Owners call the UPS Store Franchise “Indentured Servitude,” and “A Nightmare”
Franchise Pick reader LEE recently shared this post:
I’m a Vet who has paid the initial UPS Store franchise fee, and although I thought I had performed “due dilligence” before making the commitment, I fear that I may be embarking on an expensive journey to nowhere. Does anyone know how hard the franchisor “comes down on you” if you decide to bail before signing a lease or legal franchise documents? I’d rather take a hard hit now than a knockout punch later.
Several current UPS Store franchise owners shared their advice:
frozenokiewi wrote:
Run now while you can…I have been doing this for 6 years changed from MBE to UPS Store in 2003. We have two stores and neither can break even. You cannot get out once you are in…eat your loss and run for the hills! Bid on some oceanfront in Arizona it would be a far more entertaining waste of money. PLEASE back out now.
cgpeanut wrote:
take the hit now from a fellow owner. this franchise is a nightmare at this time.
ACE wrote:
Listen to your gut, don’t get sucked in any deeper.
Take everything you got in writing and all contemperaneous notes you made as to what you were told to a good attorney and see if feels you have basis to rescind all agreements and get your deposit back.
If MBE is convinced that there is some risk to them, they will fold and give your money back. In any event, don’t throw good money after bad by going forward with leasing a location, going to UPS University and all that crap.
The loss of a deposit pales in comparision to what you can lose going forward in something you do not have confidence in. The losses can be more than financial.
Jim Brown wrote:
We’re not being negative, we’re just trying to save as many people as we can from our own fate. Think of owning a ups store as being an indentured servant: Working for free for your master. Do whatever you need to to stay far, far away.
Wontbefooledagain wrote:
Lee, call a lot of UPS Store owners; don’t just talk to the ones that the folks
at UPS/MBE recommend. Talk to some that are in locations similar to those
you’re considering, and have been in business at least three years to five
years (That’s when reality starts to set in.) You needn’t have lengthy, in-
depth conversations, though that can’t hurt. But be sure and ask the simple
question: “If you had this to do all over again, would you?”
James Dunn wrote:
You should count your blessings. I wish I had ran and only lost the $7500 fee.
These store have no value. After you beg and borrow 300k before you go out of
business you will find yourself broke and destitute. When you try to sell you
will find how worthless these stores are. I think it’s a sin that UPS is
targeting vets now. These criminals have no soul.
So far, there have been no positive comments encouraging LEE to move ahead with his investment with the UPS Store franchise. Anyone out there have anything good to say about this franchise? Should Lee move forward, or cut his losses?
Share your insight. Leave a comment. [Thanks to all contributors]
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POSTED IN: UPS STORE, x Franchise 101, xBuyer Beware
23 opinions for Owners call the UPS Store Franchise “Indentured Servitude,” and “A Nightmare”
University Update
Mar 21, 2007 at 11:19 am
Owners call the UPS Store Franchise “Indentured Servitude,” and “A ……
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Les Stewart
Mar 21, 2007 at 7:04 pm
Franchise Pick is to be commended for this “mosaic” of comments.
I have, unfortunately, met dozens of investors in the past that have suffered without such a forum.
Lee: these are very sound and experienced voices. Listen to them and keep in touch.
You may want to consider “paying this forward” somewhat.
Peter Kann
Apr 3, 2007 at 7:29 am
I too am thinking of opening a UPS Store in my hometown in NY. I sent them my letter of intent and I’m going for my executive interview next week.
Is this a mistake and is there anyone out there who has any positive comments??
sean
Apr 4, 2007 at 9:18 am
Check out the other posts on The UPS Store, Peter:
http://franchisepick.com/category/ups-store/
Also search for The UPS Store on http://www.bluemaumau.org and http://www.franchisepundit.com
Ryan Knoll examines some of the economics of The UPS Store at http://franchisepundit.com/index.php/2006/07/28/ups-store-numbers-2/
The theme of Franchise Pick is increasingly Do your homework, ask as many differing sources as possible before investing, especially current and former franchise owners. Contact information is readily available. Franchising with the right company is an excellent way to start or acquire a business. Emphasis on: The right company.
