LIBERTY TAX SERVICE Franchise Complaints

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

• NoNo.. please let John Barilla and UnhappyDumdums speak their minds. They have encouraged me to actually post.

  Mr.Barilla… we are supposed to be impressed that you did $4000 in returns the Saturday before April 15? Really?
  First.. everyone acknowledges that there are successful franchieses out there – every one I’m aware of (and I’ve been in touch with a LOT of Zees) is in a low income, bank product area and even in that situation, though still successful, the profit has spiraled down in the past 2 years. Bank products are now frowned upon and are being phased out.

  I doubt that you actually own a franchsie, but taking you at your word – What income area are you servicing?
  What are the real numbers? The profit? When are you making this profit?

  When I bought my franchise JH touted that *offices averaged $75K – if you want to make more open 2*.. REALLY???? I want to see the middle income area office making $75K . That is $75K profit! – anyone can do $4000 the Saturday before April 15. Big Deal – that’s not going to get you a $75K profit at the end of the year. What a joke.

  The point is – this franchise is sold to people, hard working people willing to invest thier time and income into a system that supposedly works, only to find out only works in certain areas. And I don’t believe the numbers AT ALL. Its a crock. Once you are into a franchise the numbers don’t add up.

  After LT gouges the 18% (more than 18% if you don’t make minimum, which most don’t the first year I found out) and the high overhead there is not enough left to make a profit worth working for. Its a loser.

• ZeeOut,

  I think you are confused. I am pretty sure yesterday was a Sunday. Saturday I averaged $8k in revenues for each office. If you don’t believe my numbers I really can’t help you out. I am not sure what would be my point of posting lies on here.

  Let me get back to work. Talk to you on April 16th.

• The day doesn’t matter. It also doesn’t matter that a minority of middle income stores show a good profit.
  When you buy a franchise you expect overall stable results – success (and I don’t mean some small profit – I mean a profit worth the effort) should be the normal outcome, not the exception.
  Sorry – I know way too many franchisees in middle income areas and none of them are doing well. Sure, you can squeak out a dismal profit, but most can’t make a living. And when you are selling/ buying a franchise, its the “most” that counts. I’m one of the lucky ones – I never intended to live off my store, I never went in debpt, it was meant to sublement my income/retirement. Totally not worth the effort. Bunch of lies – the AD is joke, the system works for a few. Period. You’ve yet to show otherwise. What are the statistics for middle income areas??? I know NOT ONE doing well and I have been in touch with a lot franchisees.
  WAY too many franchisees are sitting on thier store, making little profit and only able to sell for pennies on the dollar so they hold on.

  I don’t care what day yesterday was – doesn’t change a thing. I did the same thing in my store and one big payoff week doesn’t float the season or the year.
  The system stinks, it doesn’t work for most. Period. Should not be sold as a franchise. Not worth the fees or the effort.

• Just for a point of reference, I had opened my first office in the target neighborhood that JTH recommended. Yes, we were busy the first month, but after that business dropped off dramatically. I was still profitable in my first and second years but barely. My profit in the first year was about $1500 and the second year went to 1980. Not great for full time work and of course, the minimum royalty payment went up to 8K. The profits went to JTH mostly. This is with no support, which I feel I was paying for with the exorbitant fees. After my third year I was encouraged to invest in 4 more territories which caused an absolute strain on my finances. I noticed as I opened each store, the return counts went down in total and the profit was now a loss. I would not recommend the franchise for anyone who is sane, and, more importantly, if you are already stuck in there, don’t be pressured to buy more territories. You will not make any more money and less since this would produce diminishing returns. Don’t forget those minimums on each store as well!. 5 stores in their system with 3+ years open, equals $55K you have to pay off the top. Also, don’t forget the advertising royalties of an additional 5% that you never see used in your territory. This is a losing proposition no matter what you do.

• ^^AND……..not only is LTS a money losing proposition, but LTS KNOWS it’s a money losing proposition and sign up franchisees right & left anyway. That’s what got Bernie Madoff in trouble. Pyramid scheme. How JTH has been allowed to get away with this is beyond me. Can’t wait for him to get caught and land in jail.

  This is NOT a “normal” franchise. This is a money making scheme for the coporate office only. Yes, the AD’s were u-s-e-l-e-s-s as were the computer help desk, corporate (any dept.) and anyone else we spoke to to get help or training. Their conventions were a “Look at how great JTH is”. If his whole family hates him, then of course franchisees and ex-franchisees got screwed by him too. He could care less as long as he keeps the $$$ coming in for himself. Thousands have lost $$$, significant amounts, and yet he keeps going. He’ll screw anybody out of their money. He certainly has perfected that art over his “career”.

• And JTH got $1600 per office from John Barilla on Saturday, assuming John Barilla is telling the truth. If he is, it just proves he, or anyone, could do better without Liberty.

  Liberty is a scam. Tomorrow so many Z’s will be glad to end their nightmarish seasons and wonder how they will ever get out from the financial ruin they have created for themselves and their families.

• Come everyone
  Accept reason
  Barrilla took in 8k in revenue in each office and that means liberty is a good franchise system.
  Don’t y’all get it? 8k in each of his offices…….it’s a total vindication of the system.
  I only wonder about how you get an “average in each office”
  Mathematics say you can have 8k per office or your offices averaged 8k but each office singularly can not have a average.
  This lack of basic mathematical understanding is why I don’t believe john barrilla.
  He has consistently made statements that mathematics do not bear out.
  That leads me to believe that he is just grabbing numbers out of the air and using those figures to demonstrate liberty’s incredible business model.

