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Liberty Tax
Hi,
I'm a former franchisee of Liberty Tax and I am writing in this forum to give a warning to anybody considering a Liberty tax Franchise. My tale of woe started a few years ago when I made the error of joining the Liberty Tax system. I am an accountant for a fairly large Boston area corporation and have some reasonably good tax experience along with a few tax clients. I wanted to have my own business and to do the income tax thing full time for myself instead of someone else. I thought Liberty could have been the answer. After visiting them in Virginia Beach, VA and being wined and dined by the company, I made the dumb decision to pay $25K for the rights to a territory along with a 19% royalty fee based on gross sales paid every year.
You can't make money with this concept because of the excessive franchise fees. If I had gotten at least the smallest amount of support for what I paid, I think I could have lived with them, but I did not! After numerous complaints, oral and written, that were completely ignored, I decided to let the franchise lapse. They came down on me like a fly to manure! They tried every bit of harassment in the book from opening a new store down the street from my old location,spreading the rumor that I was in jail, telling my existing clients that I had passed away (evidently, I got better), sending lawyer letters and having me followed by a private investigator. Why did they go through all this trouble? Because their franchise agreement has a 2 year, 25 mile radius non-compete clause in it! They felt that I should not be allowed to do business with my old clients even though they had no right to their business.
These are slick hucksters that are only concerned taking money from unsuspecting franchisees. Pleas be warned about their terrible and unfair practices!
- forums:
Liberty Tax Service is a
Liberty Tax Service is a retail income tax preparation firm serving the United States and Canada. They are the second largest international tax service. Liberty Tax Service operates 3,200 offices throughout the United States and Canada, and has prepared over 6,000,000 individual income tax returns. The company focuses on computerized income tax preparation, electronic filing and refund loans. Emphasis on customer service including audit assistance.
mcdst certification - mcse exams - microsoft 70-270
Strong doubt on this one...
The ONLY reason that you cold possibly "fail" in a Liberty Franchise is from NOT following "the programme". If a new franchisee will put in the (admittely enormous) hours needed to set up the business and learn the Hewitt method of doing things, there is a miniscule chance of failure.
If you have a fire or flood, are in a war zone or have your store destroyed in mid-season, I can see how this might happen, but the system is so simple and easy that - if you put in the time and effort to learn it and use it - there is amolst no chance you'll NOT make a profit the first year and continue to grow exponentially thereafter.
I suspect that the writer simply either refused to do the requisite groundwork to become know, didn't hire wavers, or didn't learn the computer programmes... We've been in business for four years and will expand to three more stores next season. It's a lot of time and work, but nothing is free in this world and this franchise is (IMHO) a real winner for those willing to invest themselves in it!
Exponentially?
Care to scale that back? To have a little credibility? You are not growing exponentially, and if your grasp of math is that bad, you shouldn't be doing anyone's taxes.But can you do volume WITHOUT a franchise?
"You can't make money with this concept because of the excessive franchise fees."
To me (NOT being in this line of business) a tax service seems to be a a prime example of where you SHOULD go franchise. If you just put out your own shingle for "Joe's Tax Service", how much business will you do? AFAIK, all the major tax service brands have pretty hefty royalties. They (apparently) are worth it because the brand names bring in the business.
People will seek out and walk into an H&R Block because they recognize and trust the brand. How long would it take for a newbie independant to build up that volume of business? If you have to discount your fees to get the business away from the big brands, not much different result than charging more but paying a royalty.
Liberty Tax
Hello Former Franchisee of Liberty Tax. I am a current Franchisee and I agree with your comments 100%. I am currently going through the same problems you experienced and would love to be able to email or speak with you on how I can get out of this situation while I still have my home and sanity. Please respond on how I can make contact.
Correction of Email
contact at biz.tax@hotmail.com -I apologize for lousy typing.E mail
E mail is:
bix.tax@hotmail.com
E mail me and I'll give my
E mail me and I'll give my phone #
Share Bad Experience
I am considering buying into th Liberty Tax Franchise system and would like to hear the pros and cons as well as your bad experience with Liberty.
Liberty Tax
You signed a contract, and then thought you could violate it? Why do you suppose Liberty is the #3 franchise listed on the Entrepreneur magazine Franchise 500 list? And the royalty is not 19%, it is 14%. There is a 5% royalty that is spent by the company directly on your territory for such things as a yellow pages ad, business-to-business marketing materials, radio advertising, etc. You aren't honest about that, so I tend to think you're not too straightforward about anything else. Liberty has grown very rapidly into a national company. Hard to believe your claims when looking at the situation objectively. I own two Liberty territories and I've found their support, software, marketing plan, etc. to be top notch while their royalties are lower than either Jackson Hewitt or H&R Block.Clearly a Liberty employee/zee. Dishonest as the day is long.
