LIBERTY TAX SERVICE Franchise Complaints

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

• @Greg – I was thinking the same thing. John Barilla and has morphed into Henry Bloch. He must have a new office with a new IP address.

  People need to keep in mind, there are many abusive people associated with LTS like Henry. If you question anything, they will abuse you for asking.

  With this company, Henry is the typical person you will encounter.

• Thanks, Greg.

  People like Barf villa Bloch are just company shills. They think they can get away with saying such negative stuff toward posters on this board like me because they know I completely speak the truth and that’s got them worried.

  All I or anyone on this board can do is educate the potential Liberty Tax franchisee and let them know the real story and let them decide for themselves. If they do their homework properly, they will walk away with their hard earned money in their pocket and go elsewhere.

  This company is being investigated for a reason. They are slime balls. Rip off artists. What goes around come around. Now it’s time for JTH to get his. The most awful, horrific experience of my life. Lasted waaaaaayy longer than a 5 year contract. They get you in their grip and squeeze as hard as they can in a choke hold position. Many, many franchisees have just walked away over the years. Just think about how much $$ they collect for a new person to come in and run the same 2×2 territory.

  There is nothing in it that’s positive for the potential franchisee, only good for LTS.
  Walk away and don’t look back. The contract is so slanted, it reaps of slime.

  ADMIN: Please make sure they cannot hack this website! They are capable of the very worst in human beings. I have to take a shower just when I realize I was part of this disgusting company for 5 long years.

• I have an offer for potential investors of a Liberty franchise territory. Instead of buying that territory give me 100k and after 5 years I will give you back 80k. Sound absurd? Not really. If you buy that territory, you will probably spend at least that much in five years and will want out from this company. You will find no buyers of your so called business and the clients YOU created will be Liberty’s.

  Better yet, just leave me out of it, don’t buy into this system, and keep your 100k for yourself. You will never be able to thank me and others for this advice but trust us, you will be saner and richer to opt out of your potentially bad decision.

• Another Liberty Tax Franchisee involved in tax fraud case.

  An Ohio man was charged this week with bilking the IRS for years through a franchise of Virginia Beach-based Liberty Tax Service.

  Towhidul Hussain, a 36-year-old Middleburg Heights, Ohio resident, ran a Liberty Tax Service franchise from 2011 to 2014, receiving more than $20,000 in kickbacks from clients for artificially inflating their returns, Northern District of Ohio U.S. Attorney Steven Dettelbach said in federal court documents.

  The conspiracy included at least 40 taxpayers, Dettelbach said.

  Hussain had no training or experience in preparing tax returns before opening the Liberty Tax Service franchise, he said.

  Hussain, who ran his Liberty Tax Service in Cleveland, Ohio, was charged Tuesday with conspiracy to defraud the United States and three counts of assisting with the preparation of false tax returns, Dettelbach said.

  Hussain hired a woman to manage the franchise in December 2011, and she showed him how to file bogus medical and education credit claims, Dettelbach said. They would direct clients to take their tax refund check to check cashing stores, and would then take a cut.

• Here is the link from the US Dept of Justice:

  http://www.justice.gov/usao-ndoh/pr/middleburg-heights-man-charged-tax-fraud-conspiracy

• Awesome!!!! Love to see them get the publicity they deserve! Also, I am pretty sure that Barilla is from Cleveland…hmmm? Could it be the same guy?

• It seems the Feds can’t touch Hewitt yet, so they are going to the Franchisees. Some day they will be able to connect the dots to Hewitt. Just a matter of time.

• ^^Franchizee:

  Now that I’ve been through what I’ve been through for so many years, I am absolutely convinced that the feds are working with Hewitt to catch the ‘bad guys’. They’ve already connected the dots to Hewitt. He is either paying them off or/and deflecting their own fraud by pointing out others, small franchises that do something out of place. I know this because 1) it happened to me and 2) it is way easier for the IRS to go after little guys like me and others than it is to go after an entire entity like Liberty Tax and the “grandfather” of Tax himself, JTH. In my case, it was so small but yet it has turned my world upside down for YEARS and has cost me a couple of hundred thousand. Something that Liberty verbally taught to me and thousands of others. EIC – Bingo

  Maybe one day in my lifetime I will actually see justice happen and JTH finally brought to his knees (like Madoff).

  My life was perfectly normal before I joined this hellhole franchise and it has been so amazingly stressful, thanks to Liberty Tax and JTH, that my life will never be the same again.

