LIBERTY TAX SERVICE Franchise Complaints
UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiar
with the Liberty Tax franchise, please share a comment below.
Entrepreneur magazine has ranked the Liberty Tax Service franchise #3 behind McDonald’s & Subway. However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.
This post was originally published
BostonTax wrote:
I’m a former Liberty Tax Franchisee
I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.
Barbara Green wrote:
I too was a Liberty Tax Franchisee and I agree with everything you said.
The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.
Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.
At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.
It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE? ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY? WHY OR WHY NOT?
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Number 1 by 2020 was only an illusion perpetrated by those trying to convince potential new franchisees to buy territories. Try getting to number 2 first. Don’t invest in a company that spews idiotic statements in a rah, rah way. What a joke.
John Hewitt set the goal of being #1 six years ago. Did folks think it was a guarantee? Have none of you worked in companies that set goals? The fact that someone cannot tell the difference between a goal and a promise tells me they are also not discerning enough to own their own business.
All the present and former franchisees are in the franchise disclosure document. Yes, people should call them and do their own due diligence. Then decide if you are more like the successful people or the failed one. Then make your decision accordingly.
JH goes on Bloomberg what good does that do his franchisees. All the interviews and press releases are just fluff to suck in investors. Look at the most recent press releases all of them on Marketwire. Not one of these releases or interviews will send a customer to a Liberty Franchisee’s door. The whole point of this rues is to keep Wall Street believing that this is a viable public company. It amazes me how JH is never challenged on his positions.
Buyer Beware!!!
^^Mr. Jimbo:
How about successful franchisees that were successful in their own right and that it had nothing to do with being a Liberty franchisee? How about successful franchisees that couldn’t stand the “rules” and AD’s and “notices to cure”? How about successful franchisees that couldn’t stand to see all of THEIR hard earned money going to Liberty for nothing in return? How about successful franchisees not being able to be in different successful locations at one time and had their employees rip them off? How about successful franchisees that watched their wavers deal drugs on the street corners? How about successful franchisees that are MORE successful now owning their own business now that they are away from that crapola company?
Huh. You can’t get it into your thick head that people that were successful also couldn’t stand working for that company and can go ahead & go on to other, just as or more successful than giving all your money to away to a bunch of bozos.
Your post reeks of ignorance. Keep your lousy comments to yourself unless you know for sure WHY people leave. People posting here were not and are not failures. They only had a momentary lapse of judgement when signing on to this pig hole franchise to begin with.
Jumbo,
Goals are great things to have. It gives you a marker of success.
It’s a good thing to set goals that are reasonable, attainable, and in line with reality.
So if you are telling everyone that the biggest by 2020 was just a goal….well, I have a bridge for sale you might be interested in.
It’s one of two possibilities if that statement was truly a goal.
1- it was so wildly unattainable that setting it was a dream more than a goal
2- john Hewitt was stupid if he thought that was remotely a possibility.
My thoughts? Well, I don’t think john is stupid. I think that it was a statement designed to get more people to give him $40,000 and then a minimum of $11,000 a year after that. Heck, he might even loan those people money at high interest to boot.
See, after that time frame to attain the “goal” has expired, liberty will most likely be still in third place and need 50% increase to tie for second place. Much less the 800 to 900% increase to reach the top spot.
See, when you are off by 800 to 900% is that really a realistic goal? We both know the answer…..its was a marketing ploy that misleading and intellectually dishonest
I got in and out without an appointment but very disappoint in the cost of service. I have no itemized forms, just EZ and the cost was ridiculous. Unfortunately I do not recommend and I am one and done with Liberty Tax.
This office at 132nd is closed now it was taken over by the location at 12944 Hawthorne blvd, Hawthorne ca 310-355-0511
In March of 2015 this new office was advertising free tax service for the month of March. I called and was told by the person who answered the phone(Alice) that if I wanted my taxes done for free that I should come in immediately which I did. I sat down with Alice and for the first 20 minuted I kept on asking why was it free the answer I got, was they were doing a (promotion) for the new location.
