THE HISTORY OF THE FAST TAX INDUSTRY
Compared to the big three--H & R Block, Jackson-Hewitt and Libtax--we are just a fledgling upstart trying to get off the ground. But we have made some headway in the industry already. It was Main St Tax that found the solution to the most pressing issue facing the fast tax franchise owner today--overhead. We have devised a means to relagate the biggest overhead expendeture--rent--to only the months during which the bulk of the tax returns are actually prepared. No more paying year round for three months use of rented space. That's just not good business sense. So this was quite an accomplishment for Main St Tax, and has established us as a major player in the world of fast tax.
Founded only a few years ago, we are off to a great start. In the short period of time we have been in existense, we have overtaken more than 95% of all the fast tax franchises in the country today. And within the next couple of years we expect to number ourselves among the top four or five frnchises in the fast tax industry. This is your introduction to the history of fast tax through the eyes of one small franchise entrapuneur who has studied the business for the past ten years, and once you understand how and why the assembly-line tax preparation business evolved, you'll know why Main St. Tax is next in line for greatness, and why we are indeed destined to become the number one fast tax franchise in America--America's Tax franchise. Reading these next few pages we hope you are left with an appreciation of how our industry evolved, because only then can you understnd my claim of Main St Tax' eventual rise to the top.
We are starting off in pretty much the same position as did any other tax franchise, like, for example, Jackson-Hewitt. Jackson-Hewitt was incepted in Hampton Roads, Virginia, with only seven operating tax offices, and all of them were in the local area, with no prospects of going to the next level until the arrival of John T Hewitt, the acknowledged spearhead of the growth of our industry. At the present time, main St. Tax has seven operating tax offices, the same number of offices as had Mr. Hewitt and friends when they purchased the Mel Jackson Tax Service to build the Jackson-Hewitt tax franchise, but we are spread out up and down the Eastern Seaboard, from Florida to New Jersey. And we have great prospects for the future. In fact, we expect to quadruple our present numbers in the next couple of years.
Mr. john T. Hewitt, founder of the Jackson-Hewitt Tax Franchise, purchased the Mel Jackson Tax Service in 1982 while transitioning from his position with H & R Block, because he had some definite ideas about where the fast tax industry was headed and a pretty good idea about who would take it there that he could not exercise while with the Bloch brothers. At that time he was just a young man trying out a new phase in the preperation of tax returns. Today his business model is the standard for all new fast tax service operations in this country. It is this model that we here at Main St. Tax copied, and intend to adopt in its entirity and to build upon for the future success of our franchise.
A lawyer once asked me, "Why invent the wheel?" Why indeed invent the wheel! That's already been done. But we can use that wheel, maybe, even improve upon that wheel or add to that wheel in some of the very ways the inventor intended. In other words, we can make that wheel more useful for our own purpose. And that's the exact approach we have taken, to move the John T. Hewitt idea to the next level in the evolutionary process of the fast tax wheel.
My business management instructor taught, If a brand new franchise intend to make inroads in its respective industry it must provide something which that industry does not already have or have not provided to that point. That is so true, but it may not be so imperative for the customer as it is for the potential franchise owner in this case. All the customer wants is his income tax prepared accurately, preferably as cheaply and as quickly as possible; on the other hand, the entrepreneur is always looking for an edge, something that would set him apart from his competitors. If you can show him how to make more money with you than with the other guy, all other things being equal, he will come with you. That's just the way it is. Well, that's what we here at Main St. Tax have done, provided something different, something that the industry had not thought of before. We can show him how to make a hell of lot more money with us without doing any more work than with the other guy, even though we have to give our thanks to Mr. John T. Hewitt for showing the way, for making it possible to think outside of the evolutionary box.
When the Bloch brother (their real last name, spelled with an 'h," not with a "k"), Henry and Richard, started their mass tax preparation service back in the 50's, they couldn't even have imagined what they were creating. The fact is, they didn't imagine. Henry wanted no part of preparing taxes. He wanted to do books for amall businesses. They thought preparing taxes took too long. A newspaper man by the name of John White convinced them to place an ad in the newspapper for whch he worked advertising tax preparations for $5.00 a return. The next day their phones were flooded with calls.
