Liberty Tax Service Franchise Cost, Revenue & Review 2026
- Investment
- $50K – $71K
- Disclosed sales
- $165K
- gross sales, not profit
- SBA charge-off
- 11.7%
- on 264 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Liberty Tax is a tax-preparation franchise serving individual filers in offices and online. Franchisees run seasonal storefront locations preparing and e-filing returns using the brand's software and marketing.
FranchiseVerdict summary · 2026
A Liberty Tax Service franchise requires a total initial investment of $50K – $71K, including a $25K franchise fee and an ongoing 14.0% royalty[2]. Per the 2026 FDD, average unit revenue was $165K[2]. SBA 7(a) loans show a 11.7% charge-off rate across 264 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $50K – $71K
- 27th pct Financial Ser…
- Avg gross sales
- $165K
- Net sales7th pct Financial Ser…
- Royalty
- 14.0%
- 39th pct Financial Ser…
- Units
- 1,663
- 77th pct Financial Ser…
- SBA charge-off
- 11.7%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Financial Services · color = vs category peers
Green = favorable by >10% vs Financial Services median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $50K – $71K including a $25K franchise fee, 14.0% ongoing royalty.
- RETURNSAverage unit revenue of $165K/year (median $139K).
- RISKVerdict B (Above average), verdict score 68/100 (higher is better). SBA loan charge-off rate of 11.7% across 264 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -149 franchised outlets in the latest year (22 opened, 171 closed) (Item 20).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- JTH Tax LLC d/b/a Liberty Tax Service
- Parent company
- LT Intermediate Holdco, LLC (direct); ultimate parent BP LTCT LLC
- FDD Item 1, page 7 of the 2026 FDD
- Ultimate parent
- BP LTCT LLC
- FDD Item 1, page 7 of the 2026 FDD
- CEO title
- Chief Executive Officer
- Scott Terrell
- Incorporated in
- Delaware
- HQ
- 2387 Liberty Way, Virginia Beach, VA 23456
- Auditor
- Deloitte & Touche LLP
- Audited financials
- Franchisor revenue
- $88.6M
- vs $100.9M prior year
Overview
About
- CEO
- Scott Terrell
- Headquarters
- VA
- Founded
- 1996
- FDD year
- 2026
- States available
- 14
Can you afford it, and what does the money buy?
Entry cost runs 36% below the typical financial services franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $3K | $5K |
| Equipment, build-out, other | $22K | $42K |
| Total initial investment | $50K | $71K |
Source: Liberty Tax Service 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $50K – $71K
- Top 40% of category vs category
- Liquid capital req'd
- $3K – $5K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 14.0%
- typical 6–8%
- Ad fund
- 5.0%
- typical 3–5%
- Total fee load
- 0.2%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 14.0% of gross sales |
| Marketing / ad fund | 5.0% of gross sales |
| Transfer fee | $5K |
| Renewal fee | $0 |
| Total fee load | 0.2% of rev |
A 0.2% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 37% below the financial services norm.
Reported as net sales, not gross sales
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Liberty Tax Service until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$64K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Liberty Tax Service unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $165K
- Per unit/yr · from the Item 19 franchised-cohort breakdown (no single system-wide average disclosed)
- Median gross sales
- $139K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- net sales
- Sample size
- 1,411 outlets
- vs category median 94 · large
- Range (low → high)
- $5K→$1.1MCited, not corroborated — printed on page 60 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 0 / 10 · above
Compared against 45 Financial Services brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $165K/year in gross sales. Median is $139K — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 2.7x.
Fee burden
Total ongoing fee load of 0.2% — below the Financial Services median of 16.5%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Financial Services medians
How Liberty Tax Service Compares
Category median of published Financial Services brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,663
- Opened
- 22
- Last reporting year
- Closed
- 171
- Terminated
- 62
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 38
- Term expired, not renewed (per Item 20)
- Turnover rate
- 10.3%
- Company-owned
- 126
- Corporate units in the system
- % franchised
- 92%
- vs corporate-owned
Last fiscal year · Item 20 exits and transfers
- Terminated
- 62
- Not renewed
- 38
- Transferred
- 59
- Reacquired
- 43
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 41 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
158 current owners across 37 states; 28 former (terminated, transferred or not renewed) listed separately.
