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Did you receive curt or downright rude service when dropping off packages at The UPS Store this holiday season?
It may be they were coping with the holiday rush.
Or it may be that The UPS Store franchise owner hates your guts. 
After all, you who drop off UPS packages without buying anything are freeloaders. Non-paying leeches. Bloodsucking parasites feeding off the host of their life savings.
Commenting at the post Is The UPS Store a Good Franchise Opportunity?, the manager writes:
The person printing saving the 5.00 label is UPS customer and not a customer of the TUPSS…
THIS IS NOT A CUSTOMER. THIS IS A FREELOADER THAT WANTS US TO KEEP OUR STORES OPEN PAY OUR RENT SO THAT HE CAN GET LOW RATES FROM UPS YET HAVE THE CONVENIENCE OF US SERVICING HIM, ANSWERING HIS QUESTIONS, TAPING HIS PACKAGES.
Francois writes:
A person that comes into a store with a dropoff is not a customer, they have spent no money in that establishment, they are not supporting that establishment. The owner is well within his rights to charge for any ancillary service (which might normally be gratis to a paying customer) which assists the non paying leach…
financials writes:
It’s unfortunate that UPS chose to put the owner in the middle, and out of frustration, the owner now takes it out on UPS’ customer. (notice it is NOT the stores customer).
UPS Store Owners are Rightfully Pissed Off…
You can’t blame The UPS Store franchisees for being pissed off. They were sold franchises under the promise of building a local shipping business with the power and brand name of shipping giant UPS. Once they had invested their life savings, they claim the shipping giant undermined them by going direct to their potential customers with cheaper pricing. Instead of paying The UPS Store, many customers pay UPS directly, print out their own labels and drop their packages off at The UPS Store.
The UPS Stores, which receive $1.00 or less per drop-off, claim they’ve become glorified drop-boxes for UPS. And they’ve got a point…
…But Why Blame the Customer?
Some The UPS Store franchisees have let their justifiable anger at UPS undermine the service philosophy of their stores. They think they’re justified in being nice to shipping customers and rude to drop-off customers. Yelp! reviews of one CA The UPS Store show how these attitudes are not lost on customers:
Rated: 2/5 stars Customer comments:
“Good attitude if you ship from this store. Bad attitude when you just drop off the package to ship.”
“The lady here is not nice… it’s the first time I’ve ever been to The UPS Store. =( But probably not to this one again.”
“…she gave me attitude and said ‘you didn’t give me the business, and bring me in the trouble.’”
“Did I really need to be lectured twice…?”
“the lady behind the counter was pretty angry.”
“I’m not fond of being verbally abused”
“She’s ONLY nice if you bring an UNPAID package… avoid this place.”
Customer Abuse is Self-Defeating
While their anger is understandable, it’s both misplaced and self-defeating. The commenters who defend maintaining a “caste system” of customers are operating under two dangerous misconceptions. The first is that all people who drop-off packages are not customers, and the second is that you can be selectively rude without negatively affecting the reputation of the entire business.
Drop-offs aren’t customers? Successful shop owners don’t perceive customers as single, isolated transactions. They perceive the lifetime value of customers and potential customers. Low shipping revenue means that the store owners must work to maximize non-shipping revenue, such as document imaging, photocopying, mailbox rental, notary services, etc. Today’s drop-off visitor is likely tomorrow’s (or yesterday’s) purchaser of other products and/or services. UPS Store owners are missing the concept of the loss leader, getting potential customers into the store to sell them on higher-margin purchases.
Rudeness is anti-branding. Word of mouth marketing is critical, especially when times are hard. Imagine how many people leave the store above unhappy. Imagine how many people they complain to. Imagine how much business they send to competitors. The UPS Store franchisees need to realize that even drop-off visitors still provide powerful word-of-mouth marketing and referrals. It’s up to them whether they get the referrals, or their competitor does.
Some of The UPS Stores Are Doing It Right
Some of The UPS Store franchisees have decided to take a healthier approach to running a service business. They keep their ongoing battle between themselves and UPS, and focus on what successful b2b service businesses do: help their customers succeed. Consider the reviews of this The UPS Store in the same state as the one cited earlier:
UPS Store, Portal Ave, San Francisco
Rated: 5/5 stars Customer comments:“I… had the opportunity to witness them service other customers. They were great to all of them too.”