Of course they were convinced after that. The response they received changed their minds in a hurry. Not only were they in the tax preparation business, they saw a chain of income tax service offices springing up all across the country, because the dream is always bigger than the pocketbook. But even in their wildest dreams they couldn't have foreseen what they are witnessing today. Ten and twelve tax returns being pushed out in a single day by one person was inconceivable back in the day. Three or four returns, maybe, would have been considered extraordinary, but one person preparing more than 4,000 returns in a single season...No, that was just plain stupid, that could never happen in a thousand years! But then, the Bloch brothers also hadn't heard of John T. Hewitt, either!
The History of Fast Tax:
The history of fast tax can be summed up in one man's story and his role in the development of fast tax franchises in America. That man's name is John T. Hewitt, industry leader, innovator and founder of two of the three major fast tax service firms in our country. Accounting Today magazine called Mr. Hewitt one of accounting professions's 100 most influential people five years running. Though he probably was not even born when the Bloch Brothers came up with this brilliant idea of building a tax preparation empire, he has become the single most important reason why the fast tax business has grown to become the billion dollar industry that it is today, and what it will become tomorrow.
It was the year the first man set foot on the Moon, the Amazing Mets, though underdogs by a lot, won the World Serices, in 1969, a year of cataclysmic events--that was the year Mr. John T. Hewitt first entered the World of fast tax. He was still a college kid when he took the tax fundamental course with H & R block, and I suspect he had no inkling that he had just stumbled into the field of his calling. It wasn't too long, however, before he was so immersed in taxes he had to think that it was either his calling or his curse. In any case, he was in it to stay.
Although his employer was the standard by which all other tax firms were measured, in his mind, there were many glaring shortcomings with the H & R Block way of preparing tax returns. After a while, he subconsciously began searching for ideas to improve upon them. Despite the fact that H & R Block had been in business for almost fifteen years when he joined the company, Mr. Hewitt was convinced he could do it better. There had to be some way to make tax preparation easier, faster and more accurate, and still not have to increase the price of having one's tax prepared. If he could find it, he would have a product that would be marketable to, yes, even H & R Block.
Fascinated with the computer age and the new technology, he got together with his father, and they developed the first tax interview software ever used for the professional preparation of income taxes on a mass scale--the "Hewtax" tax interview. This software was designed to speed up the preparation of tax returns, while eliminating, or at least, minimizing math and mental errors, and making it possible for almost anybody able to lift a finger capable of filling out a Federal form 1040. Hewtax was the most aggressive tool ever advanced in the field of taxes since the advent of H & R block.
Despite the overwhelming advantages apparent in this new software, John T. was unable to sell his tax interview program to the Bloch brothers. So he ultimately left H & R Block to form his own tax service franchise. He found a small company in Hampton Roads, Virginia, and went South to set up shop. Together with a few investors, he bought the Mel Jackson Tax Service with the idea of building the largest tax service of its kind in the country, and vying with H & R Block for the biggest chunk of the proverbial fast tax pie. Ironically he was relying on what he had learn from H & R block to do it--and a few added tricks of his own.
THE BIRTH OF JACKSON-HEWITT
It wasn't just the disappointment with the H & R Block operation, nor their unwillingness to indulge his fantasies that prompted the break; it was his own demons that drove his decision. From birth, men like John T. always harbor dreams of grandeur, that exhilarating exaltation of doing something bigger than life on their own, away from the fallibilities of others. They are entrepreneurs in its purest sense. They can never be satisfied working on someone else's team. If the bloch brothers were not going to entertain his dreams, that was all right, the perfect excuse for him to pursue his own income tax service empire, one similar to that of his former employers, but different, in that, more people would have an oportunity to operate their own shops. He also wanted to prove that the Hewtax tax interview was not just a fantasey, but a tool from which the whole industry could benefit. Armed with his newly formed small tax preparation service in the state of Virginia, he went to work on expanding the future not just for the professional tax services around the country, but for his own new enterprise and himself as well. His plan was simple: to be as big as H & R Block one day! He placed the fate of his franchise in the hands of the four Pillars of fast tax for success.
