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Franchise Pick reader LEE recently shared this post:
I’m a Vet who has paid the initial UPS Store franchise fee, and although I thought I had performed “due dilligence” before making the commitment, I fear that I may be embarking on an expensive journey to nowhere. Does anyone know how hard the franchisor “comes down on you” if you decide to bail before signing a lease or legal franchise documents? I’d rather take a hard hit now than a knockout punch later.
Several current UPS Store franchise owners shared their advice:
frozenokiewi wrote:
Run now while you can…I have been doing this for 6 years changed from MBE to UPS Store in 2003. We have two stores and neither can break even. You cannot get out once you are in…eat your loss and run for the hills! Bid on some oceanfront in Arizona it would be a far more entertaining waste of money. PLEASE back out now.
cgpeanut wrote:
take the hit now from a fellow owner. this franchise is a nightmare at this time.
ACE wrote:
Listen to your gut, don’t get sucked in any deeper.
Take everything you got in writing and all contemperaneous notes you made as to what you were told to a good attorney and see if feels you have basis to rescind all agreements and get your deposit back.
If MBE is convinced that there is some risk to them, they will fold and give your money back. In any event, don’t throw good money after bad by going forward with leasing a location, going to UPS University and all that crap.
The loss of a deposit pales in comparision to what you can lose going forward in something you do not have confidence in. The losses can be more than financial.
Jim Brown wrote:
We’re not being negative, we’re just trying to save as many people as we can from our own fate. Think of owning a ups store as being an indentured servant: Working for free for your master. Do whatever you need to to stay far, far away.
Wontbefooledagain wrote:
Lee, call a lot of UPS Store owners; don’t just talk to the ones that the folks
at UPS/MBE recommend. Talk to some that are in locations similar to those
you’re considering, and have been in business at least three years to five
years (That’s when reality starts to set in.) You needn’t have lengthy, in-
depth conversations, though that can’t hurt. But be sure and ask the simple
question: “If you had this to do all over again, would you?”
James Dunn wrote:
You should count your blessings. I wish I had ran and only lost the $7500 fee.
These store have no value. After you beg and borrow 300k before you go out of
business you will find yourself broke and destitute. When you try to sell you
will find how worthless these stores are. I think it’s a sin that UPS is
targeting vets now. These criminals have no soul.
So far, there have been no positive comments encouraging LEE to move ahead with his investment with the UPS Store franchise. Anyone out there have anything good to say about this franchise? Should Lee move forward, or cut his losses?
Share your insight. Leave a comment. [Thanks to all contributors]
All of the negative comments about UPS/THE UPS STORE are correct. My stores headed down the drain after implementation of Gold Shield business model. This model was significantly different from the MBE model. UPS changed the rules in the middle of the game even though the independent research UPS had commissioned told UPS going to this new business model may put up to 70% of the stores out of business. They withheld this information from us. Before locking up my stores I had 2 signs in the stores, ‘AT THE UPS STORE, WE DON’T SHIP, WE SINK’ and ‘I DIDN’T KNOW UPS ATE ITS CHILDREN’. It boils down to this, the average UPS STORE cannot pay its rent on shipping, what good is it. SO be forewarned before buying one!
I feel that UPS is not ethical. In my eyes they are ruthless and unfair. I own and operate my own store, TLC POSTAL CENTER, in Atwater Ca. I built a great ups shipping business up for about 10 years, and electronically did my end of day to UPS every day. They knew that my business was doing well and then they opened aa @#@$ UPS store up right across the street from me! It is my opinion that an ethical business person would not do that.
I would love for anyone to share inside information with me such as printing pricing for large volume print jobs, ups pricing, and any other information that would help me to compete with them and cut into their printing business. Other than that I now offer more choices than the UPS store, FedEX, UPS, and U.S mail. !! It’s still good to be my own boss, and I am not going anywhere UPS store, so dig in your heels and know that every day you are not making as much money as you could have by being in a different location!
does anyone out there have some up dated information on a ups franchise, this is 2011 u know? my wife works part time in one of these stores that grosses about $260,000 a year the way she figures it out the ower looks to make 40 or 50k a year and wants to sell and retire. what is she figuring wrong?
I am quite surprised to see all those comments about people losing money with UPS Stores. My family has owned one for almost 10 years and we have made money every single year before and after the switch to UPS. In fact since we bought, we have had 4 other friends and relatives buy their own stores and they are all doing fine. Just wanted to offer some balance in the comments, seems like it is possible to lose money in these stores but it is also possible to make money!
UPS to finally face the jury! Trial begins April 26, 2010. After a 7 year wait, Mail Boxes Etc franchisees will get their day in court. To show your support, follow us at http://www.twitter.com/upsontrial, facebook and share with your friends. Become a facebook fan of Platinum Shield Association. Did you know that at the time of the 2003 conversion, there were over 3500 MBE stores in the United States. Today there are LESS than 80!!!
See the video….
http://www.youtube.com/watch?v=6dMgO7eGXq4
Read more about what franchisees say about the UPS Store franchise opportunity at Unhappy Franchisee dot com.
You are so full of brown matter you must be an employee in SAN DIEGO.
