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.
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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!
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