LIBERTY TAX SERVICE Franchise Complaints

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

• ^^^Scammed1:

  Huh. I am not at all surprised. I wouldn’t put it or anything else past them. They are skunks. If there is a way to get even or to make someone’s life miserable, somehow they find a way. Maybe that’s why we don’t hear from Trish anymore either. They seem to take pride in ruining people’s lives. Nothing surprises me anymore about them. The more I talk to other Tax people and other franchisees, it seems as if many are disgusted with things and can’t wait to get out. A few I know don’t even wait 5 years.

  I’d be quite curious to know what is the basis for all the lawsuits that are taking place, either by Liberty or by others against Liberty. Do these court websites tell you what the case entails? On a case by case basis?

  In my own personal situation, Liberty made my life miserable within my 5 year contract and after I left. I was sued. They won, naturally. I’m still paying lawyers fees all these years later. They squeezed every red cent out of me and I would encourage new franchisees to be to extra vigilant in their due diligence. You have much more to lose than gain……and you will lose it all. Go elsewhere to join a franchise. Not here. You will be forever happy you did not sign on to be a Liberty Tax franchisee.

• I agree with Scammed and SanFran, knowing how this company treated me, it would not surprise me to find Liberty in cahoots with the Justice Department and the IRS.

• I agree with Scammed and SanFran, knowing how this company treated me, it would not surprise me to find Liberty in cahoots with the Justice Department and the IRS

  TexasTee, you words say it all. About 10% of franchisees leave the system each year – some slink away having not been able how to execute the system, some may have life priorities change and are unable to run their own business anymore, and some sell at a profit and enter retirement or another business. Once you put out there your conspiracy theories, we can tell which part of that 10% you are.

  Trish left the board because everything she was claiming about an impending DOJ suit has proven not to have come true (and of course her gossip was just that) — or she’s posting under another name since she has lost all credibility. I do think it’s possible the DOJ was investigating – but it appears it has not found any wrongdoing – so the suit will not happen. Hopefully, she’s taken her energy and focused on something that makes her happy.

• Potential franchisees: Please look at Liberty tax financial statements. On page 8 The cash flow statements will show that in 2013 the company issued operating/equipment loans to its franchisees of $75,605,000, the total number of stores that year is 4,520. The average operating loan is $16,726.77 per store. The reason these stores need operating loans is because they don’t make enough money to cover there yearly expenses let alone make a profit.

• Bill – you keep pointing that out – you might to also point out the amount repaid (this is a seasonal business and you pay rent/utilities/payroll year round). Where did these franchisees get the money from to repay the loans? What percentage of franchisees are in the first 3 years of operations? Is this something to be concerned about – how many businesses don’t have working capital needs – especially in the beginning?

  Also, it’s not just to store owners – so your average is overstated. Additionally, if you could take that amount and show the average monthly balance it would be much less – remember, these loans are typically paid within the same year – often within 5 or 6 months – so after tax season a young franchisee may need to borrow again. This cycle happens until the franchisee makes enough profit to pay the expenses for the entire year, along with their personal living expenses, vacation. At that point, profit becomes cash flow since there is not debt to pay.

• There are zee’s borrowing who have been in the system for more than 5 years. They borrow to purchase other territories, however they also need money to float them to next tax season.

  NOW, when we signed up with LTS, you did not need any extra money because John said you will make enough money to pay for your annual expenses and your lifestyle to take 8 mos off and do what you want to do. Also, there was very little borrowing from LTS in the beginning because John stated he was not a bank. Now you hear of people borrowing just to pay the bills during the off season and these are zees long into the system.

  What changed? IRS and their paying schedule. Can’t charge $400-$600 a return on average for the first peak because the “banks” don’t allow that anymore. So when you are regulated to a max of charging people, but your expenses keep going up, then eventually there will be a crunch on money. It is a viable business, just not the way LTS has it set up.

  As regards to DOJ and IRS having investigations on LTS, unless quittb has inside info, no one really knows what is going on. Just because we don’t hear anything doesn’t mean nothing is happening. Did the DOJ and IRS actually send a letter to John and LTS telling them they have stopped investigating? If so, that would be something substantial. As for Trish not posting anymore, I am sure she has her reasons, being she was paid off by LTS or they made a deal with her to drop their suit against her for silence on the subject. Or she is a DOJ witness and is no longer able to post due to confidential subjects. Either way unless someone has actual proof the above, it is all speculation. I would bank, the investigation is still in discovery stage and they are still gathering evidence and complying it. But without actual evidence contrary, it is all speculation.

