LIBERTY TAX SERVICE Franchise Complaints

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

• Interesting article. Looks like fuzzy math behind the firing. This market is stagnate but tax reform does’nt change early season returns . Looks like it should reduce fees for mid and late season customers who won’t need schedule A. Ghost preparers who use the diy software are big problem for keeping early season customers. I’d say two more tax seasons before all see big drop in returns. Follow up to reform is cutting earned income credit. We’ve got TY2017 and TY2018 maybe.

• For anyone still foolish enough to be considering a franchise please read this report from seeking Alpha;

  “But Liberty management would argue that the last two years, in particular, were abnormal. Again, company-owned stores – 362 of the over 4,000, per the 10-K, though only 300 were operated during tax season, per the Q4 call – had a performance that both Hewitt and then-COO, now CEO, Ed Brunot, termed “unacceptable.” The year before, over 70 franchised locations were shut down amid allegations of fraudulent tax returns. That hit FY16 results, but also led to far lower franchise demand in FY17, with franchise fees down 47% year-over-year.

  The company pitches how well the system works but of the 362 company owned stores they only operated 300 last year and those stores performance was unacceptable per Hewitt. If the company selling the system can’t make a profit how can you

  Note the 70 franchised locations that were shut down. Most of these were at one time praised by Liberty for their performance.

  Stay away from this franchise

• Is “that man” in or out? I hear conflicting reports. And if he’s out, where is he? And if he’s in……WHY?? And when will he really be arrested and sent to prison? As long as the DOJ and IRS are involved, then most likely never. He’ll go in for something stupid like being combative to his girlfriend. He needs to go for being an asshole Liberty leader…..that’s the understatement of the year….hmmmm he’s been kicked out of H & R, JH and now LTS. What does that tell you? Once a rip off artist, always. He is dirt. Lower than dirt.

• Here’s the latest from the Liberty soap opera…Hewitt is not going quietly.
  https://pilotonline.com/business/consumer/ex-ceo-of-liberty-tax-removes-and-replaces-two-board/article_f3ae7835-1995-580c-9027-52c4bfb1d4ba.html

• No help to franchisees. Nothing helping existing stores improve or maintain. More stores will quietly become independents. Plenty of companies offering tax prep software and bank products. It’s about a profit and survival for franchisees. By the way, the drama matters not if the customer knows not.

• What a group of idiots! Hewitt back with Ossenfort on the board? Isn’t she one of the ones who was teaching franchisees how to be aggressive regarding low income schedule C’s? She was also part of that group that encouraged franchisees to raise their fees to cover this new found ‘expertise’. What a circus Liberty is if you have been following the local paper: from girl friend beating to entertaining prospective investors/franchisees at a restaurant Hewiitt owns to high salaries and questionable contracts between parties that are barely qualified to dial a phone, let alone run a business. If I hadn’t been so ripped off by these crooks, I would find this whole company a large comedy.

  Its got all the elements of a great intrigue as well: sexual harassment, fraud, shady business dealings, buyoffs,and just plain incompetent management . I’m sure there are more shenanigans that we don’t know of yet. Here are my predictions of what will come out: More widespread sexual harassment, Racketeering, Stock manipulation, Bribery, Lawsuits, Bankruptcy and perhaps a little jail time under SARBOX rules for the management of the company. Maybe the SEC will finally take a look at them.

  The Liberty soap opera still has more to play out, so stay tuned…

• I said it on Oct. 17th, I’ll say it here again:

  Truth is stranger than fiction. You can’t make up some of these stories and things that have happened to current and ex (mostly ex) franchisees under “his” extremely questionable & ignorant ‘leadership’.

  ^^^Hope you’re right and all these horrendous things come out about him. Things people turn a blind eye to and he has gotten away with it for years. Slime bag all the way. Let him go crawl in a hole somewhere to die alone. Look at his supposed purchase of a Cayman Island Bank. Someone needs to scrutinize him, send private investigators after him and then ask why is it taking so long to arrest him? Must be too many players he’s paid off. Hope it all comes tumbling down very soon. That will really be a happy dance day.

• More trouble at the Liberty ranch: Chief Financial Office Kathleen Donovan just announced her resignation.