  Something is not adding up right. No one should be allowed to get away with what they’ve gotten away with for so long. It makes me convinced he IS conspiring with the federal gov’t.

• SanFran, are you saying you were involved in fraudulent EITC filings? And you’re blaming Liberty for having taught and encouraged you to do this? In other words, you cheated every taxpayer in America by filing fraudulent EITC claims they had to pay for with their hard-earned money, and you’re blaming someone else?

  This puts an entire new light on your postings. You come across as so ethical and moral and complain constantly about how you were wronged by Liberty. YOU are the one who wronged your clients and fellow Americans. Oh, but it’s all Liberty’s fault? Sounds like you’re the one who sold your soul. Please leave this board. Let the franchisees who were truly duped by the company’s false promises air their grievances and warn others to do their due diligence. Your own nightmare is self-inflicted.

• Gotta agree with Sara EA…I hope it was not like that though, San Fran…please enlighten us.

• Clap, Clap, Clap!

  SaraEA:

  What an idiot you are! Just go ASSuming things! My case is so incredibly complicated, you really have NO idea. This has been a struggle of a lifetime. If you really have NO idea, because I am certainly NOT going to go into detail, then you really can only wager a guess now, can’t you? Believe what you want, honey. It’s not at all what you think. But you go and make sure you come to your own conclusions and bash me on this forum.

  This is and has always been an incredibly dysfunctional franchise. I do know. I was one of the first.

  Liberty is 10000000000000000000000000% behind my woes. You can guess all you want. But I am not at Liberty (pun intended) to give you ANY information that would lead you to believe I’m at fault. FAR from it lady!

  If I didn’t just lose a couple of hundred thousand I would sue the living daylights out of them. In fact, that’s how I lost so much $$ to begin with. They will sue you and make sure that you have NO chance in winning or even get a fair trial with the rinky dink rocket docket Eastern Virginia court system.

  This entire franchise is rigged. Don’t for one minute think that anything they do or you learn is honest. Maybe they’ve cleaned up their act in recent years, but I’ve been fighting and struggling against them for years.

  Don’t you DARE tell me to leave this board. You can tune me out if you want to come to your own conclusions on what happened. They are manipulating and fraudulent on ALL levels. No doubt in my mind. I now have the proof I needed. I have met with the appropriate officials who know all about my case and many others similar.

  Your last comment is comical. “Your own nightmare is self-inflicted”. There is nothing that I can say to that stupid, stupid comment. If only you knew the real truth. Say what you want, missy. I don’t give a shit about you.

  This franchise sucks royally and I have all I need to carry on with the proper authorities. Looking forward to the downfall of Liberty Tax and JTH.

• Please, please understand one thing potential investors in a Liberty Tax territory or territories; The troubles Boston Tax, Barbara Green, (see top of page for these posts), and SanFranDan have had might be yours too.

  Gone for now are John Barilla and Henry Bloch. My gut feeling is that these two people are John Hewitt or someone John Hewitt is instructing to post messages on this site. Investors; Barilla and Bloch try to minimize the really negatives new investors will most likely encounter if they buy into this system. The majority of the posts are negative and true statements of the difficulties good people have had trying to make a go in the tax business with Liberty Tax.

  Liberty’s quarterly report comes out soon. Look closely at the number of stores that they have now compared to last year at the end of the same quarter. I will be surprised if the number has increased. Even if it has, that means nothing but more failures for more franchisees. We will see.

  You pay 40k for a territory, start-up costs, and do all the work for this business you might buy into. You pay 14% royalties and 5% ad fees. Minimum royalties start your first year you open a store. No national ad program and no local TV or radio unless you pay for it. It is a win-win for Liberty Corp. and you pay for their salaries and rich living. You have a slim chance to succeed. By success, that would be measured by a return on your investment and profits. That is such a pipe dream with this outfit that I have a hard time even considering it happening. Even if you do succeed, 19% of every dollar you make is a tough nut to swallow.

  You are better off considering banking your money at 1/2% interest.

• SanFranDan: Take a step back and read what you write.

  “They’ve already connected the dots to Hewitt. He is either paying them off or/and deflecting their own fraud by pointing out others, small franchises that do something out of place. I know this because 1) it happened to me and 2) it is way easier for the IRS to go after little guys like me and others ”

  Its your post and the above statement clearly sounds like you did something out of place with EIC and Liberty reported you to the IRS. I know your passionate about your feelings towards Liberty and I’m sure you didn’t intend to have it come off that way but unfortunately it did.

