THE UPS STORE Franchise Warning: It’s a Scam Claims Franchisee
April 1, 2013
THE UPS STORE Franchise Warning: Franchisee calls it a scam designed to make money for UPS at the expense of its franchise owners.
UnhappyFranchisee.Com has received another in a long line of complaints about The UPS Store franchise opportunity.
This UPS Store franchise owner even read the many warnings here and elsewhere about The UPS Store, but let himself be convinced by the franchise salesman that the complaints were unfounded.
He and his wife proceeded with the purchase of a The UPS Store franchise and have regretted it ever since.
He claims that UPS controls every aspect of his business, and has engineered the entire business model to make sure that UPS gets maximum profits while he is bled dry.
Do you have any experience with The UPS Store franchise – good or bad? Please share your experience in the comment section below.
The UPS Store Franchise “should be against the law.” – UPS Store Franchisee
The UPS Store Franchise Owner writes:
My wife and i purchased and opened a UPS Store.
I read some of the bad comments on line but was assure by the local UPS Store Franchisee that they were not true that was only one of the things he told us that wasn’t true.
I only have one thing to say. The UPS Store is a huge money maker for UPS and not the store owners.
They drain you and drain you of both money and energy.
They say you are self employed but control everything you do from the time you walk in the door until the time you leave, You work for UPS but receive zero of the rewards.
UPS makes money on everything you do and the items they make you buy from them, which is everything.
They require you to use systems they approve for everything and get kick backs from the services you are forced to buy.
Financially they drain your accounts with everything you have and don’t care if you can feed your family or not.
They take shipping from you and call you a "Print Shop" but require you to buy inferior equipment a real print shop would not get caught dead with.
I could go on for a very long time but I’m sitting here in my UPS Store knowing how they have taken advantage of me and my family should be against the law.
More on The UPS Store franchise:
THE UPS STORE: How Much Do UPS Store Franchise Owners Make?
THE UPS STORE Franchise Complaints
Are THE UPS STORE / MAIL BOXES ETC. Franchise Owners Happy?
ARE YOU UPS STORE FRANCHISE OWNER OR FRANCHISEE? ARE YOU FAMILIAR WITH THE UPS STORE FRANCHISE OPPORTUNITY? SHARE A COMMENT BELOW.
TAGS: The UPS Store, The UPS Store franchise, The UPS Store franchise complaints, The UPS Store franchise warning, UPS Store complaints, UPS store lawsuit, UPS store unhappy franchisee, unhappy franchisee, unhappyfranchisee.com, UPS franchise scam, UPS Store failure rate, UPS store franchise cost
THE UPS STORE: How Much Do UPS Store Franchise Owners Make?
June 4, 2012
The UPS Store ads call The UPS Store franchise “the perfect opportunity to be your own boss,” a way to “take control of your business future & benefit from a world-class support system.”
How much do The UPS Store franchise owners make for their initial investment of $154,947 – $293,473, ongoing expenses and sweat equity?
According to an one ex-franchisee: not much.
“Former Store Owner” calls The UPS Store franchise a “dirty little scam” that basically exploits wannabe entrepreneurs by seducing them with visits to exceptional, high-volume stores, then, once they’ve signed up, squeezing the profitability out of their stores with mandatory purchases and exorbitant royalties.
Are you familiar with The UPS Store franchise opportunity? Please share a comment below.
To make matters worse, says “Former Store Owner,” their namesake shipper competes directly with franchisees by encouraging consumers to print out their own labels from home and simply drop off their packages at The UPS Store. The UPS Store franchisees get only $1.00 per drop off package, and are cut out of any share of shipping revenue.
Here’s the account we received from “Former Store Owner”:
I remember visiting the area stores and being allowed to ask questions with the area guy standing right there listening. The store owners would not speak freely and would ONLY answer what WE asked. So you had to know what you were looking for. So later, when people came to our store alone and asked about the franchise… we told them the truth and they ran for the hills!
We were driven to all the top performing stores and were duped into thinking this will be us. Little did we know that few stores make that much. Many owners that do OK only get about $40,000 a year. My wife had a job making 60,000!!! We owned the store for a few years and we made NOTHING, zero, nada!!
Here are the problems with the franchise…
They opened way too many stores that have to now compete with each other!