THE FOUR COMPONENTS OF THE JACKSON-HEWITT SUCCESS STORY:
1) The "Hewitt" Tax Interview
2) An Identified Marketplace
3) The Franchise
4) Earned Income Credit (EIC):
The Hewtax Tax Interview: Mr. Hewitt had not tried out the Hewtax interview software in a mass situation before, but he was sure it would be an improvement over anything he had used in the past. And, boy, what an improvement! His software program solved all the problems he thought it would--faster, more accurate and cheaper, plus, many many more. He was able to offer tax preparation work to people who never thought they were capable. But more than that, he was able to teach neighborhood workers tax preparation on a scale never before attempted using his own tax interview software. Because he was able to prepare a tax return so fast, and partially because his tax preparers themselves were from the respective neighborhoods, tax filers flocked into his shops at a rate that he himself never suspected. The Hewtax interview software was a stroke of genious, and the core of his plan that made everything else possible.
Target Market: Long before Mr. Hewitt left the H & R Block organization, he had his marketplace determined. About 80% of the tax returns he himself prepared were blue collar, lower middle class or the working poor. He had no problem with it; that's just the way it was. As it turned out, he found himself happy with the situation--catering to this market. In any case, his target market had been chosen for him. When he began the process of building the Jackson-Hewitt franchise, those who purchased his franchises were instructed where to locate their tax operations. All new Jackson-Hewitt locations were to be opened in and around these dictated areas, sort of on the outskirts, and always near a successful H & R Block tax office to also capitalize on the overflow business. And why not? the Bloch brothers had already done the demographics for him. Jackson-Hewitt franchise owners had very little research to do in determining where their tax operations would be better served.
The Franchise: The Bloch brothers had toyed with the idea of making H & R Block a franchise, but never got around to it, not really, not until recently, and even then, I believe, it was prompted by the success of the Jackson-Hewitt program. A few stores were sold, I understand, but, for the most part, in the early efforts, nothing meaningful ever came of it. H & R Block remains a chain, for the most part, even to this day. They have a franchise department now, and are selling a few franchises, I'm told, but they are not pushing franchises because they have too many other things going.
However, in 2007, EXRESSTAX, an up and coming tax preparation firm, was acquired by H& R Block and is a true franchise. Specializing in picking off small ma and pa established businesses, tax preparation services or no, converting them, assimulating them or giving them an added niche for an additional stream of income, this company found its own niche. EXPRESSTAX sold its first franchise in 2002, and today there are more than 400 franchise locations across the country. Entrepreneur Magazine ranked EXPRESSTAX the 39th Fastest Growing Franchise in America in 2005 and 12th among the Top 50 New Franchises in 2006. Though it was not until 2007 when EXPRESSTAX became the property of H&R Block, you could say that Block is responsible for most of its growth. In 2008 EXPRESSTAX was ranked the 18th fastest growing franchise in America, and the 34th among low-cost franchises. It also enjoyed the 163rd spot in the Franchise 500. Just one year later it was ranked 17th fastest growing, 19th among low-cost franchises and 77th in the Franchise 500. I think that's an amazing feat! One must wonder, however, had it not been for John T., would there be an EXPRESSTAX franchise at all, certainly not one that H&R block would purchase?
Mr. Hewitt, on the other hand, came off the blocks a franchise--no pun intended. Because of the success of franchises in general, like McDonalds, Dunkin' Donuts and others, franchising had become the thing to do. Back in the late 70's and early 80's almost everybody who contemplated going into business for himself was bound by his conscience to consider a franchise before making his final decision. And why not? Franchises had a better track record than going it on your own. Even though nobody in the tax preparation business had tried it in the past with any amount of success, to franchise his new organization was Mr. Hewitt's intention from the start, and he never wavered. The Hewtax Tax Interview was what he was bringing to the table and, of course, it was a big part of his decision to go the franchise route. It was the Hewtax Tax Interview that would make tax preparation for the masses possible. With it, almost anyone could become a professional tax preparer, as indicated above. It was the only way, in fact, he could have expected to hire neighborhood applicants and teach them to professionally prepare income tax returns on a mass scale from areas where most of his tax operations would be concentrated, which was also an integral part of the Jackson-Hewitt success master plan. In 1992, Inc. magazine named Jackson-Hewitt the fastest growing private company in the country.
