UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiar
Entrepreneur magazine has ranked the Liberty Tax Service franchise #3 behind McDonald’s & Subway. However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.
This post was originally published
BostonTax wrote:
I’m a former Liberty Tax Franchisee
I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.
Barbara Green wrote:
I too was a Liberty Tax Franchisee and I agree with everything you said.
The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.
Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.
At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.
It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE? ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY? WHY OR WHY NOT?
.
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From my experience, Liberty Tax corporate could screw up a customer relationship a lot faster than any franchisee could. I had at least (4) situations that went to LT first because they lost the office contact number, and by the time they got done with LT, they were livid. I retained them all, but only after a lot of apologizing for their poor service.
dEAR MR. chidi odimegwu
I am a liberty zee also and if you had come to my store i would have kicked your ass out the door and told you to screw urself and ur old lady. But thats just me. I do have to say, that the one thing i hate of first peak, is that the customer are ignorant, unmannered animals. All they care about is scamming the system for there refund or ass they call it gubment check. These colored and noncolored folks are mostly trash and i treat them like trash. thats why i charge them $400 for a return for having to put up with there bullshit. One good way to scare them is to tell them you will have the IRS audit their EIC Credit. that shuts them up so quick and they haul ass oout of the store like lightning.
I can see your ignorant and Unhappy with your life
. Why don't you just kill yourself. Don't get mad at me because your wife is a cheating whore. With that attitude, know wonder you guys suck.
chidi odimegwu: Refrain from personal attacks and insults or you will be banned from this website. ADMIN
I'm sorry. I didn't mean to stoop to his level. Thanks for the warning.
So Mike has logged on as Chidi, and then pretending to be a franchisee and in his little world, he thinks he is making people not invest their money in this franchise. Why are you not out there making money like most of us are?
chidi writes "I can see your ignorant and Unhappy with your life
. Why don’t you just kill yourself. Don’t get mad at me because your wife is a cheating whore. With that attitude, know wonder you guys suck."
Ok, I would like to rescind my support of chidi odimegwu. I would give him his money back and then get a restraining order. Where do you guys live again? Psychoville?
The Rats are jumping ship again writes: "I am a liberty zee also and if you had come to my store i would have kicked your ass out the door... the customer are ignorant, unmannered animals. All they care about is scamming the system for there refund or ass they call it gubment check....One good way to scare them is to tell them you will have the IRS audit their EIC Credit. that shuts them up so quick and they haul ass oout of the store like lightning."
Wow. You Liberty Tax franchisees are a classy bunch.
No wonder you guys are failing.
Posts regarding chidi odimegwu really need to be on Facebook where they belong. It will have a much more meaningful result if you post there.
Hi looking for advised. this is my second year and i have done only 23 returns and 4 are free. any ideas from the pros on how to get the momentum going. any help would be appreciated.
second year zee;
What Marketing have you done since opening this year ?
Second Year Zee
Unfortunately there is no silver bullet that you can use. The first thing I would do is look at last years numbers. Review those logs and figure how much your up over last year and use this % to determine what your results will be for the season. Staff should be cut and wavers kept to a minimum. Liberty's budget is worthless so don't follow it. If your in a low income area your season will be over in two weeks if your in a middle income area your season will have two peaks. You can reduce your store hours between those periods. Your pricing is important so you need to stay competitive not cheap.