You are FORCED to buy overpriced equipment from the home office. You could easily buy it elsewhere for way less.
You are FORCED to obtain color copiers where you lose money each month. There are already businesses dedicated to this service and you cannot compete.
But here is the biggest dirty little scam!!!
The royalty fee is 8.5% of the gross sales. You are allowed to deduct the cost of stamps and packaging materials. You get 40% of ground package and 50% of air package costs. Shipments are the bulk of your business income.
Sounds great, right?
OK, if you shipped $20,000 in packages you have to pay the UPS 50-60% of that in your next bill so you never earned that money. You really only took in say $10,000.
But you pay a royalty on….. wait for it… $20,000!!!! So the 8.5% royalty is really 17% and that is nuts!
The store shipping rates are the same as the counter but they will NOT advertise that EVER! Many people still believe the outside stores charge more and.. they do!! All of those that are not UPS Stores.
At one point.. UPS was charging people 10% less than the store if they printed their label online. They drop it off at your store and you get… $1.00. But the customer would want YOU to tape their box.. for FREE! So UPS was making out at your expense.
We sold the store a few years ago and now… they have since been evicted and the store closed!
ARE YOU FAMILIAR WITH THE UPS STORE FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
THE UPS STORE Franchise Owners Lose MBE Lawsuit
December 16, 2011
In 2006, a group of approximately 200 franchisees of "The UPS Store" franchise, sued franchisor Mail Boxes Etc., Inc. ("MBE"), United Parcel Service (UPS) and other UPS subsidiaries, alleging that (among other things) “MBE and UPS made untrue
statements of material fact and omitted material facts from various communications made in connection with the offer and sale of the franchises and in connection with the conversion from the old franchise model to the new "The UPS Store" franchise model.”
The UPS Store franchisees claimed that after its $190 million acquisition of MBE in 2001, UPS coerced and induced MBE franchisees to re-brand to The UPS Store model through its Gold Shield program.
The district court granted summary judgment in favor of Mail Boxes Etc., Inc. and UPS on all counts
The franchisees appealed the summary judgement.
The US Court of Appeals, 9th Circuit, handed down its decision last week affirming that the UPS Store franchise owners failed to prove their case.
The court decision is posted below.
More on The UPS Store franchise:
THE UPS STORE Franchise Complaints June 23, 2011
Failure Rates of the 10 Most Popular Franchises April 26, 2010
UPS STORE, MAIL BOXES ETC. Franchisees File Class Action Suit November 12, 2009
Are THE UPS STORE / MAIL BOXES ETC. Franchise Owners Happy? August 10, 2009
THE UPS STORE: Overview August 10, 2009
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SAMICA ENTERPRISES LLC v. MAIL BOXES ETC., INC.
SAMICA ENTERPRISES LLC, an Illinois Limited Liability Company; et al., Plaintiffs-Appellants,
v.
MAIL BOXES ETC., INC., a Delaware corporation; et al., Defendants-Appellees.
No. 10-55433.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted November 9, 2011 Pasadena, California.
Filed December 1, 2011.
Before: SCHROEDER, REINHARDT, and MURGUIA, Circuit Judges.
NOT FOR PUBLICATION
MEMORANDUM*
Appellants, approximately 200 franchisees of "The UPS Store" franchise, sued franchisor Mail Boxes Etc., Inc. ("MBE"), United Parcel Service ("UPS"), and other UPS subsidiaries (collectively "Appellees"), alleging various state law claims. The district court granted summary judgment in favor of Appellees on all of them. Appellants timely appealed. We affirm.