Earned Income Credit (EITC): Probably the biggest boost in the development of the fast tax industry came from the IRS, or, rather, the change in the Internal Revenue Tax Code in the early 70's to include Earn Income Tax Credit. It was originally linked to welfare reform, but it was added to the Tax Reduction Act of 1975, and was intended to offset the Social Security tax of the lower income workers with children, and to give them an increased incentive to work. It has undergone many alterations since its inception, and now it is considered to be the biggest antipoverty program in the Federal Budget.
The reason for its popularity is because EITC is a refundable credit, which means if no tax is withheld from your income, and if you pay no tax at all, you are still entitled to the credit. The only requirement is that you work and earn an income. Initially the maximum credit was 10% of the first $4,000.00 of earned income, after which it was phased out one dollar for each ten dollars earned, up to $8,000.00 of earned income. At $8,000.00, the entitlement was wiped out completely. Today a worker with two children is entitle to $5,038.00 of Earned Income Credit, and with the new law, the American Reinvestment and Recovery Act of 2009, three or more children entitles him to a maximum credit of $5,657.00. We have come a long ways.
This credit was available to taxpayers only for the calendar year 1975 initially. However, it was made a permanent part of the Internal Revenue Code by the Revenue Act of 1978. The Deficit Reduction Act of 1984 increased the maximum amount of the earned income tax credit and numbered it to its current location in the Internal Revenue Tax Code (section 32). The credit was expanded significantly by the Tax Reform Act of 1986, and it has been indexed for inflation since 1987. The Omnibus Budget Reconciliation Act of 1990 expanded the credit once again and added a supplemental credit amount for families with two or more children. The credit was expanded even further by the Omnibus Budget Reconciliation Act of 1993 to include a small amount to childless workers (up to 341.00 in 1998).
(It is not my intention to give the impression that it was solely EITC that spurred on the momentum of the fast tax express. There were many other factors that contributed to the boom in fast tax, some which were not the result of the Internal Revenue Tax Code changes, others were the direct results of those changes , not the least of which was the enactment of Social Security, soon after the Great Depression. During that time (1935) SS was designed to be an emergency stopgap measure, but it has become the main source of income for a large number of retirees these days. It has also come to play a large role in guiding the direction of our industry. When workers found out that there just may be something they didn't know about Social Security, especially when the changes took place and new features were added as the years went by--like, for example, in 1984, when part of social security benefits first became taxable (50%) and again in 1994, when the taxable portion increasted to 85%--to whom do you think the weary public came for answers?
And there were other tax code changes made, too. In fact, it was during this period that the Code itself was undergoing a development of its own. Many additions were addeded to the Code. I remember when all those "retirement savings" bills were passed, and what they did for the fast tax industry. The retirement plan itself molded a different state of mind for tax preparers; and when congress saw the need, they added to it, with all those "qualified" plans, one for the teachers [TSA], one for the self-employed [HR-10 or the Keogh plan], and then the IRA for individuals, especially the IRA or the Roth IRA. You could offer a taxpayer the traditional IRA at the last minute--April 15th--and save him many tax dollars. This was great for the tax industry. The Keogh Plan, however, was a little too complicated, so Congress came out with the Simplified Plan [SEP] for small businesses. And don't forget the 401(K) and that whole group of qualified plans, which became very popular with employers, thus with the tax industry. And remember, the funding vehicle (for the Insurance agent) for many of these qualified plans was the annuity, which has its own set of tax shelter features.
[Let me explain further. The material above is included only to shed light on the developement of fast tax, not something you need to know to succeed in the fast tax field. If you stay in the business long enough, you'll learn all about these plans anyway. So don't sweat it! My background is insurance. It was in my best interest to learn about these government programs and insurance products in order to explain them sufficiently or teach others how they should be presented to clients, not to fill out any tax schedules and forms. This kind of information a tax preparer does not neccessarily need, except that which pertains to the preparation of income tax returns.]
So, you see, we've had lots of help from the IRS to spur on the growth of our industry. It wasn't just EITC. Along with EITC, came all those other credits as well, for example, the Child tax Credit, The Adoption Credit, etc., etc.; and then came the education credits, The Hope Credit, The Life Time Learning Credit; then there was the tuition and Fees "adjustment," and you could deduct education expense on your Schedule-A, on Schedule-C, etc., along with the retirement plans [mentioned above] and what all of these changes entailed, plus the new Obama Rules, those in the American Recovery and Reinvestment Act of 2009 and that other refundable credit--$8,000 first Time Home Buyers credit--to continue to aid and abet our business. Believe me, folks, the tax code will continue to undergo changes, and become more and more complicated, and drive more and more taxpayers to our doorsteps. I discussed EITC simply because I believe it had the greatest impact on the growth of the fast tax industry.)