  Also they SEC has not approved the restated financial, that will forth coming if they are in compliance with the feds.

• Well, we do have Freedom of Speech in this country and on this forum, so we have to put up with qctibs, guest 1974, stugotz and the rest of the pro-LTS bunch, even though this is a website for UNHAPPY FRANCHISEES.

  qctibs fails to point out you are still paying a 19% royalty for NOTHING, paying for seasonal employees, who cannot get a job the rest of the year and rip you off and steal from you, especially if there is more than one office, rent for a year, furniture, phones, electricity, heat………………there is absolutely NO REASON under the sun in today’s Tax environment where a Liberty Tax franchise makes sense. Not any longer. Maybe back in the 1990’s when it first began, but certainly not in today’s world.

  It’s like buying into a frozen yogurt franchise in today’s world where there are 16 on each corner………it doesn’t make sense.

  Bill & Franchizee: Keep posting. Your posts are excellent. If we can stop people from joining this god awful franchise I will feel so much more at peace.

  And TexasTee: Please say anything you want. That lousy qctibs is just starting trouble. We all know how disgusting those people can be……….we’ve all lived through it. There are way more unhappy people coming out of this 5 year experience than there are happy. I’ve asked around plenty. Many people have lost thousands. It certainly wasn’t because they could not succeed……….they could have given the right formula, but more importantly, the right support.

• qctibs – My data is coming right from the financial statemetns. Please feel free to go there and look it up. As to your question about 3 year old stores there where 1,496 US stores and 55 Canadian stores during last tax season. that was equal to 34.31% compared to 1986 stores 6+ years old or 43.94%. Each year dispite maturing stores the average operating loan per store goes up.

  The financials show that the average # returns prepared by store was 503 returns and the average net fee was $180.00 Not sure if the 503 return is net of free returns.

  When I started with this company the first year budget that you based all your spending on is 600 returns. Obviously the company knows your not going to reach those numbers but I bet there still using 600

• OK, I’ll still speak my mind: I know that Liberty, as a franchise, has a seriously tarnished record. I know of at least 1 franchisee that has been interviewed at length by DOJ. I know what was presented to me by JTH himself: you make money by the maximization of EIC’s. I hope the DOJ realizes what a bunch of corporate crooks these people are. You can make money in the tax business, you just don’t need Liberty with their 19% royalties, their $11k minimum royalty, their 12-18% operational loan rate, their lack of support or their lack of a viable marketing plan. Putting people in Liberty Clown suits doesn’t make a sound marketing plan to me. Every accountant that I know does not rely on ridiculous advertising, but on referrals from their current clients. That being said and the unexplained rise in the stock price (rising through corporate buyback), makes one wonder if you are really getting value from this franchise system, what are the metrics that determine its success ( number of returns does not seem a good indicator since a lot are free), how much PROFIT is made by the franchisee and is Liberty able to adjust to the changing market conditions, i.e. no more RAL’s, more clients are savvy to free and online services, and EIC’s are under more scrutinization. That is where any decision to join Liberty should lie.

• So just popping in. I was thinking about this forum and reading the defenses of liberty and one of the biggest defenses is that a failed franchise here is because the franchisee isn’t cut out to run a business. It’s nothing to do with liberty or the system. That got me thinking….H&R Block has more franchisees….why aren’t there a similar number of complaint post on block unhappy franchisee?

  You would think that with a larger pool that there would be some rough equivalency in number of posts right?

• Does HRB really have more franchisees? A few years ago their strategy was to buy back territories or not renew contracts so they would own more of the stores themselves. (They backpedaled a bit when they started to sell Wal-mart sites to franchisees, I believe because they didn’t want them.) I think that Block sees its main business as tax preparation, whereas Liberty and JH for that matter are in the business of selling franchises. Maybe that’s why you don’t see so many complaints from Block zees. (I’m not defending the company at all. It has its issues, but I think it does have a different perspective on things.)

  The weak spot I see in Liberty’s model is that they have to push to maximize the EITC now that RALs are gone and nobody can compete on getting the fastest refunds. The IRS has imposed some serious due diligence requirements for preparers of EITC returns. The fines for not complying are $1000, or $5000 for willful disregard of the rules, and they ARE watching. That is a HUGE risk. Do zees have to take Ethics training, as credentialed preparers are required to do? If so, they would never permit unethical strategies to maximize EITC in their offices because it is quite likely they would have to give up far more than they ever made on the returns. I just don’t think John can sell these strategies anymore, at least to people who have a clue.