• Greg,

  Let me type slowly for you. You must watch Fox News.

  Net Revenues for 4 offices on Sunday were $32k. Since i have 4 offices, the average per office was $8k. Are you still confused by 4th grade math? Seriously now you are confused by the definition of average? You are right corporate will sell a franchise to just anyone, even if they can’t figure out 4th grade math. That is very disappointing.

• Just saw Screwitt on Fox….Barilla you must be pissed!!! Your god was on Fox. Funny thing is that was the best commercial LIBERTY has ever done. John you POS nice job promoting your franchisees! !! How many of you waited all day to see your hero promote his business? Did they for warn you of the awesom interview? ? Haha haha haha! !!!!!

• Good news at least John Guerilla gets to give one of his stores it’s full days of income to Screwitt as a payment for using their crapola systems. John is obviously so much smarter than the rest of us. Keep drinking the Kool-Aid, John Guerilla.

• ^^That is so funny, Franchizee……..when I saw the latest post from Barilla, I thought exactly the same thing: Barilla Gorilla. He and JTH are made for each other in Heaven! :) But JTH will end up in Hell.

• Yay!!! I MADE it! I’m done. Selling off my crap. So excited, I could pee myself. I already feel lighter.

  Thanks for all of the comments. They are all TRUE. Anyone looking to get into this, don’t. If you are looking to do people right (ie: charging a reasonable fee for quality service), this is not the model for you.

• Don’t be sucked in by J barilla’s comments. They are consistent with the mind set of this company, i.e. its never their fault its because you didn’t follow the system or your inadequate.

  The next 6 to 7 months will be crucial to JTH. It is important that we organize to deter individuals from purchasing franchises. The first step in this process is encouraging current franchisees to speak out “anonymously” about their own situations. the 2nd step is us as former franchisees working with social media and talking to our own SBA, Scores and any other business group to let them know that this is a poorly run organization. 3rd and the hardest to achieve is to get successful franchisees to acknowledge that their success was their own doing and to form an association to give them more say in how Liberty operates.

  As I said before, JTH going public is a blessing in that the company is more transparent and what it says in its financials can be used to dispute its public claims. Stay focused and keep your emotions out of it and we will present a message that is unbiased and based on facts along with our own experiences.

  Thank you for listening and keep up the good work.!

• Bill,

  Had you spent so much of your obsessive thoughts actually running your business properly you might have made it instead of being a failure.

• John Barilla is exactly the kind of groupie LTS plays to.

  None of us here are failures. Most of the Zees I know (across several states, some very successful) all were business owners BEFORE LTS and bought a franchise to add to thier portfolio. We are not losers – we were sold loosing territories and sold a bunch of lies that if you “follow the system” it will work. So we are successful at our other businesses/endeavors but losers at LTS?? What does that tell you? I hold my head high.

  That’s why I laugh when I see the “average” of each office. I’ve posted this before and I’ll say it again – if the system worked, then the “top zees” could turn the loser offices around. But I have seen otherwise over and over again. Zees with good offices buy a loser for pennies on the dollar thinking they are going to make a mint and that office does NOTHING.. That is NOT what a franchise is supposed to be.

  I can tell you one case where a guy bought a losing existing store. That guy not only didn’t make any money but was charged royalties as a 3rd-4th year store. Needless to say, he sold after the first year to a “successful” Zee who owns a few stores some that do very well. Its been, oh, 3-4 years now – know what that losing store is doing? NOTHING. Its about the same as it always was. Its a looser!! Even this big-time Zee couldn’t turn it around. So now its an “average” and looks like a winner. HaHa… What a waste of time and effort and money.

  What a LOSING SYSTEM. this is NOT what a franchise is supposed to be. period.
  If LTS wants to sell stores – go for it. But these should not be sold as franchises.

  I’m happy for the Zees with good territories and wish them the best. But don’t make out that every loosing store is the Zees fault. We all know otherwise. We are not loosers – we are winners and can recognize a loosing situatiton and get the h*ll out. I want no part of this scam. Its sinful.

  What a joke. Buyer beware.

• It doesn’t matter what kind of person…..zee you are, if you have a store in a high income (even a moderately high income) area you will most likely not make it.

  I have several successful stores and am a top 50 overall franchisee. I clear around 200k/yr from all my stores combined. But all my stores are in low to mid-low income areas. Market to these people find a good location and you can make decen tmoney at this, but in the wrong location you will be lucky to even do 200 returns.

  Liberty will tell you different, but this is the reality.

• I must say thanks to all of you…you probably have an idea of how good it feels to find out I’m not the only one who sees problems in this franchise system.

  I’ve worked at the same branch of Liberty Tax for the past 6 tax seasons which was owned by the Area Developer when I started However, because it’s location is, how do I put this, on the “wrong side of the tracks” it was treated like the red-headed stepchild in the group of three stores owned by the AD. Every year they would buy some of the tried and true customer-appreciation gifts and a few new items to try out. When the stuff arrived, if they determined it was a cheesy POS, they sent it to our store. If the signs, costumes, flags wore out at their other stores, they would send them to us and buy new ones for the stores on the “right side” of town.