With the profound effect that EITC had on the fast tax industry, it is hard to imagine where the industry would be without it. It is also hard to imagine that an astute business mind like that of John T. Hewitt did not see this coming. In any case, he was ready for it, in the right place at the right time, if you will, set up as well as one could be, and took full advantage of the benefits thereof. Why, as one franchise owner put it, "it was like selling money at a discount." (I can relate to that, being an ex insurance agent--that's one of the lines we used in the insurance business to sell annuities back in the 80's.) And this is the way this new credit was promoted by the fast tax industry, with the emphases on "fast refund." This brought filers into his tax offices like they were neighborhood candy stores.
In 1982 Mr. Hewitt bought the Mel Jackson Tax Service, and just ten years later Inc Magazine called Jackson-Hewitt the fastest growing private company in the country. The first time since its beginnings H & R Block had "real" competition in the business of mass tax. But competition was good. In this case, competition was great for the two interested parties. As Jackson-Hewitt grew so did H & R block. During that period, both companies enjoyed some of the greatest prosperity the industry had ever gained to that point. John Hewitt took note; he saw that there was room for yet another major tax franchise in this country.
Coming to America!
John T. Hewitt, always confident in his abilities, left Jackson-Hewitt and the investors behind and went on to try it "one more time." In 1992, Inc. magazine named Jackson-Hewitt the fastest growing private company in the country. In 1994 Jackson-Hewitt went public, and was sold in 1997 for 483 million dollars. After selling Jackson-Hewitt for almost a half billion dollars, he found a small tax firm in Canada, with only 126 operating tax offices. It was what he was looking for, something that was already a going concern, but something he could build on for the future. In 1997, JTH Tax, Inc. purchased U&R Tax Depot and promptly changed the name to Liberty Tax Service. The following year, strangely enough, the Liberty Tax Service World Headquarters took up residence in the same building where the Jackson-Hewitt headquarters used to be, 4575 Bonney Road, Virginia Beach, Virginia.
Unlike with the Jackson-Hewitt situation, which was started from literal scratch, this was already a going concern. The only problem was the 126 operating tax offices were in another country. It had no name recognition in the United States. So that became his problem--name recognition. But he already knew the challenges the new company would present would be different than those faced with the the Mel Jackson Tax service, something he was aware of even while building the Jackson-Hewitt franchise. Promoting his new company's name in a new country was one of the challenges he looked forward to, nevertheless. He knew exactly what it took to make Liberty Tax a house-hold name here on the main land.
He had a three prong approach to this problem--advertise, advertise, advertise! Also unlike Jackson-Hewitt, the challenges of which were pretty much untapped, this new company presented a whole new set of obstacles, which included embracing all those encountered at Jackson-Hewitt. You see, at this point, almost everybody in the industry was using some form of tax software, H & R block, nearly all the Independents, and individuals tax preparers around the country. Among this last group, Turbo Tax had become the weapon of choice for these amateurs. So, coming up with new software was not the answer.
There was no longer anything new about franchising in the fast tax business neither. Not only had that been done before, it had been used to exhaustion. If he wanted to be successful, he was going to have come up with more than just another franchise. This was going to have to be a super franchise. And the same with the marketplace for the new company. Again, everybody was targeting the same market--blue collar, lower middle class and the working poor. The reason for this was obvious. The alternative for a fast tax franchise would have been disastrous. A recent study revealed that more than 80% of the eligible taxpayers actually received the EITC in 1990. That was a huge rate of participation compared to any other transfer program the Federal Government had devised. This was ten years later. That virtually eliminated EITC as a credible issue his new company could rely on. And, indeed, That left none of the former issues valid any more as fodder for building his new franchise. Mr. Hewitt was now in uncharted waters.
