Liberty Tax Service
Liberty Tax Service offers tax return preparation franchises using specific marketing techniques. Known for affordable entry-level investment options in the tax services industry.
Liberty Tax Service franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a single Liberty Tax office ranges from $49,700 to $71,400. This includes a mandatory payment of $25,000 to the franchisor [p.1].
What is the initial franchise fee?
The initial franchise fee for a single territory Liberty Tax office is $25,000 [p.101]. This fee may be financed with an interest rate typically of 12% and an origination fee of 1%, to be repaid over four to five years through annual payments [p.31].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 14% of Gross Receipts, while the advertising fee is 5% of Gross Receipts [p.155]. These fees are recognized at the time the underlying sales occur [p.392] and are due within thirty days after the preceding month's Gross Receipts [p.102].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement typically lasts for an initial term of five years with an option to renew at no additional cost [p.426, p.391]. You may continue to renew future franchise agreements in this manner if you comply with all agreements between you and the franchisor or any affiliated companies [p.99].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can transfer your franchise to a 'Controlled Entity' without triggering the Right of First Refusal [p.122]. However, you must notify Liberty in writing with specific details about the Controlled Entity and its officers or owners, and ensure they sign relevant forms [p.122]. Additionally, the franchisor reserves the right to refuse transfers for good cause, such as if the proposed transferee is a competitor or fails to meet qualifications [p.83(g)]. Selling your franchise to a non-franchisee party who will operate a competitive business is not allowed [p.123].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.88]. Additionally, the franchisor may terminate the franchise agreement if the franchisee fails to comply with any lawful provision of the franchise agreement and does not cure such failure after being given written notice and a reasonable opportunity to do so [p.83].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory [p.50]. Liberty and its affiliates may establish franchised or company-owned outlets in your territory under a different trademark, and they can also grant franchises in other lines of business using different marks within your territory [p.51].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for new franchisees, including required three-day or longer Initial Onboarding Training (IOT) and one-day Hands-on Training (HOT), taught by an existing franchisee. For experienced franchisees, advanced training is offered either in person at various locations selected by the franchisor or online, focusing on improving business management skills to increase profitability. Additionally, Liberty may require attendance at toll-free conference calls for updates. The franchisor also offers technical and software support during specified hours and through means chosen by them, which can include remote access to franchisees' computers. [p.104, p.105]
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2025, there were 1,537 franchised outlets. Since 2021, five Illinois franchises have been terminated by the Franchisor [p.166]. However, the total number of closed or terminated outlets is not specified in these excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor can provide actual records of an existing outlet's financial performance if requested by a prospective franchisee. Additionally, the franchisor may supplement the information provided in Item 19 with possible performance at a particular location or under specific circumstances. However, other than these scenarios, the franchisor does not make any financial performance representations [p.58].
What am I restricted to selling, and where must I buy supplies?
You are restricted from offering products or services other than those provided through the franchise unless you receive prior written consent [p.34]. You may have to buy or lease items from the franchisor or a limited group of suppliers designated by them; these items might be more expensive than alternatives [p.3].