  I think they only bought this store because the former owners wanted out and it looks bad for AD’s to have stores close in their territory. That and the fact that the low-income, high EITC clients are usually under-educated and uninformed, which means they’ll pay whatever you ask them to pay as long as they get money with no IRS involvement (most of them are on probation and/or parole). Everyone knows the under-educated are easier to make a buck off of..

  Someone posted on another site “JTH will sell a franchise to anyone with a checkbook….” which is what happened a little over a year ago. The AD sold the store to a young couple with virtually no business experience and I was sold with it, though I wasn’t informed of the sale until it closed. The wife had been through “Liberty School” and worked one season for the AD, then became a “business owner”. However, being young and naive they signed up for a really bad deal. Seems the AD sold them the store contents but retained the lease, and sublets to them, charging far more than the location is worth. Then they were charged an additional amount for each return the store prepared the year before.

  However, the AD failed to tell the former manager, whom they moved to one of their other stores, so she called all of the clients and offered to prepare their returns for half the cost of the previous year if they came to her new location, resulting in 30% of clients migrating. Then, last summer, they went to the annual conference, where they seem to have ingested large amounts of Hewitt Kool-Aid, because this year our pricing has gone through the roof. Returns that cost $220 last year are $340. It has always been Liberty’s policy to charge return clients no more than 10% over the previous year’s prep fee so I discounted a number of returns, then was told not to discount even though it’s policy, unless the client notices and has an attitude about it. That was the first strike against my new “owners”.

  Then, a guy called us wanting help entering his info into Turbo Tax and while talking to him I discovered his business has been showing a loss for the past six years, and I’m not talking about a little loss. I’m talking about $20K to $30K per year. He flat out told me he only set up this business to show a loss and offset his earning, so I doubt the guy knew what he was doing is wrong or he wouldn’t have told me so straightforwardly what his intentions were. I explained the IRS could deem this business a hobby, thereby disallowing the expenses he had written off over the prior six years and tax him on the income reduced by the losses, plus penalties and interest which could end up being quite a large amount. The guy decided to bring in his return to have us look at his situation, which his wife did a few days later, before I came into the office for the day. (I generally close the store so don’t start until 3 or 4 pm) When I arrived a few hours later, my boss informed me the guy’s wife had dropped off their returns, she had reviewed them and had CALLED THE IRS ON THEM!! Now, I don’t know if it is the greatest fear most people have but I believe that being audited by the IRS has to be one of the most dreaded possibilities anyone can face…somewhere right up there with root canal!!

  The thought of turning any taxpayer in to the IRS is so far beyond the realm of my own definition of acceptable behavior that I called a number of industry people I know and every one of them from CPA’s and EA’s to tax preparers was infuriated when I told them what she had done. I could not believe anyone, no matter how naive, angry or cruel a person, would knowingly sic the IRS on someone else. So the second strike against her was a pretty big one.

  But beyond all of the stupid moves I’ve seen made by the self-concerned, money hungry, condescending bitch has to be when she took over one of the clients I’ve had for five years and screwed up their taxes, then refused to admit she might have made a mistake. These are average people who are struggling to get by in this recession. They both work and have a teenager. The husband drives a truck/tractor and works about 240 days a year, leaving the wife to work full time, sometimes two jobs, and raise their son. In all the years I’ve done their taxes, they have never cleared an exorbitant amount of money and they’ve never owed more than $1,000 in tax at the end of the year. So when I saw they owed over $15,000 to the IRS and over $4,000 to the State, I knew something was wrong. I told the “boss” something was definitely off on their return, but she refused to listen, implying I didn’t know what I was talking about, even though I’ve been preparing tax returns longer than she has been alive! She told the clients they owed this huge amount, set up a payment application and refused to look any further into her obvious mistake. That’s the Liberty way!! There couldn’t be any error made by her because she’s too special, all-knowing and omnipotent. Why, she’s already a legend in her own mind!!

  I tried to convince her no driver on the planet could have increased their profit margin $57,000+ in one year, but she got in my face and told me the return was done and there would be no change made to it, period! Now, these are hard-working, God-fearing people who would not try to pull a fast one on a con man, yet her pride or stupidity or whatever you want to call it, has them shelling out over $20,000 unnecessarily. What else could I do but inform the client they were being lied to? Unfortunately, their fear of the IRS is so great they went ahead and signed the forms she gave them and she sent the return to the IRS electronically within minutes. As soon as I could i looked into their return and immediately discovered a $12,000 miscalculation. I’m sure there are more but I was shut down as soon as I mentioned having looked into it at all. Now the taxpayers will either have to amend the return with another tax service or be stuck paying over $20K they don’t owe, all because Liberty Tax Service needed their $450 so badly they would throw them to the wolves rather than admit an error.

  I felt it my duty as a tax preparer to inform the clients, who were none too pleased. I let them know I had tried to get the owner to reverse her position, but she refused to go over the return, and implied I had no idea what I was talking about. I left the office as I wasn’t due at work until later in the day, having been scheduled to stay open until midnight on the 15th. Somewhere around 8 pm the owner asked me to come into the back office where she promptly told me she was not pleased that I had informed the clients, she couldn’t have her employees undermining her authority and I needed to turn in my keys and the telephone she used to call me day and night and ask me questions. I promptly did so, but I am debating taking a page from her playbook and letting the IRS know she filed an erroneous return and refuses to correct her error. I’m not sure there would be any repercussions to her personally, but at least it would help the taxpayers convince the IRS they don’t owe the exorbitant amount of taxes the records are currently showing.