  This franchise is a nightmare. The decision I made in 2005 still haunts me to this day. My goal and most everyone else on this site is to help you avoid this nightmare.

  Buyer Beware!!!

• ^^Bill:

  I was NOT engaged in fraudulent tax returns. Period. Unfortunately there is much more to this than was said. When I was there very early on, there was an official training that not only showed us how to construct and maximize EIC but encouraged us to do so. We were invited to “private” cocktail hours after training classes and told how to maximize our fees by way of being aggressive on the EIC.

  I never said I personally OR anyone in my offices engaged in anything fraudulent. What I am saying is that I personally had many fights with Corporate & the AD’s and they escalated those argument issues to JTH himself. At that point is when all the harassing began. Many, many, many issues were experienced by me at their hands, for example: AD audits constantly, notices to cure for the most mundane things, corporate telling me to spend my own $$ on marketing instead of using my advertising royalty for these purposes. Those I’ve listed are the most calm part of what I experienced next.

  I regret it was misinterpreted that I was doing anything fraudulent. That has NEVER been what I’m about. At one point during the years of harassment, the IRS audited a great number of my clients. It is my “guess”, and a very strong one, that Liberty was behind these audits. Since so many of Liberty’s clients are EIC, it stands to reason that the IRS would see a pattern in these types of Tax returns that they would interpret as questionable. The minute there is more than 3 of this type, the IRS assumes that there is a pattern of fraud, even if there isn’t any. My guess is that Liberty is behind this because they want to eliminate dissident franchisees.

  Bill: I agree with your last sentences. This franchise IS a nightmare and the decision I also made many years ago still haunts me to this day as well. Not to mention all the harassment, stress and money I lost in fighting a Goliath.

• SanFran, I’m sorry if I misinterpreted what you said. This is YOUR STATEMENT that I was responding to: “In my case, it was so small but yet it has turned my world upside down for YEARS and has cost me a couple of hundred thousand. Something that Liberty verbally taught to me and thousands of others. EIC – Bingo.” You must admit, that sounds like you were engaged in fradulent EITC filings. Please tell us what you really meant.

• SanfranDan: If you had tax experience prior to becoming a liberty tax franchisee then you understand the rules as outlined in IRS publication 17. There is no way for individuals who’s only source of income is a W-2 to constructed and maximize EIC after the tax year has ended. The credit is based on earned income/AGI and number of dependents, both of which can’t honestly change after the year end. I understand in the real world there legitimate situations that do effect the credit such as taken care of a niece or nephew but these are events that are out of your control. If you follow the regulations for EIC the taxpayer’s situation dictates the EIC, you should not be constructing or maximizing anything with regards to the credit.

  My only purpose here is to help potential franchisees avoid the mistake that all of us made.

• Bill:

  I had corporate tax experience, not individual. In these “cocktail parties”, Liberty trainers suggested that the creation of a side business can manipulate the EIC through the profit or loss on a Schedule C. They called it “optimizing”. I call it fraud. Liberty was giving me bad advice and I was not following it so I got into trouble with them. I will not be specific.

  Liberty and JTH harassed me constantly, many issues I cannot say here because they would identify me. When I went on zeenet questioning them on several issues, I was shut down from posting on zeenet in the future. After that, I was subject to all kinds of stress and harassment, some small, most large and all to squeeze me tightly and quiet me down. Honestly you would NOT believe some of the things I’ve lived through from them.

  It has lasted way longer than my 5 year contract. I have felt the repercussions for years. They are very good at what they do. They hire the best lawyers and the nastiest people in corporate. It has been a very long time since my 5 year contract has ended so I have no idea what they are telling people these days about anything.

  Frankly I am exhausted with this discussion. So please move on from me and discuss ways to warn potential franchisees. The everyday headaches are bad enough to warn people to stay away and go elsewhere. Everything I’ve talked about is true: from wavers selling drugs on street corners to employees stealing from me to not able to be in each office at the same time so many dishonest happenings occurred with employees and with clients. Clients are pretty brazen people and are very vocal as to what they want and don’t want.

  The bottom line is that this experience has been wrenching. My case is probably unique enough for me to try to remain anonymous as much as I can. I don’t trust anything about that franchise. I, along with you, Bill, plunked my money down on something that I thought would build for my future. That was so far from reality. I lost it all and then plenty more.

