The UPS Store Franchise: Follow the System and Succeed!
(FranchisePick.Com) Do you believe that The UPS Store franchise has a solid business model and support system that, when diligently and faithfully applied, will provide franchise owners an attractive return on their investments? Can you give an example?
This and its companion post (The UPS Store Franchise: This Dog Won’t Hunt!) constitute a challenge I proposed to both sides of the debate.
Believers in The UPS Store franchise are invited to provide a list of successful stores that they think are run in accordance with the company’s guidelines and that show that the The UPS Store model, if diligently run on typical-to-good circumstances - will be successful.
Provide such information as:
- Store location
- When founded,
- Owner’s names,
- Estimated revenue,
- Type of area
- Link to a picture
No stores with extraordinarily high traffic or uncommon locations.
Skeptics of The UPS Store franchise are invited to visit the companion post (The UPS Store Franchise: This Dog Won’t Hunt!) and provide a list of unsuccessful stores (open or closed) that you think are or were run in accordance with the company’s guidelines
A priority should be placed on promoting - not maligning - any open stores and their owners.
WHAT DO YOU THINK? CAN YOU NAME A UPS STORE THAT SUCCEEDS UNDER NORMAL CIRCUMSTANCES? SHARE IT IN A COMMENT BELOW.
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POSTED IN: UPS STORE
10 opinions for The UPS Store Franchise: Follow the System and Succeed!
The UPS Store Franchise: This Dog Won’t Hunt!
Apr 25, 2008 at 11:57 am
[…] and its companion post (The UPS Store Franchise: Follow the System and Succeed!) constitute a challenge I proposed to both sides of the […]
cg
Apr 25, 2008 at 1:53 pm
Sean
most of the running to specs and still not having a successful store examples are in law suits which would prohibit them from posting anything
sean
Apr 27, 2008 at 2:29 pm
cg:
Understood. But there’s not a single published article, interview, case study in the public domain or not involved in the lawsuit?
There’s no shortage of hype on what a great opportunity the UPS franchise is. No one can anonymously supply a single example?
It’s interesting to note that being sued may provide a boom time for franchisors to sell franchises while their detractors are silenced.
Sean
cg
Apr 28, 2008 at 10:07 am
call and ask Mail Boxes Etc/Ups for the results of the Boston Consulting Group evaluation of “the UPS store”
tammy
May 10, 2008 at 5:10 am
I used the post boxes at the UPS store on Jonesboro Rd on 289 McDonough, GA 24135. Rented a box for 6 months. Went back and renewed SAME box another 6mnths. Then not even 2 months later got a note saying I need to renew again. I went up and called and it had gone from $96.00 for a med for 6 months to now my box 326 is considered a large and is $96.00 for every 3 months. How can this be? I talked to the Manager Lindsey and she stuck behind their new thing. I asked for a corporate number and they said there is none. I asked to speak to the manager and was told they dont work there and Lindsey has the say. Anyway DONT use this store. Service is aweful and they up and down their prices and procedure at their leisure. I have also posted my complaint on BBB.
Rags
May 12, 2008 at 1:36 pm
Sean
I went to the local UPS store to drop off the package. I asked the friendly associate to tape my box and affix my printed UPS shipping label. He did, but charged me $1 for a strip of tape. He explained that he makes no money from people dropping off packages and in my case he lost money because he spent time and material and hence had to recover that cost.
It was not a big deal to pay a dollar. But …
Do businesses need to make money off of every customer interaction? The problem with most businesses, especially those run in franchise model with very low operating margin, is that they look for every opportunity to amortize the costs.
They look at customer interactions as transactional and not as a relationship.
The transactional model assumes every customer will visit your store exactly once (at least for the next few years). So the goal is to get the customer to pay. Even a small act you do for the customer needs to be charged.
We can’t blame the franchisees for trying to stay afloat but customer experience is tied to the main brand. A customer will then relate the same experience to every UPS store and its offerings rather than treat it as one off experience with an individual.
