They’ll Have To Kill Me To Stop Me, with John Hewitt – Episode 454 of The Action Catalyst Podcast

John Hewitt, founder of both Jackson Hewitt as well as Liberty Tax Services, talks about being a world traveler without ever leaving the USA, fighting with his father while also making business history, the secret sauce of franchising, the biggest lesson from almost facing bankruptcy, competing against his own software and systems (and winning), why he might be the one person on Earth who thinks Berkshire Hathaway is doing something wrong, the pain of change, and practicing extreme brevity.  And listen to the end to find out how Action Catalyst fans can get his book for free!

About John:

John T. Hewitt is a distinguished American entrepreneur renowned for his significant contributions to the tax and business services industry. With a career spanning over five decades, he has left an indelible mark through the creation and expansion of notable ventures.

In 1969, while pursuing his education at the University at Buffalo, Hewitt’s journey in tax preparation began when he enrolled in a tax preparation course offered by H&R Block. The course sparked his fascination with the world of taxation, setting him on a path that would lead to remarkable achievements. Impressed by his talent and dedication, H&R Block swiftly hired Hewitt as a tax preparer, launching his career in the industry.

Hewitt’s rapid ascent through the ranks at H&R Block demonstrated his exceptional aptitude for the business. By 1980, he had become the youngest regional director within the company, overseeing 250 offices. However, his visionary instincts drove him to recognize the need for technological innovation within the tax sector.

In pursuit of this vision, Hewitt decided to forge his own path, departing from H&R Block to seize the opportunity for innovation. Collaborating closely with his father, he embarked on pioneering the development of cutting-edge decision-tree tax preparation software. Initially, this groundbreaking technology was intended for sale to H&R Block. However, Block was hesitant to embrace this transformative approach, failing to foresee the inevitable role of computers in their industry.

This pivotal moment in Hewitt’s career led him to explore alternative avenues to harness the efficiency and potential of the new technology. His entrepreneurial spirit and determination drove him to create Jackson Hewitt, a tax preparation service that would fully leverage the power of this groundbreaking software.

Even before this transformation, as early as 1986, Jackson Hewitt was at the forefront of embracing technology to enhance the tax preparation experience. It was during this year that the Internal Revenue Service (IRS) began to acknowledge the advantages of computerized tax filing. In a historic move, the IRS initiated testing of the electronic filing process, allowing taxpayers to directly submit their tax returns electronically, bypassing the traditional method of mailing paper returns entirely.

Jackson Hewitt, as a leader in utilizing technology to facilitate tax preparation and filing, was quick to adapt to this evolving landscape. This forward-thinking approach not only positioned the company as an industry pioneer but also laid the groundwork for the expansion of their franchise model throughout the United States.

Through John’s relentless pursuit of innovation and commitment to revolutionizing the tax industry, Jackson Hewitt became a beacon of efficiency and convenience in the world of tax preparation, reshaping the way individuals filed their taxes and setting new industry standards along the way. By 1992 Jackson Hewitt was one of the fastest growing private companies in the United States, according to Inc. Magazine, attaining a secure second place ranking in its industry.   The company became publicly traded in 1994 and was sold for $483 million in 1997 at which time it was operating nearly 1500 offices.

After leaving Jackson Hewitt, John was contractually barred from competing with Jackson Hewitt until 2000 in most of the United States.  However, he decided to launch a new company which would be the vehicle for further innovations. In order not to infringe on the terms of the non-compete agreement the new company initially focused it operations in Canada.  Liberty Tax Service was launched when John purchased a Canadian tax company on September 1, 1997. The new concern quickly achieved a huge measure of success opening over 4000 locations in North America by 2012, making it the fastest growing major tax preparation company in history.   Liberty Tax is best known for the costumed “wavers” dressed as the Statue of Liberty used as marketing mascots in front of offices across the county.  John left Liberty in 2018 to found Loyalty Brands. 