Exposure, exposure, exposure--that was the ticket for the new franchise. But the truth is, exposure was no secret ace-in-the-hole, neither. Everybody was aware of the fact that, if he wanted his business to succeed, he had to get as much exposure as was available. That's just the way it's done. But, then, again, nobody had ever played this exposure game quite the way Mr. John T. Hewitt had in mind.
The Advent Of lady Liberty:
If John knew anything, it was he had to generate the maximum amount of exposure for his new franchise as was humanly possible. What was the best way to do that? All the old tried and true methods were fine--the newspapers, a little television, flyers, etc.--but that was not enough. If he really wanted to put his new franchise on the map, he would have to come up with something more, something different, something that would get attention right now--knock your eyeballs out, so to speak.
And did he have a fight ahead of him! There were so many competitors here in the United states, with H & R Block leading the way with more than 12,500 operating tax offices across the country. At that time, Jackson-Hewitt was up to about 5,000, and there were thousands of smaller outfits with varying numbers of operating tax offices. Plus, there was another little wrinkle in the mix, an unheard of tax firm just getting started around about the same time as Liberty, called Instant Tax Service, founded by Fez Ogbazion, a college kid from Etheopia. It was in 1994 when he opened his first tax preparation office under the name of Instant Refund Tax Service--which was bought out a few years later by a Fortune 500 company threatened by the perceived impending competition in the inner city (I'll let you guess the name of that company!) Appetite whetted already, however, Mr. Fez Ogbazion went to Dayton, Ohio and formed his second franchise, the Instant Tax Service franchise in 2000, and went on to make it the 4th largest franchise in the country in eight short years with more than 1,200 operating tax preparation offices today. With all of this going on, it was a wonder that the field was not saturated already. It was a wonder that a new tax franchise from Canada had any chance at all of succeeding in this country. But succeed it would!
John always followed his mind. And the trends were in his favor. The number of filers who have their taxes prepared by professional tax preperers were growing every year. Only 35% of all tax filers had their taxes prepared professionally in 1982. By 1996 that number had jumpted up to about 50% and still growing. In 2007 a full 62% of all eligible filers had a tax professional prepare their taxes for them. If we are estimating a 90% ceiling, along with the growing population of filers and all the other factors that would naturally fall in line, we would more than double the present number of filers within the next ten to twenty years. Mr. Hewitt realized that he had plenty of "room" with which to work and build his new franchise. But what he needed now was a plan.
It is amazing how the simplest things sometimes can make the biggest difference. Of course we know that it is the entrepreneur who in the end really determines whether the business succeeds or not, because he must do all the right things to bring his business to the position to succeed. But if there was one feature that set Liberty tax apart from other tax franchises, aside from Mr. Hewitt himself, it was having Lady Liberty walk up and down in front of the tax office waving to the passersby.
Who would have thought that Lady Liberty could stir up so much fuss? All she did was walk around the building waving to passersby, not even flashing a smile, for the most part. It was just her presence--out there in that cold weather, I guess. Whatever, it worked. Sixty to seventy percent of the business in the first year of a Liberty franchise grand opening, I would guess, comes from the greeting hand waves of Lady Liberty.
I worked with the first Liberty Tax Service franchise that opened on route 18 in East Brunswick, New Jersey. The franchise owner, Jack Pinto, came from a software sales background, and was still doing very well at it, (which means he had little time for his new business, so he hired a "girl" to run the tax operation, and he himself was seldom seen in or about the Liberty Tax Service office.) His first year in the tax preparation business, his office prepared nearly 625 returns and grossed more than $120,000. When I asked Jack to what he ascribed his instant success, he simply said "Lady Liberty," and pointed to the girl outside waving to passersby. (He didn't mean Lady Liberty per se. Some days he would have a guy dressed in an Uncle Sam uniform waving to the passersby. But I got the point.) (These are relative numbers, but I do have the exact numbers, because I was in the running to purchase that franchise the following year, and received a prospectus.)
Even though I was aware that Jack tracked everything, so, of course, I didn't believe him when he told me that it was the Lady Liberty that brought in all that business! This I had to witness first hand. The next year I would track the business origination myself. (Yes, I worked with Jack in his second year in business.) Not only did Jack track everything, he would send out weekly email reports of the progress to all of his preparers. From the start, we were ahead of our first year pace, 10 to15 percent on tax return count, our average per return was higher and our none accepts were down. However, he never sent out an "origin-of-filer" report. This I had to do on my own. So I made it my business to greet everyone that walked through that door when I was on duty. Whether they were new clients or returnees, the first question asked was, "How did you hear about us?" A full 70% pointed outside to the person in the uniform waving to the passersby.
