I was weary about getting information and attempting to get a franchise with Instant Tax Services after reading a couple of reports that were listed here in Ripoff. I did lots of homework to include finding out if this company participated in the VetFran Program which is supposed to help Veterans of the Armed Forces with discounts for purchasing franchises. Read through the FDD and worked closely with their Area Developers. Throughout the first few months the company Area Developer, John Hollifield was very nice and nice cordial. I felt comfortable with this company to the point where I sent them $7,000 and received acknowledgment in writing that this fee was 100% refundable in the event an operating agreement could not be reached. Well, as soon as I received the FDD I reviewed it and found an issue at which point I advised their corporate lawyer Joseph Roda. I had been advised verbally and on conference calls that I would be able to sell other products without ITS approval. Their FDD did not state this, I advised their lawyer and he sent me an addendum which still was not clear. There were other issues with the FDD as well. I sent many emails over a 2 month time frame. I finally received an email back after I sent this, "Hello. I am writing because I have not received my deposit. I have yet to receive word back from anyone regarding a specific time frame on when I will be receiving it. This is my 5th request. Can anyone explain the reason for the delay in my request? A simple explanation, a courtesy if you will is really needed here. Please understand the position I have been put in for exercising my right to a refund as stated in your refund, attached. Your FDD is not acceptable to my business. Your company representatives all spoke of being able to sell any product without issue, the addendum, although vague in this area still, does not state any product can be sold. We were unable to come to an operating agreement and therefore I asked for my deposit back. This is not the only reason, I am listing other issues such as:
Section 3 which still leaves room for the franchiser to create a website system or other franchise that can compete with me. Section 4, stating a 5 year renewal. Section 7 which states I must get approval for space prior to construction, that I must have my office opened by Jan 3rd, must have approval for any advertising except for approved advertising, must keep office open during normal business hours during tax season and at least one day a week, and having to prepare at least 300 returns during the second year and 500 thereafter. Section 8 advising that I cannot compete with the franchise while a franchisee and for 2 years after. Section 11 discusses reporting each month, 5 business days to provide report of sales, 10 business days for profit and loss statement and each year 90 days after end of year for an annual profit and loss statement. Section 12 regarding audit, having to submit copies of all records to corporate and having to pay amounts found owing plus all audit costs if sales are short by 2% or more. Section 13 your marketing cooperative, having to be forced to contribute as determined by franchiser with a cap of 10k the first year and 20k the second. Section 15 regarding insurance and having to carry workers compensation as well as listing franchiser and TCA as additional insured. Section 17 regarding the right of first refusal which if I decide to sell giving the franchiser 30 days right of first refusal. Section 18 having owners sign a guaranty and restriction agreement as well as restricting transfer of ownership without franchiser approval. Section 19 which states I cannot terminate unless franchise materially breaches its obligations for 60 days after I provide notice of failure. Sections 20 and 21 where I can be terminated for violating a large list of requirements. Section 22 waiving the right to claim any damages except for actual damages. Section 23 where the franchiser is allowed to seek a judicial remedy. Section 25 where the franchiser has the right to purchase my office upon termination of the franchise agreement for any reason, again limiting my right to sell other products. Section 37 limiting my right to bring a claim. I ask that you forgive me if the refund has already been processed however I have followed the direction given for my refund as stated on the attachment provided to me by your company. I have in good faith attempted to work with your company. I respectfully request a call back or reply to help me understand what the delay is here."
I understand that some of these issues are typical in an FDD (theirs is listed on their website), not all though and as I chose not to sign the FDD and because Instant Tax would not change these I requested my refund. Well, I finally received a reply from Todd Kirby, another Area Developer that stated, "Contracts often are boilerplate and are written by lawyers not business men."
Basically telling me that what was in writing didn't matter because I could sell whatever I wanted. In any event, I didn't think this was appropriate as an FDD is a legal document and if the information in there is not to one's agreement then signing it is not an option.
I was told on a few occasions that my request to have my deposit returned was sent to corporate, but it never actually had gone there. I received a phone call from Joseph 2 weeks ago telling me he would call me with information on my refund, yet he hasn't. I am going to pursue getting my deposit back and will be meeting with my lawyer on Monday. At this point, the time that I have taken to take action has cost me lots more than $7,000. If I can, I will update this report as information comes down from their corporate office. Treating people of the Armed Forces or any American citizen for that matter unfairly during these hard economic times is unjust.
I highly recommend that everyone review Ripoff before doing any business with anyone and take the reports very seriously. I should have.