Outside of tax season, the company's main sources of revenue are franchisee fees and interest income. The latter, at nearly $3 million for the quarter, was up from $2.6 million a year earlier and was the largest source of revenue. Franchise fees fell to $2.3 million from $4.2 million. CEO John Hewitt also said that company did not get much help from its deal to go into 300 Wal-Mart stores because that contract was concluded late in the quarter.

"More franchisees are choosing rent-to-own for expansion in Wal-Mart," Hewitt said during this week's earnings webcast. Revenue from that source will not be recognized until the fourth quarter when the operators make a decision on purchasing those sites.

With Liberty ramping up for tax season, the decline in revenue coupled with higher expenses led to an increase in its loss. JTH reported a loss of $6.7 million, an increase from $4.2 million in red ink in last year's corresponding period.