• Yes there are more block franchisees
  It’s about 60/40 company owned vs franchise owned. They have been selling a lot of franchises in metropolitan areas that have traditionally been company only areas.
  Not long ago when smythe was CEO the plan was to flip the ratio as franchises tend to outperform company stores.

  Now with reduced compensation plans for tax pros I think they may be rethinking that

  BUT your nit picking a little
  There are a ton of block franchisees and very few actual franchisee complaints on their board

• You are guessing at what happens with hr block. What is maximizing eitc? There is no such thing. There are only a few existing franchisees posting on this board. It has provided some helpful information in the past. By the way, same day loan products still exist. Truth is better. Jackson Hewitt is invisible in my area. Nothing to complain about. Again, never taught to maximize eitc.

• As of last year had to pass the EITC test before sending a single tax return. The computer is set up to automatically calculate the rate according to the income and dependent’s. In order to keep that rate, certain document’s must be seen and copied and noted on the tax return. I would state, a small percentage of my people could not come up with the documentation, which lowered my income quite a bit. When you can’t process 100 or more people that you normally have access to, then it really cuts into your bottom line. Most of my lost income was during first peak.

  Along with people coming in and having to provide the documentation, word got out on the street that the EITC was very hard to come by and so those people either went online and did it themselves or went to a friend to process the tax return thinking they will not get caught…….Only time will tell.

• Thank you everyone for you valuable information. I am planning to get a storefront with the signs for Tax Preparation. From your experience, how many clients should I expect from the storefront alone?

  Thank you,

• @uphill battle – Probably at least 200 or more depending on your location.

• Up Hill Battle:

  Congratulations on going at it alone! Each year you can build up more clients. We had lots & lots of referrals as time went on. If this is going to be full time, will you do other things there the rest of the year? Ie; Accounting, Bookkeeping, Enrolled Agent, etc? The best thing of all……when you are not with Liberty, your clientele are much “higher wage earners” with more complicated returns, so fewer clients with higher tax return fees………all YOUR OWN. No sharing 19% royalties and all the other garbage Liberty puts you through. You will be sooooooooo much better on your own, slowly building your own business. Good for you!!! These clients will be YOURS at the end of 5 years, not theirs. Awesome decision.

• Going at it alone more like 100 returns at $150 each. Go with Liberty and you do 350 at $200. Strongly recommend going with Liberty and not listening to the obvious losers on here.

• What makes us “losers”, stugotz? Huh? Speak for yourself, none of here are losers. The only losers are the ones who continue to feed the bank of Hewitt.

  Up Hill: Again, congratulations on such a wise decision. Those clients will be yours and yours alone. You can definitely do more than 100 returns in a normal Tax season. Some of us did 100’s upon 100’s but had to share everything with Hewitt and then got nothing but grief and money-grubbing in return. And far worse things too that you can avoid by going completely on your own. Good luck and don’t look back! :) I absolutely LOVE turning people away from this god awful franchise! :)

• Simple formula
  Take the total returns prepared and divide it by number of offices

  Now there are some succesful franchisees so there numbers might be 1000-1500 maybe even 2000
  That deflates the average
  So conservatively 400-500 returns at 200 bucks
  So 100k gross
  But subtract out the free ones that the”system” says to do
  So maybe bring it down to 85k
  Pay rent all year at 1200 to 1500
  Pay for supplies and computers
  Pay for utilities
  Payroll and last but not least at least 11k to John
  Yea you can make a living but it ain’t going to make you rich by any stretch
  Maybe 25-35 k
  That’s average and backing out the successful ones that post on here

  How many new offices? 500? How many new clients? If the existing offices didn’t do a single one of those that leaves 70 returns per new office
  That’s far from 250
  And there were quite a few that had to have suffered major negative income
  It’s just in the numbers from the company
  The new offices aren’t doing 250 and if they are the existing ones took a loss
  It’s the only way the numbers can work

• New offices are not doing well at all and if there are a negative under tone in an area about LTS, then the whole area for new zee collapses. The oldest one’s may be okay but new ones will not have a chance and they will fall to the lowest number which is way lower than LTS ever states.

• First stugotz must be a sales person for Liberty Tax Service.

