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(FranchisePick.Com) According to a story in the Orlando Sentinel, UPS Store owners are angry.
In fact, more than 200 owners of UPS Stores across the country have filed a complaint against UPS and its franchiser, Mail Boxes Etc.
[Graphic: The UPS Store franchise banner]
In a filing in U.S. District Court in Los Angeles, the franchise owners said that they haven’t been able to make money because UPS undermines them, using the branded stores as drop-off points for prepaid packages and forcing the owners to focus on providing low margin services, like printing and document preparation, that they aren’t geared to provide.
Retirement Dream Ends in a Nightmare
The article tells the sad tale of Chuck Wilson, who used his retirement savings to relocate to Winter Park, FL from Baltimore to own the UPS Store there. His dream turned into a nightmare. after losing nearly everything, Wilson has taken a job with an electric company and moved into a trailer park in Clearwater.
“I never made any money at all the whole time I was there,” he said. “We were getting so desperate for ways to make money.”
“We’re so counting on this lawsuit, to somehow recoup all the money we’ve lost in this whole thing,” he said.
Whatever the result, it probably won’t come quickly.
It can take months, and sometimes years, for a complaint to be certified as a class-action suit, and for the lawsuits to be resolved.
Ellis Abide, who had a UPS Store in Orlando’s College Park area for more than three years, says he also became disenchanted with his investment.
“That wasn’t clearly stated, that I would be a glorified drop box,” Abide said.
Separate Suit Alleges Overbilling of Franchisees and Customers.
Another complaint filed May 2 in U.S. District Court in San Francisco contends that UPS overbills its franchise owners for shipping rates.
“Once you get in the store, you realize UPS is charging you more than everybody else,” said Wilson, who said it wasn’t uncommon for customers to balk at — and walk away from — the prices he offered.
But when the franchise owners started to complain, they said UPS had an answer for them.
“They’d say, ‘You have to get your profit centers going,’ ” Wilson said. Owners said they were encouraged to rely on their copy machines and document and printing services to boost revenues, but said consumers see “UPS” in the stores’ names and associate them with shipping, not document work.
[Also see: Is UPS Cheating its Customers, Franchisees… and YOU?]
High Dollar Bait & Switch?
The UPS Store franchise owners are just hoping to get back some of the money from their initial investments — which for some was $150,000 or more. They believe they’re victims of a bait and switch scheme perpetrated by one of the nation’s most reknowned brands. According to one franchisee quoted in the article:
“What I was told and what I was sold were two different things”
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CAN ANYONE EXPLAIN?
WHY A POWERFUL PUBLIC COMPANY LIKE UPS – ONE THAT SPENDS MILLIONS EACH YEAR PROMOTING ITS IMAGE TO BUSINESS OWNERS – WOULD RISK PUBLIC BACKLASH BY COMPETING WITH ITS FRANCHISEES?
COULDN’T THEY HAVE DEVELOPED A BETTER, CHEAPER DROP-OFF NETWORK?
WHY CHANGE THE NAME TO UPS (SHIPPING) IF THEY WANTED TO COMPETE FOR PHOTOCOPYING BUSINESS?
COMMENTS WELCOME.
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I bought a UPS Store franchise in 2006 and ran it for 4 years. Refinanced my house,cashed in my 401-k and sold $30,000 worth of stock to try and keep the store going. I never made a dime but lost my life savings. Isn”t there an agency that keeps track of these worthless business and why do they let them keep selling them. I need some information on joining a class action lawsuit against UPS and MBE. Buy the way I closed the store and am filing for bankrupcy.
Ralph, that is aweful news. I can’t tell you how I hate to hear of your situation. I am in a small town in the southeast and own an independent shipping store for the last 13 years or so. I’ve seen ups anbd downs, but have never had to seriously consider closing although I would presently sell my store and find something else to do.
