sell him the same territory at least four, maybe five times over before his mother suggests he should have been smarter in the first place………. and bought three territories before they were scooped up by other smart people.

• Instead of keep on complaining, why doesn’t those folks that are Zees put more of their efforts to concentrating on improving their stores, rather than just complaining on this board.

• MoneyPit, as usual you go on and on and make no sense!!! Please stop smoking that $5 crack… I am not surprised you are a failed business man!!!

• It is disconcerting that you know how much “crack” is and that it’s something you smoke……and why you’re paying way too much for your habit.
  Must be cheap in NJ.

• Pro Liberty Goons- Get the hell off this site. I am sure that your intentions at the personal direction of Mr. Hewitt himself is to fillabuster the site, change for focus of the site, and frustrate others who have a right to vent or who are looking to see if Liberty is for them. I cannot imagine why the host of the site puts up with your bullshit. Is John going to give people the ability to freely speak on his site? Hell NO! This site is called Unhappy.. Not “Unhappy and in bed with John”

  Deal is this. If Liberty would stop lying to prospective franchisees, stop gouging his existing franchisees, and started caring about the sucess of his existing offices Liberty would do great.. regardless of what H&R Block and Jackson Hewitt do. The only way for this to occur is for this site to begin to hurt him financially and I think it is beginning to do this. The more comments the higher the page ranking.. if only the press would pick it up… Fairly remarkable that a Franchisor gets such a flood of negative feedback its on franchisees. I have been involved with other franchises and I have never, never seen anything like this.

  So John.. when are you going to start working with us and not against us?

• Obligated:

  Well said. I cannot stress enough that potential franchisees to realize that there those here who are preaching how wonderful LT is, that most struggle, many fail. It is not your business ability that will make you successful. Most successful Zee’s have low rent high visibility locations, high concentrated EIC populations to draw from, and can use the system. There are many areas where zoning laws will not allow you to make your location look like a French whore house, and many areas where finding all of the right ingredients are impossible. LT has one system that fits about 5-10% of the areas in the US. I could go on and on, but I think you made the point a lot better than I.

• I have low rent yes, but my zoning laws do not allow me to even put a traditional lighted sign in my window and therefore my sign doesn’t even look like a Liberty sign. I can’t have any banners in my town either and no other traditional items that you speak of. The average household income in my territory is around $55K which is much higher than most other locations. My visibility is probably a C- and I am set off the main road in town. The reason my rent is less is because of my poor location and the fact that the landlord did not allow me to put up the large box lighted sign that most Zees have. Yet somehow I was able to make it work and be succesfull. I am building a full season business at my store, just not an early RAL and ERC season and I am doing this by delivering exceptional customer service and expertise which allows me to compete with the CPA firms and other firms in March and still compete with the Blocks and Jacksons during January and February.

• Mike:

  You made mine, and a lot of other negative comment writers point well. Had Liberty not forced expensive storefronts and expectations that I would do 600+ returns the first year, I would have been a whole lot better off. Instead I spent like I was going to see that many customers, and am still deep in the hole after 3 years. My first year was not that bad, but when you get horrible advice from an organization that is supposed to be helping you, how else would you expect someone to react. I recently had a discussion with my AD on that point ,and his reaction was basically screw you. Hence my continued negative comments on Liberty.

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  JACKSON HEWITT Franchise Complaints

  
  

• MIke,

  The more I read your comments the more I doubt your results. As I stated in my earlier post, Liberty will not provide potential franchisees with what the average 1st year store does in volumne or in revenue. As I pointed out Jackson Hewitt (similar model as Liberty) in their financial statements state that in 2008 their first year stores averaged 235 returns. According to you, your first year store did 375 returns and your store was in a low visability location. Add to that that your store demograhic “income earners making an average of 55k”, something just doesn’t smell right.

  You may not be an area developer but I know your store and your results are being held out as the kind of results other potential franchisees in the CT Mass. area can expect..

  Why don’t you tell us what City your store is in?

• John Hewitt told me face to face in our meet and greet to alter my 1000 expected first year returns to 600 as that was a more likely minimum. He said thus before two other corporate employees who did not challenge this target.

• And I might add my AGI for my demographic was $60000+ in a B location. Thank God I exceeded my target but I was still in the top 10% and financially it was a failure.

• Moneypit

  “That’s funny he told us the exact same thing”. You think he could at least personalize his predictions when you consider how much your paying for the “franchise system”.