  But lets do the math:

  Income:
  350 returns – 200 free returns x $200.00 = $30,000 income

  Expenses:
  Franchisee Fee: $45,000.00
  Minimum 1st year royalty fee: $8000.00
  Liberty’s advertising fee on $30,000: $1500.00
  AVG Rent: $2500.00 month * 12 = $30,000.00
  Utilities: Avg 300.00 month * 12 = $3600.00
  Paid advertising: $2000.00
  Suppplies & postage: $3000.00
  hardware: 5 PCs * 590.00 = $2950.00
  Printers: 3 avg $450 a piece = $1350.00
  Labor: meets Liberty hours = $28,000.00
  Security Deposits: $3000.00
  Exterior signage: $3500.00
  Rough expenses for the 1st calendar year total: $131,900.00

  Liberty will disquise these numbers, because they will have fill out a budget on fiscal year, in most new offices your fiscal year year budget will only show expenses for 4 months, not 12.

  When you sign a commercial lease, they are usually for 5 years not 4 months. So to earn $30,000 purchasing a Liberty franchise will cost you over $131,900.00 for the first year. I hope that you have some very deep pockets. Numbers dont lie, saleman do.

• Thank you everyone. Believe me, I have been convinced to not go with a franchise. Your information prompted me to do further research. My conclusions are against franchising. But if you guys have more insight on how many clients a “mom and pop” store might generate, the storefront alone, then it will be very helpful.

• Kudos to NC hillbilly!

• Up Hill:

  Congrats again on your decision. As I said before, it’ll be very hard to give you a concrete number. A lot is based on your location, how much competition is in that area, how you structure your pricing, how many referrals you get, how much advertising you do, etc. I think you need to be quite conservative with your numbers initially and build each year. If you are able to do complicated returns, then obviously you will attract higher salary clientele. But you need to know Tax laws. And good Tax software companies.

  The most effective form of advertising is actually the referrals you will get from your clients. You may expect to be able to handle 200-250 your first year. After that a 20-30% increase each year is possible and peaking around the 4th year to a further 10% growth……it still depends on where you are & what type of clients you are trying to attract. Advertise minimally…………referrals are the best way to go.

  Still, it’s best to err on the side of conservatism……..maybe 150 clients the first year is more realistic…………whatever you do on your own, it will be a thousand percent better than being with Liberty Tax, who will leave you high & dry and losing thousands upon thousands. Good luck.

• Uphill,
  Not to dissuade you from going independent but if you are considering a franchise, brand recognition you might consider an existing block franchise from someone ready to retire.
  They typically go for about 80% of gross revenue.
  The average office does about 1600 returns. Not a bad starting point and there is no franchise fee only a $2500 security deposit.
  If you get the staff to stay you can make money.
  The royalties are higher but there are very few complaints when the franchisees see national tv advertising.
  Just an idea. There are very very few complaints from block franchisees on the unhappy franchisee site. That is fairly telling

• Bill/SanFran/Franchizee (All the Same Loser),

  Give it up. Just because you are a failure, stop trying to blame the whole system. This is a good company that is consistently growing revenues, net income and offices in a tough environment. Things will only get better from here, as more people go back to work, Obamacare requiring tax returns to receive subsidies for health insurance, immigration reform, etc.

  The competition has been hurt the last 4-5 years but Liberty continues to grow.

• Stugotz is misinformed or delusional! I know what happened to me with Liberty: No advertising, lack of support, high minimum royalties, high cost to just buy a territory and constant badgering about budgets that are not at all realistic. The costs of running a tax office are steep, but when you add the burden of royalties and “suggested” advertising costs that come out of your own pocket, you cannot make any money with this franchise. Once people realize what a bunch of crooks Liberty is, they will stay away in droves. Don’t fool yourself into thinking that Liberty has the ‘know how’ to make a successful business. They are in the business of selling franchises, not the preparation of tax returns. Revenues supposedly grow for this company because they are able to find suckers to sell territories to. Once they have you hooked, they keep reeling in your money. Stay away from these predators!

• LTS is a marketing machine for selling territories and selling $50 bills. Nothing else. Oh ya, they also may process a tax return off to the side. Their biggest claim to fame is marketing themselves and John Hewitt. Nothing else.

  They are very expensive and not very transparent. Good ole Stukhotz (or whatever your code is) could be smoking some wacky weed because he is one of the predator zees who have a side business with LTS and steal more money from zees, like “zee calling center”, Fanatic U etc. They need new zees to replace the one’s who leave and charge those zee’s for outrageous amount’s of money. He is probably someone like that and can’t have people not buy into the BS he spouts.

• Last time I was a girl. How about you Bill???? And Franchizee????

• ^^^Oops. Last time I looked, I was a girl.
  Bill & franchizee: could we all be one in the same??? :)

• I resemble that! Oh by the way did I forget to say? Liberty Tax sucks stay away! !!