  Either way, I feel sorry for anyone who buys into the scam that is Liberty Tax Service, whether as a franchise owner, an employee or a client. The only thing that is certain is that someone will get screwed and John Hewitt will continue to sell his bag of lies right up until he is locked up for fraud!!

• Ed, plan on losing some of that income. IRS sent more letters and held up more refunds. Disagree on high income areas. Stores can’t be managed by absent owners. You can make a profit without EIC returns. Question is do you need a franchise in high income area? Block still losing customers. You can get them with tax experts.

• I agree with Ed. And Thank You, Ed, for being honest.

  Its the low income areas that are making the money if there is any to be made. Period. Yes, there are a few successful stores in middle income areas but not many! Most of them are barely making it – figuring out a way to make $10-20K per year hoping the “name and word” will get out. If it were only “me” I would take responsiblilty and walk away thinking the business just isn’t for me. Hey, we are not good at everything we do. I can deal with that. Live, learn and grow. But no way is it me – its just about every Zee I know in a middle income area – either losing money or not making enough to make the effor worth while. I know one middle income area Zee (though it is a bit rural, rather than suburban) who is “successful” and she has less returns every year.

  The scam is that they are continually selling middle income suburban area locations as potentially successful (remember – success is that magic $75K store average, I don’t see $20K per year as successful. ) while LTS knows full well these stores are loosers. Taking huge royalties, no support, pushing free returns (200 per year now? Really?) knowing these Zees will not make it. Simply making money from them. Then they role it all up on statistics and averages to make the company look good and sell to more unsuspecting people.

  Unprincipled liars. Disgraceful. Disgusting.

• Wow – what a story from Can’tBuyIntegrity. I’ve been working for Liberty as a tax preparer for lots of years with several different owners at the same store, the current owner is an AD. He has very little tax knowledge. We are encouraged to “overlook” certain things. I refuse to do this because as a tax preparer, I could get fined. I doubt he would pay the fine for me.

  Definitely a flawed business model. No amount of free donuts, coffee, sodas, etc. will attract the high end customers that will pay for complicated returns. Liberty makes its money off early season EITC clients who don’t care how much you charge them because they are uneducated about financial matters. All they care about is getting that huge refund from Uncle Sam. Four hundred dollars for a simple return with a couple of W-2’s and EITC? Plus a bank fee if you want the fees taken out of your refund. Anyone who can read can do it on Turbotax for $50. And they are starting to do it themselves. Plus they can go to the free places now.

  I like doing taxes, I like helping people and talking to them about their financial matters. I do not like fleecing people and I definitely do not like being told to do illegal things to file a tax return. Next year I will not work for Liberty, I will go somewhere else, like a CPA with a professionally run office, with no kids running around, eating chips and donuts and smearing food all over everything, and spilling soda all over the floor for us to clean up. What kind of business encourages customers to bring their kids!! Kids do not belong at a tax office. Would you bring a kid to a lawyer’s office?

  If LIberty wants to attract high end clients, they need to market to them. There is no marketing at all, no commercials, nothing. What kind of high-end client, perhaps with a small business and a nice income, would be impressed with a guy dressed like the Statue of LIberty, waving and dancing and offering you $50.00 to file today? Free food and $50 cash in a flash may impress the EITC crowd but with the IRS cracking down on EITC fraud those customers may be far and few between.

  I think this is a scheme to get as much money out of the franchise owners by trying to sell them a bill of goods, they can get rich by doing so many tax returns. Unless it is a low income EITC area, you will not make any money.

  Just my opinion as a fairly well educated Liberty employee.

• The problem still is that the Liberty culture still encourages Zee’s to cheat by making their customer’s tax return refund very high. This is to encourage high fees that the customer doesn’t mind paying since they are getting an otherwise huge refund! This is illegal, as far as I know, so why hasn’t there been a clamp down on Liberty and this practice?

  I still cannot figure out how anybody can make money under this system with the high royalties, high labor costs and the 200 “Free” tax returns. If someone is making a living at this, more power to them. My experience has been that this model cannot make money even with realistic fees and return counts. Lets revisit the math:

  350 Paid Tax returns at $200 each= $70,000
  Royalties at minimum 11K plus advertising royalty of 3500 =14,500
  Rent at 1000 per month all year= 12,000
  Conservative Heat cost at $400 a month for 5 months= $2000
  Other utilities such as phones at $150 a Month, Electric at 120 a month, maintenance at $50 month which includes plowing-if up north and lawn care and taxes on building which usually has a triple net lease. Add water/sewer, you are at $400 a month=$4800.
  Salaries with peak and bonuses and overtime at least $28,000 for the season (based on Liberty’s suggestion of manning, hours on any given day)
  Travel to the Inane convention and costs associated with that= $2000
  Gives me total expenses of 63,300.

  I still have to pay for supplies, internet and the employee party=3000
  This makes total expenses at about $66,300, leaving you with a profit of a mere $3700 for your efforts. This is also if your employees are not stealing or screwing up returns which you have to absorb or refund. This is while you are there at least part time at 25 hours a week during tax season for 16 weeks=400 hours. you make approximately $9.25 an hour. Your employees make much more than that and they don’t have the heartaches you have to keep the store open. Oh, yes, there is the occasional break in( at least once a season in my experience) which means you incur additional maintenance costs that come out of your $3700 profit. Pretty soon, you are working for everyone else, not yourself. Add Social Security, Medicare taxes and you now in the minus range. It just doesn’t add up!