Loyalty Brands is a synergistic group of franchise businesses and services designed to dovetail together to help the franchise buyer to prosper both quickly and over the long term. Decades of documented and proven franchise and business success has enabled Loyalty Brands to develop a business system that drives customer loyalty, repeat business and financial stability. The proven systems allow a franchise business to run smoothly and efficiently while achieving consistent and measurable growth.

Each of the Loyalty franchise concepts are easily knitted together to provide interested prospects a portfolio of businesses that are exciting for them to consider.  The brands under the Loyalty umbrella include ATAX Tax Service, Zoomin Groomin (a mobile pet spa) Loyalty Business Brokers, CR3 Exterior Remodeling, Jomsom Staffing Services, Little Medical School and Ledgers Accounting and Business Services.

John’s enduring legacy is marked by his role as a pioneer in the development and utilization of specialized tax preparation software, now regarded as an industry standard. His entrepreneurial journey continues to inspire and shape the landscape of the tax and business services sector, embodying a true entrepreneurial spirit dedicated to innovation and excellence.

Honors and Accolades:

• International Franchise Association-Entrepreneur Of The Year (2006)
• Accounting Today’s Top 100 Most Influential People (2000-2012)
• Author of best-selling book, ICompete: How My Extraordinary Strategy of Winning Can Be Yours
• Brought in over 5000 franchisees
• Founded two Top 100 retail franchise chains (Jackson Hewitt and Liberty Tax Service)
• Celebrating 55^th year in the tax preparation industry “The Grandaddy of Taxes”

John Hewitt’s remarkable journey from humble beginnings to tech titan serves as an exhilarating tale of ambition, innovation, and the power of the human spirit. His story continues to inspire countless individuals around the world to dream big, think outside the box, and dare to become mavericks in their own right. John Hewitt, the visionary who dared to reach for the stars, will forever be known as a pioneer in the world of technology and a true inspiration to all.

Learn more at LoyaltyBrands.com.

The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!

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(Transcribed using A.I. / May include errors):

Adam Outland
Welcome back Action Catalyst listeners. I am your host, Adam Outland. And today, I’m pleased to welcome John Hewitt, the Hewitt in Jackson Hewitt Tax Service, the second largest tax service in the United States, which was founded in 1982. Afterwards, John also founded Liberty Tax Service, which is the third largest tax preparation service provider in the United States. Since exiting both companies. John has authored the fascinating book, I compete and now accept the CEO of loyalty brands, which we will hear more about a little bit later. John, good to meet you.

John Hewitt
You too. My pleasure.

Adam Outland
But reading up on your background a little bit more. And at first, I was like, Oh, wow, he grew up in Hamburg and Greece. I was like, please, really traveled the world. And then I read the clues were smaller towns in New York, right?

John Hewitt
Yeah. My girlfriend now lives in Italy, Texas, Italy, Texas. Yes. Right. 35 miles south of Dallas.

Adam Outland
So you tell all your friends you go to Italy? They asked you to bring back some wine and you say I don’t know if you want wine from Italy.

John Hewitt
Exactly.

Adam Outland
You’ve accomplished so much. And a lot of your story I think starts with working for H&R Block, was that while you were still at university or…

John Hewitt
Yep, I was attending the University of Buffalo. And I took a tax course for h&r block. You know, I was, I’ve always been self confident, if not cocky. And when I was in high school, I decided I’m going to be a millionaire. I no clue how my major was mathematics. And my dad interceded. And he was always wanted to be an entrepreneur, but had too many children too quickly. And we were too poor. But he called up h&r block in 1969. And said, we’d like to buy a franchise in Hamburg, New York. And they said, as a matter of fact, we’re going to open a company store there this year we already have and it’s right. It’s right on Main Street. And it was life changing. One of the biggest blessings of my life is when I was 20 years old, I found out what I wanted to be when I grew up.

Adam Outland
Not many people can say that.

John Hewitt
You know what, most people don’t know if they’re 20, 30, 40, 50. Most people don’t know what they want to be when they grow up.