We proceeded to do my taxes and at one point I might have gotten on her nerves because I kept on asking why was it for free. She soon found out I was a repeat customer and said I’m gonna run you through as a new person. I gave her my pay stubs and she organized my taxes and after 45 min of sitting in front of Alice I was signing the electronic pad to send them to the IRS. I was informed to come in to the office after 3 weeks to pick up my refund check I thought this was strange but she was in control and had me signing and approving so I didn’t think to long about this.
In 3 weeks I get a call from this office to come and pick up my check, I go in on Friday before Easter. I’m handed a check I sign for it put it in my wallet and leave. On Monday I go to chase bank to cash it while I’m in line I look at the check again and I see that it is drawn on a US bank check, I found this to be strange and not normal. I was expecting a IRS check. I left the bank without cashing it and immediately called the office which gave me my check and asked what this was all about. I was informed by Nikki Hartfield that I paid $400.00 dollars to have my taxes done and this is a check from Liberty Tax which is the left over.
I was beside myself and the volume of the conversation went up. I explained to Nikki that I was under the impression that I was getting this done for free. She said I sorry, I think the agent dropped the ball here and did not make it clear to you Mario that it was not going to be free. Well your damn right because she had 45 minutes to tell me in person that, Mario this is not going to be free for you and the first thing I would have done is get up from the desk and walk out. I was never given this opportunity because this Alice person made be believe that I was getting this done for free. Never did I here the words from her lips saying this was a charge to you Mario.
Never did she explain to me that she could not help me in preparing my taxes for free. She mislead me to think that the service was free. I was blind sided by this practice of free tax preparation from this office in Hawthorne, Liberty Tax service.
When I called the manager On Monday after Easter in the heated phone call she told me to calm down and that she would contact me in 2 days. I knew if I didn’t calm down I would have a yelling match with this Nikki. Today is Wednesday the 9th of April and no phone call from NIKKI. I believe that they just want this to go away.
Sorry you ripped me off and very likely you ripped off many others who came during March.
I have filed for small claims court and we will have our day in court. In the mean time, People who have read this, Don’t even consider this place for Tax service they are dishonest and don’t know how to correct false advertising when they are wrong.
I’ve never been ripped off like this before and this office will never get my business. I give them a Big F for failing to treat the public honestly and with respect. I hope this helps who ever reads this in deciding that this is not the place to
If you want to make a complaint about a tax professional, go to http://www.irs.gov and in the top right corner in the search box type in form 14157, fill it out and fax it to 855-889-7957. That is the official IRS website and complaint form. Good luck, I can’t stand preparers that take advantage of the public.
If you feel that you have been to a Liberty office and are not 100% satisfied you should get your money back, they have a satisfaction guarantee, call 800-790-3863 and talk to John Hewitt, he is in charge of customer service. You must demand to talk to him, he will make sure that you are taken care of, good luck.
Mario, I am sorry to hear about your misfortune. CA has laws against tax preparers. So, call the State Attorney’s office. What allegedly happened to you might be criminally prosecutable.
Good luck to you.
Fortunately, these laws will be available in all states very soon.
Happy Tax Day, NOT.
Oh boy, look for the return of Barf villa at a theater near you :(
Classic picture last night. HR Block at 9:45 PM had a couple of customers in it working on their last minute taxes. Liberty across the street, lit up like a Christmas tree, no cars in the lot except for the preparer. Of course the Liberty opened well after February, was seldom open past 6-7 at night, and was not busy most of the season. For those of you out there considering this worthless franchise, go buy a hot dog stand and stand on the street corner. At least you will be busy.
In our area only one of 6 offices was considered successful. One zee owned 5 of the offices. Most of the offices only had 3 to people come in during the off season. In second peak, they were trying to charge $450 for one W-2 and one state.
I feel bad for the franchisees that have had bad years, the minimum royalty bill will be coming soon.
So, you bust your tail for 4 months, lose money, then lose more when you pay the minimum royalty. How painful!
THIS IS A LETTER HUNDREDS OF CURRENT FRANCHISEES COULD WRITE;
Dear John, Liberty execs, and shareholders,
We are in trouble, we cannot pay our royalties because we did not make enough money this year. Could you forgive them?