- TX 34
- NY 17
- FL 13
- GA 8
- CA 6
- VA 6
- CO 5
- MI 5
- NC 5
- OH 5
- NV 4
- OK 4
- +25 more states
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 264
- Loan volume
- $41.2M
- Median loan
- $60K
- 50th percentile
- Charge-off rate
- 11.7%
- on 264 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 88.3%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 107
- Defaults
- 27
- Typical loan rate
- 6.6%
- avg rate to borrowers
- Franchised industry avg
- 7.8%
- brand above franchise avg ↑
- Jobs supported
- 4,038
- 9.8 per loan
- Lender concentration
- 6%
- top lender's share
Borrower mix: 13% went to startups / new businesses, 87% to established operators
Franchise vs independent — in tax preparation services, franchised businesses charge off at 7.8% vs 17.7% for independents — franchising is associated with 56% lower SBA default risk in this category.
Vintage analysis
Liberty Tax Service charge-off rate by loan vintage
Top lenders financing Liberty Tax Service franchisees
Showing 3 of 107 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Liberty Tax Service from SBA 7(a) FOIA data.
- Principal loss rate
- 8.9%
- Avg SBA guarantee
- 68%
- Avg interest rate
- 6.64%
- Avg chargeoff amount
- $135K
- Lender concentration
- 6.4%
- Job velocity
- 9.8 per $100K
- NAICS benchmark
- 8.2%
- NAICS 541213
- Jobs supported
- 4,038
Top SBA lendersTop lender holds 6% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | First Bank | 17 | $11.2M | 42.9% |
| 2 | Wells Fargo Bank National Association | 13 | $872K | 0.0% |
| 3 | The Huntington National Bank | 13 | $1.3M | 7.7% |
| 4 | PNC Bank, National Association | 10 | $574K | 10.0% |
| 5 | TD Bank, National Association | 10 | $1.1M | 50.0% |
| 6 | JPMorgan Chase Bank, National Association | 9 | $661K | 11.1% |
| 7 | VelocitySBA, LLC | 8 | $73K | 25.0% |
| 8 | Zions Bank, A Division of | 8 | $496K | 12.5% |
| 9 | Wilmington Savings Fund Society FSB | 8 | $504K | 0.0% |
| 10 | Bank of America, National Association | 7 | $854K | 16.7% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 29 | 2 | 7.4% |
| PAPennsylvania | 20 | 6 | 35.3% |
| CACalifornia | 17 | 2 | 12.5% |
| FLFlorida | 16 | 3 | 25.0% |
| NYNew York | 15 | 4 | 40.0% |
| VAVirginia | 15 | 0 | 0.0% |
| OHOhio | 13 | 1 | 7.7% |
| MOMissouri | 11 | 0 | 0.0% |
| MNMinnesota | 10 | 0 | 0.0% |
| KSKansas | 9 | 1 | 11.1% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 11.7% — 27% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Liberty Tax Service exhibits acute systemic distress: a collapsing franchise network (−8.9% YoY), regulatory scandals with DOJ settlement, zero profitability transparency, and franchisor going concern issues—collectively signaling high franchisee failure risk and diminishing brand viability.
Bankruptcy (Item 4)
Subject: the company or an affiliate. Disclosed (Item 4 covers the last 10 years)
In re NextPoint Financial, Inc., et al., United States Bankruptcy Court for the District of Delaware, Case No. 23-10983 (TMH) filed July 26, 2023. On July 26, 2023, our former parent, Canadian-based NextPoint Financial Inc., in its capacity as the duly-appointed foreign representative of us and certain of our US based affiliates, filed a petition for relief under chapter 15 of title 11 of the US Bankruptcy Code (the “US Case”). ... The US bankruptcy filing was preceded by our former parent filing for debtor relief in Canada from the Supreme Court of British Columbia under the Companies' Creditors Arrangement Act R.S.C. 1985, c. C-36, as amended In The Matter of A Plan Of Compromise and Arrangement of NextPoint Financial, Inc. and Those Parties Listed On Schedule “A” Petitioners, Vancouver Registry No. S-235288 filed July 25, 2023 (the “Canadian Case”).