  I warn potential franchisees any opportunity I get to do their homework about this franchise. Talk to many franchisees, both current and ex. Come to your own conclusion. However, if your conclusion is to go ahead and sign a contract with Liberty Tax, good luck to you. I can say you’ve been adequately warned.

• Lawyers are gathering information from clients (e.g. Tycko & Zavareei). They are seeking people who were allegedly overcharged or allegedly charged a higher price than quoted.

• For anyone looking to buy this franchise please utilize the information from this site along with the information that Liberty Tax Service puts out on its investor relations site under financial information. Also take advantage of conference calls like the one Liberty did today when it released it’s first quarter results. The call is available until Sept. 4th. The excerpts from todays conference call was published on yahoo.finance, under Liberty’s stock symbol “TAX”.

  On this site you hear about the lopsided franchise agreement. The minimum royalties and the 5% advertising fee that doesn’t go to a real advertising plan.
  i.e. no national or regional television advertising.

  By going to the investor relation site and clicking on financial information you can view the company’s Annual report. At the end of this report you can review the franchise agreements so you can read the these agreements prior to attending any of the seminars. Get a feel for the language. See the minimum royalties, understand the amount of control that the company holds over you. i.e. site selection etc. Do all this before the sales force works you up into believing that you will do 600 or more returns a year. The annual report will also disclose the number of locations, the number from the prior year along with the number of returns and average net fee. From this information you can back into the information provided on this site.

  On today’s conference call John Hewitt referred to this past quarter’s franchise sales activities as “This planting season” and that “The height of our sales season typically doesn’t happen until the fall”. My goal is to help you avoid having your life savings harvested by him.

  If you review the company’s financials you will see that in the last three years they spent $18,308,00, 15,124,000 and 15,293,000 on advertising. However they don’t breakdown this number down between selling franchisees and AD territories and what they actually spend on advertising tax preparation. Keep in mind that franchisees paid to Liberty in advertising fees during those years between 16,000,000 to 17,000,000. Again Liberty does not breakout royalties and advertising fees separately. For the last three years the combined total was listed as $80,496,000, 78,426,000 and $73,149,000. So what do you get for your MONEY!!!

  To add insult to injury Liberty now pays a dividend of .16 cents a share. Based on the number of shareholders for this quarter the dividend will be $2,276,346. Of course more then 51% of the shares are held by insiders.

  As a potential franchisee you have the option of joining us in this purgatory or walking a way. Don’t let John Hewitt harvest your life savings by exploiting your own wishful thinking.

  Buyer Beware!!!

• Please heed Bill’s advice about walking away and Buyer Beware!!!

  I hope to add some educational value here for those thinking about buying a Liberty territory. Note; this site was not up and running until 8/11/2009. Think about this; many of the people warning you about the difficulties operating a Liberty Tax storefront did not have information that you now have. If you bite the bullet and buy in, well, you were warned!

  Latest from Liberty’s 1st quarter reporting:

  John says:
  “I am pleased with our sales efforts thus far, the progress we are making to expand our office count, and our ability to engage closely with our franchisees and area developers to improve return counts in existing offices,” said John Hewitt, CEO. “We have developed several new pilot programs and continue to see progress and expansion with our SiempreTax brand.”

  Pleased with sales efforts; 37 new US and Canadian territories sold compared to 30 last year. No word on how those breakout in US/Canada. No word on how many franchisees left the system. An increase of 7 is pleasing? We have 50 states in the good ole USA and that is less than 1 per state. Pleasing?

  Table A from financials;
  Receivables up $5 million – not good – loans to franchisees or franchise fees due?

  Table B from financials;
  Revenues:
  Franchise fees down -13.6%
  Area Developer fees down – 12.1%
  Financial Products down -32.6%

  Table C from financials;
  Operating loans up – which may explain increase in Receivables
  Payments on loans down – not good!
  Borrowing up – not good!

  Overall, it is not a good 1st Quarter report – in my opinion.

  Buyer beware!

