LIBERTY TAX SERVICE Franchise Complaints

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

• Yes of course. Just saying. ACA may bring more income to a tax office. Unethical people should be caught in all disciplines. But there are insurance offices and tax offices in one location now.

• I got my Life, Health and Variable Annuities license a million years ago. Boring! I was so glad to be out of Insurance and into Taxes. Now I’m thrilled to be out of both! :)

  It was Liberty Tax Service that put me over the edge. Franchising sucks. But especially with a franchise that keeps sucking the lifeblood out of people. NC Hillbilly: Most “normal” companies wish people a Merry Christmas, or Happy Holidays or Happy New Year. LTS just wants your money, they could care less about being nice to people. They are bullies!

  Good luck to those of you franchisees that now have to learn all the Insurance regulations on top of keeping up with changing Tax laws. And LTS keeping their hands in your pocket, so you come away owing money instead of collecting it.

• How will the ACA bring in more clients this year? I get 2015 but what about this coming tax season?

• The conversations with the clients are not very long but builds confidence. All of this brings more referrals. Thats why block, etc. will be in this. Clients will say my tax person told me.

• All that are not “health insurance agents” be careful, the states will sue you for talking about a product you are not licensed for!!! Insurance is an area where no one can talk about and make recommendation unless you are a licensed agent.

  H&R is going to have to be careful!

• Good point about state insurance regulations. Taxes and Insurance do not necessarily go together. Screwitt thinks he is a marketing genius. Any body can market an obsolete strategy such as his for taxes!

• Taxes and insurance go together as long as you keep one hat on at a time. It is hard to mix to not to look like a conflict of interest. But in insurance you must be licensed or you will have the regs shoved up your back side sideways. And if any agent thinks you are taking liberty in handing out advise, trust me, they have no problem calling the division of insurance on anyone. Especially when they have no clue about insurance regulations and company underwriting compliance. Giving out the wrong advise on insurance is a serious situation and state’s have no problem rectifying the situation right away.

  H&R Block, and LTS have no business in the insurance industry. They are too dirty and sleezy. Not like the industry is not already tainted.

• I think Block has teamed up with an insurance company to have licensed reps in pilot offices. When I worked there many years ago, Block had a financial services division and it was drummed into preparers’ heads that they were NOT to offer financial advice. One had to be licensed to do that. My hunch is that current preparers are being drilled to stay out of insurance and refer clients to licensed affiliates.

  Since clients are sure to ask, it’s important this season to have on hand the phone numbers/websites/local office addresses of the exchanges. Offer them nothing more than that. Liberty zees, as I’m sure Block is doing in its training, have to mandate that their employees stay out of the insurance realm. They are to appear helpful in offering means of access but NOTHING MORE.

• Spot on SaraEA.

• They will ask because of all the confusion. It makes sense to ask them if they have tried the website. Telling them about the tax credit is not giving insurance advice. We will stop there.

• I think the majority of people without insurance will stay that way. Also most people know to contact an agency. I can’t imagine to many confused about the insurance law unless they are living on the streets, where they have free medical coverage as it is.

• No. They will just need more information. Singles with lower income under $25,000 can afford with tax credits. Sure, they will be covered then not covered like car insurance, but once they start going to the doctor. Just saying. Think multi millions of people.
  Happy New Year!
  I’ve learned a lot on this board. One post from a former franchisee who posted how much he sold his stores for really, really helped. The posts about Curves saved me from looking into a store in my area. THANKS!

• The unaffordable care act will implode the whole industry. The school district in my area upped their premiums plus upped their deductible. People that usually go to the doctor, now have to pay out of pocket. Most state, they won’t go anymore unless absolutely necessary. Hence, the lower income will be paying for doctors through our tax system. However, the doctors who rely on people coming in for any little sniffle, will not see that cash flow.

  It is a raving disaster, so the tax purpose of this bill, may be a moot point, once more and more doctors have to retire and lay off people. It has been happening in my area for the last year or so.

