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ATAX founder turns Mom’s $20 into franchise


Rafael Alvarez accepting the Ronald E. Harrison Diversity Award from the IFA, which he called a “great, great, great honor.”

When Rafael Alvarez decided to start his tax preparation business in 1986, he told his father he needed $20,000. The reply: “Are you kidding me?” But his mother was on board. “You know what, my son, I believe in you,” he recalls she said. “I don’t have $20,000, but I have $20.”

Alvarez took her gift and then hit up 35 friends from college to each lend him $1,000. “I was able to collect $18,000, personal loans from my closest friends,” Alvarez says. “And then I opened up my first location and then after the tax season, I made enough money to pay everybody back.”

Support systems added

Alvarez came to the Washington Heights neighborhood in New York as a teenager with his Dominican Republic family, and has come a long way since. Today he’s set to expand his ATAX franchise, which offers tax preparation and other services, now with 40 locations in seven states on the East Coast.

The move follows several years building a team, hiring a CFO to restructure company finances, adding training services to better support franchisees, and otherwise solidifying his system.

Headquarters is in Yonkers, New York, just a few miles from Washington Heights and his original store, now run by one of his sisters and still the flagship. “I’m there every day” in the neighborhood, he says. “I’m part of the community” and the neighbors watch his progress.

“They are counting on me in a way. They are proud that one of them has made it so far when so many have failed.”

A rough neighborhood

Washington Heights has changed a lot since his teenage days. “It was a very rough neighborhood. A lot of my friends didn’t make it, they ended up in jail. Just a handful were able to survive, and I made it thanks to my parents’ wisdom about the value of education,” he says.

“My dad was all about school, school, school. Homework, homework, homework. No hanging around on the street,” Alvarez says. His late father worked construction and drove a taxi, “working around the clock trying to make enough money.” His mother, who still lives in Washington Heights, worked in a clothing factory.

Alvarez is the 2015 recipient of the Ronald E. Harrison Diversity Award from the International Franchise Association, which he calls “a great, great, great honor. It was very emotional for me to see my wife, to see my daughters, for them to be there and to see me get that particular award. It is very special,” he says.

An e-filing pioneer

ATAX’s first tax season was in 1986, which coincided with the launch by the IRS of the first electronic filing program. “I was able to purchase a primitive tax preparation software. Back then everything was done with the dot-matrix printer. There were layers of carbon paper, if you remember that,” he recalls.

Room for all

His franchise doesn’t target only Hispanics as customers and franchisees, but that fast-growing demographic will always make up ATAX’s core. He’s not worried about Siempre Tax+, the new franchise rolled out by Liberty Tax to target the same market.

“Hey, I always welcome competition,” he says when asked about Siempre Tax+. “It’s good to know that people are starting noticing the Hispanic community as a valuable component of the economic engine of this country.

“Like we say in Spanish, el sol sale para todos. The sun rises for everyone,” he says, and he hopes that includes many more people who will buy into his system.

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