Tax Preparation giant H&R Block (NYSE: HRB) has announced that it is discontinuing its franchised EXPRESSTAX subsidiary. What this means for the franchise owners of 269 EXPRESSTAX locations is not quite clear. H&R Block has stated that it will give some franchise owners the opportunity to convert to the H&R Block brand. It did not say how many would be extended the conversion option, nor what would happen to those who weren’t.
The news comes a little over two weeks after the nation’s biggest tax preparer announced it won’t offer refund anticipation loans next tax season because the appeal of the high-cost loans is shrinking. CEO Bill Cobb said in a statement that the company is getting rid of the brand because “it was no longer a growth driver and therefore not a good fit for our company.”
H&R Block acquired EXPRESSTAX in 2006 when it was a 300-unit chain. According to Entrepreneur, H&R Block grew the chain to 408 locations in 2007 and to 509 EXPRESSTAX locations in 2008. EXPRESSTAX locations then declined to 376 in 2009, and 263 in 2010.
Here is H&R Block’s 9/29/11 press release regarding EXPRESSTAX:
H&R Block to discontinue EXPRESSTAX brand
Latest move signals another step to focus efforts on client growth and brand expertise
FOR RELEASE SEP 29, 2011
H&R Block (NYSE: HRB) announced today it will discontinue service under its EXPRESSTAX brand. Currently, there are 269 EXPRESSTAX franchise offices, which collectively prepared nearly 100,000 tax returns and generated $3 million of royalty fees to H&R Block in fiscal 2011. As H&R Block seeks to continue growth in its franchise base and clientele, it will invite many EXPRESSTAX franchisees to join the H&R Block brand.
“This move is consistent with where we want to focus our future investments and resources,” said Bill Cobb, H&R Block CEO. “After a thorough review of the EXPRESSTAX business model and its recent performance, we concluded it was no longer a growth driver and therefore not a good fit for our company.”
In connection with this announcement, H&R Block will record a pretax charge of approximately $0.02 to $0.03 per share in the fiscal second quarter ending October 31, 2011.
H&R Block purchased EXPRESSTAX in 2006. The EXPRESSTAX brand attracted mostly early-season filers who also sought quick-paying financial products. H&R Block offered EXPRESSTAX franchises in locations where it had competitive and geographic advantages.
H&R Block is coming off one of its strongest tax seasons in recent years. In Tax Season 2011, H&R Block grew new clients by nearly 19 percent, saw client retention improve by nearly 4 percent, and gained market share in both its retail and digital tax preparation channels.
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About H&R Block
H&R Block Inc. (NYSE: HRB) has prepared more than 575 million tax returns worldwide since 1955, making it the country’s largest tax services provider. In fiscal 2011, H&R Block had annual revenues of $3.8 billion and prepared more than 24.5 million tax returns worldwide, including Canada and Australia. Tax return preparation services are provided in company-owned and franchise retail tax offices by more than 100,000 professional tax preparers, and through H&R Block At Home™ digital products. The H&R Block Bank provides affordable banking products and services, and McGladrey is a top provider of tax, accounting and wealth management services to mid-sized businesses.
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ARE YOU FAMILIAR WITH H&R BLOCK & EXPRESSTAX? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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Liberty Tax has experienced tremendous growth the last few years. More than half of its office are under three years old. The average office does about $110k in revenues but most of those are under 3 years old and will be growing to about $200k in the next 3 years or so. Some (like Mike-tard, Bill-tard and Frustrated) will quit because they did not get rich after 3 years so the average may be a little lower. You have to figure 1/3 of people are complete morons, which explains those three guys. 1/3 of people are average, and 1/3 of people are overachievers.
John Barilla,
If you are either in John's first two catagories you definitely should not buy into a Liberty Tax Business and if your in the third catagory Liberty needs you, you don't need Liberty. Keep the $40,000 in your pocket and if you have the tax knowledge go into business for yourself. It will take you on average 3 years to build up to between 300 to 400 returns. That $40,000 along with not having to pay royalty and advertising fees will help you when cash flow is the tightest. There is a great book titled starting your own accounting practice. It gives you ideas on marketing your tax knowledge to established accounting firms and doing some per diem work for them.
Bill,
I agree with you 100%. If you fall in the first two categories (Complete moron like Mike-tard, Frustrated and Bill-tard) and just average you should not buy this or any franchise. You should not start your own business because it is really hard to make money on your own. If you are an overachiever you will probably do well on your own but can also do just as well with Liberty. However, there is something to be said for going at it alone or having a strong network around you. You pay for it but it pays for itself.
Bill,
Jonny is in a class by herself. He invested tens of thousands of dollars into Liberty, he should have waited. Did you get your email from Liberty? They are waving the franchise fee, that's how desperate they are, nobody is buying the SCAM! Jonny works a full time job and he invested (wasted) his money buying a Liberty, and he is going into his fourth (did I really say FOURTH?) tax season and has yet to make a DIME!!! HMMMM, that must explain why Liberty is giving away the farm! Great investment JONNY, (chuckle, chuckle)!!
Mike-tard,
Whatever makes you feel better....
John:
Are you going into your 4th season and do you work a full-time job?
Bill,
See John's statements on Oct. 5th. 10:41 am second paragraph. "I have a full time job that pays the bills" Liberty is a BAD INVESTMENT, 4 tax seasons and he still has to have a full time job? DON'T BUY A LIBERTY FRANCHISE!!!
Mike-tard,
Did you ever consider my other job might be something i enjoy doing? Did you not realize that fact that my Liberty Tax office makes money and i only work 3 weeks out of the year? Once again, you prove you rode the short bus to school...
Jonn-turd,
HAHAHAHAHAH, now you only work 3 weeks out of the year????!! You are killin' me with your intellect! Once again, to any potential Franchisees, Liberty is a BAD, BAD, BAD investment!! Stay away from this organization, buy an H&R Block, Jackson Hewitt or start your own tax office. JUST STAY AWAY from this organization, do your homework and call all offices within a 100 mile radius of you and you will see that it is a failing entity.
Guys: Can you please stop the name-calling and insult slinging. It's a bit juvenile and takes away from the important issues people are coming here to research. Thanks.