Also, please stop suing people that paid you a lot of money to give your business a try. When is enough enough?
Maybe you will be blessed if you do what we are asking, and things will turn around for all of us.
Struggling Franchisees in trouble – may have to close down
^^^Dear Trouble:
I feel for you. We’ve all been in your position. :( It sucks. You ask when is enough enough? Unfortunately they will continue to sue and take and take and take until you are bankrupt and worse. It is David vs. Goliath continuously. Best thing is to cut your losses and walk away if you can. No one wins except them when they sue you because they make you go to their court in VA, which is already slanted toward them. They will then take your territory and re-sell it for twice or three times the price. I cannot tell you how evil they are. We have paid the price of joining and signing one 5 year contract. It has ruined our lives totally. You are unfortunately not alone. This has happened and continues to happen to thousands of unsuspecting people each and every year. It will only stop when the CEO is arrested, in jail and the company is shut down, god willing. Sooner rather than later. :( And by the way, I was ‘successful’ by their standards and hated every minute of those 5 years.
Anyone looking to join this dump for next Tax season: read through these posts and maybe you’ll knock some sense into yourself by walking away.
For any struggling Liberty Tax Franchisee I encourage you to post on this site. Your story is important. While it won’t change your situation it will help another person or persons avoid making the same mistake.
In September it will be six years since we exercised our mutual termination agreement with JTH. I found this site in 2010 and have been consistently posting here ever since. The Liberty bashers will say its because I have some sort of mental issue. But the reality is, thanks to this site, I along with many other x and struggling franchisees think we are providing a valuable service by presenting our stores and by providing fair and accurate information to those considering a Liberty Tax Franchise.
Tax season is over now JTH will get back to selling Liberty/Siempre Tax franchise.
It’s our job to see that they are unsuccessful in doing so.
Buyer Beware!!!
Does anyone know how I can get a list of current lawsuits Liberty has against former franchisees?
I cannot tell you why I need this.
In the future, I also may need the help of some of the former franchisees that post on this site.
Will keep you guys posted but I need to be discreet about what I am doing.
I just finished my best season with the Liberty franchise. We had a big last minute rush. By the way, I only did a couple of newspaper ads and our average net fee is reasonable. We don’t get involved in fraudulent returns either. I had a customer come in at 11:45 p.m on the 15th.
First time that’s happened in 10 years.
It’s the other franchisees that make the difference. Some bad ones in the bunch, but most of our locals are doing the job.
Sorry about your experience, but that’s not the case for us.
To guest, and all other successful Liberty franchisees;
Good for you that you made enough money to cover 19% paid back to Liberty. For those people who need to see something visual, see below;
19% on $100,000 = $19,000 – 500 returns if average net is $200
19% on $200,000 = $38,000 – 1000 returns
etc, etc,
So, for those doing 1000 returns at $200 average net (which is high), you get to pay $38,000 for your software,yearly post card mailing, and tech support (minimal). Let us not forget that marginal customers that get the post card, may call the toll-free number and get another Liberty office. You could lose a former client.
Congratulations to those successful franchisees! But guess what; you still are paying way too much in royalties and ad fees to work your guts out.
Trouble is always brewing for those whom are greedy!
I just finished my second year without LTS. I made 20% more than last year. I got rid of some of my straggler LTS cr@ppola customers. I have a bad feeling, I will see them next year, because they will love me all over again!
With that being said, I get to keep all my money. I am not hurting without LTS, I am gaining in a whole another direction. I have been making my little niche in my community and the surrounding communities. Plus writing people in other states who have moved.
I have many more extensions to do for the next 6 months and will write more people, which rarely happened with LTS.
I just need to rest for a couple of days and hit it again! I would be $11,000 down by May 5th when the rest of my royalties would of been due, instead, I get to pay my bills all year with a couple of bucks left over.
Franchizee: The most important lesson potential franchisees should take away from your post is you never needed Liberty to be successful but some how they made you believe you would be better off if you where a franchisees. Now, after realizing it was a mistake, you relied on yourself and are slowly & steadily building a successful tax practice.
Most if not all former franchisees’ realize that their biggest mistake was not believing in themselves. This self-doubt played right into Liberty’s hands.
