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POSTNET Franchise Complaints

July 20, 2012

PostNet franchise opportunity:  Are you considering it?

Be aware that data released by the Small Business Administration (SBA) indicates that PostNet franchise owners who qualified for SBA-backed franchise loans have a high loan failure rate of 30%.

That qualifies PostNet for inclusion in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)

Are you familiar with the PostNet franchise opportunity? If so, please share your experience, opinions or insights with a comment below.

If you are an PostNet franchise representative or employee, please leave a comment or email us at UnhappyFranchisee[at]gmail.com.

Postal center franchises that appear on the WORST FRANCHISES  list include AIM Mail Centers (44%), Postal Connections (35%), PostNet (30%), Postal Annex+ (30%) and Pak Mail (28%).

(The UPS Store franchise is not on the SBA worst list, but it is one of the most controversial franchises among franchisees – See THE UPS STORE Franchise Complaints)

PostNet franchise owners have an alarming 30% SBA default rate.

The apparent drop in PostNet franchises in recent years is also a cause for concern.

PostNet Franchise
PostNet U.S. franchises in 2008: 415
PostNet U.S. franchises in 2011: 314
Growth in franchise units 2008 – 2011 (#) -101
Growth in franchise units 2008 – 2011 (%): -24%
SBA loans granted since 2001: 121
SBA loan failure rate: 30%
Sources:  Entrepreneur (growth), Coleman report (SBA)

 

The inability to repay an SBA-backed loan (or any franchise loan, for that matter) indicates a serious situation for the franchisee.

It’s likely that PostNet franchise owners who received SBA loans may have collateralized their franchise loan with their homes or other personal assets, and many were unable to repay those franchise loans… despite the serious incentive to do so.

Are you familiar with the PostNet franchise opportunity?

What do you think accounts for the SBA loan failure rate of PostNet franchise owners?

What steps should PostNet be taking to stop further franchise failures?

Has PostNet taken serious action to address the problems that led to these loan failures?

Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.

ARE YOU FAMILIAR WITH THE POSTNET FRANCHISE OPPORTUNITY?  PLEASE SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

PostNet, PostNet franchise, Post Net, Post Net franchise, PostNet franchise complaints, PostNet complaints,  postal franchise, postal centers franchise, shipping franchise, franchise failure rates, SBA franchise loans, worst franchises, unhappy franchisee, Brian Spindel, Steve Greenbaum

Comments

5 Responses to “POSTNET Franchise Complaints”

  1. Anon says:

    Sorry for the Test, I didn’t want to write a magnum opus with no shot at getting it displayed.

    I am a former PostNet Owner and was a controversial one for them at that. Im all for revealing truths and all, so here it goes. Unlike many franchise horror stories, I dont think Postnet suffers from a predatory franchisor who ultimately ruins the success of the franchisee. The real problem that they wont tell you (and how could they?) is that the mail store industry itself is dying.

    I got in at the first of the millennium and out halfway through the decade. In that time I saw the rise of the UPS Store and the rise of FedEx. PostNet did not sugar coat those events, but kept us informed and saw them as “challenges” rather than huge threats. I saw it differently. They wanted to move the franchise toward a printing/copying direction and away from shipping. All well and good, but its like trying to convert a car into an airplane. You can do it, but it will be expensive and more than likely will not be as good as an airplane. Now this shows me that they knew the writing was on the wall, but at least they are trying to move the franchise ahead of the wrecking ball. However I think the ultimate axe is out there and its coming soon.

    As a mail store owner you are the ultimate middleman. You are selling postage for all the carriers and pretty much everything in the store at a markup. The typical line of a diehard is “you dont go into the grocery store and ask what thier markup is”. True enough, but on a shipment or a stamp, it matters more, and the customers WILL ask. With the rise of the internet the effort it takes to check shipping rates has gone to nothing. Back in my days there werrent Iphones, but nowadays the customer can check an app and question your prices instantly. They tell you those cost-conscious customers are not your target customer, but then who is? The 1%? Sure wasnt anyone who threw Benjamins on my table and said keep the change. The packaging can work, but its not every day youll get someone willing to pay top dollar to ship a moose head.