• Mike! You need to add to our wonderful conversations more often! :)

• In my neighborhood, a Liberty Store closed. The location is for rent.

• ^^Up Hill Battle:

  Oh my! What a complete surprise! A Liberty store in your area closed! How could that be?!!!

  Be very careful about going into an ex-Liberty location. THEY will probably hit you up for royalties on the people that walk in off the street that were Liberty Tax customers last year. They will do everything in their power to sue you for being another tax office going in to the same location. Crazy, I know, but they will find a way to justify it. PLEASE make sure if you decide to open up at that location that you get something in writing ahead of time from Liberty Corporate……….but then even after they sign something they will still find a way to make your life miserable. I guarantee it. Proceed with caution.

• ^^SanFranBattle:

  Thank you. I will consider your advice. The good news is that there are store fronts aplenty in the neighborhood.

• I am of the fairer persuasion!

• An alternative to going it on your own or paying into a franchise is to go to work for a local Mom & Pop or CPA firm. At least there you will get a steady paycheck, sans expenses and royalty fees, and learn if this is the business for you. Some just hate dealing with the stress and deadlines of tax season and with problem clients (and all companies have those).

  I offer this advice because your question about how many clients you could expect your first year seemed naive. That is simply not a legitimate question. You can hang out your shingle and not get a single client except maybe some family and friends. Or you can get tons if you get your name out to the right people and a popular preparer in the area just retired. It’s like my asking if I open a ski-mobile shop how many will I sell my first season.

  Many successful independents start slow. Keep your day job but market your tax prep sideline. As the number of clients grows you can decide when it’s time to go full time. And don’t be deluded. This is an all-year job. Clients have questions or need tax planning, and the IRS spits out letters all year long.

  When you’re on your own you have to market yourself. If you pay to join Liberty, they will not market you, even though they charge you for it, so you’ll still have to market yourself. Either way you have to be a salesperson, and you need to decide how good you are at that and whether you care to do it. How successful you are at it, and the circumstances in your local market, will dictate how many clients you get your first and subsequent years.

• ^^ SaraEA:

  The question about how many clients the store is worth is a very legitimate
  Business question; it is far from naive. Good business people will track the source of their clients. So, I suggest that you take a few business classes. You sound like a fast talking salesperson who is trying too hard to be an intellectual. You got stumped by a question that requires some thought.

• I knew two weeks into my first year that this franchise was a bust. NC Hillbilly’s numbers are very accurate. After two years of heavy losses, I was able to get out, and quietly under a new name, opened an independent store. Opened on a busy street with an office that cost me a fraction of a storefront, had another preparer besides myself, sent out emails to former clients, and did over 130 returns the first year, high income earners, and walked off with $29K after expenses. While that is not a huge amount, I went from losing thousands, to a positive cash flow. I reduced my headaches 100%, and enjoyed the season. I continue to watch Liberty stores open only to close within a two year period. As others have said, expect about a 25-30% increase in returns every year, and now after 3 years, I am doing quite well. Independent is the only way to go.

• Frustrated,

  How is my brotha from another motha!!! You haven’t used that alias in a while.

  SanFran/Frustrated/Frachizee/Bill

• ^^ Frustrated

  Thank you. Your information is incredibly useful.

• You might not like it but Sara Ea is right. Even frustrated says 130 returns first year. Remember frustrated already had experience marketing for clients and still only got 130 first year.

• 130 returns the first year going alone. haha….

  My office did 130 returns the last 2 days of tax season last year with Liberty Tax. 3rd year office.

• ^^^GIVE IT UP STUGOTZ.

  LIBERTY TAX SERVICE SUCKS. EVERYTHING ABOUT THAT COMPANY SUCKS. IT DOESN’T MATTER HOW MANY RETURNS YOU DO. IT MATTERS HOW THEY TREAT YOU. THEY SUCK.

  ANYONE READING THIS WILL BE SO MUCH BETTER OFF N-O-T GETTING INVOLVED WITH LIBERTY TAX SERVICE E-V-E-R.

  THEY TREAT YOU LIKE SHIT AND THEN THEY STOMP ON YOU AND SPIT ON YOU. NO ONE EVER SHOULD BE TREATED LIKE THAT ESPECIALLY AFTER GIVING OVER YOUR HARD EARNED MONEY TO BUY A FRANCHISE.