Best of luck. Let us know what you learn, and what you decide!
John Barton
Jun 14, 2007 at 8:23 pm
Please please please. Anyone that reads this must understand what a horrible nightmare you will endure should you decide to buy into a UPS Store franchise. I did and lost 165,000 in just over 1 years time. I bought a 6 year old store that used to be profitable under the MBE brand. The store switched to UPS Store branding 2 years before I bought it and profits sank horribly. I’m a dual degreed, intelligent individual that lost his mind while buying into this place. I ended up getting the area franchisee to buy my store for a fraction of what I paid, just to save my soul. A 6 year old store made me less than $0 during the time that I owned it. UPS and your area franchisee will eat your lunch if you choose to take this one. Sure, there is an occasional success story of UPS Stores doing well in paper generating, lawyer driven towns, but those are so far and few between. I’m serious… $165,000 loss in just over a year. I have a capital loss that will last me through retirement. This franchise model simply will not work. Please don’t believe the franchise 500 rankings. There must be such a high level of financial influence that sways that list to get The UPS Store such a high ranking. I’ve never met a happy UPS Store owner, and I’ve met many, I’ve talked to them on-line, I’ve read their stories. I just thank God that I am young enough to recover from the financial devistation that this place caused me. PLEASE DON”T DO IT.
NOWAY
Aug 31, 2007 at 6:30 pm
The killer owning a UPS Store is the margins. They are simply too low, around 43%!!! NO Buisness can survive on 43% MINUS expeneses!!! Run like hell if you’re thinking about owning a UPS Store!!!
Mark
Sep 26, 2007 at 3:44 pm
If you intend to open a UPS Store think hard about it. We have 2. One is break even after 4 years and the other we are closing. When I advised MBE that we were closing, not one person from franchise relations called. I got an e-mail with necessary documents to fill out to close it properly. We wanted to try and move it but they won’t let you close while you move. Once you close you lose the franchise. I guess they have a huge back log of idiots like me who want to give them the $100k necessary to go broke. They care about no one but themselves.
sean
Sep 26, 2007 at 6:00 pm
Mark Sorry to hear about your stores.
Do they let you walk away from the franchise agreement without claiming you owe future royalties, etc.?
Mark
Sep 27, 2007 at 3:11 pm
I don’t know much more yet. I cant imagine future royalties on no sales. If they take the franchise away it is no longer mine! I will try and keep you posted. We close tomorrow. I Overnited a letter to the CEO delivered Monday and havent heard ANYTHING from thste bastards. THey really just dont care
Lisa
Oct 14, 2007 at 11:31 am
Mark, we are looking at the UPS “dream” but from what I’m reading it’s a nitemare. Would love to see if you would be talk with my husband and myself to let us hear your story.
The UPS Store Franchise Owner’s Lawsuit Certified as Class Action at PIGASYS
Oct 23, 2007 at 3:24 pm
[…] March 21st, 2007 Owners call the UPS Store Franchise “Indentured Servitude,” and “A Nightmare” […]
Fred
Nov 28, 2007 at 10:53 am
I own an MBE Store and will convert to ups.
Fred
Nov 28, 2007 at 10:54 am
correction I will not convert to ups store
rich
Dec 15, 2007 at 6:19 pm
Hi there,
Is there any remedies you think for ex-the ups store victims like us?
We bought into the trap 2 years ago …. Am wondering if we can jump on the bandwagon?
