In the past couple of years, Liberty Tax Service franchises have been springing up almost everywhere that their long established competitor’s can be located. This chain is headed up by a team of experienced management professionals, most of which have worked for the competition and many in high raking positions. They seem to offer everything those other tax preparers offer, but without the high price tag. Liberty has over 3,000 locations and is currently the third largest tax franchise company in the world.
Background and Benefits
Founder of Liberty Tax Service, John Hewitt, is a 39-year veteran of the tax industry famous for his business and financial leadership and franchising success. John began his career at H&R Block. He struck out on his own 1982 and founded Jackson Hewitt, later selling it in 1997 for $483 million. He also invented his own tax preparation software with his father. John Hewitt created Liberty Tax Service in the fall of 1997 with an ideal in mind. He wanted to become "the #1 tax preparation business in the universe." Franchises are selling rapidly and Entrepreneur Magazine voted Liberty Tax Service #1 in its category for 2009.
How Much Does a Liberty Tax Service Franchise Cost?
Liberty offers a five-day Effective Operations Training designed to train new franchisees in everything from accounting to marketing, staffing, and office procedures. Intermediate Operations Training covers tax return preparation procedures and technology applications, along with a two-day marketing module. Advanced Operations Training includes three days of Tax Academy that includes even more marketing techniques. Royalties are high at 14% of gross receipts less allowable exclusions with escalating yearly minimums ranging from $5000 to $11,000. In addition, there is a 5% National Advertising royalty. Evidently, there is no minimum cash liquidity or net worth requirement and you can own one of these franchises for a total investment of between $53,800 and $66,900 including the franchise fee.
What We Like
As we mentioned before, Liberty does taxes for less than the competition. In fact, they charge about half the price of one of their major competitors, but rumor has it that starting this year (2009) if there is a problem with a return, the tax preparer will be held personally liable. An insider says he files four tax returns an hour using the tax preparation software. Four tax returns an hour brings in a tidy $600 to $800 per employee for the franchise. Not a bad ROI by any standard.
- Accuracy Guarantee – Liberty Tax guarantees their work. If you discover an error, they will pay any resulting penalties and interest.
- Free Consultation – Liberty Tax offers free consultations.
- Ranking — Liberty Tax was voted #1 in its category by Entrepreneur Magazine.
- Competition – Although twice as expensive, H&R Block offers tough competition, and better-trained staff.
Liberty Tax Service Information
$53,800 to $66,900