Buyer Beware!!!
Thanks Bill – That is correct.
The only reason I stayed as long as I did with LTS was due to being in Leases with the commercial locations, or after 2 seasons, I would of kicked them to curb right away.
LTS wants you to get locked in a lease of a minimum of 3 years or at least 5 years. Once, I was available to walk away, away I went.
Most people only stayed due to leases, nothing to do with this “terrific” franchise. I am noticing it being a common thread in most business dealings.
http://www.wxyz.com/news/feds-ask-court-to-shut-down-a-dozen-liberty-tax-franchises-for-inflating-tax-returns
Feds ask court to shut down a dozen Liberty tax franchises for inflating tax returns
Ouch.
Another Top Gun Liberty Tax Owner shut down by the Department of Justice. This case reads very similar to Annie Fullers case — creating false returns to maximize the refund and higher preparation fees.
Justice Department Asks Federal Court to Permanently Shut Down Liberty Tax Service Franchise Owner
The United States filed a complaint asking a federal court in Detroit to bar a Liberty Tax Service franchise owner and his companies based in Illinois and Michigan from preparing federal tax returns for others, the Justice Department announced today.
The civil complaint against Syed N. Ahmed and his businesses, Nasah Inc., Millinium [sic] Financial Solutions Inc., Mars Inc.-Hamtramck, and Mahad Inc., was filed in the U.S. District Court for the Eastern District of Michigan. The complaint alleges that Ahmed operates at least 10 Liberty Tax Service franchise locations.
According to the suit, the defendants improperly obtain inflated tax refunds and refundable credits for customers by preparing tax returns that include, among other things, false or inflated Schedule C (Profit or Loss From Business) income and expenses, bogus dependents, false filing statuses, improper education credits and false itemized deductions.
More to come?
How does Liberty Corp. not know about their bad franchisees?
I expect to see this from a sole proprietor filled with greed, but Liberty and Mr. Hewitt who gets to ring the Nasdaq opening bell on 4/15. What is going on here?
John H., you need to get some religion and work on keeping the good guys in your system. Start by lowering the minimum royalties for your good guy franchisees whom invested their hard earned money to earn an honest living.
Next, drop the lawsuits against the people whom could not make it because they did not cheat the system. Fire the lawyers and pass on the savings to lowering the minimum royalties to those whom just might make it for you if you give them a chance.
Also, lower the 12% interest rate to about 6% on those you help to make it with loans. You may not be too far from turning things around if you take my advice. Being stubborn and greedy will never pay in the long run.
Otherwise, more trouble will always be brewing for those whom are greedy. Guaranteed!!
Trouble: You answered your own question, John Hewitt is filled with greed…
Buyer Beware!!!
Since when did business become perfect systems where everyone makes money? How many startups fail that are not franchises? You don’t need a franchise system to fail in business. And you can succeed without being a franchise. Franchises offer systems to help you succeed and get paid royalties to do so. It is up to the owner/ manager and employees to make it work. Does the system fail on occasion not producing results that you expect or that were promoted to you? I bet! Everyone advertises and promises results. Why would they promote failure? Why would banks loan money to franchisees? Why do franchises have 75% success rate?
Let me say that everyone needs to take responsibility for their own actions and failures. If you have ever worked with the public on a daily basis, you know that people create their own realities. It’s only human. Is Liberty Tax perfect? Probably not. Do you think that some of the previous owners (present owners too) made mistakes with their business? Oh I bet.
Price of service – this makes me laugh. Most people know the price of a product or service before they agree to buy it. Companies can charge fees based on services they provide that differentiates them from other businesses that offer the same service. HR_Block, Liberty Tax and Jackson Hewitt provide immediate service. You don’t have to wait or make an appointment. They have third party banks that will take fees from the refund. They have experienced and trained tax preparers. Oh I know…they are not all experienced or trained well. EVERY company has employees with ranges of skills – some very very competent and others not so competent. EVERY company has employee theft. EVERY company has policies to benefit the shareholders and owners. But it doesn’t mean the companies don’t have some really great advantages too. If a company is not out to make money, they better close their doors. http://www.consumeraffairs.com/finance/hr_block_charges.html
This is the second Liberty Top Gun that been gunned shut downed down this year. Both cases are very similar in what was being done. This seems to be a pattern that is being repeated by top Liberty Offices. Don’t know if this is pressure being put onto the Zees by the ADs or the extra recognition that John Hewitt gives these owners with unusually high returns.