About 6 years ago a local hardworking lady bought an MBE across town and converted it to a UPSS. She went broke and closed it 3 years ago. She said UPS worked against her and pretty much bankrupted her. I looked into buying one a few years back but after studying the books couldn’t see the profit. About 8 months ago some guy opened a huge, brand new UPSS about 3/4 miles from me. He must have spent $200,00 putting that store in place. He even had a door cut in the side of the building to support his mailboxes. Presently, I do not know how he is doing, but can tell you the economy in my small town is very poor. I don’t see how he could possibly pay all the fees, pay bills, make payroll, etc. with such a big investment. I’ve done much research and find it crazy that a person would ignore all the negative press on the net and get in bed with UPS.
Perhaps you could shed a little light on the attraction of UPSS for a potential investor?
Want to get screwed? Have alot of money that you need to get rid of?
If you pay sticker price for cars, donate money to organziation that you have never heard of that call you during dinner, or have always wondered what its like to file bankruptcy, then we need to talk.
The UPS Store could be just the opportunity that you are looking for. I can assure you that I will do everything that my boss tells me to do to ensure that
you get screwed out of every nickle you have ever earned. Call me(858)455-8800 or write to me: Stuart Douche
Chief Puppet Officer
MBE Headquarters
6060 Cornerstone Court West
San Diago CA 92121
Even if they never buy a thing, here are some good reasons to treat drop-off customers right.
THE UPS STORE Franchisees: Drop-Offs Can Drop Dead
kindly confirm for me if the following address brought some phones for shipping to me and you’ve put them on hold for some reason;- Sandra Gomezi, wpm stocks Inc., 2008 North A1A, Highway Indialantic, Florida 32903 USA.
My details NAPSA BOX 730178 KAWAMBWA ZAMBIA.
Which is it? What do you think?
The UPS Store Franchise: Follow the System and Succeed!
The UPS Store Franchise: This Dog Won’t Hunt!
I just dropped a small package at a UPS Store today, it weighed 1.6lbs and was not very large. They charged me $13.02, UPS website quoted me $10, and I could have sent it postal for about $8, although I wouldn’t have had tracking.
I won’t use the UPS Store anymore, they’re just too expensive…now maybe I understand why.
1661 days ago
[...] June 13th, 2007 UPS Store Franchise Dream Ends in a Florida Trailer Park [...]
I’ve enjoyed recent visits to BrandCurve.com (check it out everybody) and meant to comment sooner.
I’m familiar with Monkey Joe’s, and featured them on my http://www.topnewfranchises.com blog. I’d love to interview your franchisee friend (invite her to email me at info[at]ideafarm.net).
Monkey Joe’s is part of Raving Brands, a very creative restaurant franchise group that founded and recently sold Moe’s Southwest Grill. I’d be interested in learning how your friend is doing with it.
I thought about mentioning your post to our UPS guy this morning, then thought better of it…
Hi Sean,
Thanks for commenting on my UPS post at Brandcurve.com. I’m glad you led me to your blog, which is chock full of great info! I was curious if you’ve heard of a new franchise in Central Florida called Monkey Joe’s. I have a friend who lives in Georgia who loves to take her son to the local Monkey Joe’s (www.monkeyjoes.com), and I can’t wait to take my kids to the one that opened near us. Not that I can afford it, but it sounds like a cool franchise.
1789 days ago
[...] Share This [...]
I’ve worked with a number of large corporations (not UPS) that acquired franchise chains It can be very difficult for them to understand the nuances of working with franchise owners – or respect their concerns – as they are relatively small cogs in their very large machine.
An important lesson for those looking to buy in to a specific franchise. What are the current owner’s exit plans? Who would be a likely buyer? What are your rights,if any, if your franchisor is acquired?
Sean,
“WHY [Would] A POWERFUL PUBLIC COMPANY LIKE UPS -…- RISK PUBLIC BACKLASH BY COMPETING WITH ITS FRANCHISEES?”
Because of that one word – “Powerful.” They’re no different than any other greedy, self-consumed corporate outfit. Somewhere along the way they may have developed an attitude so prevalent in “Big Business” today.
They are above the law and reality!
Hopefully, as things like these tend to do, it will return to bite them in the a$$, if indeed these allegations are true.