Thanks,
Richard
patrick Perry
Jan 8, 2008 at 7:26 pm
Run like Hell Your lose now will not compare to your lose in a few years, I owned a UPS stor for twelve years. Stated as a Mailboxes Ect than after 10 yeaes change to UPS on their and the local bandits promises and great dog & pony shows. After losing over 175K in the last three years I did not get any help in buy out for a fraction of the actual value, Best thing I ever did in the UPS franchise was to strip the stor of everyting and move on with my life. Blood pressure down only work 40 hs a week and my wife will now talk to me. This is a bad idea in a dieing industry. Pat
May
Jan 14, 2008 at 10:37 pm
I was just about to fill the application and make the initial deposit. Thank God I run into this website, because I was initially scared. I can’t believe what I’m reading. I had this UPS dream for the past 5 years. This is the first time I read something about this.
Dave Thomas
Jan 23, 2008 at 8:54 am
I have 30 years sales, marketing, and management experience and an MBA in Finance. I was considering a UPS store in the Phoenix area, until I went through the corporate financial statements. My goal was to make $100,000 per year income.
I calculated a store needed approximately $650,000 in annual sales to generate that much.
However, the average store only grossed approximately $375,000. Moreover, the agreement stipulated that the area franchisor had the right to open a store within one mile of any other store. The area franchisor had financial incentives to open other UPS stores near a successful store. The area franchisor also had a subsidiary that forced a store to purchase the buildout material, construction services, and supplies from them at high prices.
They wanted to take me to talk to their “pet” stores to talk aobut the system. Instead, I went to three or four stores where I heard the truth. Nobody was making money! They all wanted to build a successful store so that they could sell it and get away.
My advice: Run like hell !!
MICHAEL GORLANO
Jan 23, 2008 at 8:53 pm
I will make this short and simple. I purchased a 4 year old establish store in an upper income community that peaked in 04 at the top of the hype of this bambozling franchise. Closed it down 2 years later and am thankful that i lost only $400K and 3years of my life. DO NOT FOR ANY REASON GET INVOLVE WITH THIS MASTERFUL CORPORATE SCAM. This is my experiance with MBE/UPS! Do you want to share this experiance?
ANI
Jan 24, 2008 at 8:41 am
I would say DON’T BUY INTO THIS FRANCHISE!! Now whether you choose to listen to all of those that say don’t or just do it anyway because you think you know more than those of us with years of corporate experience, MBA’s, PHD’s etc, then I have a store for sale right now. People, these stores are a nightmare. Have you found any website or blog from owners who do nothing but talk about how wonderful they are and how much money they are making? If so, post it here.
My life has been ruined on so many levels after buying a new store, not a transfer. You may make money right from the start, no question. But in order to do that, you must be in the right location at the right time and that will be like knowing the numbers in the lottery. Those stores are 1 out of every 200 maybe, can you risk that? I can tell you that I made a bit over $45K in December (busiest month). Sounds like a lot to a newcomer…I still have bills that I cannot pay from that month. Most stores make around $18K to $28K a month, more in December. If bills cannot be fully paid on $45K, what do you think happens the rest of the year? Put your money into a CD and wait another year, read these posts, and then look at things again. I can assure you, by 2009, things will drastically change again and not for the better.
Carl
Apr 23, 2008 at 1:31 pm
Anyone have any knowledge of the pending lawsuits? After getting classified as class action, the suits have dropped out of the news. It’s been going on for 5 years now.
Jim Brown
Apr 24, 2008 at 9:25 am
I will only comment on the MBE’s suits by saying this: It appears that they are going well. one of these has a class component on behalf of the converted stores.
The UPS store’s suit does not have a class component. It is scheduled to go to trial in federal court in September, 2008.
sean
Apr 25, 2008 at 1:16 pm
What do you think?
The UPS Store Franchise: Follow the System and Succeed!
The UPS Store Franchise: This Dog Won’t Hunt!
Davey
Jun 5, 2008 at 10:33 am
Dave Thomas,
Too bad you didn’t look around a bit more. Not all of these store are losers. For example, I am located in the Phoenix area and STR exceeds 700K, and I am very profitable, and have been ever since the changeover. Sadly, most stores have a different story to tell. Sometimes you just have to kick the rocks around a little more to turn up that gem.
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