• Please take heed to what Bill and Sad but True say: The advertising dollars collected from franchisees are used only for lavish parties designed to make Liberty look rich and viable. My experience has been anything but that. When you see all the advertising royalty money being spent by Liberty, and there is no national advertising on mass media, you have to ask yourself where is all this money going to? My AD as well as John Hewitt told me that 100% of my advertising royalty money was going into my market. What they failed to say was that it was going into their pockets while they were in my market. Never did the ad royalties get close to what I and others put in. The best year, we got about half and that was used for costumes for Liberty clowns and some signs. More often, less than 20% of my ad royalties ever saw my market and when asked about that, Hewitt only commented that they were being “banked” for future use and that the money was being used for current needs in other markets. This was later to be proved as not true because when I asked for the “banked funds” in the following year, I was told that these were not available because they were for previous years and all used up. I even raised this concern on the Z net and Liberty promptly shut down my access to it and any negative comments were censored.

  This is just one aspect of how dishonest Liberty is with their franchisees. Do you really want to be part of a company like this? We are warning you and if you but this franchise and discover what was said in this forum is true, you were warned!

• Taxastee: Thanks for pointing out that Liberty didn’t give you back money to spend on radio ads or items that you thought was necessary. What they did instead was send you items life “Liberty Wavier outfit” or some other type of advertising medium that they received a kick back fund.

  In my earlier post I pointed out the dividend that Liberty is now authorizing per quarter. The total amount of the dividend if issued for each quarter would be over $9,000,000.00 dollars. Half of what Liberty spent last year in advertising. If you look at their financials they have just over $4,000,000 on hand so how can they possibly afford to pay this dividend? The right answer is they can’t. But the reality is that 1) JH and the rest of the majority owners are going to get 51% of this dividend and 2) They want to maintain share value. Unfortunately for current and potential franchisees it will do nothing to build the franchise.

  For those potential franchisees who think I’m just bitter about my experience I will gladly talk to you. Just ask admin for my e-mail address. I have talked to several. Some of the potential franchisees actually e-mailed me after our conversation to say they have chosen not to invest. I did have one conversation with a adjunct professor at Carnegie Mellon in Pittsburgh who I couldn’t convince that this company is not a trustworthy company. He became an area developer. He also holds himself as a franchise consultant for a company called franchoice. Below is his biography:

  “Chris knows the challenges of finding the perfect business opportunity. For the past 15 years, Chris has walked in the shoes of a business owner. With business ownership experience in multiple industries, Chris possesses the skills necessary to help candidates find the perfect franchise opportunity to achieve their specific goals. After beginning his career with a Big 6 accounting firm and earning his CPA license, Chris spent 3 years working in financial management with 2 rapidly growing companies in the healthcare and manufacturing industries. In 1999, Chris made a career shift from employee to owner. Since he chose business ownership, Chris has owned and operated businesses in a variety of industries including commercial printing, medical equipment, professional services, real estate and healthcare staffing services. In all of these businesses, Chris served as both the lead investor and, more importantly, the leading executive of the company.

  Since 2006, Chris has been an Adjunct Professor of Entrepreneurship at Carnegie Mellon University. He has worked with hundreds of students to evaluate, plan and start businesses in countless industry segments. In 2011, Chris joined a leading retail franchise as a master franchisee.

  Chris has joined FranChoice in order to help candidates benefit from his deep and diverse business ownership experience. Because of the variety of industries in which Chris has direct experience, he is able to assist candidates in evaluating multiple business opportunities with an experienced guide on their side. Chris’ goal is to help every candidate find the franchise opportunity that will help them reach all of their personal and professional goals. ”

  I would like to hear from this “master franchisee” about how thing are going as AD for that region. “As a franchise consultant” I think it would be more ethical to say what franchise you are a affiliated with as a “Master Franchise”. This would help those who are looking for advice to realize you have a personal stake in selling a Liberty/Siempre franchise.

  Greed, self-preservation drive people to make less then ethical choices. This company walks a fine line and many of the people associated with this company are willing to do the same thing.

  Buyer Beware!!!

  Buyer Beware!!!

• Liberty’s paying dividends is how Mr. Hewitt can afford a $1 salary that I believe I remember him taking for this year. If my memory is correct, this means the dividend he is getting as (what I assume) majority shareholder, takes the place of his prior salary. This is a big tax savings for Mr. Hewitt and Liberty Corp.

  What a guy!

• Block is positioning themselves well in the tax industry marketplace. JH seems to have “righted” their ship. Liberty, well John is happy to be in third, getting rich, while new franchisee’s enter the trials of trying to be a success, but with failure on the horizon.

  Buyer beware!

• “To add insult to injury Liberty now pays a dividend of .16 cents a share. Based on the number of shareholders for this quarter the dividend will be $2,276,346. Of course more then 51% of the shares are held by insiders.”