Liberty claims that they are not training Zee’s do fraudulent returns. But Liberty had another former Top Gun Zee, Annie Fuller, claimed that she was instructed to teach by corporate to this method. It could not be proved that this training was approved or endorsed by Liberty Corporate or had any knowledge that this training was going on. Both John and Danny Hewitt walked away, unscathed.
If you are thinking about buying a Liberty Franchise, stay away from this company it is very bad investment.
Getin TouchwReality proves our points to those interested in buying a Liberty franchise, DO NOT DO SO! Failure awaits you. Not to mention, five years of hard work, if you stick it out, and around 80k to 100k of money spent and gone forever.
Hmmmm,? Immediate service for tax prep trumps ethics? Tax season is three months long, let’s see, let us price gouge the early and late filers because we offer immediate service? The early filers have three months and no hurry to do their taxes. What about those whom make appointments, do you give them a discount?
Give me better reasons for pricing than those, your points fall flat with me.
Another one bites the dust!
These Top Guns need to be investigated by the IRS and all the high tax return offices in other companies such as H & R and Jackson Hewitt. I see returns done wrong constantly and giving credits and refunds that are not there but manufactured.
If they followed the rules, they could not pay their royalties, nor toot how much money they have at the end of the season. Better keep your money because you may need it for a lawyer to stay out of prison.
In my area, one zee kept getting audited by LTS, however the other top guns in the area were never looked out even though they did two to three times more returns. One top gun was our AD and his outfit lied and cheated all the time on returns. Boy oh boy, I hope he is sweating bullets. Of course his family will bail him out eventually.
John Hewitt did not appreciate the smaller zees with the correct tax returns nor the great customer service. We were losers to him and his automatic emails. We did not give him heartburn, these top guns will thou.
Hope it was worth it!
Read the report. This is a warning from the department of justice to all involved and not just Liberty. Early season issues are an epidemic in major cities. Tax offices on every corner, including the majors of HR, JH, Liberty. More ‘local chains’ spring up every year. They mention the high fees in the report. Don’t overlook that all the customers interviewed denied knowledge. They did’nt deny accepting the refunds.
Interesting that the documentation was extensive and the DOJ basically is saying so what. That’s the game changer.
It may be a clean up campaign for inner cities, starting with the big guys.
Wait to see if they work on Turbo Tax. Looks like Turbo Tax is trying to fix the problems with fees. Pretty high this year if you filed using their online product.
Change is coming.
I am an existing franchisee with Liberty. I had to write the comment for the person who started this forum. You are incorrect about most of the things you said. There is no royalties on uncollected fees or chargebacks. I have been a franchisee in Oakland, CA for 6 seasons. I originally bought 2 territories and end up selling 1 of my office because it is hard to manage both at the same time. As far as the marketing fees of 5% we pay, it is totally up to you where do you want to spend that money. For example- 30% off to non returning client, Now if your AD is not doing what he should do, than It’s not John Hewitt’s fault. I have had few things I needed to get it done and I emailed John directly and to my surprise the respond was instant and he took care of me right a way. Any time I needed anything from Tech support or anything else from Corp, they responded very quickly to me. I don’t know why you had such a bad experience.
This system is not for everyone. You must have a drive to be successful in this business. If you think John is going to come and run your office, than you need to wake up my friend. No one is going to run your business. End of the day it is you who is responsible for your failure and success. I had similar feelings in my beginning years with Liberty, but It didn’t take me long to realize that this is my business and I have to be on top of it. With all said I also do not follow the entire system of marketing myself and I don’t think most people can do that or spend that kind of money in marketing. But this year alone I grew 30% in revenue and 26 % in number of returns. Doesn’t matter what you say or anyone else. Liberty does get people in your door and now it is up to you to treat your customers right or wrong. For example what happened to Mario in above complaint. That preparer was dishonest and lead him to believe that it is a free return and charged him money on RT. Very bad business practice. These are the people who fail in long run and start writing on unhappy franchisees and start pushing their dirt on JOHN or Liberty as a whole.