  Also, George Robson, retired from the Board yesterday. He was not one of Hewitt’s 5 selected Board members. He was CFO at H&R Block in the 90s.

  http://ir.libertytax.com/node/10481/html

• Donovan resignation not good. Money problems?

• Looks like franchise selling season wasn’t too good. Look at the volume on the sell side of the stock today. Stock price down almost 17%. Having Hewitt back doesn’t seem to be a positive!

• One thing is for sure, there is turmoil in the house!! I so hope Screwitt takes the helm again!!!

• As long as franchisees contracts are one sided, Liberty still profits at the expense of those hard working franchisees.

  Still a terrible investment for those looking to get into the tax business.

  I have to believe that whether John or someone else is control that they will kill the cash cow: the poor, underserved franchisees.

• I don’t think the CFO resigning at this point is an issue. She obviously worked closely with Hewitt for the last 4 years and had a high salary. Looking back thought the news articles she stayed through numerous fraud investigations, the purchase and use of the Italian restaurant and Hewitt’s arrest among other things. I wonder why she didn’t resign earlier? Maybe just there for the money, which would be sad.
  Time for a new CFO and new CEO (not Hewitt) to get this company stabilized, in my opinion.

• Ex-CEO of Liberty Tax likely had sex in his office and dated employees, report says
  By Kimberly Pierceall
  The Virginian-Pilot
  Nov 9, 2017 Updated 1 hr
  How is it that the founder and head of a company could be fired by a board he controlled?
  It happened to John T. Hewitt, the former CEO of Liberty Tax, earlier this year. At the time, Hewitt and company officials gave no details as to why Hewitt was ousted by his own board.

  The Virginian-Pilot has learned that Hewitt was fired after the Liberty Tax board received the findings of an extensive internal review conducted by a high-powered law firm.
  The review was initiated to look into claims that Liberty employees heard Hewitt having sex in his office. During the review, the scope was expanded to include other allegations: that Hewitt gave preferential treatment to employees and franchisees he was believed to be involved with romantically, and that he placed his personal interests above the company’s.
  After two months of interviewing Liberty employees, the firm’s report concluded that there was “credible evidence” that the main allegations against Hewitt were “likely” true.

  https://pilotonline.com/business/consumer/ex-ceo-of-liberty-tax-likely-had-sex-in-his/article_90141e98-cf88-56a8-afcd-e1170fef68c6.html

• WOW. Just WOW. This news woman, Kimberly Pierceall, of the Virginian-Pilot, must be having a field day!!! If she digs even deeper, she will most likely find lots and lots of dirt on him for years. Even though this franchise has been disgusting in every way possible, it was made very clear to me that the head guy, the ex-CEO, is the one who started all my (and hundreds of other franchisees) REAL trouble. He is a loser in every sense of the word and I hope this is the beginning of his fall from grace, big time.

  The article talks about employees being interviewed: what about the hundreds of franchisees??? I was interviewed by the DOJ and IRS sooooo many years ago, it seems as if time is just slowly plugging along. This needs a major shake-up like what’s happening in the rest of the country with famous people in Hollywood. This a-hole, JTH, needs to be IN JAIL, and no where but JAIL. If the DOJ and the IRS interviewed enough franchisees, they will see the pattern of abuse by that man. He threw so many franchisees under the bus and have ruined their lives professionally. FOR YEARS. NO MORE getting away with it, a-hole. Go straight to jail, where you belong.

• The major exposure would be if it’s true he paid large sums of money for a failed or returned franchise. That opens up the possibility of class action from others who lost money. It sounds like his behavior could let a franchisee out of the agreements. Somebody has decided to get him fired regardless. Its not the baseball games and the accusations of at work sex, but the misuse of company money is a major accusation. They could have trouble collecting royalties unless they make him pay back any misused funds. It’s certainly enough to cause trouble getting any new franchisees. Thanks for the information, I’m keeping a copy of the article just in case. He must think he’s too ugly to get some on his own. Behavior of low intelligence, but it is just accusations; so far.