You signed a contract, and then thought you could violate it?
- you only realize the deceptions AFTER you sign.
And the royalty is not 19%, it is 14%. There is a 5% royalty that is spent by the company directly on your territory for such things as a yellow pages ad, business-to-business marketing materials, radio advertising, etc.
- The effective royalty IS 19%. A zee pays their OWN yellow pages advertising. I got a box of oversized t-shirts and some cookie tins. Wow. From $275,000 of sales I got $300 of advertising! The truth is the advertising ROYALTY (yes ROYALTY - read your email which states franchise and advertising royalties) goes to paying the Marketing department wages.
You aren't honest about that, so I tend to think you're not too straightforward about anything else.
- I think you need to look in the mirror a few more times. Check the number of territories handed back, abandoned or sold for less than half of what was invested.
Liberty has grown very rapidly into a national company. Hard to believe your claims when looking at the situation objectively.
- There are 800 entities with 3000 offices. Franchise agreement states if you don't achieve 1000 office by year four you could lose your territory. At last check, office 100 of 3000 prepared only 1100 returns. Taking into account Liberty's required 100-200 free return program Doesn't that mean about 2900+ are preparing LESS than 1000? YOU NEED 1000 PAID returns to survive. I think you're a little shady yourself.
I own two Liberty territories and I've found their support, software, marketing plan, etc. to be top notch while their royalties are lower than either Jackson Hewitt or H&R Block.
- I was top 50 and I doubt you're as convincing as your post in real life. Software - Taxwise - not even theirs for the first 9 years. Support - you have got to be kidding! Marketing Plan? - They suggest $16-36k on marketing alone! Check out the marketing plans on the right side in zeenet. Who has $30k to spare!????
They will fall to 10th next year or worse.
you guys who are complaining...
Didn't you know what the royalties were before you signed up? Those who want to bail out, didn't you know there was a non-compete clause in there? To those who aren't making $$, what were your revenue projections?
I have nothing to do with the tax business. Wouldn't use a storefront tax preparer anyway. A lot of our emplyees do, even those who can file an EZ. I pretty much view the storefront tax prep business as a way to make fees on "Refund Anticipation" loans to poor people, clientele kind of like an Aaron's Rent to Own.. But just wondering if this Zor really is to "blame". What did you think the Zor was going to give you that they didn't? Are the other tax prep Zors better, should you have signed up with H&R Block or Jackson-Hewitt instead? Just wondering.
background and success
If you do not mind me asking, what was your background before entering into agreement with Liberty? What are the highlights of your success with Liberty and what where the obstacles and challanges? What are the things you like about owning a Liberty franchise and how do you think they can improve? Where do you own your territories? How long have you been in business?
Liberty Tax
I have been in franchising for 23 years. I go with people to discovery days that are thinking of buying a franchise. I went along with a young man to Liberty for the dog and pony show. The first sign of trouble was someone picked us up at the hotel in an Uncle Sam suit. We went to the office and the whole staff was wearing shorts, flip flops and other casual wear. I have been on more discovery days than I can count and never ran into such a worn looking group. We had a sales rep that was in the Navy at one time and told us some wild tales about his submarine days. More than we needed to know. We ate lunch with John H and he gave us all the good news about the company. We went in after lunch and got the hard sell , the sales rep pulls up all the H@R Block locations on his computer along with their YTD sales information. That was interesting to say the least. One thing I remember the sale rep saying was that we were getting in on the ground floor of the next Microsoft. He must have said this 5 or 6 times during the day. It was shady from the word go. I told the young man I was with to find somehting else to buy into and he took my advise and did not buy the Liberty deal. This was in 2003 and the big push was RAL refund loans. After looking at the fees they charged, I could not see where there was much left at the bottom line and still do not see it. This is a business model that is facing death head on. HR Block has lost money the last couple of years and they are pushing their on line business and this is where their futture will be. 50% of tax payers pay no federal taxes now, Liberty, jackson and Block are all fighting each other for the lowest slime in the bucket. If you like going to pawn shops, title loan companies, buy here pay here car lots, and bail bonding compaines, then you will do well in the instant tax prep. biz. This will be your customer base.
co-branding idea:
Package up your storefront tax prep office with a Rent To Own shop. Apply the RAL straight to a big screen TV! Be sure to sell lottery tickets too. And if you can get the licenses, how about liquor and cigarettes?