My advice to anyone who is looking into Liberty is- Find the best location before you sign any contract. The key to be successful in this business is:-
1-Location, Location and Location
2- Be honest and reasonable to your customers.
3- Hire the like kind people (honest and friendly)
Don’t listen to all the crap people are talking about. I don’t work for corporate or have anything what so ever to do with them. Also I have no commissions coming to me for you to sign in or not (lol). I am about to do 1000 returns this year in my 6th year. I look back and I am very thankful to liberty tax for giving me this opportunity. Do your own due diligences. Don’t listen to the failed people (they did something wrong or have no business sense at all), they will drag you to their own promise land with them. One part I agree to the person who wrote an assay. Royalties are bit high but at the end of the day, I rather have 81 % of something than 100% of nothing. There is no way on the planet earth, I could build 1000 clients in 6 years being Mom & Pop shop and have a decent ANF (average net fees). I have seen some comments from people who used to be on conference calls and used to teach us how grow our business. Later got kicked out by JOHN for wrong doings (such as fraud) and now they talk all kind of shit about liberty and discouraging people not go that path. Losers will always be losers. Winners keep moving forward. Elephant don’t stop walking when dog is barking at him. So keep moving forward whatever you do and you will become successful if you put 100% efforts in your business doesn’t matter liberty or anything else.
Now chill….
A pattern has been established on this complaint site. Whenever bad news for Liberty comes out, such as the civil complaint against Syed, new posters come on this site to defend Liberty. I find this interesting. They have a common message and we whom have read most if not all of the comments, can recognize their theme. They do things differently, they have 1000 clients, John is an okay guy, 19% royalties are not so bad, the others of us are “losers”, “failures”, or “never should have been sold a territory”.
They hate the truth. The truth is that which Bill often posts, the good territories are gone. Except for Syed’s now. Big bucks to be made in those territories. I hear there are a lot of small business that need a tax preparer now.
Lined up for those territories. I’ll bet he gets lawyer and fights. His preparers probably set up at home for 2016.
Nah, Bill failed as a franchisee and yet you’ll never hear him admit to his part in his failure despite the fact that I and many others have succeeded. Now, with regard to Ahmed, Liberty really should know about these franchisees before the justice department has to shut them down. When you have erage returns running 50% or 100% above national average in one particular office, or one franchisee’s office, you can know that and investigate. Liberty really does need a compliance officer for franchisee compliance. Nevertheless, many of us have run profitable Liberty franchises for many years. I’ve retired now, after 15 years as a profitable franchisee, but I’ve seen many Bills come and go. Unfortunately, Liberty does sell franchises to people who predictably are not suited for self-employment. That’s too bad. Prospective franchisees have to know themselves. Liberty can’t know you better than you know yourself. But the royalties are lower than Block or Jackson Hewitt. If you already know how to prepare, efile, and charge as well as effectively market than you probably don’t need a franchise. If you know nothing about the tax business, like I did, a franchise makes sense. It takes business skill and analysis to figure out if it is for you. If you are more like Bill and NCHillbilly then you definitely should not buy a Liberty franchise.
Franchisee,
While there are 3 majors there really is two little ones and one big one. There is a huge difference between the two and the one.
You constantly lump them all together. Here is the piece that separates them.
JH and Liberty are 99% franchised. Block is 40% franchise 60% company owned. What’s more, virtually all of the franchise offices are more rural, small town territories.
Block believed the administration of all the rural areas would be too expensive and consuming so they franchised them out. The urban areas are virtually all company owned. There just isn’t as much likelihood for a a situation like this to happen with block.
Further, most Block franchisees have been with block 15, 20, 25 years. That’s why it’s so hard to find block franchises for sale. You can find Liberty territories and JH territories pretty easily, not so much with block. I finally found a retiring franchisee (33 years with block) near me and got in. It is a different experience than independent but when I rolled my business in and the franchise business…..wow!