• Click on her article about bonuses awarded to some who stayed after he was fired. My question would be how do you have money for bonuses if it’s been two very bad years financially? Why are’nt bonuses dependent on profit and improvements for franchisees? Where in the friday afternoon fart is our marketing money?

• Possible Suggestions for increasing your ANF and Revenue while reducing Royalties to Liberty being paid first:

  1) Minimize Refund Transfers and Easy Advance with Refund Transfers. Look for a fee pricing & payment structure that is more likely to induce clients paying out of pocket for the return. This will ensure if a client pays, your get the money first, and corporate gets its royalty later. This also ensures that refunds intercepted by BFS or refunds being withheld until a notice of proposed changes are resolved don’t only leave you holding the bag.

  2) Don’t promote and minimially offer the gimmic Send A Friend & Cash in The Flash. The prospective clients who need this-refer them to the Liberties in your area who do promote that garbage.

  3) Prior to closing the sale, Invite Clients to opt into the Audit & Corresondence Assistance protection by charging them a higher Tax Preparation Fee. The ones who opt out, can get the lower tax Preparation fee but let them know that if they still need the Audit and Correspondence Assistances, that will cost them a fee payment similar to one for clients who come in off the street. You’ll notice there’s nothing contained in the client guarantee language either at offices or posted online which say Audit and Correspondence Assistance have to be free.

  4) When you get Tax Resolution Clients off the street-those in need of correspondence / audit assitance, charge them fees for those services-but on a pay as you go Plan (or on a lump sum payment).

  Again offices that do the above need to work out pricing and payment plans individually per their market and client expectations.

• Class Action Suit, anyone???
  Boy would I love that!
  Return our marketing fees since they did NOTHING but tell us how to spend our own money on gimmicks that don’t work. Royalties for WHAT? Driving the franchisees out of business with their lousy business model that is at years out of date and never worked in all locations anyway? The real kicker is telling the franchisees we loose $$, or didn’t make enough, because we didn’t “follow the system.”
  Those b*stards should all rot. Crooked den of thieves, all of them.

  BTW.. who would have sex with that ugly SOB? Eeeeewwwwww

• Looks like the new CEO said Cash in the Flash isn’t mandatory and that Zees don’t have to have wavers. One can only hope this business stops behaving like Ghetto Tax Scamming Services.

• In 2011, after losing my entire savings to this deplorable idiot, I moved to large city in the SE. At that point, I surveyed the Liberty Tax locations in my area. There were 12 within a 5 mile radius. Today there are none….. They have all gone out of business. Some still show on the website, but their offices are cleaned out, and they no longer exist. For anyone thinking of getting into this franchise, please stay away. it is a failed system that will not work, no matter where you are. LT is a corrupt company, and will bleed you dry, no matter your circumstances. Hopefully as the economy has gotten better, people will not be as interested as they were in “working for themselves”.

• The problem is anyone can be a Liberty Owner. You don’t need to have any background in Taxation, Law, or Accounting. You just need be a smooth talking “businessperson” who buys into the model of “we’re in the sprinkle some $50 dollar bills a client’s way and fill em up with drinks and snacks and they’ll forget all about how their being bent over on the fee to have a blockhead do their tax return.” Oh don’t get me started on the dumbass Preparers who get hired out of a 60 hour rapid class or what passes off as a full 60 hour tax class that’s just run by a hands off non tax-law-accounting background zee who hires someone else to teach but doesn’t give them the tools to succeed at teaching and training the batch of students to become legit tax professionals despite the best efforts of the teacher.

• Frustrated and Disgusted said “Some still show on the website, but their offices are cleaned out, and they no longer exist.” Could this mean that the number of offices Liberty reports in its annual reports is not accurate? I don’t know where they get their numbers from, but if the website is not updated are they using old data and exaggerating their office count? Hmmm…SEC might be interested.

  I agree with Roger that the only way to make it in the tax prep business is to have well-trained, responsive preparers. Clients don’t really go to the brand (with the exception perhaps of HRB because everyone’s heard of them). The go to their preparer who has done well by them, was pleasant, didn’t overcharge, and kept the IRS at bay.

