Service franchisee calls work 'intense'

END OF A TAXING SEASON

April 12, 1993|By David Conn | David Conn,Staff Writer

Robert Phillips' tired eyes light up and a broad smile spreads across his face when he thinks about fairways and greens. That's where he's headed after April 15.

"A couple of weeks after tax season is over, if the weather is good, I plan a lot of golf," he says with determination.

For now, however, last-minute tax filers are keeping everyone in Mr. Phillips' six local Jackson Hewitt Tax Service offices glued to their computers. For much of the last three months he's been working seven-day, 100-hour weeks.

"It's just absolutely intense during tax season," says the 35-year-old Crofton native and former Navy pilot. "It's unbelievable."

This from a man who flew in the 1986 attack mission on Libyan leader Col. Muammar el Kadafi.

But the hard work is paying off. Two years after becoming a Jackson Hewitt franchisee -- or "business partner," as the company calls him -- Mr. Phillips has become one of the Virginia Beach, Va.-based company's more successful new partners, with four storefronts in Dundalk, East Baltimore and West Baltimore and locations in the Towson Marketplace and Golden Ring Montgomery Ward stores.

Last year, with five offices open, Mr. Phillips' franchise prepared about 3,900 returns. Many of his preparers graduated from the free tax preparation courses he teaches for six weeks in the summer. By Thursday at midnight, the IRS' deadline, this year's returns are expected to number about 6,300.

Mr. Phillips' success is due in part to his parent company's drive to become a force in the $4.7 billion tax preparation industry. Jackson Hewitt is still leagues behind H&R Block, with its 9,200 offices worldwide, and 15.6 million returns prepared last year.

But the 11-year-old company, founded by former Block executive John Hewitt, has 615 offices in 28 states and the District of Columbia, up from 321 two years ago.

Jackson Hewitt plans a public stock offering next year with an eye toward operating 6,000 offices by the year 2000, according to Susan Ventresca, director of franchise operations.

This year Jackson Hewitt launched a $5 million national ad campaign. Baltimore, according to Mr. Phillips, has been targeted as a growth region, which means the company is spending even more here to promote itself.

The Jackson Hewitt franchise is Mr. Phillips' first shot at running his own business. But he feels his eight years with the Navy, during which he also taught leadership and management courses to prospective officers, gave him the skills to lead an operation that now employs more than 100 people, at least from January to April.

"My strengths are management and leadership," he says. "That's what the Navy teaches you." It also teaches service, which is why Mr. Phillips offered free tax preparation for people recently laid off from the local Westinghouse operation.

A graduate of the University of Maryland, Mr. Phillips received a master of business administration degree from the University of Rhode Island. After leaving the Navy in 1989, he became a broker for Merrill Lynch in the Norfolk, Va., area.

One of his clients, who was director of marketing at Jackson Hewitt, sold him on the franchise idea. Since no territories were available in southern Virginia, he returned to Baltimore, where his brother and sister-in-law joined him as partners.

The three spent $100,000 for the franchise rights to nine "territories," each comprising about 50,000 people, covering half of the Baltimore area. He hopes to run 15 to 20 offices within the next six years.

Most of his business is preparing relatively simple returns, such as state and federal "short forms," for a $43 fee.

Jackson Hewitt, like most other commercial preparers, also offers electronic filing. The company doesn't charge an extra fee for that service if it also has prepared the return. Otherwise, the cost is $43, which also includes a review of the client's taxes.

For another $49, Jackson Hewitt offers next-day electronic "refund anticipation loans."

Today, Jackson Hewitt's employees use the company's proprietary Hewtax software, now in its 10th generation, to lead customers through a "decision-tree" interview intended to catch all possible deductions, like the software programs sold in computer stores, such as TurboTax and TaxCut.

It's these home preparers -- with or without their own computers -- whom Mr. Phillips considers his primary market, not the customers of his competitors. He plans to hook them first with the electronic filing service.

"They've come in for electronic filing and they've seen what a good job we do" catching costly errors, he says. "Those are the people we want to convert to being clients for life."

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