Appellants brought claims under the California Franchise Investment Law ("CFIL") and common law fraud and misrepresentation, alleging that MBE and UPS made untrue statements of material fact and omitted material facts from various communications made in connection with the offer and sale of the franchises and in connection with the conversion from the old franchise model to the new "The UPS Store" franchise model. Reasonable reliance is required under Cal. Corp. Code § 31300, the CFIL section imposing liability for misrepresentations made in franchise documents, as it requires that the damages to the franchisee be "caused []by" the misrepresentations. See Mirkin v. Wasserman, 5 Cal.4th 1082, 1092 (Cal. 1993); Younan v. Equifax Inc., 169 Cal.Rptr. 478, 487 (Cal. Ct. App. 1980). Reasonable reliance is also required under Cal. Corp. Code § 31301, the CFIL section imposing liability for misrepresentations and omissions made in other communications related to the offer or sale of a franchise, as that section requires that the franchisee, "not knowing or having cause to believe that such statement was false or misleading," have "rel[ied] upon such statement." In a well-reasoned, but unpublished, district court opinion, Judge Margaret Morrow summarized the rule: CFIL "incorporate[s] the reasonable reliance requirement of the common law." California Bagel Co. v. American Bagel Co., 2000 WL 35798199, *1, *18-*21 (C.D. Cal. 2000) (unpublished). Finally, it is well established that reasonable reliance is an element of common law fraud and misrepresentation claims. See City of Industry v. City of Fillmore, 129 Cal.Rptr.3d 433, 450 (Cal. Ct. App. 2011); Wells Fargo Bank, N.A. v. FSI, Fin. Solutions, Inc., 127 Cal.Rptr.3d 589, 600 (Cal. Ct. App. 2011). Because Appellants have presented no evidence showing that they reasonably relied on any alleged untrue or misleading statement, Appellants’ CFIL and common law claims fail.1
Appellants brought an additional CFIL claim under Cal. Corp. Code § 31125 for failure to register the amendment to the franchise agreement in connection with the California franchisees’ conversion from the old franchise model to the new "The UPS Store" franchise model. Appellees argued before the district court that the registration claim was barred by the one-year statute of limitations pursuant to Cal. Corp. Code § 31303. Appellants failed to address the statute of limitations bar before the district court and, specifically, failed to oppose Appellees’ motion for summary judgment that was based on the one-year provision. Moreover, Appellants did not address this argument in their opening brief before this court. Arguments not raised in opposition to summary judgment or in the opening brief before this court are waived. See One Indus., LLC v. Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1158 (9th Cir. 2009) ("A party normally may not press an argument on appeal that it failed to raise in the district court."); Dream Games of Arizona, Inc. v. PC Onsite, 561 F.3d 983, 994-95 (9th Cir. 2009) ("We will not ordinarily consider matters on appeal that are not specifically and distinctly argued in appellant’s opening brief.") (internal quotation marks and citation omitted). Appellants therefore have waived any argument that their failure to register claim is not barred by the statute of limitations.
Appellants alleged that MBE breached its duty of "best efforts" under the franchise agreement to obtain incentives for franchisees. The undisputed facts establish that MBE engaged in several efforts to obtain improvements to incentives to franchisees but did so by means of oral persuasion. Appellants’ contention that attempting to obtain these same improvements by means of written requests was necessary to meet the best efforts requirement is without authority or merit. Therefore, summary judgment on this claim was proper.
Appellants alleged that UPS breached the implied covenant of good faith and fair dealing in failing to increase the prices set under the carrier agreement with the franchisees. The district court found that the implied covenant claim was preempted by the Federal Aviation Administration Authorization Act of 1994, which prohibits states from enacting or enforcing "a law, regulation, or other provision having the force and effect of law related to a price, route, or service of" carriers such as UPS. 49 U.S.C. § 14501(c)(1). Even if this claim was not preempted, however, it fails under state law. The implied covenant of good faith and fair dealing cannot be used to impose an affirmative duty to forbear enforcing the terms of the contract or to limit the ability of a party to do what is expressly authorized in the contract. See Storek & Storek, Inc. v. Citicorp Real Estate, Inc., 122 Cal.Rptr.2d 267, 277 (Cal. Ct. App. 2002). That is what Appellants wished to do here-to impose on UPS a duty to offer better prices and incentives than those dictated by the agreement. Therefore, even if not preempted, summary judgment on the duty of good faith and fair dealing claim was proper.
Appellants brought claims under the California Unfair Competition Law ("UCL"), alleging that MBE and UPS engaged in fraudulent, unfair and unlawful business practices. "Appellants’ claims under [the UCL] are governed by the `reasonable consumer’ test …. Under the reasonable consumer standard, Appellants must show that members of the public are likely to be deceived." Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (internal quotation marks omitted). Here, Appellants presented no evidence that a reasonable consumer would be deceived by the alleged fraudulent, unfair and unlawful business practices of MBE and UPS. Summary judgment on Appellants’ UCL claims was therefore proper.