UPS should incent the franchisees to build better relationships, and help reduce overhead costs by providing simple supplies to the stores to create better experience.
sean
May 12, 2008 at 3:31 pm
Rags:
I agree with what you’re saying. Ultimately, the fault lies with UPS to put their franchise owners in this position. It sounds as though that owner handled it as well as he could. But it’s still an awkward situation for everyone.
The problem ultimately lies with the fact that, according to the franchisees, UPS double-crossed the Mail Boxes Etc. franchisees that they convinced to convert to The UPS Store brand. They got the MBE owners to drop FedEx, dhl and other competitors, then rewarded them by going direct to their customers with lower prices, then turning the franchisee’s store locations into big drop boxes.
UPS should not only compensate franchisees for materials, etc., but also for the business zees will tell you they effectively stole from their own franchisees.
cg
May 13, 2008 at 8:21 am
Sean is right RAGS. The issue is that the UPS customer in most cases is driven into the store on a drop off and with that does not contribute to the operating cost of that franchisee. Hence you get situations such as the other customer above complaining of the increase of mail box service. The problem is the UPS customer (the drop off customer) is not paying his fair share. He is price driven yet feels as if the franchise owner shouldn’t be. The bottom line is to stay in business you have to make money. If UPS is driving 3000 of their customers into your store yet those customers do not contribute to your operating cost in proportion to the servicing you are required to do and the operating charges you have to carry so the UPS customer has the CONVIENCE of doing business with UPS and not the store owner something needs to change on both the consumers understanding and UPS’s understanding. The consumer would not like to go into work and donate time to his employer with out earning a salary. Well hello the franchisee doesn’t like it either. Especially since UPS sold him a “bill of goods” The plain fact is and Scott Davis ( I believe it was him) in the recent stockholders meeting when question if the purchase of MBE had worked out for UPS said yes, they needed convenient locations for their reverse supply side and MBE served that goal That Reverse supply side IS THE DROP OFF PROGRAM. UPS leveraged it’s profits against the ROI of the Franchisee. There is no way, any way that you cut it that this ends up in the long run being good for anyone other than UPS.
Rags
May 13, 2008 at 3:32 pm
cg:
Thanks for taking the time to write a detailed answer. I do not know about the franchise deals nor do I want to take sides without knowing the details. I do want to bring out a different perspective based on value addition and lifetime value of customer:
You said the customer is not paying her fair share. We can’t expect customers to pay for something they do not value. We cannot expect customers to pay for cost amortization. There are substitutes for them like USPS that would pick the packages from their door. If there is a charge for a customer to drop off the package, they will stop doing so.
The underlying question is, did the stores add value to UPS when they became part of the latter and if they did the franchisees make sure they get a share of the value they added. If 3000 customers who are dropping off packages saved transportation cost and other costs for UPS, then the stores should expect a share of their value add.
On the other hand if 3000 customers are walking into the store who otherwise would not have, then this creates a great opportunity to convert some of these drop-off customers into customers for other value added services. Such conversions will lead to higher lifetime value for these customers than what the stores would generate by charging for a drop off.
ASK THE MAN THAT OWNS ONE
May 13, 2008 at 7:23 pm
Gentlemen, you can talk all you want about lifetime value of a customer. If the UPS Store goes under next month, the lifetime value is lost.
If UPS believed in relationship building versus transactional based actions, explain why they refuse to mix their own margins and insist on high margins on every facet of their business.
For example, when UPS charges a rurall surcharge on top of a residential surcharge plus a fuel surcharge, that is certain treating the interaction with that customer as transactional not relationship building. They are insisting every package pays its way. If they gave a hoot about relationship building, they would eliminate all those pesky surcharges to build relationships with customers rather than what they do now. You mail a package to grandma in the outlying area, with all the charges you pay a lot more than what it would cost parcel post, You are perceived as high price and I won’t be back to ship that package to a business where you actually are competitive with the post office.
That is transactional thinking at its worst.
They as a company, UPS preaches about lifetime value of a customer at meetings. