About Liberty Tax Franchise
Liberty Tax is one of the largest and most recognized tax preparation franchise brands in the United States, offering professional income tax return preparation and related financial services.
The company has been franchising since 1997 and operates under its parent company, BP LTCT LLC, with a well established system known for its distinctive marketing techniques and community engagement strategies.
The franchise fee is $15,000, making it one of the more accessible entry points in the tax services franchise space.
Liberty Tax Franchise Cost & Fees
Minimum Investment
$42K
Average Investment
$52K
Maximum Investment
$61K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $15,000 | One-time payment upon signing |
| Royalty Fee | 14% of Gross Receipts of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 5% of Gross Receipts (2% of BPA Gross Receipts) | National brand fund |
| Total Investment Range | $42,200 – $61,400 | Includes build-out, inventory, working capital |
The investment range of $42K–$61K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (14% of Gross Receipts) and marketing fee (5% of Gross Receipts (2% of BPA Gross Receipts)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $15,000 | $15,000 |
| Initial Advertising | $5,000 | $5,000 |
| Travel and Living Expenses While Training | $1,000 | $2,500 |
| Equipment & Furniture | $7,500 | $15,000 |
| Signs | $2,500 | $5,000 |
| Rent | $3,000 | $6,000 |
| Payroll | $5,000 | $7,000 |
| Insurance | $200 | $400 |
| Additional Funds – 3 months | $3,000 | $4,500 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $5,000 per territory |
| Renewal Fee | No fee for renewal |
| Technology Fee | $25.00 per Easy Advance for each approved loan; In California, $39.95 handling fee for each Refund Transfer |
| Audit Fee | Costs of the review and interest of 12% per annum on the understated amount |
| Exclusion of Pre-Existing Tax Clients | $5 per client |
| Additional Services Fee for Bookkeeping, Payroll & Advisory Services offered through Xero, Inc. | $150 training course fee for each person |
| Interest | 12% |
| Commission Fee | 10% of the sales price, subject to a minimum of $5,000 |
| National Call Center | $.50 -Appointments; $1.50-Tax School; $3.75-customer follow up; $5.25- Tax School kit sent |
| Customer Refunds, Penalty & Interest, Unpaid Send a Friends | The amount of tax preparation fee, Financial Product fees, misdelivered check amount, penalty and interest, or unpaid Send a Friend or E-Send a Friend |
| Change to opening schedule in multi-territory stipulation | $3,500 |
| Sales or Gross Receipts Tax | If required by the state or locality in which your Territory is located, the initial franchise fee, royalties, and advertising fees will be subject to sales or gross receipts tax. |
| Set-Off | The amount you owe us for unbilled royalties or other amounts, which amount for the royalty can be in amount of 14% of Gross Receipts and advertising fee of 5% of Gross Receipts owed to Liberty from the Gross Receipts, plus an additional 25% for liquidated damages for your misconduct. |
| Holdover Fee | An additional 2% of Gross Receipts on top of the standard Royalties |
| Liquidated Damages for Premature Closure during Holdover Period | An amount equal to the Royalties you paid to us (or should have paid to us) in the six months prior to closing the Franchised Business |
| Attorneys’ Fees and Costs | An amount equal to our costs and expenses. |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Minimum 4-day IOT in-classroom training and 12-15 hours of online training, plus one-day HOT at existing franchisee locations. |
| Classroom Training | Approximately 10 hours 45 minutes (excluding Industry Description/Typical Tax Season, National Office Trainings, New Zee Team and Operations Team, Internal Systems, Starting a Tax Business, IRS Efile Requirements, Employer Identification Number, IRS E-Services, Electronic Filing Identification Number, Supply, and Products which are 30 minutes to 1 hour each) |
| Training Location | Virginia Beach or Dallas Fort Worth |
| Additional Training | The franchisor provides and may require attendance at one- to four-day advanced training for experienced franchisees, which may be held at various sites, on the web, or electronically. The agenda focuses on improving business skills and profitability. Franchisees are responsible for travel, lodging, and meal expenses for all training. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Non-exclusive |
| Exclusive Territory | No |
| Territory Size | Typically covers an area that generates approximately 7,000 to 8,500 paid federal tax returns based on IRS data coupled with population data. May be re-sized if population exceeds 35,000 due to mapping error. |
| Description | Franchisees do not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution. The franchisor restricts itself from operating a physical tax preparation office using the Liberty name within the franchisee's territory. Franchisees may operate multiple offices within their territory with prior approval. Advertising outside the territory requires written approval. The franchisor offers online tax preparation services nationwide, including within franchisee territories, and pays a reverse royalty of 14% of tax preparation fees from customers in those territories. The franchisor may establish other channels of distribution or grant franchises for different lines of business using different marks in the territory. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 5 years |
| Renewal Term | Successive 5-year terms |
| Renewal Fee | No fee for renewal |
| Renewal Conditions | Timely written notice of intent to renew (180 days prior), execution of a general release of claims, remodeling/refurbishing/modernizing the business, full compliance with agreements and Operations Manual, and signing the then-current standard franchise agreement (90 days prior). Royalties and advertising fees will not be raised upon renewal, and territory boundaries will remain the same. |
| Transfer Fee | $5,000 |
| Transfer Conditions | Franchisor approval based on current qualifications, compliance with franchise agreement, payment of transfer fees, signing a release, transferee attending and successfully completing training, transferee agreeing to fully and timely complete remodeling/refurbishing/modernizing within 90 days, and franchisor's right of first refusal. |