Appellants argue that the district court erred in failing to apply other states’ "unwaivable" statutes, and in failing to apply Illinois law for franchisees with Illinois choice-of-law provisions in their franchise agreements. In addition, Appellants argue that the California choice-of-law provision, found in the majority of the franchise agreements, does not apply to pre-contract wrongs and that therefore the other states’ statutes applied. As to the first argument, the district court found that Appellants’ claims would fail even if the other states’ statutes applied. Appellants have failed to show why this conclusion was erroneous. As to the second argument, the franchise agreements with California choice-of-law provisions provided that the agreements would be "governed and construed under and in accordance with" California law, which covers all contract claims, including pre-contract wrongs. See Nedlloyd Lines B.V. v. Superior Court, 834 P.2d 1148, 1151-54 (Cal. 1992) (holding that the phrase "governed by" in a choice of law clause compels the "logical conclusion" that the parties "intended that law to apply to all disputes arising out of the transaction or relationship"). Therefore, the district court did not err in applying the law of California to all of franchisees’ claims.
The district court did not abuse its discretion in refusing to unseal the record. The district court found good cause to seal the record on Appellants’ initial motion. Appellants then failed to provide adequate justification for unsealing the record, and failed to follow Central District of California Local Rule 79-5:3 regarding motions to unseal. The refusal to grant the motion to unseal the record was not an abuse of discretion.
The district court considered all of Appellants’ arguments in opposition to Appellees’ motion for summary judgment at the time of the first and second order, and was not required to restate its findings in rejecting Appellants’ request for reconsideration of prior rulings.
The district court’s grant of summary judgment in favor of Appellees on all claims is therefore AFFIRMED.
Footnotes
* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
1. Because we find that Appellants’ common law fraud and misrepresentation claims fail for lack of a showing of reasonable reliance, we need not decide whether the CFIL preempts these claims.
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Contact for site author and ADMIN: unhappyfranchisee[at]gmail.com.
ARE YOU FAMILIAR WITH THE UPS STORE FRANCHISE? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
THE UPS STORE Franchise Complaints
June 23, 2011
YOU CAN’T MAKE ANY MONEY WITH A UPS STORE!! That is PURE TRUTH!! – Michael Riggins
Is The UPS Store franchise opportunity a scam? Do The UPS Store franchise owners lie and cheat in order to dump their franchise stores on unsuspecting buyers? What do you think? Share a comment below about The UPS Store franchise – good or bad.
According to commenter Michael Riggins:
“I hired the BEST CPA in the Land who investigated an existing supposedly successful UPS Store with sales of over $300,000.00. We gave careful Due Dilligence and learned there was money being pumped into the business from the owner’s personal bank account to keep the business afloat. There is NO Money to be made in owning a UPS Store. I Promise you!!
“Watch out for UPS Store Franchise Owners as they will try to hide in their Quick Books showing they are succesful. Don’t Trust it……… They will tell you there is money to be made in printing and other services and that is all a BIG, HUGE, FAT PIPE DREAM!!! I have been an Executive of Retail Businesses for over 25 years and this is ALARMING!!!! There are large companies out there in every city that do printing and other services. They have sales people that call on businesses too…. So, get rid of the PIPE DREAM…..
“UPS charges FAT Franchise Fees and other Fees, and Fees, and Fees, and Fees. YOU CAN’T MAKE ANY MONEY WITH A UPS STORE!! That is PURE TRUTH!! You will have some Store Owners tell you that you can make money but they are saying it so they can sell their business and not have any bad info out there on the street. So Remember that……”
What’s your experience?
HAVE YOU HAD DEALINGS WITH THE UPS STORE FRANCHISE OPPORTUNITY? IS IT A SCAM? ARE UPS STORE OWNERS DECEPTIVE IN SELLING THEIR BUSINESSES? SHARE A COMMENT BELOW.
Failure Rates of the 10 Most Popular Franchises
April 26, 2010
Failure Rates of the 10 Most Popular Franchises What are the failure rates of the 10 most popular franchise opportunities? Read more
UPS STORE, MAIL BOXES ETC. Franchisees File Class Action Suit
November 12, 2009
The UPS Store and Mail Boxes Etc. franchise owners have launched another legal attack over the alleged screwing-over they received by franchisor United Parcel Service (UPS).