  Yes, it’s no coincidence Liberty begins to pay dividends the year John Hewitt, owner of 1M+ shares of Class A stock, decides to take a $1 salary. Those 1M shares will translate into $640K for him over the year on a dividend of $0.16 per quarter.

  P.S. Did you hear on the Liberty call their plans for 180 total Siempre Tax locations in FY16 and 100 new company offices that will later be resold to franchisees by the close of FY16? Who is going to buy a company office in April and then pay rent on it for the next 8 lonely months?

• The company offices will most likely be existing locations where the 2015 zees have bailed out. Look for company offices to increase and franchisee offices to decrease.

  They are hanging on to the ropes to stay alive. Soon it will be by a thread. I can invasion them trying to sell the company and nobody wanting it.

• Sad But True: Unfortunately that’s not how I see it playing out. It most likely will look very similar to Jackson Hewitt in that the creditors will need to come in and take it over. I’m personally surprised that the banks financing the credit line aren’t more concerned. I understand interest rates are low but interest expense this past year grew by 550,000. But from a practical position wouldn’t it make more sense to keep your own cash vs. paying out dividends and paying off shareholders.

  Cash flow has been an issue for this company since its inception. So while the company does pay off it’s credit line its other liabilities are increasing. Specifically A/P and N/Ps to AD. So why would any good company payout dividends or buy back equity when they would be better off keeping the cash and using it to build the company?

  Potential franchisees should ask themselves why they should invest in a company that doesn’t invest in themselves.

  I feel like Jacob Marley in a Christmas Carol asking you to listen to my advice before it’s to late. if you don’t you will be joining us in our life of purgatory.

  Buyer Beware!!!

• Bill: Did not think of the scenario you posed. Anyway, you are correct about potential franchisees asking themselves why they should invest in Liberty.

  As for the current franchisees, it may end up really bad for them. If Liberty fails, they (or their creditors) might just sell the clients to the highest bidder. Sorry, current successful franchisees, even you do not own them (the customers that is). Not sure if there is a provision in the contract or franchise law that addresses any of this. It will be messy!

• My suggestion is to go out and enjoy your holiday. It’s not the doomsday scenario. Market is saturated but not over. Companies succeed or fail all the time. If you’ve been providing great customer service there’s no need to worry about the client list. Jackson Hewitt is still kicking. That’s the proof of possibilities even if something major happens.

• Welcome to the JTH/Liberty Tax Service TCPA Settlement Website

  A class action lawsuit involving JTH Tax, Inc., also known as Liberty Tax (“Liberty”) received preliminarily settlement approval in the United States District Court for the Northern District of Illinois on May 7, 2015.

  The proposed settlement includes as class members all persons whose cell phone the Released Parties or someone on behalf of the Released Parties called using a device that has the capacity to dial numbers without human intervention, where any call was made between and including September 25, 2009 and April 19, 2015.

  If you are part of the class described above, in order to receive a monetary award under the Settlement Agreement, you must complete and submit the Claim Form online, by fax or by mail so it is postmarked or received by AUGUST 15, 2015.

  Plaintiff Nicholas Martin filed a lawsuit alleging that JTH Tax, Inc. violated a federal law called the Telephone Consumer Protection Act (“TCPA”) because the calls were made to his cellular phone via autodialer without his consent. Plaintiff also sought to represent a class of persons who had been called by JTH Tax, Inc. on their cellular phones without their consent. JTH Tax, Inc. denies any wrongdoing on its part, but has agreed to settle to avoid the costs and uncertainties of litigation.

  The Court has scheduled a Final Approval Hearing (“Fairness Hearing”) for September 16, 2015 to decide whether to approve the settlement. As a potential Class Member, you may submit a claim be eligible to receive benefits, request exclusion from the Settlement class, file an objection with the Court and ask to speak at the hearing if you wish, or do nothing.

  https://secure.dahladmin.com/JTH

• We know that the Liberty Franchisees are encouraged to overcharge. We know because of the high royalty fees that, if you don’t overcharge, the minimum royalties due will kill you. We know that Liberty encourages “aggressive reporting” of tax payer’s returns to maximize refunds through EIC manipulation, hence, higher fees. You have to follow the Liberty formula in order to pay Liberty. This formula puts the franchisee between a rock and a hard place. Add to the equation the immense startup costs associated with opening this franchise and the knowledge that you will not get any technical, operational or marketing support. It seems obvious to me that this is clearly a business to stay away from. The software doesn’t work, your AD is only interested in busting your butt and the corporate people, on a good day, are indifferent.