  The “franchise system” = 5 boxes for processing tax returns, processing area ( a section seperate from the tax prep area), 800 sq ft retail location close to an H&R Block or Jackson Hewitt location, tax software, floor plan for 4 desk with chairs and a reception area. Guerilla Marketing & hours of operation, tax school, a Lady Liberty custom ( not included in fee). An Area Developer (very little business value). All for $40,000.

  If anyone is serious about opening a tax preparation office in NJ I will be glad to provide you with the training you will need to get started. My fee would be based on a negotiated hourly rate.

• I think Block only charges a $2500 deposit upfront. But, they also have a 40% royalty. I’m not sure what the breakup fees would be if it doesn’t work out and you’re responsible for find the location and furnishing it.

• Having read all of these posts, I wouldn’t trust Liberty. Having said that, most franchises are tough to get to work out unless you pay the big buck for a Mcdonalds or something. As you all know, the real money is being the franchisor not the franchisee.

  I once bought a franchise (5K) that sold photographic business cards (back before computers made it easy). That was the easiest $5,000 I’ve ever lost. The main company was out of business a couple years after I threw in the towel.

  There doesn’t appear to be just a whole lot that a Tax franchise offers that you can’t do yourself. At least Block has a Brand that most are aware of and they do a ton of national advertising. I imagine you can go to a party supply store and pick out a liberty costume and pay some homeless guy to wear it. Professional tax software is easy to find and there are still companies out there that off RALs and Racs. Not sure what the 40K is for, really.

• I am in the process of seeking a LT franchise but after reading these comments, I think I will pass. I would like to speak to a couple former Zees to get personal opinions in real life if possible. Does anyone know how to contact and find a former Zee? Thanks.

• Vernon franchise companies are required to give anyone seriously considering their franchise a document called an FDD franchise disclosure document. In that document they provide a list and contact info for all franchisees who recently left the system. They are required to provide that so they can be contacted by prospective franchisees.

• why do you want to speak (and model yourself) to someone who failed perhaps miserably. Speak to franchisees who have mad eit work and model yourself after them

  JMHO

• You would be smart to talk to both successful and not. Find out what went wrong and then see how the successful overcame it. No way would I only talk to the successful.

• Vernon:

  You are smart to talk to other franchisees. Unfortunately when I had my discussions, I talked to both successful and less successful Zee’s. I asked several questions. Unfortunately the successful Zee’s told me that the less successful Zee was a poor manager and I shouldn’t listen to him. The less successful Zee was the most knowledgeable and gave me the best advice of any of them. Be open minded, make sure you add up the positives and negatives. Be careful.

• Anyone have an opinion on the Roni Deutch Tax Center franchise?
  Comments welcome here:
  http://www.unhappyfranchisee.com/is-roni-deutch-tax-center-a-great-franchise-opportunity/

• I could write a book, but won’t. In my quest to find the “happy” Liberty Tax franchisee, I am coming up empty. It is amazing what BS you get from Liberty corporate that the world is beautiful all of the time, and the franchisees who when I really press them for their opinion, think this franchise SUCKS. Most would sell in a minute if someone offered them a fair price, and strangely, there is very little market for used LT franchises unless they are sitting in a “goldmine” EIC area. The problem, few if any have ever reached what they considered the promised return on investment. Many have stores are 4-7 years old, most have done what they could to develop business, and most are saying it isn’t worth it. A lot of work for little return. None have ever come close to what the local H&R does, few have been able to move people over from the Mom and Pops as JTH suggests, and most are just doing their thing trying to survive, as this has become their livelihood. Kind of like realizing you have a bad diseas and have given up rather than do something about it. If you call this success, the everglades are still For Sale.

• Frustrated and Disgusted,

  We are all getting tired of reading about you crying all the time… File for bankruptcy and get over it…. Face it, your not cut out to do this.

• To Frustrated and disgusted. Most here agreement with you. If barilla was a country he’d be North Korea. Enough said.

• moneypit on November 25th, 2010 4:58 pm

  MoneyPit, i guess you would be Greece. Spend all your money and then ask others for a bailout and when they tell you to cut your spending, you get all upset and protest on the streets.

• by the way, i ma sure moneypit and frustrated are the same person using the same name.

• John Barrilla,

  I see that you are also making posts on JH site and trying to drum up disgruntled franchisees there… Out of 44 comments a third are yours. Not having much luck? You are a plant.

  The bad faith of Liberty Tax (and I think John Hewitt) is what is drving this site, not their Zees trying to cause trouble. If he would only focus on making his zees happy and successful rather than lining his pockets.

• John Barilla,

  Where is your Liberty store? I’d love to see how you do…..assuming you are cut out for the tax business. Let us know…

  If you don’t own a Liberty, you have no idea whgat it takes to make it work, none.

