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.
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View Comments
Dear Admin,
Thanks for the site. I am investing in B2B and B2C services in Baltimore. I have considered adding UPS stores in the portfolio. Great site - the % discontent is irrelevant - the comments here are measured and reasonable and if anything reveal people who value the UPS brand but have financially crippled franchises due to new and or unappreciated corporate business policies. It appears their market did not or no longer align with an imposed business model.
I appreciate those who took time to detail and explain how the model no longer works for them. I was originally dismissive of Randy's comments, non specific support without addressing specific complaints - it did sound like marketing. But his follow up comments appeared sincere and direct. He stated, "The reasons for our success are specific, quantifiable, and available." Well, ... perhaps my market is similar to his. I really would like to hear what he has to say.
As the administrator you responded, " I appreciate that offer. Please contact me confidentially at UnhappyFranchisee[at]gmail.com if you are willing to share the specifics of your situation."
Randy sent the email and there was an acknowledge of receipt. Is any portion of Randy's email available to share? Would he care to post any part of it himself?
Sincerely
Gino
I am currently going through the approval process for a new TUPSS franchise and have the same request as Gino above. Would you be able to share any more details from Randy that have specifics of his situation? This would greatly help me make the final decision.
Thank you.
TS
Dear Gino and TS,
Sorry for the delayed response. I haven't visited this site in a while. I am happy to share any info that I can to help people make an informed decision. Our store continues to grow at an aggressive rate. I mean no disrespect to those who have had a negative experience nor do I question their sincerity. I am simply offering that I too have had (and continue to have) my own experience with our store. We just celebrated our 5 year anniversary and are enjoying the journey. Our market is not large and there are 5 other stores in our area. (Note: Our market is neither unique nor affluent)
What I wrote before is still accurate today. "The reasons for our success are specific, quantifiable, and available.” I am also still very willing to freely share our experiences with any who are interested. Pasco is part of the "Tri-Cities" community in Washington state and our store is the Pasco store. The other 5 stores are in other parts of the Tri-Cities. Feel free to send me an email via the store web page and my team will make sure that I get it. Once I do, I will connect with you and answer any questions you may have.
Randy
Like any other business there is always competition. It's all about your business skill. My wife runs two UPS stores and she is very successful with The UPS Store. Of course there is work, you need to do lots of prospecting.
Buying a franchise is simply buying a job that (if you're EXTREMELY LUCKY) pays minimum wage.
Run, Forest, Run!!!
The comment that "50% of the UPS Store locations are losing money" is often repeated. I owned a UPS store in the Tucson AZ area for a few years and there were very few stores that went out of business, and that was during the great recession.
Reading these stories is quite pathetic. I was not aware that UPS stores do not make enough profit.
Yes, changing times in all the shipping.
We have an independent store in Gainesville, Georgia. Operated it for full 5.5 years. It is a family business and we are looking for new owners. Great and busy place to work.
We added monograming service to the store. Makes enough to help with rent.
Anyone interested in running this business shipping Fed Ex, USPS and DHL.
We used to ship and receive drop off packages for UPS. Waste of time and energy.
Glad that we decided to shut that down after learning that UPS stores have been paid $1.00 per box.
We were getting 50 cents and UPS drivers stopped scanning drop offs to save time on their route.
Bad things could have taken place as UPS does not accept responsibility for lost or damaged packages that have not been scanned.
Our location is acceptable to a lot of local folks. Great customer base.
Price is way bellow what UPS charges. No franchise fees. No mandates to buy supplies from UPS approved suppliers.
Any questions to be made at 770-712-5000.
It’s so sad to read about all the other store owners that struggle as well. My family has owned a location for over 18 years now. They bought it as a Mailboxes Etc and the corporate structure has only been getting worse ever since.
I don’t want to waste my or your time by listing everything out but I can say for certain that every single thing written above is 100% true. The corporate office is the worst aspect of The UPS Store franchise as a whole. Any time you deal with absolutely anything corporate is going to be a crippling headache.
Our experience has been all over the place. It started out pretty rough, got better, went down, got terrible, and thankfully has been steadily getting better ever since. (Knock on wood it stays that way.) I assume every owner has experienced this. The corporate office isn’t there to help.
Now, that shouldn’t necessarily keep you from buying a UPS Store. It’s not a terrible franchise. You do need to have a lot of money to invest though. If you think it stops at the initial purchase price, you’re sorely mistaken. You have to own multiple locations for it to be profitable at all.
The whole problem is no one seems to have any clue where the franchise is headed. Times are changing. Retail shipping is a dying industry, printing isn’t growing, and UPS itself is stopping people from renting mailboxes. What’s left? I sure don’t know.
Thanks to all whom have let their voices be heard, it had to be difficult to comment on a business model that you have all committed to in hopes of a better future / family / retirement.
I have been soul searching as well for a business to operate w/ my spouse in our golden years, hoping to pass the baton to our family in the near future.
Reading all of the comments above, a liquor / gaming license might not be that bad after all, at least I can drown my sorrows on the way out if it fails.
Thanks again to all store owners for chiming in, I wish you all the very best, and a prosperous future...Merry Christmas 2018 and a Blessed New Year
Wow! stumbled upon this site. Guess I'll be another person saving their initial franchise fee.
Thanks to all of those that shared their experiences and unfulfilled expectations. I'm truly enlighten and thankful I hadn't invested yet.
Good luck in your future endeavors.