  Is this an organization to be a part of? I think not. Why has the US government basically ignored the fact that the trouble starts at the top of the corporation, not at the franchisee level? A good organization to stay away from.

• Regarding return manipulation – it’s not true. You decide on fees. If you overcharge it’s on you. On the EIC, no one can tell me to break the law. It’s better to remember the Feds punish individuals, good company or not good company.

• Fees are preset by corporate, as Franchisee you can manipulate the numbers. Also the fees are set up on a schedule increasing or lowering at different dates throughout the tax season. This is in tax system.

  Has the new tax program been implemented which is solely online?

• Fees can be adjusted by the franchisee. Final decision is with store owner. Good company or bad company.

• Before the season John determines your price. Yes you can change it up or down, but many AD’s get on the store owner. They ask you if you know more than John about the tax industry, and why have you changed the price. They do not say a word if you charge more, but will if you charge less.
  John can get away from price fixing, by saying it is only a recommendation and the store owners are not required to use his recommendations.

• You’re right “out and glad”. Our AD never showed us anything about pricing. So what out and glad stated is absolutely correct. Most are never shown until years later.

  Becoming a Zee, there is very little tax training nor any other training. But full of training on how to market, get people in the door and hand them a $50 bill. Bribe them to come in the office. In reality this is a crap deal for the Zee not John Hewitt.

• The other bogus thing that Liberty does is to project that you will do 600 returns in your first year. There were a whole bunch of new Z’s in my area and we all got the exact same projection sheet from corporate,

  That $50 bribe for new customers, John Hewitt instructed us to add $60 to the return cost so we can recover it and, of course, he gets 19% of that. Our AD was really a joke-he had no knowledge of the tax business and wouldn’t let any of us do his tax returns. Gives you an idea where he was coming from.

• Wow! Over 280 existing stores are available for purchase from Zees looking to sell on ZeeNet. Ouch!! That doesn’t include corporate stores that are also available for sale. Why the huge turnover/retention problem? John promised ACA was the biggest game changer in the industry. Turns out maybe its an end game for LTS. Look elsewhere for another ponzi scheme or open your own Mom and Pop store and save $40k per territory + 11k per year in Royalties. For those of you hanging on by a thread maybe now is the time to get out! Cut your losses and be free. Don’t sign another franchise agreement.

• There you go, my doom and gloom scenario is not too far fetched.

  Successful franchisee’s will be hurt the most by the demise of Liberty Tax. Block and JH stores being so close to your stores will come back to haunt the successful Liberty franchisee’s. You can disagree on my speculation but John will protect himself first. Sorry Liberty franchisee’s, but it will not end well for you.

  Just my opinion, of course. We will see what happens. Guaranteed, John will not be hurt financially on this. He will sell before it is worthless.

• John will make sure everyone but himself takes the “fall or hit” of no money. So far he is the only one smelling like a rose. People pay him for the new franchise fee, any minimum royalties and interest from loans being issued. It is a great deal for John.

  Think about this, you borrow money to stay afloat until the next season. Once Feb rolls around, you start writing tax returns, but they are usually “bank products” and those fees are eaten up by Hewitt through inception fees, to pay for your loan. But the kicker, you still owe the royalty off that money that was intercepted. So to balance your book, they will generously loan you money to operate and pay your royalties and your payroll. Once your loan is paid for, they will intercept the next set of money.

  Basically, you work very hard to pay interest and barely get by to fund Hewitt’s lifestyle.

  What a deal.

• Concerned Zee: Thank you for your post. “Over 280 offices (franchises) for sale”. This represents close to 7% of all currently owned franchises. However this is not a new trend.

  Using the company’s annual report I looked at the number of 1st year stores opened in 2013, then I looked at the number of 2nd year stores in 2014 and the number of 3rd year stores in 2015. From year 1 to year 2, 20.6% of stores closed. From year 2 to year 3 an additional 15.4% of those stores closed. So of the 402 1st year stores opened in 2013 only 257 opened in the 3rd year for a total failure rate of 36% through 3 years.