“I’ll definitely ship through this store from now on :)”
“I can tell you “ALL” of their staff are so helpful and great people. They treat all the customers that come there, even the crazy ones with kindness and professionalism.”
“I listen to them telling someone information that they probably repeat hundreds of time and just think, how they always say it in an informal nice way? I don’t know how they train or pick their people but it empresses me.”
“They win the award for best businesses in San Francisco for me.”
Which of these stores do you think does better financially? Which of these franchisees is happier (or less miserable)? And which has more credibility in building a case against UPS?
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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@Dropbox and Sean;
The stores that became a new franchise system, the TUPPS system, never had enough strategic planning to consider how to a) effectively disrupt the drop-off system without b) alienating the unsuspecting public, and c) doing so in a way which caused monetary damage only to UPS.
UPS is a notorious union busting company, so any collective action is difficult.
But, simply bringing it to the attention of the public that the drop-off is doesn’t make the franchise operator any money is not likely to fly.
Why should the public care? Although the McDonalds example is cute, it would be different if McDonalds gave away coupons on the internet and required its franchisees to redeem them. Oh, it does do that already!
Sean, as always, makes a good point!
If the public knew what UPS-MBE has done to the Moms and Pops who bought The UPS Stores or those MBE owners who were made an offer that they couldn’t refuse, they would be appalled and disgusted that “big business” like UPS would and could exploit and abuse the little guys so brazenly under the laws and the malicious binding but unbargained contracts that govern franchising.
If franchisees could ever get before juries and expose what franchisors are doing, there would be a change in the laws.
The public doesn’t understand that the FTC, in effect, with the FTC Rule “pimps” for explotive franchisors because franchisors are allowed to sell their franchises on the basis that there will be great profits and success and yet disclaim this in the package of the disclosure document and the actual contract. But, at the same time, they are not required under law to provide proprietory UNIT performance statistics to new buyers upon which buyers can access the odds of profitability or success of the investment. Lots of pigs and dogs are wrapped up in government disclosure documents. .
Wasn’t indentured service and slavery outlawed? Should multi-billion dollar corporations who have investigated building and operating their own retail outlets but rejected the idea as too expensive be permitted to buy a franchisor and exploit and use the savings and cheap labor and debt of “captured” franchisees to serve THEIR bottom line? —and then throw these “resources” away as needed because of their ability to CHURN an appearance of viability to new buyers.
But, of course, the public has no idea that these UPS Stores are independently owned. They think they are a division of UPS, and why wouldn’t they? This is the whole idea of franchising, isn’t it.
If UPS is shamelessly exploiting the retail store owners who wear their name, it is because the status quo of the law appears to allow them to do exactly this! When they advertise the UPS Store, using the contributions of the franchisees to the advertising fund, the American Public thinks this store is a retail outlet of United Parcel Service.
The public has no understanding that the little independent business person who rents the brand name has none of the protections of the law provided to either consumers or to employees or to big corporations –yet this independent business person bears all of the risk and expense of building and operating the physical business that wears the brand name and produces gross sales/royalties for the franchisor and shipping fees for the owner of the franchisor, The United Parcel Service –even as the franchisee is operating at a loss or teetering at breakeven.
The franchisors make their profits on the gross sales, NOT the PROFITS, of their franchisees and in the instance of UPS-MBE, both the franchisor and the owner of the franchisor, UPS, have done very well, as was their intention, apparently from the get go!
Yes, it will probably take a documentary on one of the main TV channels or a BIG story in the business media and the main media to EXPOSE what franchisors are doing to franchisees who are “duped” into buying unprofitable franchises because of government regulatory policy.
Maybe franchisees would be better off trying to use a PR campaign instead of trying to address the courts to bring about change, especially since the courts and almost 30 years of case law support the franchisor and his system. Something to think about! Might be cheaper and more effective than lawsuits —and better theater, at that!
I see where you are going. Yes of course it’s negative. However, it’s not the outcome. More like par for the course. Or losing a battle in the war.
