Franchisor Marketing

The Franchise Pick blog post Jackson Hewitt Franchise Mess hurts all Franchisees  details the PR nightmare that a single franchisee can cause a chain.  (In the even that you’ve been visiting your Amish cousins for the past few days:  Tuesday, the U.S. Justice Department announced that it sued five Jackson Hewitt Tax Service Inc. franchise companies for allegedly filing $70 million worth of illegal tax returns.

The DOJ claims that 125 Jackson Hewitt outlets in the Chicago, Atlanta, Detroit and Raleigh, N.C., areas filed bogus tax returns, and that some franchise managers and employees got kickbacks from customers in return for helping file the phony returns.

Jackson Hewitt tax preparers were accused of creating fake deductions, falsifying W-2 forms and fabricating business expenses.)

In an effort to try to minimize some of the damage being done to its franchise brand (and its tanking stock price) at this critical time of year, Jackson Hewitt issued this quick statement:

Jackson Hewitt Statement Regarding Department of Justice Announcement

PARSIPPANY, N.J., April 3 /PRNewswire-FirstCall/ — The complaints announced today by the Department of Justice are limited to one franchisee, whose entities noted in the complaints operate more than 125 locations out of more than 6,500 Jackson Hewitt locations nationwide. The Company estimates that these entities represent about two percent of its total revenue. We do not believe that this matter is likely to have a material adverse effect on our financial position.

While we cannot comment on franchisee litigation, Jackson Hewitt takes such matters seriously. The Company expects its franchisees, which independently own and operate their businesses, to comply with the terms of their franchise agreements. Accordingly, they are responsible for conducting their operations with integrity, in compliance with all applicable laws and regulations.

Jackson Hewitt remains committed to providing accurate, quality tax preparation and the highest levels of customer service. Comprised of a network of thousands of tax preparers, and franchisees nationwide, the Jackson Hewitt system values its relationship with its customers and continues to assist them with their upcoming income tax filing requirements.

Contact:
Sheila Cort
Vice President, Corporate Communications
Jackson Hewitt Tax Service Inc.
(973) 630-0680
Sheila.cort@jtax.com

SOURCE Jackson Hewitt

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