  These numbers are not out of thin air , as any Zee will attest. I am probably more conservative with my numbers than most. Also, of the 200 free returns you do, none come back since they are always looking for a free return.

  So, if you want to lose money, do illegal things, overcharge those that can ill afford it then this is the franchise for you. If you are honest and forthright, stay away from this company because they surely will take you down with them.

• Sicktomystomach:

  Congratulations. You are OUT. It is the overwhelming majority on this forum that this franchise SUCKS. It is NOT a legitimate franchise, it is take, take, take, take. How much $$ can the average person give up before calling it quits? JTH banks on that. Literally. How can he screw people out of their hard earned $$ the fastest?

  The five years I spent there were Horrendous. The few years I spent trying to untangle myself from their firm grip was nightmarish. Like a cult, but worse. And of course, just like J. Barilla points out, “It’s ALWAYS your fault”!!! Not the fault of the company, but the franchisee. Natch. That is the sign of a sick, sick CEO and the way he runs his company and instructs his corporate. The AD’s have made TONS of money off of their franchisees sitting on their ass doing nothing except writing up ‘notices to cure’ for not crossing your “t” or dotting your “i”.

  This man has been kicked out of H & R Block and kicked out of the very company he started, Jackson Hewitt. The FEAR that they put into your head is so sick. It may have worked before the internet, but can no longer work now. Too many people have been screwed and can come on forums like this to tell the truth.

  Someday I will be able to tell my nightmarish story. The thousands I lost doesn’t even come close to the stress I and my family were subjected to.

  I agree with Bill: start giving specific examples of how they ‘operate’. I actually fear for my life so I cannot be specific. They are the biggest group of sharks out there. They make ‘shark tank’ look timid.

  I have thankfully turned away countless people from joining this franchise on my own. Hopefully many additional people have read through this forum and decided to back away. Kudos to all who back away! Thuis franchise needs to SHUT down and cease operation. Immediately!

  The time has come for the National News magazines to take a hard look at this franchise and do some investigating work. Calling our State Reps as Bill has pointed out is equally as important. Once the truth comes out, this company will have no choice but to shut down. Yay. There should be enough evidence out there to put that man away for life. Nothing less would be acceptable.

• TexasTee,

  My employer only paid us $9.00 prior to passing our Level 2 test, and $10.00 after that. This is in California, where the cost of living is much higher than most states. This is also in a state where the current minimum wage is $8 per hour, but is going up to $9 per hour in July.

  Seems like everyone makes near minimum wage with Liberty.

  Ed, I have had similar experiences. People wanting to say we’re the most accurate and honest, but then willing to look the other way in order to charge someone $500.

• Unhappy Employee: The low wages are typical of this franchise. In fact, Hewitt outwardly recommends paying people as low as possible because they are “Tax Junkies”. He feels that people will work for next to nothing just for the love of doing taxes! What a load of BS!

  As for the numbers I used, these were the minimum or near minimum wages allowed in my state. If anything, I erred on the conservative side.

  There were a few Zee’s in my area that the common practice was to get “Interns” from local schools to work during tax season for no pay. The idea was that they used this platform to learn the business. These students did not know any more or less than the clowns hired from off the street about taxes, but you did not have to pay them. This was another one of Hewitts’s schemes.

  It just goes to show that this company is sleazy throughout its rotten structure. And people are investing in this company? Boy, are they going to get a rude awakening!

• This discussion was too far down the list. It needs to stay near the top, front & center so that potential franchisees will find it easily and run in the other direction BEFORE they plunk down any of their hard earned money for a territory of the worst franchise in the history of franchises.

  This discussion board has helped so many people already save their money and move away from signing. Let’s hear from more! :)

• SanFranDan,

  This website was there when i bought in 2010 and i ignored the comments on here because they seem like a bunch of people that wanted to blame someone else with not legitimate complaints. I seriously doubt this website has affected anyone’s decision one way or another.

• ^^Thanks for your honest answer, guest22. Are you happy still?

  I know for a fact that this website has helped many people’s decisions NOT to invest in this franchise. I also know that my own personal experiences, along with the experiences of many other franchisees that I have gotten to know from the annual conventions and in talking to “neighbor” franchisees in other parts of my state and in other states have been extremely disraught and stressed by the daily pressures coming from the franchise itself. In my case, I had an “over the top” negative experience in every way, shape & form. I cannnot say on this forum what my ‘legitimate’ complaints are. But what I can say is that the people working in the corporate offices, the AD’s, the Help Desks, the Lawyers, the site selection people, etc.,etc.,etc. have been an incredibly unhelpful, difficult group of people. Now it could be that I had my franchise many years ago, way before you began I was already out. But I can say that I have an extensive Tax background and didn’t need help understanding preparing tax returns. The overall culture of this franchise is TAKE, take, take, not help. The overall culture is so negative, that it was hard going to work each day. When I left, at the end of the 5 year contract, it was so incredibly unprofessional, actually that’s an understatement. I cannot even begin to voice the words of how bad it was. They need a serious attitude adjustment and serious people skills. They have “ripped” off hundreds of thousands with their franchise agreement. It is so much more rigid than other franchise agreements. You don’t know until you’ve signed. One thing I learned for sure, is that it is NOT your territory, office or customers. They all belong to the franchise. No matter how many times they tell you otherwise, they are not yours.