The worst part about it is that federal judges need to get these cases off their books in a hurry, so the complicated cases often end up in appeals. Unfortunately, this takes more time and money for the plaintiffs.
Maybe I misunderstood. Last month’s ruling wasn’t a negative outcome for the franchisees?
What negative outcome are you referring to? There were three major cases. One case settled. The second went to appeals, which reversed the lower court’s decision, and they go to trial next month.
The last one will go to appeals just like the previous two. I’m guessing the outcome will be the same as long as the law is applied correctly.
Dropbox writes: …the average retail customer should be educated on what is actually going on here.
I think this is a great point. (And the McD’s example is great, too) Small business owners are an important part of the overall UPS customer base. How many of these small business owners really understand how UPS has treated the small business owners (their franchisees) who trusted them with their livelihoods and life savings?
When Pillsbury’s Haagen-Dasz tried to coerce retailers to drop the fledgling Ben & Jerry’s ice cream line, B&J launched a grassroots “What’s the Doughboy Afraid of?” campaign consisting of bumper stickers, t-shirts, an 800 number and a couple of hippies picketing Pillsbury HQ in Minneapolis. It was so successful, Pillsbury settled out-of-court and the press made the previously unknown Ben & Jerry’s a household name.
I’m sure most attorneys would have told Ben & Jerry to only do battle in the courtroom, and to not speak out outside official channels… in those stock press releases few people read. I’m sure the court case would have gone on for years while Pillsbury drained B&J of funds and ultimately prevailed. (Sound familiar?) Ben & Jerry’s could never have beaten Pillsbury in court, but their low-budget PR campaign worked immediately for no more than a few thousand dollars (if that).
I’m not saying that the lawsuits were not worth pursuing… or that the negative outcome was predictable… But I wonder if The UPS Store owners will be considering alternative ways of being heard. I’m sure they could have commissioned a heck of a documentary with even a portion of what they paid the law firms.
I invite all skeptics, to go to McDonalds with your own hamburger meat, ask the smiling associate to “just cook this for me and oh, could you throw it on a bun with a little ketchup”, do not pay them, and watch their reaction. Then have 50 people do this everyday for 5+ years and I guarantee they will either be out of business, or would be asking you to leave, and not with a smiling face. Now McDonalds Corp selling the hamburgers will still be in business making $$ because they are not supplying ANY of the Customer Service/supplies/labor/brick and mortar/utilities/taxes/equipment…After you do this little test at McDonalds, have the same 50 people take their own Starbucks coffee made at home to a Starbucks retail location everyday, and see how they react, they are not a franchise, so why would these employees care whether you bring your own coffee? Because if the Starbucks location doesn’t make $$ they are out of jobs!!! Name another retail store you can go to and have services provided for “FREE”?
This would make a GREAT documentary, the average retail customer should be educated on what is actually going on here.
I was one of those 455 store owners that closed since the change to the MBE/UPS Store concept.
I was an MBE and did reasonably well. Then the Brown monster arrived and you could see the writing on the wall. I had built another business while owning the store and used the store to my advantage until it was time to close at the end of my franchise.
I had compared the figures and I came out further ahead by selling all my equipment and inventory and got on with my life after 15+ years.
And MBE/UPS did not make any money off me if I had sold they would have made $50k, by closing I cost them thousands of dollars in royalties and fees that I did not pay.
Good luck to all. Happy New Year.
I can understand that some of you are skeptical with regard to the plight of the store owners. Why would UPS let these fail? Well, it depends on how you define failure.
How UPS/MBE works this scam is through the churn and burn. There are currently 4,300 stores domestically. From April 1st, 2003 (the time when most of the stores converted from Mailboxes,etc), until December 4th, 2007, 2,553 stores changed hands. Of those, 441 stores (17%) changed hands more than once. In addition, 455 stores closed, for a total of 3008 stores that either closed or sold.
If an owner sells his or her store for $1, is it a success? To MBE/UPS it is. That store is still in operation. In my experience, and I admit this is only an opinion, it takes the average owner one to two years before they realize that they’ve been duped. So then what happens? Sue, close, sell, or continue to complain.