JH had tried and lasted 2 years in the area, Liberty has gone through 3 owners in the last 7 years. The Block franchisee was there for 33 years (I did very extensive research before buying)
They are not the same model. Franchise with block is less than half of the business, franchise with Liberty and JH is virtually all of the business. They are completely different models…..oh yea, what did I have to pay block? Nothing! A $2500 refundable deposit. I did have to pay the franchisee a pretty penny.
Past failures or successes are not indicative of future results. The tax prep business has changed and competition is fierce. Now is not the time for a novice to invest their money in a tax franchise. There are not enough good preparers looking for work willing to help you. The good ones won’t work for close to minimum wage. So, workers are your first problem. If you don’t know how to prepare taxes, forget about this business.
Don’t be fooled by the various success stories on this site. If you have money to invest, invest it elsewhere. This is one investment where you do most of the work, spend most of the money, and watch the franchisor get rich.
My heart sinks with sorrow when I see a brand new Liberty office open. I give them a 25% chance to make it. No hard feelings towards Liberty Corp. but they need to do more to help their franchisees.
The weird thing is, the Feds don’t just come in and shut somebody down. There are letters and warnings long before a shutdown unless it’s just crazy crazy fraud from the get go. Most likely, these folks had been notified and warned and chose to continue their fraudulent returns.
We all know john knew about this. Office A has an average eitc of $2000 and 12% of clients with self employment. Office B in the next town over had average eitc of $3500 with 60% of clients with self employment. Office A averaged 1 qualifying child per return office B had 3 qualifying children per return.
Yes, John has those stats yet chose to ignore them. And in some cases, he had those stats and had those franchisees preach to the other zeez how you “Hewitt”
It seems that a lot of the pro Liberty people come out at the time of the most controversy regarding this franchise. You can’t defend a system that preys not only on its customers, but on its franchisee’s as well. It should not surprise anyone that franchisees are getting in trouble with the IRS due to the way Hewitt and Liberty train them to conduct business. Unfortunately, the government is only going after the branches of the corrupt tree which is the franchisees, and not the root of the evil, which is the franchiser himself. I guess if you have a corporate veil to hide behind, you feel invincible. This is not only a negative reflection of the Liberty Tax company, but a condemnation of the tax system itself. Liberty has allowed through its methods of doing business a system of stealing from its franchisee’s as well as the government. You can’t expect to successfully defend this behavior forever-something has to give. That is why this company is a fraud and just a matter of time until the IRS realizes where the real problem is. Best Advice: keep away from this company because it will lead you down a slippery slope of trouble. But we all know this.
Sad but true hit the nail on the head. None of this matters if you can’t get preparers and you have no experience. It’s a saturated market and it’s not a place for your investment now. Store at a bargain price if you know taxes and marketing or have a very good support system. It will still be very difficult to find qualified tax preparers. Most of what you will is try to keep your cost down and provide quality service, and hope the returns don’t bring IRS letters.
The money is the root of the evil. Greed is the problem and everyone knows it. The Feds did come before and the warnings were there.
To those still with Liberty, has hewitt or your AD or has anyone sent out a memo or email regarding this likely soon to be prisoner? When I was with Liberty any negative or real news/issues were forbidden to be discussed. If I were a franchisee I would demand it. All of these so called “rogue” franchisees are severely tarnishing the reputation and hard work of the “good” franchisees. If screwitt covered this up…uh…no..definitely he wouldn’t do that:)
Mike,
The best thing for the current franchisees is for Liberty to be shut down. This will enable the current franchisees to take down the Liberty sign and put up a sign such as “Joe’s Income Tax”. What happens is these “good” (and there are good ones) franchisees, that developed their own customer base without Liberty’s help, will be now be able to keep all of their revenue. No more 19% royalties and ad fees.
More trouble lies ahead for the greedy and anyone who commits fraud! Just wait and see!
Wow. So much activity and so many new names. Looks like barf villa has come up with some new aliases. :(
I continue to agree with NCHillbilly constantly. I was one of the earlier zees. I can tell you that back at that time, the Liberty name & brand was non-existent. Pretty much as it is today!