  You can believe anything you want to, guest22. However, I am here to warn potential franchisees how over the top stressful it was to work there and to dis-engage from them. They certainly need all the facts, the pros and the cons, to make their own informed decision. If I were them, I would RUN in the other direction, not just because of my negative experience, but to so many others negative experiences that are not posting here.

• I see on LinkedIn that another 3 year zee is trying to sell her territory in Phoenix/Scottsdale. The territory has 2 stores with room to place another 2 stores. Competition is 3 HRB’s (2 do over 1000 per store), 2 JH’s and 2 Wal-mart kiosks. She is trying to sell it them herself so she does not have to let Liberty charge a commission to sell it. That is above the 5k transfer fee Liberty will charge the seller. This information is on the Liberty Tax Service Zee, AD and Corporate Employee Group.

  The question I have is that if Liberty is such a great system and the competition is doing so well, why sell? Also, why is there only one reply to the offer? The Zee is an owner of an accounting business. This should be a good merger of the two businesses.

  We do know that she would not want to say anything bad about Liberty so she could get her money back from the sale.

• For anyone considering this franchise. Please look at the company’s financial statements for clarity about what franchisees can expect. Liberty will tell you that you will need to budget for 600 returns but the financials show that the average office does 398 returns. If you go to page 47 of the financials you will see that there are more franchises each year system wide revenue by office is declining.. In 2011 the average store’s revenue was $88,062 in 2013 it was $84,336. a 4% decrease. At the same time the financials show the 2011 average net fee to be $174 and in 2013 $180 an increase of 3.5%, These numbers show a company on the decline.

  I will be glad to speak with any potential buyer.

  Buyer Beware!

• of course they have declined. You have approximately 400-500 kiosks dragging down all the real office numbers. Anyone can take a sentence out of context from a report and twist it however they want to.

  These kiosks are great for office count but the most kiosks only do 50-100 returns. This will have an adverse effect on real office averages both in return coutn and total net fees, not so much in ANF per return though.

• Ed,

  that is what he does he focuses on one more and tries to make a point. The only point he has made is that he is a bitter failed franchisee. There are many offices around me doing over $200k in revenues and profiting $80k working 3 months out of the year and really hard for only about 4 weeks. This is a great franchise but only mistake was selling a franchise to certain people that had no business owning a business. By the way Bill/Mike/SanFran/Franchizee are the same person using different names making the same nonsense comments.

• OMG.
  Talk about nonsense comments –

  “doing over $200k in revenues and profiting $80k working 3 months out of the year and really hard for only about 4 weeks. ”

  Right!! And you sit on the beach the 12 months out of the year and work part time for 13 weeks a year, leaving 4 weeks of hard work.

  HaHaHa.. you just made my day. You really ARE a corporate *ss because NO ONE in our out of the franchise believes that.

• Expect to make about 25 to 30% after working 6 months. Manage your lease costs. Don’t expect any marketing.

• John B sounds like one of those late night real estate infomercials – just follow the system and you can run your business from a caribbean island. And just *why* isn’t *everyone* doing it – well… because YOU are smarter than average and ready to make the sacrifice the rest of America isnt’ ready for. YOU just need to follow the system – and be a real CEO. And if you fail it’s YOUR fault.
  OMG…. This is too much.

  JB should be on an infomercial.. this is the best yet!!

  BTW.. I meant sit on the beach 9 months of the year. I’m actually busy running a REAL, PROFITABLE business and made a typo.

  This is better than SNL…

• John Barilla wrote “By the way Bill/Mike/SanFran/Franchizee are the same person using different names…”

  This is not true. I have checked and these are four distinct commenters posting from different geographical areas.

  — ADMIN

• ^^ADMIN:

  THANKS for having our backs! :) When I look down, I see boobs. I believe Franchizee does too. Mike Bill: probably not.

  That ass John Barilla can say whatever he wants. He is the only one that is singing Liberty’s praises that much. Of course he would say that it has to be the franchisees fault and not the fault of the company. Sounds exactly like John Hewitt: You will not succeed until you follow my formula to the T. Yeah, right. What formula?? Free returns? Guerilla marketing? Yeah, it all works. That’s why there are so many franchisees getting out in droves.

  Thank you to Bill, Greg, NC Hillbilly and each one of you that has posted actual FACTS. NUMBERS don’t lie. Never before have I EVER encountered such rampant cheating and dishonesty from a group of people who call themselves a legitimate company. Can’t wait for their downfall.

• Thanks Admin.

  I can’t wait till it shows my store is off their records. There is no way they can sell the territory I had, since it WAS NOT a territory as it was misrepresented. There should be other stores shut down once the new numbers come to light with LTS.

  But of course if they can get the Wal-mart in my old area I am sure it will look like another number.

  So glad this night mare is over with them. Just one more year and blast it to them will be worse.

  Having Hewitt loosing almost a 1000 store fronts in two tax seasons, this last one was even worse than the other’s overall. Of course some stores did more but most did less or same but with higher cost’s then it was a moot point of money. And LTS not doing any ounce of advertising. Their mailers went my current clients, with nothing new to add.

• Thank you everyone. Please keep posting. You guys enlightened me about the scam of franchising. Also, I look at the numbers that you guys post. The numbers give me a general idea of how the market is. In addition to that, your comments prompted me to do formal research using industry databases. It is a tough market and the profits (without franchising fees) are slim. Please keep sharing the information.