• John Barilla:

  Money Pit and I are not the same person. It is unfortunate that you are refuse to see reality. I have worked with and for businesses who were great at their business. They understood their value proposition, knew their customers, created a good product and were able to make it happen. Liberty is nothing but a poorly managed business that has figured out how to scam people into purchasing territories whether they work or not. They were successful when tax refunds took weeks to get, people were afraid to do their own, and there was plenty of money to go around. Since then, software like TurboTax, organizations who do taxes free, and the IRS sending out checks in 8-15 days have totally changed the business. Liberty is still selling the same old concept to a smaller and smaller audience hoping for a different result. Even you would have to admit that the average for Liberty at 300 returns per year is not a winning strategy no matter how you slice it. Liberty says they are increasing the number of returns, but if you look at how many stores they open, you will see that they are only growing by adding stores, their same store sales are not increasing. That means a ton of stores are not doing well. H&R even with their decrease over the last couple of years still does more than 2.5-3 times what Liberty does per store. I suggest you spend a few minutes calling some random stores and I can pretty well guarantee you will get the same responses I received. Not a good picture.

• John Barilla:

  Ran into another franchisee the other day. He was one of the “I love Liberty no matter what” crowd like you. Carried the Ops Manual in one hand just like a bible. He was one of those who when a territory failed, he purchased it thinking it was just the owner/manager who didn’t follow the system. His numbers have dropped ever since he started and he is getting rid of stores left and right. Last year his average was less than 300 per store, and had a couple that are doing miserably. I can guarantee the stores followed the system. It’s time for you to see the light.

• After reading so many posts, including some planted positives, I would like to say Thank you to all.
  While trying to become a LT franchisee, I have been in touch with several current LT zees, who are decent, hard working people.
  Almost all of them are clearly following the “system” and yet struggling to keep one store profitable, never mind opening another location or even living off that one income.
  I wonder how many wealthy business people are in LT system who ventured to develop a large region (like upstate NY or state of MD etc…) similar to Panera Bread or other successful companies, when a minimum of 10+ or more offices would be expected within a short period of time.
  Investing a million into 10-12 locations, running by site managers and generating about $15K+ clear annual profit may reach 12-15% ROI.
  Is that realistic?
  Even if that’s a reachable level after the second or third year (!), why would that type of a business-investment of one million cash make better sense than any other higher ROI?

• TG
  You make an interesting point, and have struggled to understand the same issue you present. I know several people who have several stores, all doing modestly, and are hoping to do more. Unlike most companies, Liberty makes little to no effort to “maximize” ROI. They have no concept of efficiency or how to help their franchisees’ ROI. Their concept is based on the franchisee taking all of the risk, doing both local and Liberty’s advertising including their name recognition, and in return offering software and a basic marketing plan that fails in many locations. After a couple of years dealing with them, I would seriously suggest you look for a franchisor that not only has a good marketable concept, and also one that knows how to grow and innovate as the market changes. Liberty is stuck in neutral, is still selling the stale business model they have had for years, and are unable to realize the entire market has changed. I should have known when I asked JTH what his plan for the future was and his comment was continuation of the same plan, that this was a loser from the get-go. There are some great franchises out there, and ones that will change, grow and get better. This on is down for the count.

• I launched my own mom and pop last year and prepared just 400 tax returns. Average net fee just under $200. Made $18k net after full years expenses. Not alot but a tidy profit after paying back my startup.
  Cannot use my regular username because that would give away too much information. Hasten to say I was a former Liberty soldier. Loved the concept. Liked the Clients. Handled the yearly changes (staffing/payroll/marketing). Hated the net profit.
  Without the franchise fees I expect to make $40-50 thousand net this year (my second).
  Now no-one tell me Eagle Tax Service, Busy Bee Tax Service, Iron Man Tax Service won’t work! Any tax office with a mascot and good marketing and good staff plus low rent and good parking can’t make money!
  Scary fact… JTX (Jackson Hewitt just got 80% RAL approval through Republic bank. Stock went up nearly 100% in two days! They also announced 100% RAC funding. Scary days ahead when the LTS people had JH going out by the years end.

