In this exclusive Q&A, we learn more about the tax preparation and business services franchise, ATAX, from its founder and CEO Rafael Alvarez.

Franchise Chatter (FC): Can you please share a bit of background on the ATAX concept – including its founding story and growth up to this point?

Rafael Alvarez (RA): I founded ATAX in 1986 with $200, two computers, a fax machine, and a $1,000 loan from 18 of my friends in my home city of New York. The plan was always for ATAX to be a full-service income tax preparation business that represents and caters services toward the Latino community. It blossomed, and we began offering additional services such as bookkeeping and accounting, notary services, and insurance analysis – often helping to better educate our community on the steps they need to take to ensure citizenship and financial success in the economy.

Additionally, every ATAX franchisee has the ability to offer supplemental services as part of their business model. These secondary services can range from English as a second language, immigration advice, passport photos, and so on, which turns the business into a year-round operation even as tax season has come and gone.

ATAX began franchising in 2007, and now we have more than 50 locations across the United States. In 2019, we partnered with Loyalty Brands, a synergistic business services franchise company to help take our growth goals to the next level.

FC: What is the relationship between ATAX and Loyalty Brands?

RA: Loyalty Brands is a business services franchise group that was founded in 2018 by John Hewitt. John came to me, and as ATAX is the first Latino-owned tax preparation company, he wanted to help expand our growth model beyond the East Coast to better meet the needs of the thriving Latino community.

According to the U.S. Census Bureau, an estimated 55 million Latinos live in the United States with over four million being business owners, and another 11 million undocumented. Since 2012, the number of Latino-owned businesses has grown by over 30 percent, and accounts for over $700 billion in revenue – proving to be a major driver in the growth of the U.S. economy.

With that in mind, we joined forces to fuel our expansion, and utilize Loyalty Brands’ widespread suite of services to benefit our existing franchisees. Loyalty Brands also houses five other franchise concepts that benefit one another, such as a networking and brokerage franchise. Through our existing partnership, ATAX franchisees can better understand other aspects of business, and, if they are looking to expand their business portfolio, they can enter a franchise agreement with these sister brands as well.

FC: What makes ATAX an attractive business opportunity for potential franchisees?

RA: The tax industry is attractive to business owners in that it can be seasonal; from January through April, you’re hard at work advising and preparing taxes for your clients, and then you have slower months that allow for a nice work/life balance, which is top of mind for a lot of franchise owners.

ATAX differs in the fact that it gives all its franchisees the option of being a seasonal or year-round business. I mentioned the additional services we offer, such as bookkeeping and payroll, which provide multiple revenue streams and allow business owners looking to stay open all year the ability to do so without challenge. Having that choice is really alluring for our franchisees, as it gives them ownership of their time, and the ability to dabble in additional business services beyond just tax preparation to help their community.

FC: How does ATAX differentiate itself in the tax preparation space?

RA: ATAX is a one-stop-shop for the communities we serve. In a financial scope, there really isn’t a request we can’t service. This fuels trust and comfort between us and our customers as we help advise their niche requests and needs.

What it really comes down to is the educational foundation ATAX has been built upon. We’re in the tax preparation business to help Latino businesses and individuals better understand the ever-changing tax industry, and dispel any fear attached to economic processes and tax laws. We want to set them up for success down the road, giving them the foundational understanding that they need to make moves to benefit their businesses and families.

This sentiment rings even more true for undocumented citizens. We are the only tax firm to service the over 11 million undocumented citizens in the United States, and we are here to help them apply for citizenship and everything that comes after.

FC: What qualities do you look for in a potential franchisee?

RA: Anyone with a passion for helping others and who has previous business experience fits the bill of our ideal franchisee. While having a background in the financial sector isn’t necessary, we do like our franchisees to have knowledge of the management process and the cyclical tax business since they will be building – and leading – a team of experts in the field.

It also benefits our franchisees to be bilingual, as one of our optional services is teaching English as a second language, and we are a bilingual tax preparation franchise.

FC: What is the typical investment to open an ATAX franchise?

RA: The cost of opening an ATAX franchise (franchise fee plus overall investment costs) sits right around $70K, with discounts available for military veterans.

FC: Can you tell us more about your role with ATAX?

RA: I’ve always had a passion for this industry, along with ensuring that my community is properly educated and serviced as the economy changes daily. With that understanding, I’ve stayed with ATAX from the very start. My roles have changed as the concept grew; first spearheading our online filing options and making a name for ourselves in e-filing, and now working to revolutionize our growth plans and take our business one step further. I am always looking for ways our business can grow and then find the avenues we must take to get there.

FC: How can people learn more about ATAX and its franchising opportunity?

RA: Anyone who is interested can learn more about our franchising opportunity by visiting https://ataxfranchise.com/.

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