Liberty Tax Franchise – Costs, Fees & Earning Stats
Net Worth Requirement:
Units in Operation:
$43,700 - $78,900
$20,000 - $40,000
Liberty Tax was founded in 1997 by John Hewitt and is currently based in Texas.
The Liberty Tax franchise offers a solution for those wanting to start their own business in the tax preparation industry. Liberty Tax services include tax preparation, electronic filing, bookkeeping, payroll, loans, insurance, and credit repair.
This article provides an overview of the costs and fees associated with a Liberty Tax franchise, as well as some information about the earnings potential for this type of business.
Is Liberty Tax a franchise?
Liberty Tax is a popular tax preparation franchise with locations across the United States. Liberty Tax franchisees are responsible for providing tax preparation services to their clients, and they also receive training and support from the company.
In addition, Liberty Tax franchisees are required to pay an initial investment fee, as well as ongoing royalties.
How many franchises does Liberty Tax have?
Liberty Tax is one of the larger tax preparation companies in North America, with over 2,500 franchises across the United States.
The company has since grown to become a major player in the tax preparation industry. The company has been ranked as one of the top 100 global franchises by Entrepreneur in 2020 and has received several other accolades over the years.
Liberty Tax has a large footprint across the country, it’s one of the more popular tax preparation companies in the nation providing affordable tax preparation support. According to the Liberty Tax franchise website, they have 1.6 million consumer and small business clients.
How much does a Liberty Tax franchise cost?
Liberty Tax franchisees can be a great way to start your own business in the tax preparation industry. But how much does a Liberty Tax franchise cost? The short answer is that it depends on a number of factors, including the location of the franchise and the size of the operation. However, Liberty Tax franchises will cost between $43,700 and $78,900 to get up and running. This includes start-up costs, supplies, equipment, and working capital.
In addition to the initial investment, Liberty Tax franchisees can expect to incur ongoing costs such as royalties (14% of gross sales), and brand fund fees (5% of gross sales). These percentages tend to be quite high compared to other franchises.
Owning a Liberty Tax franchise requires $50,000 in liquid capital and a net worth of $100,000.
As the tax landscape continues to change, there is a growing demand for services that can help people navigate the complexities of the tax code. For those looking to tap into this growing market, a Liberty Tax franchise offers a good opportunity for franchise ownership.
What is the Liberty Tax franchise fee?
The franchise fee for a Liberty Tax franchise is $40,000 for a standard territory. The franchise agreements are for five years and there is no fee for renewal.
An important note: franchise fees are reduced for veterans and first responders who want to open a location.
The ideal liberty tax franchisee is one who wants to expand their business portfolio and provide a valuable service to their local community. The company prides itself on its high customer service standards and has a growth mindset to help develop its market. Also, to be a franchisee, Liberty Tax doesn’t require the franchisee to have prior tax preparation experience.
The Liberty Tax franchise provides franchisees with technology to run their businesses from anywhere. They offer full-service support including training, IT, operations, and marketing. A franchisee will have access to national and local marketing campaigns (they have a dedicated marketing department) and support. Liberty Tax isn’t just tax preparation services, they offer consumer lending, credit repair, and bookkeeping services as well. This provides the franchisee with multiple revenue streams to grow the business during the tax season and also during the off-season.
How much can you make owning a Liberty Tax franchise?
The table below shows all franchise offices in 2020 broken up into how many years they have been operating and the numbers that they have generated for the year.
The Wolf’s Take 🍟
Liberty Tax is a long-standing franchise that has been helping individuals, family owners, and/or business owners with things such as tax preparation, bookkeeping, insurance, and more.
It’s a massive franchise system with over 2,000+ units, so it has plenty of proof of concept of the business model. Given the average franchisee in 2020 did $239,000 in revenue, that’s a great return given the investment is at most $78,900 to start a franchise.
For this franchise, it’s likely difficult to break into given how many franchisees are already operating in America. If you are interested in this brand, make sure to understand the available territory, and how much room you’d have to attract customers without encroaching on another franchisee’s territory.
This franchise can operate very well however as what I’d call, a “starter” franchise – one that is a low investment and can allow you to dip your toes into entrepreneurship without draining your life savings. If you do well enough, you can then use that experience and cash flow to move on to bigger franchises that offer high return propositions.
On the Franchise Empires podcast, I interviewed David Schuck, who did just that – he started out with a Liberty Tax Franchise, grew to 12 locations, and then was able to buy into Club Pilates, a popular boutique fitness franchise.
Today, David owns 39 Club Pilates, and he even still owns those 12 Liberty Tax Franchises!
If you’re looking for an opportunity to own your own business and generate revenue, a Liberty Tax franchise may be a good fit. A Liberty Tax service has a proven business model and high demand. So if you’re ready to take the plunge into entrepreneurship, a Liberty Tax franchise could be a good investment.
This is not investment advice. As always, look at the franchise disclosure document and do your own research and due diligence before investing and realize any investment may go to zero.