• “Mr. Hewitt’s conduct … has left me in a very difficult position”: 4th Liberty Tax board member leaves.
  By Kimberly Pierceall
  The Virginian-Pilot

  https://pilotonline.com/business/stocks/mr-hewitt-s-conduct-has-left-me-in-a-very/article_0abfca83-01b5-5798-8d1b-2811fbfca720.html

• Good one. It looks like he’s having a hard time accepting the outcome of the review. Franchisees don’t own the stock and it should’nt effect profits, but franchisees depend on dedicated Corporate employees. This could make it hard to hire competent people.

  Some of our local non-Liberty franchises have closed offices still listed on their websites. This just makes it look like they have more locations.

  Dumb move getting it on at work. Dumb move for both parties. I think it will get cleaned up and the company will go on without him. It’s also a wake-up call for franchisees, et. all who think its a party instead of a business.

• ^^^When will the DOJ and IRS wake up and convict this guy already? They’ve been collecting info. on him for years.
  LTS needs to change their name altogether if they are going to survive.
  He’s been kicked out of all three “top tax” company’s: H&R, JH and now LTS. He is probably the most disturbing person to unfortunately come into my life. Or me into his web of lies. He needs to ‘pay’ for the countless lives ruined. And that means jail time, for years.
  Boy oh boy, my life would be so completely different now if I had never signed on to ONE 5 year contract. Amazing how much stress and dirt has come out from corporate just by me trying to be a respectable franchisee.
  I will be the happiest person alive NOT to have to post any more on this forum because it would mean that HE is finally behind bars, where he should have been all along. His ousting from his own company really is the beginning. What happened to me was so sad, and so avoidable. If I were dealing with normal business people that owned this franchise company, I would most likely still be there and continue being successful. Here it is, WELL OVER a decade I’ve been trying to get that man brought to justice. First step: completed—he’s been thrown out. Next step: not yet completed–jail time. A good and LONG jail term. Then I can finally have some peace.

• Not even a small percentage of the dirt on Liberty and how they ran this franchise has made it into the press yet. If someone ever goes back and truely investigates how many millions were stolen from people with the Area Development Contracts and how Liberty, particularly John and his CFO manipulated and took millions from Area Developers with zero intention of ever allowing them to complete there financing agreement and taking full ownership of the DMA. This way Liberty was able to go public much faster and see significant growth without having to spend an enormous amount of money on support staff, (Spent Very Little) and also they rarely had to pay out the 50 Percent per the DMA contract to Area Developers who owned the DMA without any financing to Liberty attached too it. If ADs completed the financing they would receive half the Income from royalties and terr. Sales for an indefinite period of time, so great effort was made not to allow this to happen. DMAs were almost always forclosed on prior to the financing being completed. That is once the income rose significantly enough where it was feasaable for ADs to be able to pay off the financing. If you look at Libertys payroll expense for support staff compared to the companies size and it’s growth rate for the 8 or so years leading up to them going public the numbers are just flat out too good to be true. It’s too good to be true because it was too good to be true.

  Liberty was created and designed to control every aspect of the business via financing. It started with the DMAs and Area Developers and when they were able to get away with that on a large scale they went full speed with the shady financing that enabled Liberty to grow so fast and what has killed them in the long run.

  Franchising has been out of control for years and now a few are starting to shed some light on a system that has ruined so many good honest people for years.

• I believe that certain board members or certain people affiliated with Liberty may have gotten word of a federal investigation and that is why they cut ties like and when they did. John’s actions have been questionable for a long time. He has been overly paranoid of anyone gaining any kind of power or influence inside the franchise system which led him to intentionally destroy many franchisees amd Area Developers. John saw this as his dream and empire and everyone else involved was disposable and not necessary the moment John deemed them to be unnecessary,.

  No idea if Federal Charges will ever be brought and if they were, if they would be against John and Liberty or just John himself. Either way it’s not the kind of case the IRS likes going after just because of the amount of resources and money it takes to convict a large rich organization. The IRS normally sticks with destroying the little guy that cannot properly defend himself and leaves the large corps like Liberty alone. Let’s be honest if you are a Liberty Franchisee the past several years you have been a possible target of the IRS just due to the fact you are associated with Liberty.