I can also tell you without a doubt that Liberty trained their new franchisees “verbally, never in writing” to do certain things to maximize the schedule C’s and to commit fraud. I can also tell you without a doubt that Liberty is definitely behind the trouble that zee’s are facing with the IRS now. It is so much easier to after “smaller” entities than it is to go after a large corporation. However, the CEO and the corporate dweebs are the real culprits. No question. Once the IRS and DOJ turn their attention to the “Tax Grandpa of well over 40+ years, they will undoubtedly re-coup thousands upon thousands of tax fraud that came from the top on down. Again, no question in my mind.
What a freakin’ negative learning experience this was. I was 100% successful because of my own hard work, NOT Liberty’s “full proof” training method. Puuulease. Thank goodness that over the top stressful chapter of my life is history.
Anyone wanting to sign on as a franchisee next year: read through these thousands of posts and you will determine on your own whether to pursue this or not. Hope you DON’T. You will save yourself thousands not to mention all the stress.
Mike,
Yes, Liberty has proactively reported the news to its franchisee base and it has said it is cooperating fully with the justice dept.
SanFranDan, I started with Liberty in 2001. I have attended every kind of training the company has offered. I am reluctant to call you an outright liar, but I have never ever heard anyone in authority at the company EVER suggest or even hint that any franchisee should break the law. And, I seriously doubt you have either. Your credibility just went out the window, dude. I hope you can back up your claims. unhappyfranchisee.com is going to comply with any subpoena from Liberty to support a defamation suit. You are really out of your league on allegations that the third largest tax preparer in the country recommends that its franchisees commit fraud. No, on second though, I think I will call you a liar. That’s jut pathetic.
ADMIN Note: Please scroll down to see my message regarding this comment. Thanks.
Admin,
So, Jim says “unhappyfranchisee.com is going to comply with any subpoena from Liberty to support a defamation suit.” Does Jim’s (someone who started with Liberty in 2001) statement have any verity to it? Has unhappyfranchisee.com been subpoenaed or is this a threat? If a threat, what authority and inside information does Jim have to a defamation suit?
Freedom of speech is another right that is trumped by franchise laws, in favor of the franchisor? SanFranDan said that Liberty trained their franchisees “verbally, never in writing”, as a quote. Seems to me that this would be a frivolous lawsuit because of a she (SanFranDan is a she Jimbo) said, he said comment?
Be careful my dear (not) Liberty, trouble is always brewing for the greedy!
Two top guns are mortally wounded this year, Liberty rakes in these top guns royalties, that are way above the norm. It is corporate PR that requires Liberty to “proactively” report the news to its current franchisee base. Why do you have to tell your franchisees to watch out for committing fraud? Because it is wrong or because the spotlight is now on your company because of two takedowns in one take season? Is Liberty going to pay back the royalties to the IRS on the fraudulent returns?
Once again, trouble is always brewing for those whom are greedy! Guaranteed, crime does not pay! Do we remember that cliché? I would hope so!
Jim: What always discredit people like you is you’re reluctant to tells us where your stores are or anything else about you. Yet you want us to take what you say at face value. However, thanks to this website there is a voice, a large and numerous voice that provides creditable information about there experience.
I am upfront about my time with this company because I no longer under a contract and have to worry about Liberty suing me.
I did do my due diligence when I was investigating this company. Every one of the franchisees’ I spoke with gave me a positive answer about the company, Only one offered a caveat that it was a “lot of hard work.”. At that time of course I didn’t realize how the company spied on franchisees. It wasn’t till after we signed and went to a franchisee meeting that a franchisee from the same area I was investing in told me to be careful what I said because the company had spies.
As for my own personal experience in November of 2005 I bought a territory in Somers Point NJ. However, the same company that sold me the territory would not approve any of the locations that we chose. Somers Point like Pleasantville is a small town with only two main traffic arteries, Route 9 and Shore Road. The two towns are only 10 miles apart. However, the number of people filing for the earned income credit was much higher in Pleasantville. The company deliberately sold me one territory with the intention of having me move to Pleasantville.
Mr. Armstrong please contact me.