Adam Outland
Yeah, vision is lacking for a lot of people and and so they find themselves drawn to other people’s visions, which I guess it’s okay.

John Hewitt
It’s ok for people like me that have vision. I need people like that. That’s right. Yeah. Every industry needs CEOs and visionaries. And I’ve always been a crazed competitor. You know, it’s with me, it’s show me a good loser, and I’ll show you a loser. So I’ve always had this fanatical, obsessive desire to win. And so whatever I did, I learned something when I was about 17, to solve arguments, because I’m so argumentative. And my friends that I would be listening on the car radio, and I saw would come on. And I’d say it was the Moody Blues, they’d say, it was three dog night, and we’d argue and no one would win. Right? So I invented a game that I played to this day, that I bet you it out, you have to either have to stop arguing or bet it out. And so I bet like a million dollars in my lifetime. I only bet one at a time. I don’t bet $10 or $50. Yeah, I’m incredibly competitive. In 1980. I became a regional director and I foolishly 10 years earlier said that’s my dream is to be a h&r block Regional Director. And I previously set that goal and I made it and I was so excited and and then my dad, he took me down a notch. He said, John, I’m going to computerize taxes, and I want you to join me. It took him six months to convince finally he convinced me and we both quit our jobs. And in 1981, we built the first tech software for an Apple computer.

Adam Outland
What was it that made you feel that you guys would be good business partners and that that would that would work out?

John Hewitt
Well, as a teenager, I mean, my dad and I bought like cats and dogs. I mean, he wouldn’t talk to me for months on end. I was just so rebellious. Isn’t it my rebellion wasn’t drugs or, or crazy stuff there was I wanted to hang out with my girlfriend so I’d sneak out at night and hang out with my girl. But he wanted someone that would obey the rules. In my career I’ve had my mum worked for me, my dad, my sisters, my ex wife, my children, my nieces. And I’ve had lots of people work, but not everyone worked out well, I had to fire my ex wife, fire one of my daughters, and I’m fired by one of my sons so that everyone worked out well. But it was so bonding with my dad, and that it took him from this rebellious teenager, I had 45 years with him, where we were almost best friends that we had something in common. He was partners with me and building the software. He was the board of directors of Jackson Hewitt, he was on the board of directors of Liberty Tax. And when it came to business, he always gave it to me, but in any in every other face of his life, our lives he would not pay any attention to.

Adam Outland
Wow, and from there, how did you decide that franchise was the route you wanted to go?

John Hewitt
We started with six offices in August of 82. By January, we had a lot. So we bought six offices from Bell, Jackson’s widow changed the name to Jackson Hewitt, and had 11 nose then the second year we had 15. And the third season we had 22. So in two and a half years, we had gone from six to 22. So that’s pretty good growth. But my goal from day one was to have more offices in h&r Block than they had nine bows. And I realized I’d be like 600 years old by the time I got to 9000 at that rate. So we immediately start change. I decided we’re going to franchise we need h&r Block franchise, and we exploded we went from 22 to 49 to 197 to 350. So we exploded with franchise, Adam, the beauty of franchising that no one ever talks about because I think they they feel guilty, is I get someone like yourself a very talented person, and you pay me to work for me. I mean, if I went out in the marketplace and had to hire you, I’d have to pay you hundreds of 1000s of dollars. But you pay me I get a great person like yourself, who wants to change their life, and you pay me to work for me. So that’s almost a scam except for I’ve made 1000 millionaires and my 5000 franchises and hundreds of 1000s of employees. I’ve changed 10s of 1000s of people’s lives.

Adam Outland
And what you offer, I feel and then you can correct me is when you buy a franchise you’re buying into in some ways, especially in the early days coaching and direct mentorship, you’re paying for the systems in the organization to say this is the value proposition that you’re buying into. And there is 100 I think for a lot of successful people to have that kind of mentorship and guidance and tools, because they’re motivated, but they prefer a little bit of a shortcut on the learning curve, right?