  Too many lives have been destroyed and too much damage has been done to too many people for true justice to ever be seen. My hope is that someone can use Liberty as a example amd show the real state of franchising and show how it has ruined more lives than it has enhanced. And all this damage and heartache was done intentionally so that someone at the top could fulfill his twisted dream. Liberty is not unlike many other franchises out there where the design is to use franchisees time and investment and then discard them like trash to enhance the bottom line and to grow an empire. Franchising as a whole is cancerous and is broken right now. Franchisees putting there life savings and security Into one if them is just pure insanity and never should be done.

• ^^^Out:

  Thank you for two very well written posts here. The fact that he was THROWN OUT of not one, not two, but all three “top tax franchises” he was a part of, is incredibly telling in of itself. There are not enough negative words in the English language except to say he is lower than the lowest scum.

  My question to you all: My experience was so deep, so personal and so out of this stratosphere…. they always say that truth is stranger than fiction, boy ain’t that the truth. I am trying to write a book on my experience. Do I fictionalize it? I do not want to be recognized by him. I somehow think he still would have the power (which he doesn’t) to still come after me & my family. He has destroyed so much already. I’m not sure I’m writing it to ‘get even’ as much as for my own edification, and to put some closure on the longest negative & stressful chapter in my life. There’s a reason there doesn’t seem to be a lot of negative books on franchises. But I want to finish writing it and also try to have it published. Any warnings you can think of? Thanks in advance……….

• Prediction. Only 1 to 2 more seasons for retail tax stores. More than 30 to 40 percent of franchisees will drop out if they can’t sell. It will go the way of Black Friday long lines and malls. Major change is inevitable because of delayed refunds, shrinking profits, and other changes.

• Any word on a tax refund loan for LTS it looks like HRB and JH have a nice one but nothing on LTS WWW? If I was a bank I would have issues with whats been going on.

• I’m interested in writing about my experiences as well. San Fran Dan has brought up some interesting queries as to what should be written about and how. I’ve started talking to some of the other franchisees in this area, most are out of business, about their experiences with the Liberty robbers. I’m just not sure how to present this. Can I also get some help? Would ADMIN be willing to act as the liaison between all of us so that we can get their stories out? I would love to hear from as many as possible to get some ideas on writing and on what the common themes are connecting these Liberty crooks, John Hewitt and the rest of the merry band, and as to what kind of crooked franchise this is. We got over 5400 posts here on this one subject, so I think there is something that can be done. Let’s help each other.

• Texas, you should contact the Virginia Pilot, especially the lady that writes all the good ones about Screwitt I bet she would love to hear from you.

• Liberty Tax, Inc.
  Robbins Arroyo LLP Is Investigating the Officers and Directors of Liberty Tax, Inc. (TAX) on Behalf of Shareholders
  Robbins Arroyo LLP is investigating whether certain officers and directors of Liberty Tax, Inc. (NasdaqGM: TAX) breached their fiduciary duties to shareholders. Liberty Tax, together with its subsidiaries, provides tax preparation services and solutions in the United States and Canada.
  Liberty Tax Shareholders Have Legal Options
  Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003

• SanFranDan and Texastee, you’ve gotten very good advice to go to a media company to get the story out. An interested journalist can get these stories published and stir the pot, perhaps enough to get state or federal officials to initiate an investigation. I would not try to publish on my own. First of all, you should expect to get sued big time. If SanFran has already lost years of life fighting and agonizing, double that. No book publisher would take on such a project just because of the company’s penchant for litigation. Newspapers and perhaps TV investigative reporters, would likely be interested. Their legal depts will advise them and be prepared for lawsuits. An added benefit is that you can remain anonymous and out of the reach of JH and company.

• SanFranDan I understand the fear of retaliation and while it does seem that John and Liberty seem to be down and possibly out for the moment, things change and change quickly so that fear you have I believe is a good thing. I don’t see John going down without a fight and if there’s one person who is willing to fight like hell without stopping it is John Hewitt. John Hewiit backed into a corner can be dangerous. Hard to see him winning this one I agree but I have seen so much I wouldn’t count him out just yet.