  So in essence, you may have a great insurance plan, but you won’t have a doctor or hospital to see someday, because you don’t use the system enough to sustain the buildings and people. So the great tax potential probably won’t happen because if it is not repealed, we won’t have a health insurance industry.

• Time to get back to the purpose of this website and that is why investing with this company is a bad idea,

  According to the annual report the company operated 167 more company stores last year then in 2012. The additional expenses associated with running those stores amounted to a 19% increase in employee compensation and 1.7 m or 6.3% increase in admin/general expenses (rent and utilities) over the prior year.

  On the revenue side Tax preparation fees increased by 3.1 m. Of the 3.1 m increase, 1.4m of the increase was attributed to their online tax preparation service. That means 1.7m of the increase in tax prep fees was attributed to the 167 additional stores.

  When you average out the revenue, they generated $10,179.64 per store. Ironically the expenses for rent and utilities also averaged $10,179.64 bringing them to breakeven before you factor in employees to run the store. Once you add in that expense these stores operated at a loss.

  The company qualified the additional 167 locations as resulting from their agreement with Wal-Mart. Regardless of why they had to operate these stores the bottom line is they lost money with these stores. This just confirms what we already know this business model does not work. Without franchisees sending their own money and absorbing the losses this company wouldn’t exist.

  Buyer Beware!

• Bill,

  You are too funny. I will be at $10k revenue at each of my offices by January 15th. Meanwhile you/Franchizee/SanFran/Miketard/ will still be writing on here counting how many comments are on the site and thinking you are having an effect on something and you won’t even open your office until January 31st, because that is the first day IRS will accept e-files. You will then blame the business model not your idiotic decisions. What a bunch of Class A Dumb Dumbs. Anyone that would listen to you and make a business decision based on what you write should not become a franchisee because he would have failed anyways if they agree with anything you say. GET A LIFE DUDE!

• @Bill – LTS is selling the idea and so is H&R that this is going to be the next EIC. It ain’t going to be. People should know now that this will not pan out period.

• Sorry testicle, I have two appointments today.
  Bill, agreed. Anyone considering buying a Liberty call all your offices in your neighborhood and ask them how they like liberty, they answers will likely horrify you.

• My local LTS was not opened at 9:00am for their 12 hours. They are staying on their off season hours! Psst don’t tell John John.

• @Tespirate – Is that $10,000 cash up front or is it bank products?

• Testapirate, what is that $10k income from? In the next week I have two estate tax returns, two deceased taxpayer final returns, at least two issues requiring legal research that I charge quite a bit for, and a handful of (long) overdue returns. Total fees will not approach $10k.Years ago when I worked at a fairly busy Block office and we still had RALs, I don’t think we booked $10k in revenue by Jan 15th. What is your secret?

• Testapirate: I’m not posting on here to change your mind. My goal is to provided factual information for potential franchisees….

  The information I presented came right from Liberty’s annual report and can be found by going to Yahoo finance. Symbol for the company is “TAX”, go to SEC filings and review annual report.

  If those 167 stores were owned by a franchisee, the franchisee would have incurred those losses and on top of those losses would have to pay the minimum royalty fee ($8,000,.00) and 5% advertising fee on the actual tax prep fees.

  For potential franchisees: If the company can’t turn a profit how can you?

  For any new franchisee who is now second guessing yourself there is still time
  to get out from under this obligation. You will need a good franchise attorney and it is very important that you document everything. “site location”, lack of support etc. can all be grounds for getting out but not if you go past the first year.

  Buyer Beware!

• ^^Excellent advice, Bill.

  But good luck getting out of any obligation once you’ve signed on with them. They will turn it around and say it’s your fault for site location and lack of support. They turn it around on the franchisees 100 % of the time.

  The key is to NOT sign with them in the first place! They are wolves, preying on each and every potential victim. Just waiting to pounce.

  Read over these 3000+ posts and STAY AWAY!!!

• Well if anyone saw the renewal contract, anyone that signs that hunk of junk deserves what they get. They invade and treat you worse than employees by employers. They can stop in at any time and then snoop through anything not locked down in your office even stuff if you have another legit business operating out of your LTS office.