According to the NOTICE OF PENDENCY OF CLASS ACTION Morgate LLC v. Mail Boxes Etc., Inc., United Parcel Service, Inc., et al.
Superior Court of California, County of Los Angeles, Case No. BC294647":
“The Court has certified a national class (“the Class”) consisting of all franchisees in the U.S. who operated a Mail Boxes Etc. store and who converted their franchise to The UPS Store through the Gold Shield Amendment on or before March 21, 2003, regardless of whether such franchisee is still operating The UPS Store Center.
The Court has also certified a subclass (“the California Sub-class”) consisting of all franchisees who meet the above-described criteria and whose centers are or were located in California. Every franchisee who is a member of the California Sub-class is also a member of the Class.”
Janet Sparks summarized the class action allegations in her post on Blue Mau Mau:
The complaint alleges three claims against defendants: negligent misrepresentations; intentional misrepresentations; and misrepresentations based upon disclosures required by the California Franchise Investment Law (CFIL). Plaintiff alleges that the members of the class were misled by false statements and concealment of material facts contained in five documents provided to franchisees during an organized presentation to franchisees by UPS and MBE, known as the “Gold Shield Program.”
…Plaintiffs are seeking the recovery of damages from the MBE defendants. In addition, for the alleged violations of the California Investment Law, they are seeking the option to rescind the Gold Shield amendment of their franchise agreements.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Are THE UPS STORE / MAIL BOXES ETC. Franchise Owners Happy?
August 10, 2009
Are you familiar with the The UPS Store® franchise opportunity?
Are The UPS Store® or MBE franchise owners happy? Why or why not?
Please share your thoughts and opinions below.
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In 2009, Entrepreneur magazine named The UPS Store/Mail Boxes Etc. franchise opportunity #8 on it’s much-hyped Franchise 500 list.
Previous years The UPS Store/Mail Boxes Etc. was also favorably ranked at #11 (2008); #5 (2007); #4 (2006); and #5 (2005). In it’s listing, it claims “The UPS Store® – the perfect opportunity to be your own boss. We are the top-rated postal & business services franchise. Locations available nationwide. Take control of your business future & benefit from a world-class support system with The UPS Store.”
According to Entrepreneur’s franchise listing:
The first Mail Boxes Etc. store was opened in Carlsbad, California by Gerald Aul, Pat Senn and Robert Diaz, who designed it as an alternative to the U.S. Postal Service. In 2001, Mail Boxes Etc. became a subsidiary of UPS and began re-branding as The UPS Store in 2003. The UPS Store locations provide packaging, shipping, copy and print services, mailbox services, computer time rentals and more. Franchises are located throughout the United States and in over 40 countries.
According to Entrepreneur, The UPS Store/Mail Boxes Etc. has 4,459 U.S. franchises, 332 Canadian franchises, 1,236 foreign franchises and 0 corporately owned locations.
Are The UPS Store/Mail Boxes Etc. Franchise Owners Happy?
Do The UPS Store franchise owners enjoy control of their business futures? Do they benefit from a world-class support system with The UPS Store? The high ranking bestowed by Entrepreneur magazine and other advertising-driven magazines seems contradictory to the highly publicized franchise lawsuits and the negative comments from The UPS Store Franchise owners we’ve seen (Read THE UPS STORE: Overview.)
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A THE UPS STORE or MAIL BOXES ETC. FRANCHISE? ARE THE UPS STORE / MAIL BOXES ETC. FRANCHISEES HAPPY? WHY OR WHY NOT?
THE UPS STORE: Overview
August 10, 2009
Franchisees
April 12, 2008
We encourage personal accountability, detailed facts and honesty.
We discourage personal attacks & insults, vagueness and hyperbole.
The opinions expressed and statements made on UnhappyFranchisee.Com are solely those of their individual authors and are neither verified, controlled nor shared by UnhappyFranchisee.Com, Relentless, Inc., its owners, readers or staff.
More on The UPS Store franchise:
THE UPS STORE Franchise Complaints June 23, 2011
Failure Rates of the 10 Most Popular Franchises April 26, 2010
UPS STORE, MAIL BOXES ETC. Franchisees File Class Action Suit November 12, 2009