| Termination for Cause | Immediate termination without notice for insolvency, unsatisfied judgments (30+ days), material violation of laws/regulations, harmful acts to Liberty brand, abandonment of business, failure to open by January 2, operating/advertising outside territory, property sold after levy, failure to use specified software/electronic filing/financial products, EFIN denial/suspension, falsifying application/financial data, refusing record inspection, engaging in fraudulent tax returns, or three or more breaches within 12 months. Termination with 7 days' notice for other breaches of agreement/manual, amounts 30+ days past due, materially underreporting revenue, failure to comply with IRS e-file standards, failure to renovate/refurbish/upgrade within 60 days, or 60+ days in default of loan/lease/sublease. |
| Non-Compete Period | 2 years |
| Non-Compete Details | During the term of the agreement, you agree not to directly or indirectly prepare/electronically file income tax returns or offer financial products for a fee/charge in the US or Canada, except as a Liberty Tax franchisee. You also agree not to divert business to competitors or act injuriously to the brand. For two years post-termination/expiration/transfer, you agree not to directly or indirectly prepare/electronically file income tax returns or offer financial products for a fee/charge within the Territory or 25 miles of its boundaries, except as a Liberty Tax franchisee. You also agree not to solicit Liberty employees or other franchisees' employees for two years. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | You must provide franchise services under your direct supervision and control and/or under the direct supervision and control of a full-time on-premises general manager who has successfully completed IOT and HOT and been approved by the franchisor. The general manager does not need an equity interest. You must use best efforts to promote the business, operate during specified hours, and comply with all laws and regulations. |
| Required Suppliers | Franchisee must purchase or lease certain goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items from the franchisor, its affiliates, or approved suppliers, or under franchisor specifications. This includes computer software, financial products (refund-based loan programs, electronic deposit services), electronic filing services, and prepaid debit cards. For other products and services (identity theft protection, credit restoration, insurance, mortgage loan originator services), the franchisor may require use of sole or preferred providers. Processing and tax preparation computers must be purchased from an approved vendor. |
| Supply Restrictions | Franchisor provides specifications for certain products, services, and supplies. All tax return preparation and processing computers must be purchased from an approved vendor and meet specifications. Other computer equipment can be purchased from any vendor but must meet specifications. Signs can be purchased from any vendor but require pre-approval. Advertising and marketing materials must be approved by the franchisor. Franchisees are restricted from offering products or services other than franchise services without prior written consent. Franchisees are not allowed to have an independent website or utilize mobile applications for digital marketing. |
| Franchisor Revenue from Suppliers | Franchisor and/or its Affiliates contract with suppliers for volume discounts, rebates, and/or other cash payments based on volume purchases. These payments may be retained by the franchisor or used for advertising. In the last fiscal year, $0 was received from franchisee purchases of training materials, which is 0% of total revenue of $100,894,000. Required purchases and leases from the franchisor are estimated to be approximately 20% of the total purchases and leases. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | Yes |
| Description | The franchisor may, in its sole discretion, provide or arrange for third-party financing for a portion of the initial franchise fee, operating capital, or additional territory purchases. Interest rate is typically 12% with a 1% origination fee, repaid over four to five years through annual payments. Financing terms vary based on funds availability, creditworthiness, market conditions, and compliance. A security interest is required, and principals must personally guarantee the debt. Prepayment is allowed without penalty. The franchisor does not guarantee notes, leases, or other obligations to third parties, except in exceptional circumstances for office space leases. |
Liberty Tax Franchise Earnings — Item 19
Average Revenue
$42K
Median Revenue
$39K
Revenue Range
$2K – $114K
Sample Size
1789 units
Past financial performance does not guarantee future results. Individual results will vary.
Liberty Tax Litigation & Risk Flags
20 Pending Actions ListedReview the full FDD for details on pending litigation.
Bankruptcy History DisclosedA bankruptcy disclosure is present in this FDD.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Liberty Tax System Growth
Total Units
1885
Franchised
1813
Company-Owned
72
Liberty Tax currently operates 1813 franchised locations and 72 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2021 | 112 | 206 | 2256 |
| 2022 | 75 | 150 | 2104 |
| 2023 | 23 | 171 | 1885 |
Transfers: 77 | Closures: 171
State Registrations
Registered in 14 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$100.9M
Net Income
$-98,463,000
Total Assets
$138.3M
Audited by Deloitte & Touche LLP for year ending December 31.
Liberty Tax Franchise — FAQ
The total investment to open a Liberty Tax franchise ranges from $42,200 to $61,400, per their Franchise Disclosure Document. This includes the initial franchise fee of $15,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Liberty Tax charges a royalty fee of 14% of Gross Receipts of gross sales, plus a 5% of Gross Receipts (2% of BPA Gross Receipts) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Liberty Tax Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Liberty Tax to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Liberty Tax franchise owners report average revenue of $42K and median revenue of $39K. This is based on a sample of 1789 units. Past performance does not guarantee future results.
Liberty Tax has been franchising since 1997. The FDD shows an investment range of $42,200-$61,400, a 14% of Gross Receipts royalty, and includes an Item 19 earnings disclosure. There are 20 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $15,000 and the total investment ranges from $42,200 to $61,400 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Liberty Tax and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Liberty Tax or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com