UnhappyFranchisee.Com – Are you familiar with the Jackson Hewitt tax franchise opportunity? What do you think? You’re invited to share a comment below.
According to the Jackson Hewitt website, Jackson Hewitt Tax Service Inc. (NYSE: JTX) is an industry leader providing full service individual federal and state income tax return preparation through more than 6,400 franchised and company-owned offices throughout the United States.
After its rapid rise to the #2 position in the industry, Jackson Hewitt has had some rough years and myriad problems. According to Wikipedia:
“The 2007 Department of Justice investigation, poorly constructed financial products, and a company-wide tax law compliance initiative that many insiders believe did more harm than good combined to erase nearly 50% of the company’s market share over merely four years.
“Additionally, the company negotiated out of a default on its debt in May 2009 and technically defaulted for several days in May 2010 (though an agreement with creditors was announced within one week of the ‘default’).
“During the 2010 tax season, Jackson Hewitt was not able to provide its flagship refund anticipation loan product in 50% of its stores, placing it at a operational and marketing competitive disadvantage. The company’s current agreement with creditors requires that it secure refund anticipation loan funding adequate for 100% of its stores by September 30, 2010 and that written commitments from lending institutions be made available to creditors by November 15, 2010. Failure to do either will place the company once more in default.
“The debt indicator is a significant part of the provision of refund anticipation loan funding and its lack of availability is expected to increase the cost of such products to consumers and decrease the level of their availability.
“This IRS change significantly reduces the probability that Jackson Hewitt will be able to comply with its renegotiated loan covenants as discussed above. The stock currently trades below one dollar*.”
* The Jackson Hewitt stock price is listed at $1.11 today
Unhappy Franchisee has received numerous complaints about the rival Liberty Tax Service (see LIBERTY TAX SERVICE Franchise Complaints).
Is Jackson Hewitt franchise have worse problems?
How is the franchisor doing in helping Jackson Hewitt franchisees weather the storm of operational & marketing challenges, and adverse publicity?
Is this simply a franchise (Stock? Tax preparer?) to avoid at all costs?
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Company responses, clarifications or rebuttals welcome. Contact the author/site admin at UnhappyFranchisee[at]gmail.com.
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View Comments
As long as you can get a REFUND online, the world can end. Anyone with an internet connection can steal from the the Treasury Billions of dollars and not get caught for 15 months.
A fake W2 and a live social is all you need.
Eliminate the Online Refund now.
Do you really know anyone who has $400 a month to spend on an investment that costs $500 a month?
Financial services as we know it is dead. Obama USA can no longer afford to pay people who do not work.
I am now using tax slayer pro which is the highest rated (NATP) software.
Your market is your market; that means within a radius of 10 miles is your entire tax market clientel- the big firms know this and sell franchises by zip code. I've spent 75K on my education and I have to pitch that as a marketing strategy against the "six week wonder experts" the nationals firms create.
How long before the IRS goes to using the SEE1 as a basic standard for tax preparers? If this was done the quality of preparers would improve.
How about telling self pre parers they must use a "professional" if they make a 1K error in their return? It would stop the self preparer fraud
Big Al:
I did not send in my $150 to the EA crowd in Wisconsin. Rather take the kids to the park then give a penny to those Education morons.
No one cares what software you use. I love the double ply however for my a$$et.
I must show the world that your EA kool-aid is tainted.
Forget any EA crap and get yourself 1 million paying customers then you have something to talk about in you basement operation.
There will always be criminals, but - in the long run I think :
The IRS will have to depend on software to do cross checks - avoid sending out fraudulent refunds. Preparers can only get answers to the questions. The systems should know if someone is dead or did'nt work, or if 'you are not the father'!
I'm guessing the EIC & other credits will shrink low enough to reduce refunds by 2013 / 2014. That will 'dry-up' the large tax prep fee.
The exam is going to be hard to pass. That will decrease the number of preparers.
Franchised stores will need to get people who can past the test or pay for EA's.
Unhappy franchisees will be glad they got out, because making a profit will get more complicated.
The test will be so easy, any Junior College dropout could do it at lunch.
If IRS wanted to, they could eliminated all EAs and have just CPAs do the work, the correct way.
If you are a CPA got nothing to worry about. It was fun taking the 3 day CPA Exam and passing it.
Hard to be a pretend CPA in the hood.
Quite frankly, I believe all paid-preparers should be either a CPA, EA or Attorney. I realize the RTRP (Registered Tax Return Preparer) that the IRS has established is trying to eliminate some of the "riff raff" but doesn't go far enough. That may be considered "protectionism" and may or may not increase the cost to the end consumer but I like to think, as a CPA, it would bring back respect to our profession. Can't practice law without being admitted to the bar or practice medicine without going to med school and residency. Just my two cents worth.
There seems to be many other "income tax prep" franchises available and wonder if any of you have any insight on Tax Centers of America out of Russellville AR or Pro-Tax out of Charlottesville, VA? Both seem to be family-owned operations. Anyone know the good, the bad and the ugly on these companies?
Brian:
You need to consider online refunds.
You are in the refund business.
Not the tax business.
I am not "in the refund business" and do not pretend to be those people who talk about a one man shop preparing over 3k total returns in a year better get a themselves piss tested!
As for EA NTPI education, it is worth every dime I spent on it; the opportunity to meet over 600 of the sharpest tax minds and network with them is definitely a chance you should not miss. Also NAEA's headquarters is not in Wisconsin.
I believe in the proverb that " a wise man takes not the counsel of a fool"!
Figures don't lie but liars can figure; until I see audited statements of tax return prepared by one individual over 2k total returns I will remain skeptical.