Audited financials (Item 21)
Yes · Deloitte & Touche LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 68 / 100 verdict
- 01MINORSystem contracting sharply: 1,885 units declining 8.9% YoY signals accelerating franchisee exits and market saturation
- 02HIGHExtensive litigation including DOJ/IRS settlement and class actions indicates regulatory scrutiny, reputational damage, and potential ongoing compliance costs
- 03MINORHigh royalty burden (14% of gross receipts) leaves minimal cushion given seasonal tax prep business and declining unit count indicates franchisees unable to sustain profitability
Severity inferred from the FDD text · not a regulatory classification
Litigation case detail29 matters · Item 3
Litigation cases
The franchisor
Pending (3)
JTH Tax LLC d/b/a Liberty Tax Service v. Charles C. Njoya
pendingBrought against a franchisee · filed 2025-06-09 · Virginia Beach Circuit Court · CL25-3201
“JTH Tax LLC d/b/a Liberty Tax Service v. Charles C. Njoya, Case No. CL25-3201, Virginia Beach Circuit Court, filed on June 9, 2025. The Complaint against former franchisee alleges breach of non- compete, breach of contract and note.”Page 13 of the 2026 FDD, Item 3
Outcome:“Trial is scheduled for May 2, 2026.”
JTH Tax LLC d/b/a Liberty Tax Service v. Temeyka Odessa Scott
pendingBrought against a franchisee · filed 2025 · U.S. District Court for the District of South Carolina · 3:25-CV-13908
“JTH Tax LLC d/b/a Liberty Tax Service v. Temeyka Odessa Scott, 3:25-CV-13908, U.S. District Court for the District of South Carolina (filed December 2025). Action arising out of the termination of a franchise relationship, alleging breach of the franchise agreement, tortious interference, and related claims based on the alleged unauthorized removal of business assets and records”Page 13 of the 2026 FDD, Item 3
JTH Tax LLC v. Patrick Perez
pendingBrought against a franchisee · filed 2025-05-15 · U.S District Court, Northern District of Texas · 3:25-cv-01234
“JTH Tax LLC v. Patrick Perez, 3:25-cv-01234, U.S District Court, Northern District of Texas. Complaint filed on May 15, 2025 alleging breach of franchise agreement and Lanham Act violations.”Page 13 of the 2026 FDD, Item 3
Outcome:“request for default judgment is pending.”
Concluded (11)
JTH Tax LLC d/b/a Liberty Tax Service v. Anthony Focca, Platinum Ltd, Andrew Wolfe, Think Taxx Inc and David Biondi
settledBrought against a franchisee · filed 2025-04-03 · Eastern District of New York · 1:25-CV-01850
“JTH Tax LLC d/b/a Liberty Tax Service v. Anthony Focca, Platinum Ltd, Andrew Wolfe, Think Taxx Inc and David Biondi, 1:25-CV-01850, Eastern District of New York (filed April 3, 2025). Action alleging breach of the franchise agreement and violation of an existing injunction.”Page 13 of the 2026 FDD, Item 3
Outcome:“The matter was resolved in December 2025 by settlement of $125,000 and injunctive relief.”
JTH Tax LLC d/b/a Liberty Tax Service v. Javier Solis
settledBrought against a franchisee · filed 2025-07-17 · Virginia Beach General District Court · GV25-22660
“JTH Tax LLC d/b/a Liberty Tax Service v. Javier Solis, Case No. GV25-22660, Virginia Beach General District Court filed on July 17, 2025. Liberty obtained a default judgment in the amount of $25,000, $80 in costs, $1,945 in attorneys’ fees, plus interest at 12%, on August 12, 2025.”Page 13 of the 2026 FDD, Item 3
Outcome:“The parties agreed to a settlement and a settlement agreement in being circulated between counsel.”
JTH Tax LLC d/b/a Liberty Tax Service v. Mark S. Williams and Pekajo Services, Inc.
settledBrought against a franchisee · filed 2025-08-28 · Virginia Beach General District Court · GV25-27930
“JTH Tax LLC d/b/a Liberty Tax Service v. Mark S. Williams and Pekajo Services, Inc.,Case No. GV25- 27930, Virginia Beach General District Court, filed on August 28, 2025. The parties agreed to a settlement and the case was dismissed on October 28, 2025.”Page 13 of the 2026 FDD, Item 3
JTH Tax LLC d/b/a Liberty Tax Service v. Roberson
settledBrought against a franchisee · filed 2025-05-21 · U.S. District Court for the Northern District of Georgia · 1:25-cv-02845
“JTH Tax LLC d/b/a Liberty Tax Service v. Roberson, Case No. 1:25-cv-02845, U.S. District Court for the Northern District of Georgia (filed May 21, 2025). Action alleging breach of the franchise agreement, breach of post-termination non-competition obligations, and trademark violations.”Page 13 of the 2026 FDD, Item 3
Outcome:“The parties settled this matter in December 2025 for $150,000.”