  Honestly I no longer desire to seek revenge on Liberty or John. I am betting that our stories have alot of similarities as do many ex Liberty Franchisees. I do however have a burning desire to get the word out on Franchising and how it has become corrupt much like Washington DC and to let people know what they are really getting into when they buy into a Franchise System. I think the best way to do that is to expose how Franchises really work on the inside.

  There’s enough evidence if someone with the knowledge and persistence would investigate to show That Liberty was a Franchise designed to take advantage of Area Developers and franchisees and ruin many of them intentionally. The rules to the game of franchising are 1000 percent in the franchisors favor. And any rules or laws that may be there to protect you, are in reality an illusion becsuse without a legal system that is willing to enforce the rules and give a Franchisee equal protection under the law all the rules and laws to protect a Franchisee are a fairy tale. Unfortunately we live in a society where we don’t have equal justice for all. We have a 2 tier justice system for the elites then the rest of us.

  If I was going to write a book I would suggest focusing in on helping people realize what buying a Franchise will really do too you. To do that you will need cold hard facts and examples on how Franchisors are able to completely control you and all your money and crush you at will when they deem necessary. Untill the story of how a franchise like Liberty truely built there empire, I don’t think the majority of people out there will understand nor will they heed all of the warnings. What is needed are facts that shows without a doubt that what is done in many franchising systems is in reality criminal.

  Good luck on your book and if I can ever help please let me know.

• ^^^Thanks for your suggestions, everyone. Not sure what I’ll do yet. It’s not that I seek revenge, I just seek closure. I thought I’d be happy when he was booted out. I’m not because he is still on the board, still getting payouts, and still free from jail.

  I guess I’ll really only be happy when he’s stripped of his dignity and sent to jail. For a lonnng time…..it’s the only fair thing to do. And with that, all his money rights would be gone too. Someone still needs to investigate his ‘private bank’ in the Cayman Islands.

  Part of the reason I’m still needing closure is that things in my own life have been very ‘down’ since this all happened many years ago. Once I can get control of my own life again and get the confidence I need that was taken away from me, I won’t give a s— what he’s doing or not doing. However I do agree that not any dirt has really come out yet. I wish it would come out quickly and nationally, the same with what’s happening to all the fallen men around us. I also agree that I don’t have the resources anymore to fight a lawsuit on a book I would write about this experience. Yes, contacting the media has been on my mind too, for many years. I may just write the book for my own closure & health and not do anything with it. How many times have we written letters that haven’t been mailed? This is one of those times. Yes, Out, I agree that it would be more of a warning type of book about what you’re getting into and what to look for. Anyone reading this forum that has not yet put down money on a Liberty franchise territory: Take your money & run. There are a million better things to do with your hard earned $$. Even with JTH out.

  Bill & all you others:

  How have you been able to move on without letting the scarring continue? Boy this isn’t easy! :(

• SanFranDan…Read this press release concerning new board members and pay close attention to the information when it talks about the details of Ossemdorfs DMA note and repayment. https://marketexclusive.com/liberty-tax-inc-nasdaqtax-files-an-8-k-departure-of-directors-or-certain-officers-election-of-directors-appointment-of-certain-officers-compensatory-arrangements-of-certain-officers-6/2017/11/ Also look at the amount she borrows and pays back. Liberty intentionally did not sell DMAs to individuals or groups with the cash upfront or that had the finances to have a prayer of completing the financing the vast majority of times. A few did own DMAs but they were near the start of the franchise when Liberty was desperate for income to survive. If they Allowed ADs to own DMAs they would be giving away half there income in definatley and that was never ever part of the business plan. The vast majority of time and I mean VAST! They sold these DMAs to individuals they could ensure could never be able to complete the agreement but also to individuals who they thought could do the job well enough, especially when it came to recruiting new franchisees, getting franchisees to open additional stores, and franchisees they felt would be suckers and ensure no stores closed in their DMA even if it meant them taking it over themselves. The ADs would do the work because they truely believed they actually owned something and that they would be able to fairly complete the contract. But like the Majority including Johns own son and many many others, it was just a cruel shell game where they ensured at all costs that the vast majority of ADs would never complete the financing enabling them to 1. Get free labor and not have to pay Corporate Help in the form of Coroorate ADs, and in reality they were instead having the Area Developer actually pay them too sell stores, give support, and all the other duties. Area Developers paying Libetty to work for them! 2. They were able to grow much faster keeping expenses unbelievably low. 3. I strongly believe they practiced funny accounting for years leading up to going public to ensure only a handfull of DMAs ever were actually owned by an Area Developer. This has changed some over the past 4 years but before they went public this was common practice to not allow ADs complete their financing agreement. this is a key reason Liberty was able to grow so fast and go public so fast. If Ossendorf could not complete Libertys financing agreement who realy could? Very very very few! And even if in reality they could, Corp made sure one way or another it never happened. Certain people that Jihn felt were important were taken care of even though they lost their DMA but most were just broke completely.

