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Liberty Tax passes a milestone
by
Heather B. Hayes
Virginia Business
February
2005
John
Hewitt has always wanted to reach the top of the tax
preparation services market. He didn’t make it
with his first firm, Jackson Hewitt, but he just might
get there with his second, Liberty Tax Service.
The
Virginia Beach-based company recently welcomed its 1,000th
franchisee and now has 1,800 offices operating across
the U.S. and Canada, including 94 in Virginia. Liberty
Tax Service is currently ranked as the eighth fastest-growing
franchise entity by Entrepreneur magazine and the 22nd
fastest-growing private company by Inc. magazine.
“We’ve had incredible success and we’ve
achieved it incredibly fast,” says Hewitt, who
established Liberty Tax in 1997 shortly after Jackson
Hewitt — and his 5 percent ownership interest
— was sold.
In fact, among firms on Entrepreneur magazine’s
Franchise 500 list, fewer than 50 have more than 1,000
franchises, and in just seven years, Liberty has managed
to reach the same level of operation that it took H&R
Block 21 years to achieve.
Jackson Hewitt — which Hewitt founded in 1982
and took public in 1994 — still has fewer than
800 franchisees.
Reaching the pinnacle of the industry will take a lot
more effort, though. H&R Block currently leads with
a 21 percent market share. “We have to get 30
times bigger if we’re going to top them,”
says Hewitt, noting that even with its impressive performance,
Liberty has thus far captured just 0.7 percent of the
tax services business. The company needs between 1,600
and 1,800 franchisees owning an average of six to eight
offices each to reach Block’s size. “We
don’t expect that to happen overnight, but we
do think we can get there in 12 years.”
Liberty’s franchise model will certainly aid in
the quest. Franchisees can get in with a $28,000 franchise
fee and about $20,000 in related startup costs.
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