Is LIBERTY TAX SERVICE a Great Franchise?

Is LIBERTY TAX SERVICE a great franchise opportunity dedicated to franchisee success or a “cult-like” organization out to “churn and burn their franchisees”?

flickrcomphotosbrent_nashvilleThat question arose recently on an post about the Liberty Tax Service franchise entitled Are LIBERTY TAX SERVICE Franchise Owners Happy?

UnhappyFranchisee.Com points out that In 2009, Entrepreneur magazine listed Liberty Tax Service as the #3 franchise, surpassed only by Subway at #1 and McDonald’s at #2.  At the close of 2008, the number of U.S.-based Liberty Tax Service franchises reached nearly 2,500.

The Liberty Tax Services franchise website claims it’s recognition and growth is due to it’s superior approach and dedicated franchisee support.   It claims:

The Liberty Tax franchise opportunity has been developed based on over 600 years of combined experience in the tax preparation industry. Our policies and procedures are tested and proven. The use of the Liberty system provides many positive results, including the ability to build a customer-oriented, recession-proof business in your territory and the chance to be an integral player in North America’s fastest growing tax service.

However, a commenter on the Liberty Tax franchise post, “An Insider,” tells a different story:

If anyone measures franchisee turnover, my guess is that Liberty Tax would rank on the bottom. They churn and burn their franchisees. Since the company often finances them, this is a way they make money. They sell a franchise at X dollars, the franchisee spends their own money getting it through a tax season but doesn’t have enough cash to make their note payment to the franchisor or Hewitt himself. The franchisor then terminates their agreement and sells their unit to the next franchisee who pays them 2X.

The Liberty franchise is cult like. Franchisees are not allowed to make negative comments about the brand, Hewitt, or any of his in crowd or they are deemed non-team players, so you will not likely find them posting comments here. Franchisor retailiation would likely result in a termination of their franchise…

On the advertising comment – remember Liberty franchisee pay into the ad fund, yet they get virtually no electronic media – IE TV or radio. The company chooses to spend their ad dollars for clowns to stand on the street instead. I would venture to guess that leaves lots of ad dollars in their ad budget for the company to use to sell franchises and promote the brand nationally. I’m sure their franchise agreement allows the company to use the ad dollars any way they see fit. Most franchise agreements do.


Photo credit:   January 25, 2009 by Brent and MariLynn Taken in Smyrna, TN  License:  Creative Commons

Post from: Franchise Pick