  The contract with LTS is sooooo bad, that it is any wonder they sold 53 new territories. Unless the first 5 year contract is different than the next 5 year renewal contract.

  Also make sure that all your LTS offices are open 12 hours days starting yesterday. The H&R in my area is only opened 9-5 Mon – Fri and their first Sat hours will be on Jan 25.

  Much more money sense.

• Franchizee: besides the ability to come into your office at will is their changes to the financial terms like increasing the minimum royalty?

  The company’s financials from last year already show signs of the company’s growth starting to slow down. Now with the restatement and them only being able to sell only 53 new territories this tax year will be as they stated “below expectations”. To compensate they will try to bleed as much out of their franchisees as possible. They don’t have any other choice, they can’t compete in the online market and don’t have the cash flow to advertise this part of their business. They also have less states to sell their financial products in which will hurt that part of their business.

• @Bill – since we would of been a renewal – minimums would stay the same. What I loved is “you can renew your franchise agreement for no money down!” Yee haw sign me up.

  I suspect new people are paying more minimums.

  With that agreement, you would need to insane to sign or so far into debt, you have no choice. Some of the scuttle butt going around, franchisees would leave if they had no debt and their leases are done.

  The only reason they have as many as they do is due to debt.

• What tax franchise don’t you recommend ?

• ^^^I don’t know enough about “other” tax franchises, but I was a franchisee with Libert Tax Service for 5 impossibly long years. There was not 1 redeeming factor about that company. They suck. Stay far, far away. You will be forever grateful.

• Open your own or buy a Block. Stay away from liberty!

• Sorry to get off topic, but I have a question regarding my Zones computer. I left Liberty over a year ago and still have my Zones computer. I have not used it since, but will need to use it this year as a second computer, but I am hesitant to connect to the internet because of any potential monitoring by Liberty. How can I either check to ensure my computer and home network are secured or delete whatever monitoring system they have on the machine?

• balancetrend: Take your computer to an expert to have it cleaned. The Liberty software has a tendency to stay in your operational software like windows. Like them, you can hide, but they find you! Be careful since they have a way to monitor the old software and use it as evidence against you. They also will sue you and demand under “discovery” that they copy your files so they can compare them and claim them all as their property. Since they have a couple of friendly judges down in VA, they can get away with this.

• @ balance trend – Those computers are automatically set up for them to access anytime. It is in the remote access area. I have to keep mine off line and use for scanning old files onto. Go to start button and type in remote access. It is on one of the tabs of they (LTS) always has automatic access to the system.
  Also I have gotten rid of the router from Zones, that can be an access also. Thrown mine away. Have changed my DSL line number also.

  Also the manufacture of the system is Liberty, so it is built for their use. Sorry to say you will have to toss them. You can access your processor off line thou. Take one to a computer person to see if their is any way to use without their knowledge.

• I had a hell of a time getting rid of Liberty spyware. Finally had to reformat hard drive and then the computer ultimately crashed anyway. Probably a good idea to get a new computer when you leave.

• I am using my old computers (Zones) for the Microsoft word and storing scanned returns. Keeping them off line, so not going to waste, just using them differently.

• I agree with Texas Tee, when you look at how low the cost is for purchasing a new computer why take the chance. when I was involved with Liberty I put on QuickBooks on one computer and it didn’t work right. Turns out Liberty had some sort of spyware looking for other tax programs (Intuit). They then sent out an e-mail telling us to keep QBs on a stand alone computer.

• @Bill – that is right – Especially on the processor, I think it was Rufe who said keep everything off the any zone’s computers. Use personal computers for everything else.

  Bill – Did you ever know what type of spyware they use? Or is it imbedded in the system it self and can’t be taken off ever.

• Thanks for the feedback. I figured the computer would turn out to be useless!

  Over a year without Liberty and happy as can be!!!

• Great for off line!

• John John sent out an email and since there is NOTHING going on in the LTS office, he had to give everyone a pep talk. The gist is “calling your customers” is how some of the top offices had their huge increases from last year.