District of Columbia v. JTH Tax, LLC
settledGovernment or regulatory action · filed 2022-09-21 · Superior Court of the District of Columbia · 2022 CA 004285
“District of Columbia v. JTH Tax, LLC, 2022 CA 004285, Superior Court of the District of Columbia. The DC Attorney General (“AG”) filed a complaint against JTH Tax, LLC on September 21, 2022 asserting an alleged violation of the DC Consumer Protection Procedures Act. The AG alleges that Liberty’s Cash-In-A-Flash promotion was deceptive and misleading”Page 15 of the 2026 FDD, Item 3
Outcome:“On January 9, 2024, Liberty Tax entered into a settlement agreement with the AG, wherein we agreed to: pay $550,000 for customers who participated in the cash-in-a-flash promotion between tax years 2014-2021; stop using the Cash-in-a-Flash promotion nationwide; and not create any similar incentive type program; provide the AG certain marketing data and information concerning incentive type marketing for five years ...”
Gorilla Tax Services, Inc., et al. v. JTH Tax, LLC, d/b/a Liberty Tax Service et al.
dismissedBrought by a franchisee · filed 2021-11-02 · American Arbitration Association · 01-21-0017-9382
“Gorilla Tax Services, Inc., et al. v. JTH Tax, LLC, d/b/a Liberty Tax Service et al. (Case No. 01-21- 0017-9382). On November 2, 2021, Claimant initiated an arbitration before the American Arbitration Association alleging breach of an area developer agreement for failure to renew and violation of the Illinois Franchise Disclosure Act (“IFDA”) and Wisconsin Franchise Disclosure Act (“WFDA”).”Page 14 of the 2026 FDD, Item 3
Outcome:“This matter was voluntarily dismissed on March 12, 2024.”
Road King Development, Inc., et al. v. JTH Tax LLC and Franchise Group, Inc.
dismissedBrought by a franchisee · filed 2021-01-28 · U.S. District Court for the Eastern District of Virginia · 2:21-cv-00055-RAJ-LRL
“Road King Development, Inc., et al. v. JTH Tax LLC and Franchise Group, Inc., 2:21-cv-00055-RAJ- LRL, U.S. District Court for the Eastern District of Virginia. Defendants filed a complaint on January 28, 2021 alleging breach of Defendant’s area developer agreements.”Page 14 of the 2026 FDD, Item 3
Outcome:“The Court granted summary judgment in Plaintiff’s favor on its claim for wrongful termination as to Road King.” (page 15)
JTH Tax, Inc. and SiempreTax LLC v. Gregory Aime, Aime Consulting, LLC, Aime Consulting, Inc. and Wolf Ventures, Inc.
dismissedBrought against a franchisee · filed 2016 · United States District Court for the Eastern District of Virginia
“JTH Tax, Inc. and SiempreTax LLC v. Gregory Aime, Aime Consulting, LLC, Aime Consulting, Inc. and Wolf Ventures, Inc., We and SiempreTax+ LLC filed suit in the United States District Court for the Eastern District of Virginia against the defendants, former franchisees, on June 9, 2016, as amended on June 22, 2016, claiming the defendants breached the purchase and sale agreement”Page 15 of the 2026 FDD, Item 3
Outcome:“The matter was remanded to the District Court and the Parties subsequently resolved this matter for a non-material amount (.09 million). A joint stipulation of dismissal with prejudice was filed on April 2, 2021 and the Court entered an Order on April 6, 2021 dismissing the case with prejudice.” (page 17)
Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc.