So, that was the secret--Lady Liberty. It was so simple it was incredible. Though Jack used Lady Liberty and Uncle Sam, I have not seen any other Liberty Tax Service Office use both. In fact, the Liberty franchise put out a six foot cardboard likeness of the Statue of Liberty that all Liberty Tax Service franchise offices must carry in front of their stores. I guess the Home Office got tired of seeing all kinds of maverick uniforms representing Liberty Tax Service. That meant the Uncle Sam uniform was fair game. No longer is it fair game; Main St. Tax has adopted the Uncle Sam mantle.
Main St. Tax--The Next Great Tax Franchise:
There is no person in this business that I respect more than Mr. John T. Hewitt, as you might have guessed from the tone of this dissertation. But where has John T. been on this one? We all know that the fast tax preparation business is more seasonal than any other seasonal business you could engage. I mean this business flatly cuts off on the 15th day of every April, come what may. That's it! That's the end, no more. Now, you would think that by this time somebody would have noticed that--that it stops on the 15th day of April--if nobody else but John T. Hewitt. After all, it runs for only three months out of each year, and ends on the same day every year, with a thud! Yet, nobody noticed the thud, nobody noticed this huge problem? But--think about it--maybe it was not a problem as far as they were concerned. They had done it this way so long they were content with the status quo. What's the point, anyway? They themselves couldn't make the season any longer; that was set by the Internal Revenue Code. The problem was worse than that, however. The problem was nobody seemed to care!
It seemed criminal to me, however, that anyone should have to pay rent for twelve months on space used only three months out of the year. Surely everyone can see the inequity of such an arrangement as that. It is the single most dominant fear of every potential new franchise owner. They wonder out loud, "how do I pay the rent for the rest of the year!" Why, then, has no one addressed this problem and come up with a viable solution? But more surprisingly, why has not Mr. John T. Hewitt, the most celebrated individual in the fast tax business, the man who founded two major tax franchises and made both successful in record time, come up with a solution to this problem?...I guess only Mr. Hewitt can answer that one. Notwithstanding, a solution has been found...by a little known franchise called Main St. Tax!
Main St. tax was founded in 2006 by William Morgan, a tax preparer who followed in the footsteps of his mentor and most noted name in tax franchise History. Before getting into taxes, William Morgan worked with the Mutual of Omaha Insurance Companies for twenty years. He was the General Manager for the Piscataway Division Office, where he was also the recipient of many alcolades and honors, in route to building the largest agency in the state of New Jersey and the third largest in the country. He was nominated six stright years for President Circle by the company, and on one occasion appeared on the cover of the company magazine. Supervising more than eighty-five Sales Reps at one point, five staff managers and six clerical personnel, producing almost five million dollars in annualized new business premium a year, he was considered among the top five elite managers in the companies.
William Morgan was a tenacious follower of John T. Hewitt, and tried to match his experience step for step, including going to classes and working with all of the big three, yes, and even opening and running a tax preparation shop for H & R block. (It is important to note here that the H & R block office opened and ran for one season by Mr. Morgan [Easton Ave., New Brunswick, NJ] did no where near the production that Jack Pinto's Liberty Tax Service office produced in its first year [only about 4 miles distance from the Block location managed by Mr. Morgan, and right down the street from another H & R Block location--which, I might add, was doing about two thousands tax returns a year.] . Though, admittedly, at Block on Easton Ave, New Brunswick, NJ, we got started late in the season, there was still no reason why we should have done so poorly, only about 12 tax returns all year. The difference was promotion [equals 12 returns for Block, 625 for Liberty]. The way the two companies promoted their new locations was like night and day. Why, H & R Block didn't even run a single newspaper ad for the new location! Let it also be noted here that Mr. Morgan was merely a personal producing manager for the H & R Block office, and had no control over promoting the new location. On the other hand, when he (William Morgan) opened the Main St. Tax preparation office on Franklin Blvd. (Somerset, NJ), about a 1/2 of a mile from the H & R Block location he opened ten years earlier, though he also got started about half way through the season, he produced almost 250 tax returns, despite the fact that a Liberty Tax Service franchise was also having a Grand Opening that same year right across the street from him, not two hundred yards away--in a mall!