John Hewitt
It’s a huge shortcut it saves years and years. Yeah.

Adam Outland
Because you hit those potholes. So they didn’t necessarily have to.

John Hewitt
I’ve either made every mistake or I’ve seen every mistake. A couple of times, we almost went bankrupt. One year I had an opportunity. We are growing by leaps and bounds. And remember our number one goal was to be bigger than the 9000 HR blocks. And there was a company in the country that had about 250 locations. And they decided to offer tax where there was they had a relationship with a company come up every ward, which also doesn’t exist anymore, which is a miniature Sears and they offered to sell us the Montgomery Ward contract. Well I had just I had just hired my two favorite people from h&r block that were running 300 offices, and I just done an offering and raise money and it would make us immediately that year, six years after we started we’d be number two largest in the country. And so we didn’t do enough due diligence but we bought that relationship and we opened in about 150 Montgomery Ward’s Welcome to Buy Now they had treated the they had had a horrible season and they treated the taxpayers all over the country. And these countries they were in like 27 state. So we went from three states to 27 states and they had such a bad year the previous year. They hadn’t paid their prepares so the prepares were angry with them. They didn’t either they quit some of them a couple of situations they competed so mean and miserably that they would come into the Montgomery Ward because these are little kiosks and oh my god reward they would come in and and Rick Truth to customers right from under our nose and said, I’m over. You know, I’ve been doing your taxes for three years. I’m over here, come to me. So we had to go to Montgomery Ward that we have to shut down honor to these locations. We’re getting killed, you almost went bankrupt. Wow, I took zero pay. And many people took a 50% pay cut. But we came out of it very robustly bigger and stronger than ever.

Adam Outland
What was the number one lesson that taught you?

John Hewitt
Don’t roll out anything on a national level. If you’re going to test anything, do it reasonably small tests before you go take it out and do it nationally.

Adam Outland
But in your, you know, in your position, you know, would you say that your risk tolerance is relatively high?

John Hewitt
I say it’s off the charts. Adam. Think about it. We had six stores. And I went through my investors and said, our goal is to be bigger than h&r block. Now my word is my bond. We only got to 6000 Jackson, it has 6000 locations, but it became a billion dollar company. And Molly one, one of 1000 people in the country that are going to be at our company. We didn’t get to 9000. But but everyone made a lot of money. If you invested 5000 with me in 1982 it was worth 2,000,015 years later. So I had no investors that were disciplined. But I set big, hairy, crazy, audacious goals. I am so much risk taker. I walk the tightrope of insanity.

Adam Outland
And then you did kind of repeated this again.

John Hewitt
Yeah, exactly when I sold Jackson Hewitt that I started Liberty Tax and now when my non compete and then I had to, I had to compete with my own name, my own software, my own system and my own people. And now, Jackson unit 6000 offices and h&r block at 9000. Guess what goal we set to be bigger than block. And again, I didn’t get to 9000, I only got the 4000. I did it five times quicker than I did it at Jackson Hewitt I and I formed another half a billion dollar company, I formed, again, one of the top 100 largest retail chains in the country. I’m the only one that’s founded to the top 100 retail chains. But Adam, when you start out and you’re competing against a 9000 chain, and a 6000 chain, and the 6000 chain as your own name and your own system, you have to be almost stark raving mad to believe that you can do it.

Adam Outland
What phase of business building are you most attracted to, the early stages where you have to be kind of scrappy, or do you like the large scale sweeping side of it once you’ve gotten to scale?

John Hewitt
It gets boring to me when we stop growing by when we’re not growing by leaps and bounds. You know, the culture in your organization is critical to the quality of your organization. And it’s so much easier to have a great culture when you’re growing exponentially. If you’re if you ever get to a vantage point where they’re not growing, they’re flat. Right to me, if you’re not growing, you’re dying. That’s not my leadership scope. I’m a builder and a fighter and a scrapper as you said. But no, once it gets to out, turn it over to the suits at that point. You guys take over? Yeah, it was that growing double digits or more, or 50%? Or is that growing by over 10% don’t even waste my time. I’ve got better things to do.