Yes! Aleksandar M. Velkoski —-if you have never been in the position of working 12 hour days for six days a week to no avail ( but you are busy with lots of drop-off customers coming in and out of your store) because there is NO profit and you are NOT breaking even or just breaking even because you pay yourself minimum wage and your PT help as little as you can get away with, you really can’t empathize with these owners.
The UPS Store owners who break even because they pay themselves no wages or low wages have to stand in this status for the entire term of the contract, or try to sell the unprofitable store to another who thinks he may be able to break even because the owner will sell at a loss or a wash that will enable them to break even. Those who don’t break even, either first generation franchisees or later generation franchiseesm lose their entire investments and more if they are driven into bankruptcy because of their personal guarantees on the space and equipment leases and the franchise itself.
MBE/UPS knowingly sets a malicious legal trap in its contracts for its franchisees in both success and failure that ensures that they will always profit whether or not the franchisee is operating at a loss, breakeven, or a profit because their only interest is in producing gross sales for the system upon which they realize their profits. MBE-UPS disclose no UNIT financial performance statistics in their franchise disclosure document or actual contract and can hide the unprofitability of their units from new buyers.
Those who suffer from the malice of premeditated store churning but who are trying to save themselves to no avail are not inclined to put on a happy face when they are dying inside. Stores don’t fail overnight and there has already been several years of stress and pain in woking toward breakeven.
Even though the owners understand that the dropoff customers DON’T UNDERSTAND THAT THE STORE IS INDEPENDENTLY OWNED and NOT OWNED BY UPS, they are human and resent being USED for UPS profits at the expense of the store owners profits. They sometimes know that MBE-UPS are waiting for them to default so that they can take over the store for a third-party standing by who may be able to get to breakeven if he gets their business for nothing. It is not surprising that they don’t greet these drop-off customers with a smile because they are stressed out and sick at heart knowing what the future holds for them.
Many UPS Store Franchisees have already failed out of business and into obscurity. Some failed as well as operating franchisees are in court looking for justice. Those still working in their stores are hoping to survive. Some UPS Store Owners are making a profit, but how many? and who are they? and why are they making profits when so many (some say 77%) are not making profits and are in danger of failing?
Why is UPS still selling these stores to innocent prospects who have no idea of the unprofitability and the rate of failure of first owners of The UPS Stores?
Interesting article. I never really thought about why the above could be the case. I mean, I’m trying to put myself in the store owners position but I can’t logically agree with their actions. Maybe it’s because I don’t truly understand what they face on a daily basis, but based on the explanation above I’m not convinced.
Thanks to both Michael Webster and to Sean Kelly for their comments concerning the “screwing over” by UPS/MBE of “good faith” first owner franchise investors as well as former MBE franchisees who were made “an offer that they couldn’t refuse.”
While the first owner-buyers have taken the greatest hits, even those UPS owners who purchased “churned” units are suffering because of lack of profitability of the model and have been put at risk of losing everything by MBE-UPS who may find it more difficult to CHURN an appearance of the viability of their franchise network in the future.
It sure looks and feels like the whole idea of The UPS Store was an intentional tort that UPS believed could be committed with impunity and immunity under cover of federal regulatory policy and the status quo of law, process and procedure surrounding franchise law.
I accept Sean’s advice above; i.e. that it is still better to put on a happy face for the dropoff customers if you have a chance of breaking even, but I know that he knows that it is hard for the “drowning” TUPSS victims to put on a happy face when there is no life preserver in sight and it is almost the END and the statute of limitations has run out.
Christmas 2008 will not save TUPSS owners who are operating at a loss or the breakevens who are teetering on the edge of failure and loss of their entire investments. UPS will continue to profit even as they allow the UPS Store System to die of attrition. I believe that it was Richard Solomon of Franchise Remedies who suggested that this was their intention.
Lots of blood will be spilled in the future and yet MBE-UPS still advertises this unprofitable franchise in the business sections of newspapers and on the Internet and will victimize newly recruited franchisees under cover of federal regulatory policy that doesn’t mandate that they disclose the unprofitability of their units to new buyers of the franchise.