Don’t do it! UPS does not give you a chance to run your own business. You have to go with their approved vendors. You are told what you can sell in your store. What hours you must maintain. UPS does not look at what sells in certain areas, they want all the stores to have all the same items. You have to invest in their advertising even if it is not suitable for your area. A friends of mine has a son who has a degree in Graphic Design and Advertising. Her fiance offered to hand him over his store. There is two more years left on the lease then he can either renew or completely go on his own. He looked into what UPS would allow him to do, which was not much! He declined. My friend is releived he declined. Imagine turning down a business which is handed to you even though you don’t have to continue with the UPS name after two years. That should tell you something! If anyone knows of any lawsuits against the UPS Store, please share — my friend and her fiance are at their witts end. They have used their retirement to keep afloat. They also make you update your stores every few years which could be as much or more than $40K and before you can sell it has to be updated. Also, there are no benefits. You would think you could get into the group plan with the UPS drivers but you are not eligible so that has been another expense for them. Feeling for my friends — and all their stress!!!
This is based on canadian experience but i hear it is all pretty much the same in the USA.
My own very negative experience mirrors many others. Because there are a few success stories do not be fooled. The business model serves UPS well and The UPS Store poorly. We sold out ( at $ 125K loss) in Dec 2008 and thrilled to get out. One UPS Store exec advised that a third lose money, a third break even and a third are profitable. If you understand accounting that means two-thirds of the stores are WORTHLESS in that no one can make any more than a salary and likely not that – a new owner cannot pay a dime and have revenue to pay off the 10cent debt.
Understand clearly that drop-offs are killers and they generate insignificant revenue compared to a LOT of work. Second is that UPS has many subtle ways of soliciting your regular shippers and getting them on corporate accounts and they become drop-off customers – you get a buck when they come in with open packages, no tape, no customs form , etc etc and they are typical one-visit clients. These two issues are the killers and you cannot fight it.
The best advice I have seen on all these sites is simply: If you are silly enough to even think of a UPS Store franchise just speak with at least three other stores that are 3+ years in operation ( not a store they lead you to) and ask them if they would do it again. End of story.
If I could go back in time, I would’ve never opened one of this stores. Never ever!
It is a very very veeery expensive school of the “know-how” of how franchises work.
I have owned a UPS Store for 3 years and it broke even in 18 months. At the end of the 3rd year each owner (2 of us) were paying over $5000.00 in general expenses, such as cell phones, travel, dinners, etc… plus we paid each owner $5000.00 each in owner dividends. We anticipate paying owner dividends of $10,000.00 at the end of this year. Our basic investment was $200,000.00 and believe at the growth rate we are having we will make back our original investment in 5 to 7 years, plus covering many out-of-pocket expensed that we were paying out of our personal pockets in the past. Because of our success we have now purchased a second store in our market and think it will meet with the same level of success. It is important that the owners stay involved in their stores and get our in the local community and neighborhood and make sales calls and market the store. Success comes from hard work not standing behind the counter.
Every MBE/UPS document starts with a legal disclaimer – that should be your first clue!
Location is everything and there are very few UPS Stores that are making money right now. In the SW most stores are in high rent shopping centers and sales are off 30 to 50% so good luck making any money. In the current depression people are not shipping anything so life is very tough. That is why so many stores are for sale.
Fids something else!
I should have realized that there are more stores than myself suffering the same fate that we are. We have been in this operation for quite some time and still have yet to realize what we thought was our dream business. I am sorry to say that we are deep in debt and have to juggle monies every month to try and pay our creditors. I’m often wounder if the powers that be care whats going on with the franchise owners. I personally think that since the franchise is currently owned by BIG BROWN they can eliminate the AREA owners as they have their own personel that could do the job much more economical? Just my thoughts.
My husband and I are on the verge of buying a UPS Store franchise in an area where none exists nor do any Kinko’s/Fed X. Should we continue with this or would it be a waste of our money and time?
Are UPS Store franchisees making a bad situation worse?
THE UPS STORE Franchisees: Drop-Offs Can Drop Dead
Dave Thomas,
Too bad you didn’t look around a bit more. Not all of these store are losers. For example, I am located in the Phoenix area and STR exceeds 700K, and I am very profitable, and have been ever since the changeover. Sadly, most stores have a different story to tell. Sometimes you just have to kick the rocks around a little more to turn up that gem.
What do you think?
The UPS Store Franchise: Follow the System and Succeed!
The UPS Store Franchise: This Dog Won’t Hunt!
I will only comment on the MBE’s suits by saying this: It appears that they are going well. one of these has a class component on behalf of the converted stores.
The UPS store’s suit does not have a class component. It is scheduled to go to trial in federal court in September, 2008.
Anyone have any knowledge of the pending lawsuits? After getting classified as class action, the suits have dropped out of the news. It’s been going on for 5 years now.
I would say DON’T BUY INTO THIS FRANCHISE!! Now whether you choose to listen to all of those that say don’t or just do it anyway because you think you know more than those of us with years of corporate experience, MBA’s, PHD’s etc, then I have a store for sale right now. People, these stores are a nightmare. Have you found any website or blog from owners who do nothing but talk about how wonderful they are and how much money they are making? If so, post it here.
My life has been ruined on so many levels after buying a new store, not a transfer. You may make money right from the start, no question. But in order to do that, you must be in the right location at the right time and that will be like knowing the numbers in the lottery. Those stores are 1 out of every 200 maybe, can you risk that? I can tell you that I made a bit over $45K in December (busiest month). Sounds like a lot to a newcomer…I still have bills that I cannot pay from that month. Most stores make around $18K to $28K a month, more in December. If bills cannot be fully paid on $45K, what do you think happens the rest of the year? Put your money into a CD and wait another year, read these posts, and then look at things again. I can assure you, by 2009, things will drastically change again and not for the better.