Franchise Deep Dive: Liberty Tax Service's Franchise Costs, Fees, Profit and Data

This tax preparation and financial services franchise provides income tax return assistance to individuals and small businesses.

By Victoria CampisiStaff Writer

1:13PM • 11/15/23

LAST UPDATED: October 2023

FRANCHISE WEBSITE: https://www.libertytaxfranchise.com/

NUMBER OF LOCATIONS: 2,500+

REPORTED COST TO GET IN: $58,700 to $71,900

REPORTED ROI (Item 19): N/A

Liberty Tax Service is a franchise that offers professional income tax preparation service and online tax filing.

How Many Liberty Tax Service Locations Are There?

In September 1997, Canadian tax franchisor U&R Tax Depot was acquired. The following year, the company opened five offices in the United States and became Liberty Tax Service. In 2021, Liberty Tax Service was acquired by NextPoint Financial, an all-inclusive marketplace for financial services.

Today, Liberty Tax has over 2,500 retail branches across the United States and Canada and over 12,000 tax professionals. Since 1997, the franchise has helped millions of Americans with their taxes.

What Is the Liberty Tax Service Business Model?

Liberty Tax Service offers consumers free tax consultations, in-office and online tax preparation, loans, and a variety of other services. The main components of the business model include:

Tax Preparation

Trusted community partner for personal and small business tax prep
Offers in-person, online and virtual support through "Virtual Tax Pro"
Mobile app for appointment booking and starting taxes online
Free tax preparation tools and calculators on the website, included in royalty fees

Bookkeeping Services

Partnership with Xero Accounting Software for a comprehensive suite
Seamless integration of bookkeeping files with tax software
Turnkey system for business process automation (BPA) services, leveraging cloud technologies
Expert training for tax preparers; no additional staff required
Corporate-run lead generation marketing program

Tax Debt Resolution

Partnership with community tax, making Liberty Tax one of the largest tax debt settlement companies in the U.S.
Addresses personal and business tax debt with a referral-based model
Bilingual team members (English and Spanish) for enhanced accessibility
Free consultations and financing options available to clients (except in Minnesota and North Dakota)

Liberty Tax has newly available territories, and awards both multi-store and single-store franchise agreements. There are several ownership options available:

Open a New Franchise: Invest in a new Liberty Tax franchise location, and receive free professional site selection assistance.
Buy an Existing Franchise: Purchase an existing Liberty Tax location(s).
Convert Your Business: Change your business into a Liberty Tax.
Sell Your Business: Sell your existing tax preparation business to Liberty Tax.

How Much Can Liberty Tax Service Franchise Owners Make?

Earnings for Liberty Tax Service franchise owners are not publicly available.

How Much Does It Cost To Open a Liberty Tax Service?

Depending on size and location, typical franchise fees for a new Liberty Tax office will range from $58,700 to $71,900, including the franchise fee, startup costs, equipment, supplies and working capital. Prices for existing locations are decided solely between the buyer and the seller, and can vary greatly based upon size, location and profitability.

Currently, royalties are 14% of gross receipts less allowable exclusions, subject to the following minimums:

First year — no minimum
Second year — minimum $5,000
Third year and beyond — minimum $8,000

In addition, a 5% national advertising fee is collected.

What Is the Franchise Fee for Liberty Tax Service?

The initial franchise fee for a standard territory is $15K.

Who Is the Leadership of Liberty Tax Service?

Scott Terrell — CEO
Raymond “Randy” Guba — Chief Financial Officer
Eric Norona — Chief Operating Officer

What Helpful Articles Can I Read to Learn More About Liberty Tax Service?

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