• Ed: The kiosk probably do change the numbers but since Liberty does not provide that information I have to go with what I know. If the kiosk do so little volume and are not profitable why have them? Could it be just another way for Liberty to pad it’s office numbers to support it’s argument that it’s the fastest growing tax service?

  The financials do show that the company ran 157 kiosks in 2013 but in one of their recent financials they indicated in 2014 most of them will be run by franchisees. A good way for the company to shift all the risk of this bad idea on to its franchisees.

• I generally think the kiosks are a bad idea and don’t make any money generally. In the right walmart location (very low income high trafficed area) they might be worth your while. But generally not.

  The good news is you generally don’t lose any money from them because they are very cheap to operate (1 person working tax season rent only etc)

  50 – 100 returns is break even and that happens to be what most of these do. The one plus from these is I think it does help with branding and advertising. Who knows how many returns came in your main office because they saw the walmart signs there the few times they go shop at Walmart right before they filed. It is difficult to impossible to measure this.

  Also, if you run one of these for 1 or 2 years, it is conceivable some of the customers will migrate to your storefront obviously making it that much stronger.

  No reasonable person would expect these kiosks to produce even a third as much as a storefront should. And I can attest that Liberty really has increased kiosk count from 2012 to 2013 operations and even more so from 2013 to 2014 operations.

  This will definitely bring all metrics down except for locations and to a much lesser extent ANF of return. But yes, for the peanuts you generally make on these, they ar enot worth the headache of fooling with IMO.

• Nice try Ed. The kiosk make sense for marketing purposes but the bigger problem is decreasing support from the company on maintaining client base. They’re tellingyou how to do it and all of this is costing money. Territory price is overstated because of the high cost to run it. So even with a ‘profitable’ store it will be hard to sell it. A business is an investment, not a hobby. I admit it looks like HRB and Jackson Hewitt – same problem. Still say go indie.

• So, if you have a kiosk, you are effectively doing free advertising for Liberty through visibility? Why should you do that? This is still a very high cost model that is not effective nor does it build any equity value. Several stores in my area are for sale and when a friend of mine called the AD about them, he steered them toward the new, more expensive, territories. When asked if corporate HQ or the AD sent any potential buyers to them, the Zee selling them said that she has had no referrals and that the AD has virtually abandoned her.

  This is clearly not a company to be involved with.

• Ed did not mention the additional items needed. If you have never had a kiosk before, you will to by the kiosk, anywhere from $500 to $1500 per seat. The computer and printer $800. This would ensure that you will not make money in the first year. Additionally you have the following:
  1. Wal-Mart requires that you rent the space for the entire season. You will only do returns in first peak.
  2. How your taxpreparer acts after first peak, will bring changed to your image. In our area, JH has the Wal-Mart’s. After first peak the preparers are sitting around reading romance novels. What do you think potential clients think when they see a preparer sitting around doing nothing?

  To make a profit, you need to have one of your best preparers that can also do marketing. However most zees want that preparer in the storefront to make the most money.

• Well it seems that the Wal-Mart kisok’s is one hell of a major marketing expense. That is about all they are worth. Jackson Hewitt was in our two different Wal-marts this past tax season all day long everyday. Used to be once the first peak was over, then they would close up shop. Not sure what the rules are now, but they had to work at playing games on the computer and reading books.

  We even got a birthday email from John and his cronies and Danny must be working for LTS again because we get “marketing” info from the marketing guru at LTS. Thanks Danny!!! We still get emails from the other vendors with LTS on different sale’s etc.

  One thing to keep in mind, LTS will tell and show you the top gun zee’s in your area and how you are the next top gun to come on board. They will show their numbers and some of the money they make. No doubt, they will sell you on huge expenses and lots of money up front to act like you are making that money prior to making one dime and most of that dime will go to Hewitt.

  They will only approve locations which will force you to take out loans either from them, now you are an indentured servant or make you take out of your retirement funds to pay the rent, royalties and taxes that come due long after tax season ends.

  They will check up on you either turning on your computers when you are away and they are not able to usually turn them off. My one processor crashed one tax season three times in one month. It was such a pain in the arse.

  They will monitor you remotely and have others check up on you. They will tell you this is your business and how you are the CEO of your destiny. That is all a falsehood and only that is true as long as they say it is true. They only want the royalty and business for them. You are pawn in their big scheme and a nobody once you leave.

  One last thing, who in their right mind would want to admit they were with LTS. They have such a terrible reputation.

• From the corporate mindset, one reason to have kiosks in Walmart is so the competition doesn’t have them. When JH’s contract with Walmart in much of the nation ended years ago, H&R Block grabbed the contract. There were RALs back then, and the thinking was that Walmart EMPLOYEES alone would cover the expenses and then some. Didn’t happen. The real reason in my thinking is that they just didn’t want Liberty to have them. HRB held onto the contract for a few years (even coercing employees from storefronts with mandatory rotating shifts at WM because no one wanted to work there), until they realized it was a lost cause. They ended the contract and probably chuckled themselves silly when Liberty stepped up and took it over.

  Liberty found a better way. They don’t run the kiosks themselves but sell them to zees as part of the territory. Management has to know these places don’t make any money, but they don’t care because they aren’t paying the bills. And while it does keep the competition out, I don’t think the competition wants them anymore. JH left with a bad taste in their mouth, HRB learned they aren’t viable outlets, so Liberty was a sucker to take them over. Anyone know what happened to the Sears outlets after HRB let its long-term relationship end? At least some of those stores made some money sometime.