  Liberty has not made there money on Tax Preperation, that has always been an illusion. They are in the lending shell game. They made money being a short term low risk high interest rate finance company that loaned money and had very small amount of risk and as important they had complete control over the franchisees and they were never afraid to exercise that control and pressure franchisees to make certain decisions just to get financing. . There’s a reason that LIBERTY never had any desire in anything except low income bank product customers and online self prepared customers. That’s how they got paid. Any franchisee focusing any attention to anything but early season Bank customers or bank customers period was put down and eventually gone. The entire franchise system is based on a slick shell game. Make the Franchisees believe your in the same business with them when in reality the franchisees are Libertys loan business and they ensured that the majority of franchisees could never make any sort of real money because they had already taken 99 percent of meat off the bone leaving franchisees with less than scraps. Keep them paying high interest and fees to ensure they have to come back year after year after year just to survive. Keep them broke and desperate. Similar to payday loan lenders or a loan shark on the corner! If it wasn’t for the crash in 08 I believe it would of been much grander and many many more would of been financially destroyed just so John could brag about being able to bear HR Block. It was and always been about John Hewitt not about the Franchisees or anyone else.

• Wow! Thanks for the information. Whats crazy is that they could’nt pay for the AD in the 5 or 6 years of the notes. Looks like their share of the royalties didnt even cover the yearly notes, even though in excess of $100,000 yearly. Its even deeper when you read the disclosure and conclude that Ms O was franchisee for over 15 years and borrowed operating funds last year. Why couldnt long term franchisee borrow money from a bank at 4% to 6%? Probably didnt want the business debt tied to family personal debt. Corporate debt not tied to personal debt.
  Both lost tons of money on AD’s, but disclosure doesnt mention if they own company stock.

• Guest what else is interesting about Ms. O. DMA is that upon Libetty purchasing the DMA back they forgave the upside down portion of he debt she owed. This was never the norm. Normally no matter how well the Ad did the financing was set up to ensure that they never would be able to pay off the debt. Of you look where it says she made around 60k the final year she was the AD for that DMA, that I’d not Money she received. All of that money went to pay off the debt she owed Liberty for the DMA. Like I said before it’s a financing shell game. The hook has always been to brag about the AD contract and how amazing it is and how it’s one of the most amazing contracts in franchising. And I agree, if your ever able to pay it off in full you would make an extraordinary amount of income for the work and expenses you have. The dirty little secret for a long time is only a small percentage compared to all the DMAs that have been sold, many multiple times, have ever been able to own one outright.

  The DMA sales process and how it’s been used is the cornerstone to how Libetty became a success! I would love for a forensic accounting specialist to investigate this because I gurantee that they would hit the mother load of fraudulent activity!

• Block and Jackson Hewitt will most likely destroy what is left of the Liberty market share within 2 years time. The gig is up for Liberty. It is now comical to even tell potential investors to stay away from plunking down any money on a Liberty franchise territory. Comical because we would all laugh in the faces of anyone even thinking about joining this ragtag outfit.

  Many of us that invested in this woeful company never had the benefit of all of the inside information that is on this site. This site is replete with the “buyer beware” warning. So sad that many have been burned by this outfit. We at least can take solace that our motives were pure. We wanted to make money operating an honest tax business but we unfortunately were partners with some very bad characters.

  We are watching the final chapters be written on Liberty Tax. Goodbye, and good riddance.