Adam Outland
And so because you were again, bored at your enormous amounts of success that you had, you decided to start something new again.

John Hewitt
After I sold Liberty Tax and we started learning to branch out in each of the first two iterations that Jackson Hewitt and liberty There was just one franchisor. At loyalty, we have eight different franchise awards. And we’re exploring some extra some new concepts. And between the brands, we’re exploring mentorship, I can mentor CEOs of each brand. We’re exploring my vast array of people around both the United States and Canada who believe in John Hewitt who have either worked with me at blocked or Jackson Hewitt or liberty. So when we go to a city when we when we go to Houston, there are hundreds of people that have worked with me that believe me, so they could be a customer, they could be an employee, they could be a franchisee, so we’re exploring that opportunity. simplistically, it’s just an umbrella company of a different franchisors. So instead of standalone franchisor like Jackson Hewitt, we’re in liberty. We have a tax and we have zoom and Grumman and we have inspection boys home inspection. We have a different companies instead of just one branch. Nice work. I’ve been always disappointed in organizations like Berkshire Hathaway that couldn’t cross work. You know, they have a stable of great companies Coke, Geico. But to my knowledge, they don’t ever get the two groups across the market. You know how many people at GEICO drink Coke? And how many people had Coke buy car insurance, you would think there would be some attempt at cross marketing, but they do nothing.

Adam Outland
And what’s the vision going forward for you?

John Hewitt
The vision has something to do with my age, I’m 74 years old, and I’m going to work forever, they gotta kill me to stop me. But I only I don’t think I have energy to go more than another five or six years in eight brands, I think I think that we’re going to get down to just one or two industries over the next five or six years. So and that’s more related to my age, and then to any other business reason. So we’ll sell off the lesser performers, or the ones that I don’t enjoy as much. And then alcohol, I personally down soon have the management that then that I put there. So have access to the mentorship. But my focus is going to be just on one or two different industry, there’s no retirement again, they got to kill me to stop me when I was young. I said, You know what, I’m going to be a mentor. I don’t know how I’m gonna be there. And you know, I have the greatest line, I just go retire. You know, I’ll be 20s or 30s. And I’ll just have the screen sight. And I realized along the way, what would I do? I mean, I don’t like fishing. I don’t like golfing. I don’t like sitting I like fast ADHD, fast, go, go go, changing lives. But I enjoy business and helping people more than anything else.

Adam Outland
I love that mindset. Often leaders are asked to share their best advice they ever receive. But I kind of want to flip that question. And ask you, what’s some of the worst advice that you’ve ever received?

John Hewitt
Wow, I the worst advice that I ever received, the one of the worst that when there’s, there’s a bunch of statements I really despise. And one of them is that’s the way we’ve always done, right? I’ve always been at the cuts of creativity in my industry and in DOD. And the people that I mean, the dumbest advice I ever saw, written and made me was the head of the US Patent Office 1899. He well, we might as well shut down the patent office, because everything that can be invented has already been invented. And this was in 1899. I mean, just the human beings inability to improve and, and be committed to improve and change in and just meeting tooth and nail, you know, one of our 10 principles is improve each step. And one one year, I had a sort of an epiphany. And I went to each of my leaders at their year end review. And I said, How do you improve? It was sorry, it was the salary state. It was like, I read two books, or nothing about change of behavior. And change is so hard for people and it’s it’s not the change. That’s hard. It’s the pain of change. Everyone I know virtually any every person I know if I say to them, Do you want to change? Do you? Do you want to improve? They’ll say of course I want in from of course. But just don’t ask me to change. Don’t ask me to get up earlier. Don’t ask me to eat their bread. Don’t ask me to exercise different. Don’t ask me to think different. Of course I want to improve. Just don’t ask you to change. You know, if you do what you always did you get what you always got. Doing the same thing and expecting different results is the definition of insanity.