  I should add that some Walmart locations likely do very well, namely those in rural areas where population centers are 50 or more miles apart (think the plains of Iowa or the mountains of WV). In places like these folks head to Walmart and civilization maybe once or twice a month to pick up bulk groceries and whatever else they need. Might as well bring your taxes as long as you’ll be there for the day. Very different from here in the northeast, where there are probably 20 Walmarts within a 50 mile radius, and countless tax prep chains in between.

• JH is still Walmart’s major partner and probably has cherry picked the best locations over the years, leaving the “bottom of the barrel” to Liberty. Last year, JH did very poorly in the Sears locations they took over. In a relationship driven business, you just can’t go in somewhere and expect to have clients land at your feet. It takes time to build up a business.

• Closing down loser franchisees like Bill/Mike/SanFran/Franchizee produced good results. Less offices and up in returns.

  Liberty Tax Service Increases U.S. Customers Served by 6.3% Through April 18th
  VIRGINIA BEACH, VA — (Marketwired) — 05/02/14 — JTH Holding, Inc. (NASDAQ: TAX), parent company of Liberty Tax Service, announced today that through April 18, the Company and its franchisees served approximately 6.3% more U.S. customers than it did during the same period in the 2013 tax season. Liberty Tax Service offices prepared 1.82 million U.S. tax returns this tax season, an increase of 4.5% versus the prior year. The Company also processed 191,000 returns online, an increase of 26.5% versus the same period in the 2013 tax season.

  “The 2014 tax season was a successful one for Liberty despite the fact that, as previously announced, the Company was unable to sell franchises during a portion of the second quarter of fiscal 2014 because we were completing a restatement process. Our franchisees worked incredibly hard to bring customers in early and are already making plans for next season,” said John Hewitt, CEO. “We anticipate a normal upcoming sales season and believe that the implementation of the Affordable Care Act next year represents an exciting opportunity for us and we are looking forward to next year.”

  Tax Season 2014 Results

  Tax Season Tax Season
  2014 Through 2013 Through Percent
  U.S. Tax Returns 4/18/2014 4/18/2013 Change
  Offices 1,818,000 1,739,000 4.5 %
  Online 157,000 115,000 36.5 %
  Free File Alliance 34,000 36,000 -5.6 %
  Total Online 191,000 151,000 26.5 %
  Total U.S. Returns 2,009,000 1,890,000 6.3 %
  Return counts are rounded to the thousands and percentages are calculated on rounded amounts

• Liberty corporate brass have to feel good about their TS14 results. 4.5% retail growth, though, is their 2nd lowest return growth rate in their history besides last year’s 1% growth.

• Sorry John, I had a great tax season, much better than Liberty’s and I did not do one free return nor listened to ANY conference calls. I should change my slogan to the fastest growing ever, because at the rate liberty is growing , Hewitt will be long dead before he even catches Jackson Hewitt!! And that will be one Happy Day!

• To anyone that reads this forum on a regular basis or to anyone that is reading this forum for the first time and considering purchasing a Liberty Tax Franchise:

  “John Barilla” is the O-N-L-Y poster here who seems happy with the franchise. Almost everyone else that has posted that has been a franchisee with Liberty Tax or has enough knowledge of the tax business are ALL 100% negative on this franchise as an investment or as a way to earn a living during tax season. There really is no investment. You lose whatever you put into it and then some.

  Whatever numbers that Liberty is posting and giving to news agencies are almost 100% fake and misleading. They will do anything they can to twist and deceive and to con anyone and everyone into believing that their “formula” is the correct one. This tax franchise stinks to high heaven. They are liars, cheaters, sneaky, scam artists that will “take, take, take all your $$”. They really are criminals in every sense of the word.

  Just as dumb asses like Bernie Madoff and now Donald Sterling get what they deserve, it’s John Hewitt’s turn now too. Every news agency should be uncovering REAL facts about him, how his company is really run and when that happens, he almost assuredly will end up in jail. There are not enough negative adjectives to describe John T. Hewitt and his cronies. They are sharks and more than dishonest. They are thieves, swindelers and the worst example of what NOT to get involved with in business.

  Of the millions of taxes prepared by Liberty Tax franchisees this year, how much did they charge per return? How accurate were they? How much cheating and dishonesty took place, hmmmm? LOTS. How many were free? How many were charged way more than they should have been? How many ‘businesses’ were made up just to get better tax breaks? How many franchisees actually KNOW how to prepare a return accurately themselves? How many of their employees do? How many franchisees let their contracts expire in disgust? How many did not renew? Why? How many did Liberty go after to litigate? How much did the AD’s earn off of these franchisees sitting on their asses and playing solitare on the computer? How many franchisees go to the convention each year and are told (off the record of course) that this is how to cheat and get away with more money in your pocket? How many cases did Liberty win in the Eastern District court of Virginia? How many did franchisees win? -0-

  How many franchisees were quite profitable?? I, for one, was. And I Hated every minute of my 5 years there. Thank goodness the contract wasn’t for a longer time period. I could not wait to get out. Making $$, yes, but sooooo unhappy. What a bunch of unprofessional crooks. They need to get caught and need to be brought to justice. Plain and simple. Period.

  Folks: Save your hard earned $$ and go elsewhere. You need your $$ more than they do. You hand it over and in return you get unbelievable stress and heartache. Just back away and look elsewhere.