Not only did William Morgan follow in the footsteps of John T. Hewitt, he has read everything about the man, and studied the history of his life as a leader in the fast tax industry, his techniques, his methods, etc. Having never met the man (except in a phone seminar once), he has come to know Mr. Hewitt as well as any one colleague could know another. It is in this vein that William Morgan felt uniquely qualified to carry on the tradition of aggressive innovation in the continuing evolution of the fast tax industry.
If anyone could fashion the next major fast tax franchise, who else was better suited? Besides, was it not William Morgan who had come up with the solution to the overhead expense problem? After all, if you had the option of paying rent, electric and gas, telephone, insurance, etc. three months out of the year as opposed to twelve months, which one would you choose? If you had the option of making $60,000.00 or $70,000.00 a year profit as opposed to $20,000.00 or $25,000.00, what would you do? No other franchise, company nor person was in the position to offer these giant leaps forward but Main St. Tax. No one else had figured out just how to do it but William Morgan, founder of Main St. Tax. And I'm sure if you would ask Mr. Hewitt he would tell you that if William Morgan hadn't done it, he (Mr. Hewitt) would have.
At this point, it is not important to get into how we are able to cut expenses so drastically. Suffice it to say, we guarantee we will live up to every assertion made herein. And not only do we guarantee that you will pay this lesser overhead for only three or four months out of a year, but that you, as a Main St. tax franchise owner, will pay far less for more space in the area in which you choose to set up operation than anyone else in that area. In other words, while everyone else in the area may be paying thirty-eight hundred dollars ($3,800.00) a month, you'll pay only eight or nine hundred dollars a month--or somewhere thereabout. Sounds ridiculous, doesn't it? We know, but what do you want me to tell you...that's simply what we can do for you.
Our start-up cost is also lower than industry-wide, and so is our price per return. All this we guarantee and directly related to expense-discount way of doing business, and this secret will be revealed to you as soon as your commitment is secured. We are sorry it must be this way, but we don't have any choice. We can't allow the rest of the industry knowledge of what we are doing until we are ready for them to know. One or Two years from now secrecy will not be such a premium. However, we will tell you this much right now...We have also unveiled a proven means to attract much, much more business than even Lady Liberty or Uncle Sam, that will cost far less than having someone walk around your building all day waving to passersby, in the cold of Winter. And this plan, so simplistic in its concept and yet so engenious in its effectiveness, you would think Mr. Jophn T. Hewitt himself had his imprint on it Learn more.
All right, let's sum it up...We're offering the same type of franchise as the big three for $10,000. less. We're providing uniform office buildings that are recognized all across the country for twenty to thrirty thousand dollars less than you would pay for any of their office space (or any office space in the respective areas,) and we're locating your offices on sites where neither of the big three are equipt to go at this point in time. We're lowering your electric and gas expense by 75%, and your local advertising by 80%. And we're situating you where you will have more expossure than anyone else in the area--we guarantee it! What we're offering is hard to believe, I know. What we're telling you is incredible. But what we've said is true. And when we reveal how we are able to accomplish such grandious feats, you will be stunned at the simplicity of it all! But you'll know that you have finally jumped on the right bandwagon, because anyone who knows squat about business ventures would kill for an anopportunity like this one. Never again in your lifetime will you receive such an offer!
These enhancements that Main St. tax has made are a tremendous advancement for tax franchises everywhere. It is the industry's first effort in generating more profits for the fast tax franchise owner, and changing the way that fast tax operations will be conducted in the future. But, remember, this new innovation can not make the money for you, and should not be thought of as a panacea. The income generated in your business--or any business--still rest with the management efforts and skills of those in charge. We can only show you the way.
(It's not like these other franchises can change their mode of operation overnight, anyway. But when you see something that is too good to be true, and yet is true, you'll be tempted to take a stab at changing overnight. A little precaution is warranted here, I think. We are simply trying to so up a few exclusive contracts with venders, reach a certain number of operating franchises and extablish our franchise as one to be reckoned with before going public. That is what this secrecy is all about, nothing more.)
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