settledGovernment or regulatory action · filed 2008 · Virginia State Corporation Commission · SEC-2008-00087
“Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc., (Case No. SEC- 2008-00087). We received a letter dated September 17, 2008 from the Virginia State Corporation Commission (“SCC”) which claimed that our previous non-disclosure of Commonwealth of Virginia”Page 24 of the 2026 FDD, Item 3
Outcome:“In December 2008, we settled this matter whereby we agreed to pay a $10,000 penalty,” (page 25)
The People of the State of California v. JTH Tax, Inc., Employees Plus Inc. and Does 1-150
judgmentGovernment or regulatory action · filed 2007-02-26 · Superior Court of California, City and County of San Francisco · CCGC-07-560770
“The People of the State of California v. JTH Tax, Inc., Employees Plus Inc. and Does 1-150, (Case No.CCGC-07-560770) filed on February 26, 2007, in the Superior Court of California, City and County of San Francisco. The State alleged that in prior tax seasons we marketed loans by blurring the distinction between loans and refunds, giving misleading refund time frames and other deception;”Page 22 of the 2026 FDD, Item 3
Outcome:“The Court awarded the State civil penalties of $1,161,699 and restitution of $135,886 to customers who had authorized cross collections.” (page 23)
Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc. (No. SEC-2008-00024)
settledGovernment or regulatory action · Virginia State Corporation Commission · SEC-2008-00024
“Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc., (Case No. SEC- 2008-00024). Based on an investigation conducted by the Division of Securities and Retail Franchising of the Virginia State Corporation Commission, the Commonwealth alleged that we violated the Virginia Retail Franchise Act”Page 25 of the 2026 FDD, Item 3
Outcome:“To resolve the matter, we entered into a Settlement Order in March 2008 wherein we agreed to pay $4,000 costs of investigation and not violate the Act in the future.”
Parent, affiliates and predecessor
Concluded (1)
United States of America v. Franchise Group Intermediate L 1, LLC, d/b/a Liberty Tax Service
concludedGovernment or regulatory action · Franchise Group Intermediate L 1, LLC ('FGI L1'), an entity of former parent Franchise Group Inc. · filed 2019 · United States District Court for the Eastern District of Virginia · 2:19-cv-653
“United States of America v. Franchise Group Intermediate L 1, LLC, d/b/a Liberty Tax Service, (Case No. 2:19-cv-653) filed on or about December 3, 2019 in the United States District Court for the Eastern District of Virginia. The Department of Justice (“DOJ”) alleges that JTH Tax failed to maintain adequate controls over tax returns prepared by its franchisees,”Page 18 of the 2026 FDD, Item 3
Outcome:“On December 20, 2019, the Court granted the joint motion and the motion to seal, which fully resolved the legal proceeding initiated by DOJ.”
This list shows 15 of the 29 matters Item 3 discloses; the rest are in the filing.
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
What are you signing up for?
Ongoing fees run about 0.2% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory population | 7,750 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 7 days |
| Curable defaultsℹ | 6 |
| Mandatory arbitration | No |
| Arbitration location | Virginia (litigation forum); Indiana, Illinois, and North Dakota franchisees must arbitrate before the American Arbitration Association |
| Jury trial waiver | Yes |
| Governing law | VA |
| Litigation count | 29 |
Items 10, 11
Training & Operations
- Classroom training
- 24 hrs
- On-the-job training
- 8 hrs
- Training location
- Virginia Beach, VA or Dallas Fort Worth, TX (IOT); selected existing franchisee locations nationwide (HOT)
- Ongoing training
- Required
- Site selection
- franchisor_approved
- Franchisor financing
- Offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
186 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Liberty Tax Service franchise?
The total investment to open a Liberty Tax Service franchise ranges from $50K – $71K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Liberty Tax Service franchise owners earn?
According to Item 19 of the Liberty Tax Service FDD, the average gross sales per unit is $165K. The median is $139K. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Liberty Tax Service?
Liberty Tax Service is franchised by JTH Tax LLC d/b/a Liberty Tax Service. Its parent company is LT Intermediate Holdco, LLC (direct); ultimate parent BP LTCT LLC. The ultimate parent named in the FDD is BP LTCT LLC. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Liberty Tax Service FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Liberty Tax Service FDD and qualifies whose outlets they describe.
What is Liberty Tax Service's franchise failure rate?
Based on SBA 7(a) loan data, Liberty Tax Service has a charge-off rate of 11.7% across 264 loans, meaning 11.7% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Liberty Tax Service franchise locations are there?
As of their most recent FDD filing, Liberty Tax Service has 1,663 total units in the United States, including 1,537 franchised units and 126 company-owned units. 22 new units were opened in the latest reporting year.
Is Liberty Tax Service a good franchise to buy?
FranchiseVerdict rates Liberty Tax Service as a B-grade franchise with a verdict score of 68 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.