Adam Outland
I love that one. And everything you just said about coming back to the original answer your question that one of the worst things for you to hear is well, that’s the way we’ve always done it. And I feel like that even points back to when you approach h&r Block originally with the software you design and said, Hey, you guys should should use this. And I’m imagining the response was something like, well, this is the way we’ve always done it.

John Hewitt
Yeah, in that in that annual report. They said people ask us why we don’t computerize why should we customers don’t care? It doesn’t save us any money. We’re never going to compare us. How could they be so inane to say, we’re never going to computer. I can see okay, we’re not going to computerize next year. What we’re never going to computer is how stupid is that?

Adam Outland
Yeah, that’s good. And then what’s a habit or practice that you feel has saved you the most time each day or made you more efficient?

John Hewitt
I’m like the world’s best at that. I’m more jealous of time than any human being you’ve ever met. So if someone says, sends me a question, I’ll say, Why are in I won’t bother. I won’t bother sending a long answer. And if someone makes the mistake of sending me an order question, do you want to do it on Monday or Tuesday? I’ll say I always say, to irritate them and to get them to change. I always say what you know that do you want to meet on Monday or Tuesday? I’ll say why not? Yes. Why? And so now they gotta come back. So my people they used to, I try changing for a little while, like Monday or Tuesday. I put one if I met Monday, and two of I met Tuesday, but some people couldn’t figure it out. So when my my staff sends me an email, and I wonder, do I want to meet one Monday or two Tuesday, so they have to type in one letter? And I don’t, the biggest savings is I don’t talk on the telephone. It’s almost impossible to get me to talk on the telephone. Now, when I say that I’m exaggerating a little. I talked on the phone maybe once or twice today, but I hate chit chat. I’m horrible at chit chat. I mean, let’s get down to business. Let’s, let’s talk I don’t really care how I mean, I tried to be nice. And how’s your family? How’s your child? I was your spouse and but I’m not good at what let’s get down to business. So not talking on the telephone. And answering questions very succinctly is my style. And so if you sent me an email, it could be 100 words, it was almost impossible for you to get more than 10 words back. I learned a valuable experience with with people that just like to vomit talk. I mean, I’ve had a couple of employees one person, one woman found me to the door the bathroom, she’d couple times she found me it’s in a car. And she’d be talking, I’d be shutting the door and driving away. And I realized that they’re so used to being there, the rude ones, and they’re so used to it, that it doesn’t bother me. But that didn’t affect them at all. The next day, they were the same way. Talking too much time is the only irreplaceable resource. You can replace gold and diamonds. And every time you can’t replace that.

Adam Outland
Last question to end with, with all this experience behind you, if you had an opportunity to sit down across the table with a 21 year old version of yourself, what what advice would you give that 21 year old version?

John Hewitt
Yeah. What are the ways that I’m different than other people? I never worry about what if I never go back and think about? I know, I know. I mean, because let’s say I give myself the greatest advice in the world and went out got hit by a bus. So don’t have any advice I’ll give. I’ll give this advice to every 21 year old, find something you like to do work hard, persevere. Life’s too short. A Monday morning, if you’re going to work and not looking forward to it, you’re going to the wrong place. So that’s the advice I would give each and every 21 year old. I don’t ever think about what if I had done something different. So probably somebody loves to do work hard, persevere.

Adam Outland
Great interview, great anecdotes. You wrote the book, I compete. And if people wanted to follow your journey or stay in contact with you in some way, what would be the best way for listeners to do that?

John Hewitt
Well, first of all, I’m on LinkedIn and Facebook and then get my book for free. I will send it to him for free. Just send me J O H N at loyalty brands.com and I’ll send him a free book.

Adam Outland
I’ll take you up on that. That’s great. I really enjoyed this conversation interview with you.

John Hewitt
My pleasure. Thank you.