  To test my data I reviewed the 2nd year stores opened in 2013 compared with 3rd year stores in 2014 and it showed 15.4% of those stores closed. I then compared the 3rd year stores in 2014 with the 4th year stores in 2015 and found that an additional 14% of stores closed. Based on these figures a 1st year store has a 50/50 chance of making it to a 4th year.

  Why would you pay $40,000 in franchisee fees and $24,000 in minimum royalties fees for a 50/50 chance you will be open in your fourth year.

  Buyer Beware!!!

• I am contemplating on opening my own office for the upcoming tax season. I am asking for assistance in the selection of the software.

  I have read all of the posts in this thread. Drake has been mentioned as a strong contender.

  ProSeries (Intuit, Turbotax) has a strong market presence.

  I am considering TaxWise, also.

  Any information will be appreciated.

  Kindest regards,

• I have preferred Tax Wise in its unencumbered form (not distributed by Liberty). Its fairly straightforward to use, especially when navigating through the forms. Pro series is also navigable as well. They are all very weak on the state tax returns with the Northern states of being particular difficulty. California as well has opportunities for improvement. I liked TaxWise because of the multi-state aspects of its software. There were actually good calculations between states where you lived vs. where you worked. The allocations seemed to be OK once you got used to them. Some of the software is incapable of doing more than 10 states which would be an issue for those with clients in the entertainment industry. It just depends on your client base.

  Good luck and enjoy life without Liberty Tax

• After Liberty, I started using Drake. The unlimited version is around $1,500. You can get a pay per return version that runs $300, for 20 returns then 20 per return until you hit 100, then it converts to a full version. Drake does partner with banks, so that you can offer a RAC similar to Liberty. With the RAC, you can either issue a check or Direct Deposit. The Direct deposit is $5.00 less expensive. The bank/Drake charge $29.95 total. We do not add any additional.
  If you have a problem with the software, Drake has a great support staff (a heck of a lot better than Liberty.)
  I do like Drake, also it tells you if you have a problem that will not allow an e-file.

  I hope this helps.

• Thank you Texastee and “Out and Glad.” Your suggestions are helpful. Also, any other advice will be appreciated. I am thinking of starting with one station, computer.. I might expand later. Does anyone have suggestions on a Point of Sale system?

• I’ve used Drake and Proseries, both are great. Drake is much better on price and their packages include everything. I am not a fan of Drake the way it stores files, they are not easy to find and move. I also do not like waiting to find errors when the return is calculated. Proseries files storage is much better and easier when working with multiple computers. I like the live error-checking; very helpful, but you will pay a bit more for Proseries.

• Uphill..taxwise, irs uses it and it is pretty good, Santa Barbara is the bank and this year they will have a type of RAL. Most importantly great move on getting away from Liberty! Do you have a location picked out yet? Do you have your client list? Are you out of your non-compete yet? Is your Liberty office near by and still open? You could have some real fun this next season:)

• Thank you everyone for your suggestions. Balancetrend, for now, I will probably only have one computer terminal. But it sounds like ProSeries works well with multiple terminals.

  Mike, currently, I have a few locations from which to pick. I am not encumbered by a non-compete contract. I am able to round up a few clients but not enough to make a profit. I am prepared to lose money for a few years, until the business becomes sustainable. I gleaned from the discussions that it is possible to earn 600 returns per year (after about 4 or 5 years).

• Why does need a Tax Franchisee in the first place. One can work from home with all the online tools. Collectively, one can buy Tax Preparation software, built a collective website and help one another.

  I had purchased 10 Licensees, created a website and charging $500/- per licensee for both Personal and Corporate Tax Preparation and 20% for Revenue for Advertisement, Teaching, Expert Opinion, help and support.

  Out of this 20%, 10% would be refunded to the contributor, if no Advertisement and/or Expert Opinion asked for. This 10% will reduced progressively based on the turnover.

  Next year would enter US Market.

  Anyone interested, reply to my email.

• Uphill, you have to decide if you’re looking for quantity or quality. 600 returns is a lot (just ask any new franchisee who was told they’d do that many 1st year). I do maybe 200 individual returns a year. Many of them have every schedule there is and cost upwards of $1,000 (some twice that and more). Not all of them of course. I also do 50 or so partnerships, trusts, estates, a few corps, and one nonprofit. Even if you did 600 relatively simple individual returns, you’d be working nonstop, and you’d run the risk of these people eventually discovering DIY software and leaving anyway. Better to focus on the folks who have complex situations and can’t do it themselves, or don’t want to because they’re busy running businesses and making money.