What uncertainty did KPMG express regarding its ability to continue to rely on management's representations at Liberty Tax, Inc. (the parent company of Zoomin Groomin)?

According to Zoomin Groomin's 2025 Franchise Disclosure Document, KPMG, the independent registered public accounting firm of Liberty Tax, Inc. (the parent company of Zoomin Groomin), resigned on December 8, 2017. KPMG had concerns regarding its ability to rely on management's representations due to several factors related to John T. Hewitt, the former Chief Executive Officer, who remained Chairman of the Board and controlling stockholder.

Specifically, KPMG informed the Audit Committee and management that Mr. Hewitt's past and continued involvement in the Company's business and operations, including his continued interactions with franchisees and area developers of the Company, led it to no longer be able to rely on management's representations. This situation caused KPMG to be unwilling to be associated with the Company's consolidated financial statements.

KPMG also noted that certain information known to the Board regarding the reasons that the Board terminated Mr. Hewitt as Chief Executive Officer had not been disclosed to the current Chief Executive Officer and Chief Financial Officer. Because of this lack of disclosure, KPMG was uncertain as to whether it could continue to rely on management's representations. However, KPMG stated that it was not aware of any information that caused it to question the integrity of current management, but rather that the structural arrangement by which Mr. Hewitt controls the Company was the cause of KPMG's concerns.