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Log In / Register | Sep 25, 2017

Liberty Tax Service

Now that the 2014 tax season is over Liberty tax will again focus
on selling Tax franchises. Their sales people will paint a picture of
a business in which you will be doing 600 returns in your first year and
that you don't need any tax experience. The same pitch that they have sold to so many other failed franchisees. All of their claims are unfounded and can easily be disproven now that JTH is a public corporation. In 2014 they had 4175 offices, did 1,890,000 returns with an average net fee of $191.00.
This works out to an average of 453 returns and revenue of $86,465.00 for all stores. The financials also provide the number of stores by age. Using a weighted average the 1st year store did 105 returns and $20,082 in revenue and a 6+ year store did 631 returns and around $120,497.00. Besides the franchise fee of $40,000.00 you will have to pay at least the minimum franchise fees of $5,000 the 1st year, 8,000 the second year and $11,000.00 the 3rd through 5th year plus 5% advertising fee.

There are numerous reasons not to buy this franchise, but the number one reason is the minimum fee. "IF THEY BELIEVE SO MUCH IN THEIR SYSTEM THEN THEY SHOULD ONLY CHARGE ROYALTIES ON THE FEES YOU COLLECT".



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