• JH and HRB have loans this coming tax season but can’t find any info on offerings for LTS anyone have any information? If they don’t should be the final nail in the coffin.

• Jackson Hewitt and HRB both will have to change there business models soon or they will also be history within next 6 years. The days of making your profit taking advantage of people’s ignormace and irresponsibility is quickly going to come to an end when it comes to tax preparation. We are about to see a shift in professional tax preparation and the shift will not be in retail stores. It will be a shift to people dealing with tax preparers who they have a relationship with but everything will be done by phone, email, and the cloud.

  HRB will outlast all others just because they are the ones who instead of betting everything on the scam they built a true tax practice in many if there locations. I think they still will loose market share but they may be the only big box tax stores that have enough intelligence to change.

• LTS will be offering loans this year, very similar to the amounts that JH and Block are offering, though I understand a slightly higher amount. This product will be highly misleading to clients, rumors are flying that there will be a very low approval rate for individuals applying for the maximum amount.

  The loan fees that LTS will be charging the offices are extremely high and this will be passed on to the clients via extremely higher tax preparation fees. LTS is encouraging owners to add to the tax preparation fee an E-file fee of $49.95 which LTS will get 50% of. Individuals applying for these loans will see fees over $600 or more for simple tax returns

  You do not have to worry about JH and Block destroying LTS, that is happening within. LTS new CEO is clueless and his objective is making money for corporate not the franchisees or area developers.

• So, the objective is the same as always; fleece the franchisees and clients. For the franchisees it’s not only their money but their time and dignity. Dignity because they let LTS take advantage of them.

  Don’t be duped potential and current franchisees. Don’t get in and get out when you can.

• Out – you are definately on point. All three face the same challenges. The market is changing and tax offices will have a major shrink over the next 2 years. Survivors will be the ones with a staff of experienced professionals. Early season stores know its coming unless head buried in sand.

  Because everybody, including the banks, is after money – mom and pops in a basement can offer advances up to $2,500. My email is full of offers from tax software companies.
  Loans are no major advantage.

  Soon the race begins and we shall see the outcome by March 1st.

• https://pilotonline.com/business/stocks/liberty-tax-delays-earnings-announcement-because-of-recent-management-changes/article_84f57d2a-e261-5586-99a0-c8032ff545b1.html

  Liberty Tax delays earnings announcement because of “recent management changes”
  By Kimberly Pierceall
  The Virginian-Pilot

  After canceling its first quarter earnings call with analysts and investors following the ouster of its CEO and founder John Hewitt, Liberty Tax postponed its second quarter announcement and call, too.
  The Virginia Beach-based company announced the postponement Wednesday evening, the night before the scheduled 8:30 a.m. call to discuss its financial condition in the three months ending Oct. 31.

  The company’s board of directors voted to fire Hewitt from his position of CEO in early September after hiring an outside law firm which found credible evidence Hewitt had relationships with staff and franchisees whom he treated with preference, had sex in his office and arranged off-site meetings and trips around the Yankees baseball team schedule.
  Hewitt, though, has remained chairman of the board and chooses a majority of its nine-members because of his controlling stock ownership. He removed two board members after his firing, replacing them with longtime Liberty Tax franchisees. Another two independent board members announced their departure and the chief financial officer announced she would resign at a future date. 

  Liberty Tax said the delay was because the company was still finalizing “their quarterly assessment of internal controls as related to recent management changes.”

• After thinking and studying this for a while Ai don’t believe there is a chance in hell that Liberty will ever find agreeable terms with John. The only agreeable terms is for him to return and be the face of the company and allow him to have a say in the direction of the company. Other than that short of the feds coming down on him I don’t see any way they are able to fix this without him returning. I’m betting he returns shortly after this season and it may even be much much sooner than that. Liberty cannot Force John to sell his shares or give his control he has over the board. So the only thing Liberty can do now is try to limit any damage he may cause. That will be impossible and he will quickly be back in control once they let him in the door.

• Sanfrandan. You and I need to talk. I think you and I speaking may result in something very very positive for everyone. If your interested let me know and I can arrange it. I think you will enjoy the conversation and be very excited after we speak .

• ^^^I’m wary, but interested. Let’s figure out how to talk. Thanks.