  Thanks John for the pep talk, it is really going to pay the bills right now as payroll keeps on a ticking with no income. Of course anything written after January 31st, he will do a fee intercept, so these offices will be in larger debt situation. What a perfect storm he has created.

• John is very concerned that there will be minimal growth in brick and mortar offices. This only proves without a national advertising program, Liberty’s guerilla marketing techniques only go so far.

  He even did a major mail campaign to franchisees in November and December mailing to them a large add telling them to advertise. He should have used this money to market.

  His whole strategy is for the single owner offices to fail so the large multi-office zees purchase these struggling locations at marked rate.

• The second largest zee in my state has not been staying open the 12 hours as of yet. Closing down around six or so. Sometimes there is a waver, most of the time not. Their offices are empty, like duhhhh!! That zee cannot afford to pay over time at this time of the year when nothing is happening. They are advertising to get your $50. Ya, that is one tank of gas or so!

  One of the last phone calls I listened to with John he said not to advertise prior to Christmas. Is John bi-polar??? One day this is the greatest marketing technique, the next day, scrap that, do this. He is just all over the map.

• I read on Accounting Today that Liberty has teamed up with some outfit to offer international calling deals (supposed to save money because you get to use a US phone number or something). Is this something zees have to offer or can they opt in? Are they purposefully targeting a certain market that some zees might not have access to or don’t want, or are they just trying to team with anybody and anything to increase revenues? It just struck me as weird because I can’t connect tax return prep with international calls. Kind of like asking if you want fries with that new tire.

• @SaraEA For marketing they have US411 text marketing. Some of their deals are not available to every state and every zee. But was so blessed to get their marketing materials and emails!

• I use to think it was Liberty’s ideology that was opposed to investing more into national advertising. However, now that their a public company it is apparent that their whole focus was not to build a legitimate tax retailer to compete with HR Block but to create an illusion of one. In order to do that they kept selling franchises and then pumping in operating loans to keep these franchises afloat until they could have a successful IPO, The IPO fell flat. The company is cash poor (unless it incurs long term debt) and this year it offered 2.7 m less in operating loans to its franchisees which will spell disaster for many of the marginal franchises.

• Has anyone been sad about leaving this company? Anyone setting up their own tax prep office, see money the first year after leaving LTS?

• No and yes

• Thanks

• He is a crook and must be stopped. That company is a sham. Bill: you are correct: it is the illusion of a company, which is why the support and advertising were piss poor. Almost non-existent.

  If I were looking into purchasing a LIberty Tax Franchise today and I did my due diligence and found this forum, I would read these posts and RUN. I would keep my money and sanity intact and spend elsewhere.

  Being associated with LTS for 5 years has put me financially back years. I am still digging out of the loans. (And I was a “successful” franchisee with multiple offices!) Moving on and out of the tax business for me was the most uplifting part of this disgusting experience.

  Most of all I want that crook to pay for running an illusion of a business. He has absolutely perfected the art of ripping people off over his illustrious 42+ year career.

  DOJ and IRS: Look VERY carefully. He is hiding a lot. Go get ’em!

• I keep getting the daily updated communications. It seems the support has been regulated to Knowledge Based answers. Don’t call them until you have tried the knowledge base. Well in the past, I couldn’t find the answer or understand the solution due to it was usually missing a step, like the infamous “enter”.

  I agree with Bill, the loans are keeping them afloat and the zees, with just a circle of debt constantly running.

• Franchizee, heck NO and definitely YES!!!! Spent about 5 years with Liberty and left with a large debt, within 2 months of being on my own, I made money and just about cleared my Liberty debt!

• On 1//14/14 JTH spoke at the CJS Securities Investors Conference. One of the things they spoke about was called “NexGen”. Apparently this year they will have three different online programs, Liberty Tax, E-Smart tax and DYI tax (for free filing). NexGen is suppose link brick and mortar stores with the people who are trying to self-prepare their returns. Curious to know what current franchisees are hearing about this program?