If the new buyers of The UPS Store franchise really understood how small a percentage of first- owner franchisees achieve breakeven, let alone profitability, within the startup estimates of MBE-UPS, they wouldn’t buy this franchise.
Hopefully, new prospects will be warned and will understand that the biggest corporations involved in franchising do not make voluntary disclosure under Item 19 of the Franchise Disclosure Document because they can then hide the unprofitability of the units from new buyers and use their visibility as prove of viability in the sales process.
This “trickery” is enabled by ineffective federal and state regulation of franchising.
I’m not defending UPS Store in the slightest. I think this is one of the most blatant screwing-overs in the history of franchising.
I also think this further exposes one of the destructive fallacies of franchising: That big name, established companies necessarily provide a safer opportunity and more benefits. Large companies like this, and others, like Quiznos, seem to act with little to no regard for those who’ve trusted them with their financial futures. Many people, like answering service here, can’t comprehend that a respected brand like UPS would act so callously – but they do. I think TUPSS owners are justified in seeking all available legal remedies. I think they also should be even more aggressive in spreading awareness and putting pressure by any means possible.
If individual store owners think they’re better off venting their animosity on people who come in to drop off packages instead of embracing the service philosophies of successful companies, by all means go for it. Let me know how that works out for you.
I am going to disagree with you on this one, Sean.
The UPS model forces a TUPPS to cheerfully service walk-ins who aren’t their customers, or go postal.
The psychic damage to the franchisee in either case is both premeditated and known.
There is a good case here for an intentional tort against the franchisor.
Which of these stores do you think does better financially?
-Cause and effect are not clear RE: this issue. Without a clear understanding of the issues involved (each situation to one degree or another unique). Employees are not likely to care about issues like drop-off (pre-paid) as opposed to paid (at retail) shipping. If you get an attitude likely it is from someone that cares about that issue (i.e. 6x12hr owner-operators). These people did not start out this way (owners with attitudes) but none-the-less find themselves there in spite of themselves as a result of total desperation. Do these issues affect business? Probably so.
Is the effect determinative of success or failure? Probably not, since the “attitude problem” is a direct result of “desperation” driven by a business model that no doubt has an atrocious profitability record to begin with. The question really is which stores are really profitable and how and why are they profitable?
The truth is that full-pay, original franchise owners, who bear the cost of opening the franchise and “the hurdles” of the first couple of years of operations are probably a minority of these “profitable store owners”. A store that cost $300,000 to open is a lot easier to run profitably if you buy it for $10,000 and leverage UPS/MBE because (just between friends) you are doing them a favor.
Owners of a particular kind/profile are steered to these “subsequently churned” units by MBE. These new owners use the stores current status to cut a deal that “meets their needs” otherwise “no deal”. Most of the sacrifice is made by the store owners the remainder by MBE. UPS still have what they want, an open retail location. And MBE still has an operating unit that pays royalties. The franchisee has usually lost everything and sometimes this is literally evvvvvrything.
Which of these franchisees is happier (or less miserable)?
The answer is clear. But to suggest that their actions and attitudes are what make them happy or less miserable is probably missing the point badly. If you are interfacing with employees that right there is an indicator. That store can afford to hire employees. To assume that happiness is the problem and the result is poor business is misinformed at best.
And which has more credibility in building a case against UPS?
This/these issues (in the real world of franchise law) would have “no material bearing at all. Think what you like but it is really the farthest thing from reality that being nice to customers would have anything to do with how UPS treats you RE: issues that effect the bottom line. Will they take retributive action for non-approved actions (i.e. customer care standards)? Yes. Will they help you when you tell them that you are on the brink of loosing everything and this is what makes you “cranky”? NO.
It’s a shame that the UPS stores didn’t quite catch on but they are what you mentioned in the article – glorified drop off boxes. Sure, there are the occassional customers who come in needing the full “package” (i.e. box, peanuts, etc.) but most people will save money by packaging @ home then taking your box to the store to ship.
It is understandable that the owners of these stores are irritated but I highly doubt UPS – the shipping giant – would make empty promises to these people about expected profits. I’d like to speak to an owner about the franchise pitch they bought into from UPS.