    Ok so shipping is dying, you move into printing. Look up the number of local printers and know that all of them probably have most of the area’s big printing locked up. If youre quite the salesman you might get some business, but youll be doing it with whatever itty bitty copiers your store package got you into and they have presses. What does that mean? More machine purchases. More leases or costs to make up for. And as the people at home gain cheaper technology they will need you less. Its like an arms race.

    If you want to see more of PostNet, the CEO, Steve Greenbaum took his franchise to Undercover Boss and did an episode. While you know all reality TV is scripted, I didnt see anything unrealistic on that show. Ive met Steve a number of times while I had the franchise at conventions and he really is that nice and Friendly. Hes got a ton of experience in the industry, and has hit the big time on the Franchisor councils and whatnot. Hes clearly made a ton of money at this, but I dont really think its all on the backs of the franchisees as much as the other horror stories I hear. Its costly to get in, but nothing a mortgaged house cant get you in. The problems the franchisees faced were real issues, but I dont think there is much he could do to solve it. Nice of him to open his wallet to them, but its not going to save them. It was really just a way to get the postnet brand out there, and not a bad try at all.

    Really, its not the franchise as much as its the industry. You might as well be a blockbuster watching the redboxes spring up everywhere. The successful store owners in my opinion would be successful at anything and really are limiting thier upside potential in the industry. If you can sell ice to eskimos and would enjoy packing boxes and printing and you dont open your store in a non rich neighborhood you might do ok, as in make an average upper middle class paycheck. I get that now and dont have to worry about paying a landlord and the utility bill of where I work.

    Overall I would never buy any franchise at all. Youre paying for a job with NO GUARANTEES OF SUCCESS OR A PAYCHECK AT ALL. Id just like to say that I dont think the franchisor in this case is all that bad, but its a buggy whip maker whos watching the model T’s go by and they think the business will continue. However I do believe they have some good intentions, but after all, they are in the business of selling franchises, are they gonna talk you out of it?

    Lastly, this franchise has some decent overseas penetration, so they can pump up thier store numbers to 500 or 800 or some such number. Pay attention to the USA store numbers.

  2. I am making this post on behalf of Post Net Round Rock 214. Marietta Smith has owned this franchise for at least 3 years now. However, during that time she has not turned a profit. Marietta is in a good location, has great staff, and goes out of her way to make her customers happy. She offered services that would not ordinarily be available to her customers, graphics design, and notification of mail on hand, drop shipping of packages over the phone, and free training classes on graphics design.

    Marietta is a saint, she has been through a lot, the first year of her business I understand that her son, who was helping her in the shop was sick and needed a kidney transplant. Within the first year, her son died and she was not able to take time off to grieve for him, because she had to run the store. Marietta invested all of her savings into this business.

    Also during that time, Marietta helped several family members, and employed one other family member there while she came to Austin and worked for Marietta for short period of time. Unfortunately, this family member had a stroke and could not longer work. Marietta tried her best to care for her and sitll run the PostNet and take care of her son, but it was too much for her.

    Marietta announced almost 6 months ago that she was going to have to sell the franchise. It was not until recently that she found a buyer. The buyer was very difficult and made all types of demands on Marietta to make changes to the shop that they wanted. They also refused to pay her employees or the box rental that was due. In addition, PostNet itself would not allow the franchise to be sold until it was put in the state it was requred by the franchise contract. That cost Marietta approximately $5,000 to come up to standard required to sell.

    On the date the sale was supposed to take place, the buyers were still making outlandis demands on Marietta and were inconsistently approaching her about different matters one at a time. Then she got a call from the buyer’s lawyers, who stated that the sale was off. the buyers did not give her the courtesy of letting her know before she spent all that money.

    I was just recently made aware that Marietta has only got until 6/30/14 to sell the property. She is still subject to $1,000s more for box rentals due and equipment leases if she does not sell the property on time. If anyone is willing to help her or knows of any recourse she can reference to get relief in this situation please contact me at or contact the Round Rock TX Post Net #214. And may God bless you for anything you can do.

  3. Rex says:

    This is not a business or a franchise for the weak of heart. If you have little or no sales or business background and expect that on day one the people will be waiting for you to open up and the cash starts flowing then you’re in for a very sorry surprise. Looking at the door waiting for people to come in will never get you anywhere. Thats not how it works with any small business and most certainly will not see you to quick prosperity with Postnet. Exceptions? Perhaps. Postnet locations are posted on their website. Call the owners and talk. Most will talk freely about their experiences.