• After the months and years of dealing with this organization, while I originally thought they were morally corrupt, instead I now think they are just terribly mis-managed, and with Danny Hewitt as the heir apparent, the future looks really bleak. The organization thinks JTH walks on water. Maybe it’s time he went under. The industry is changing as we speak, and he is stuck in the same rut that he has been for years. The policies are antiquated, the direction he is taking the organization no longer fits the market, and at the end of the day, it will end up just like Jackson Hewitt, his former employer. Good Luck……………

• Can anyone recommend the name/number of an attorney that has successfully handled a lawsuit against Liberty. I’m recently widowed and Liberty put my husband in a financial situation that only Liberty benefited from (for 6 years) and that my husband would never have been able to climb out of. He was stressed beyond belief! I have 3 small kids to support now and Liberty is trying to muscle me into signing away my rights to ever sue them or deparage the Liberty name. They indicated that it is a generous offer that I should accept, to which I replied, “if it’s soooo generous, why is there the need to force me to sign away my legal rights?”. They had no answer to that….

  Any help is appreciated….

• Talk to your family attorney. Liberty is set up so that any actions take place in Virginia, which, if you have read any other commentaries, has a very favorable court system for Liberty. Never sign away any of your legal rights just because they say so. It only works to their advantage and they will take advantage. Please remember that they are nothing but a litigation machine designed to bilk people of their money. I also belive, but I am not a lawyer, that a contract cannot take away your federally guaranteed right to freedom of speech vis a vie the disparagement clause. Seems somebody doesn’t want someone to talk. Hmmmmm………

• Regrettably, you are unlikely to succeed in any lawsuit against John Hewitt et al.
  In the EOT John proudly proclaimed how Liberty Tax cannot be sued due to the content of their Franchise Agreement preventing such.
  I heard of a class action which never got off the ground some years ago.
  Virtually any legal action will be deemed by them required to be held in a courtroom in Virginia which Liberty has several judges who favor Liberty.
  The costs would be prohibitive and consequently the idea of challenging them would be financially not viable.
  I wish I had better news but the reality is Liberty can and probably will only fall on their own sword. Enough lawsuits against them for misleading ads etc… keep them in the news anyway but then again they have such a big legal department for these and other such purposes.
  JTH are more than happy to sue everyone and sundry including siblings, children and relatives who may go out on their own in another tax biz.
  Good luck… and if you decide to proceed regardless, begin with a heap of prayer!

• Welcome to Liberty Tax. I would suggest you look for a good franchise attorney who can hopefully negotiate a better settlement for you and your family. There are some great ones out there. Remember, JTH got fired from Jackson Hewitt, and has decided to use his Liberty franchisees to make him bigger than H&R Block. Liberty loves to get people in over their heads and then threaten them that they need to “fulfill their contractual obligations”. I suggest from experience that many things they force you do are not in the contract., especially when it comes to locations. When you talk to the attorney, as part of his due diligence he/she should be able to get the names of people who have been forced into similar situtations. There are a lot of them out there. If not, there are plenty here. JTH is a corrupt and ruthless individual. Good Luck with your situation.

• What Liberty did to my husband was morally unconscionable. And, it frustrates me to no end that they pretend to be a morally upstanding entity. My husband was an extremely hard worker, no one would dispute that, including Liberty corporate. He followed the Liberty directive for operating procedures, staffing, guerilla marketing, business to business marketing, etc.. He listened in on weekly conference calls and implemented suggestions. We saw very little of him during tax season and no ROI to make it worth our while.

  I have no doubt that Liberty is “buttoned up” legally. I’m sure they have more attorneys than Harvard Law School. Clearly, I don’t stand a chance in trying to “lawyer up” against them, however I feel a moral responsibility to at least shed light on my huband’s experience.

  Thanks for your feedback…..

• Widowed,
  I am sure I speak for many here when I say I’m very sorry for your and your childrens’ loss. I admire you staying strong for them thru the holidays, which must be rough. You have our condolences and prayers.
  Excuse me for being indelicate here, but I’m not sure what you’re saying is the basis of your lawsuit. Are you saying that Liberty Tax or the stress from it played a role in your husband’s death? Is there evidence that it was a factor or is your suit more general?
  I think it’s important to know the basis of the suit before commenting on whether it’s viable. There also may be precedents.

• Guest:

  I doubt Widowed wants to lay out her issue on this forum. I am pretty sure I understand what she is dealing with. If you read your promissory notes and contract, JTH collects your Liberty debts from your heirs and from your estate if you pass. Her husband borrowed money from Liberty to build his business. He passed away, and left a business which Liberty is taking back. She is still left with the indebtedness of the business even though his business no longer exists. JTH would sell his mother into prostitution if he could make a buck doing it.
  That is the problem with this business. There is no residual value. He passes, the value of the business is low and the debts are enormous. She will end up paying Liberty for the debt, and was given nothing for the business.

  She is in my thoughts and prayers. And for those of you reading this who are considering buying a franchise and financing it through this corrupt organization, think once, twice and three times before you sign anything.