  THE REAL STORY IS THAT THEY ARE STRUGGLING. WHY? BECAUSE THEY TREAT THEIR FRANCHISEES LIKE SHIT AND THE PUBLIC CAN SEE THAT AND KNOWS IT NOW.

  STUGOTZ: YOU KEEP ON BEING A LIBERTY TAX FRANCHISEE. IT’S A MARRIAGE MADE IN HEAVEN. YOU ARE MADE FOR EACH OTHER.

  THE REST OF THE GENERAL PUBLIC KNOWS WHAT MOST OF US ON THIS BOARD KNOWS……THE COMPANY IS DISGUSTING, MANIPULATIVE AND THE BIGGEST RIP OFF ARTISTS THAT HAVE ROAMED THIS EARTH.

  THE IRS, DOJ AND SEC ARE SCRUTINIZING THAT COMPANY AS THEY SHOULD AND ARRESTS WILL BE MADE. HEWITT MADE IT INTO A STOCK COMPANY SO THEY CAN’T SHUT IT DOWN, BUT THEY SHOULD. HEWITT BOUGHT AN OFFSHORE BANK, HMMMM. THEY NEED TO SEIZE HIM AND THROW HIM IN JAIL. HE IS A DETRIMENT TO OUR SOCIETY. HE’S FLOWN UNDER THE RADAR FOR 42 YEARS…..A TRAVESTY. NOW HE’LL PAY.

  AGAIN…..THIS IS “UNHAPPY FRANCHISEE”, GET THE HELL OUT……THE ONE PERSON WHO IS “HAPPY”. MAYBE YOU’RE SO DELUSIONAL YOU DON’T EVEN KNOW HOW BAD YOU HAVE IT!

• And there you have it
  The average returns per office math won’t work
  Stug is hogging them all
  He is very successful and with the few others that are successful it leaves very few for the many
  But then again, if you average those numbers out…his 3rd year office is probably doing 5-6 thousand returns as the industry as a whole doesn’t typically do nearly that number at the deadline and those returns typically are harder to complete.
  The clients don’t have all their info. They procrastinated. They had a complex situation they put off etc etc
  The staffing to complete that many returns accurately and correctly would be quite large and require a great deal if experience in the preparer staff for a 3rd year office.
  The simple big refund easy returns have long since been in to get their money.
  The last folks have a much greater chance of having a balance due which means your spending a lot of time looking for every possible deduction under the sun.

  I’m just not buying 130 the last 2 days of season
  I could be wrong but I would think you’d be running 6-7 preparers with experience to do that if there was a clientele to support it in a 3rd year office

  Stung knows the truth
  It doesn’t matter what he says here
  He knows the truth

• I love the way John John in his propaganda states, this is your business. You are building this for your family. You get 8 mos off a year and all the expenses will be paid for in the three months of hard work. This is a recession proof business, oh really….

  I mean the BS is heavy and someone like Stug is able to write that much business while everyone else is suffering. Thanks for being such a good morale booster. How many tax laws are you breaking or not doing the return correctly? How are you able to write that much business without it coming back to haunt you? Very little quality control or they were mostly done and you just had them pay and sent them off.

• For actual data just look at the financial statements. In 2013 JTH did 1,800,000
  US returns with 4262 stores for an average of 422.33 returns. However, not all stores are of the same age. 42% are 6+ years old. 1 year stores accounted for 18%. Using a weighted average the 6+ year stores averaged 625 returns and the 1 year stores averaged 104 returns. The last year Jackson Hewitt was public it listed average # of returns by Store age. At that time a 1st year store averaged 166 returns and a 6 year store averaged 334 returns. The lower Liberty numbers for 1st year stores are a result of the loss of RALS and opening of Kiosks.

  Liberty tells you that the average net fee was 180.00 so a first year store would generate $18,720.00 of which 8,000.00 would be paid as a minimum royalty to Liberty and $936.00 (5%) would be paid in advertising fees. Factor in $8,000.00 for the $40,000.00 franchisee price over the 5 year term and at the end of the first year you have $1,784.00 to pay your other expenses. That’s why so many Liberty franchisees need operating loans to survive. On average about 10% of liberty office close per year and the number would be much higher without the operating loans.

• Thank you Bill. The information about 104 returns for the first year is useful.

• What Greg is saying is stugotz is full of it, period. Liberty is awful, stay away.

  Bill speaks the truth. Us his numbers to get a better idea of what to REALLY expect. Now you see why it’s so easy to lose in exess of $50k a year, not including the franchise fee. Add Hewitt’s 12% loan and you have recipe for disaster and bankruptcy.