Don't Spend That Refund! Hold that Stock?

Well if you had your tax return prepared by THE LARGEST Jackson Hewitt Franchisee or one of his offices, you may want to hold on to that refund, because the IRS will be calling.

And if you own Jackson Hewitt stock, do you hold or do you sell?

Shares of Jackson Hewitt Tax Service Inc. plummeted Tuesday after the federal government sought to bar a major franchisee from preparing tax returns over allegations of fraud and more than $70 million in combined losses to the U.S. Treasury.

Read More  (Business Week)    |     Read Even More!  (MSNBC)

I wonder what one does when they get the BIG REFUND --- Spends It --- and then they IRS comes and says GIVE IT BACK?

This will be very interesting to watch in the coming months.  It could easily become a situation whereby a franchisee brings down the entire network...Franchisor and Franchisee.  If, as is alledged, the franchisee was promising LARGE REFUNDS in order to stir up more business, I wonder if he paid royalties on ALL of the business?  I wonder if corporate ever looked to see why 1 franchisee's sales and client refunds were so much higher than the norm?  It will be interesting and we all know that the IRS will spend $1,000 to collect $1 --- what do you think they'll do about $70 million?

The attached shows some extremely interesting financials on Jackson Hewitt.  It looks like the franchisor is making MONEY, and that franchisees are doing well, as well, in spite of 19.2% Royalties, Mktg & Adv. 

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!