    We bought our franchise and kept it going on its wobbly two legs for ten years, finally selling it in 2014 to another Postnet franchisee in the area. If you expect to buy this franchise and later sell it at some preconceived profit, you’re likely doing it all wrong. You lay out a giant wad of cash up front of course but your chances of recouping that are not likely to appear soon. You will continue to lay out more money after opening day. Positive cash flow is on the horizon but it takes a good long while to get there. Thats just the way it is to start a business and keep it right side up until it starts paying its own bills full time without your help. As with any franchise you pay a royalty and advertising percentage each month, paid off the top gross dollar. You can have 20 thousand in sales at a negative profit margin but you still gotta pay..Its just like another tax. Speaking of which, if you live in a high biz tax state, think long and hard about what it will cost you each month just to pay those bills along with the franchise obligations. Do your homework. Postnet actually requires you do that before you have a second sit-down with their sales department.

    Postnet is one of those company’s that keeps trying to grow up and be a big shot but simply gets in its own way. Corporate personnel turnover in the franchise support and marketing areas as an example are frequent. Job titles are like nuts under a cup. Always shifting. Promotional ideas are brought to the table by committee involvement with several franchise locations then suddenly disappear. A new person comes aboard and you start over. Employees there seem to leave out of frustration.
    The company has tried over the years to disconnect itself from the shipping industry and at the same time, emerge as a prominent printing source for business and walk ups alike. Its tried.
    The competition in the print and graphics sector has become loaded with low ball pricing and services and features that Postnet simply was late to the marketplace with or may not have at all. The internet boom in the printing industry has hurt, and hurt badly small operations like Postnet. It all comes down to who’s cheapest. Free this and that gets you nowhere but to bankruptcy when you’re this small. The shipping industry as a retail outlet continues to shrink each year and the margins in that are slim at best.

    One may ask how we survived 10 years under these conditions. Easy. We serviced the hell out of our customers, hit the streets talking with business customers, securing commercial accounts and working the walkups for anything beyond buying a stamp or running a copy.. Sell Sell Sell. Face to face, not with flyers or an ad in the local newsopaper. We did that too but it wasnt where the sales came from.. A Its not easy to do. Social ques and personality were a requirement of anyone we hired. No drones or pissed off surly teenagers allowed. We paid them as much as we could and then some. No cheapo employees. You’ll get what you pay for otherwise. You have to make a Postnet an addiction to your customers, not just a place with cool machines that’s conveniently next to a grocery store.
    Sales cannot be taught. Its an acquired taste.

    The President/CEO Steve Greenbaum is much like you may have seen him on TV on Undercover Boss.
    He is an on-site, committed person to his company and its goals. He actually works there. Everyday from what I could tell. Very nice, mostly down to earth type. I had spoken with him at length on more than one occasion and found his resolve to never waiver. He’s in it to win it.
    His second in command and right arm if you will, Brian Spindell is equally dedicated but has a somewhat short attention span and has a “push it on through” mentality when confronting issues and problems. He’s a front man for selling the company and if you’re an experienced salesperson you’ll pick up right away that you have to separate the bullshit from the reality. Does he lie? No. Just embellishes the truth a bit.

    Postnet craves constant, credible leadership. At the time we left, it was a somewhat disjointed affair with many battle plans and haphazard execution within its own corporate walls, much blame going to the turnover problem. Its trying to catch up, but it seems to be doing it on the cheap.

    Will it work for you? It could but do your homework locally first and do it all. The Postnet presentation is just that, a presentation. Take what they tell you and research research research. Like any business venture, especially a franchise don’t get all excited and quick jump into it. Talk to other Postnet locations if there are any nearby. Also have money, and lots of it ready to go. There’s so much more to being a small business owner than “Being Your Own Boss”.

  4. Michael says:

    Hello Rex. Thank you for you clear and insightful review of PostNet. I am/was seriously considering buying an existing PostNet that is not doing too well, as I have very heavy graphic arts background. I figured this would be a good fit for me. I have seen the TV show. I have spoken to Steve. They sell their product with professionalism. But, I am having a very difficult time figuring out if there really is any money to be made at this. I would love to chat with you.

  5. Hancock says:

    Michael –

    If a nice guy like Steve Greenbaum sells you a failing PostNet and you lose all your money is Steve still a nice guy?

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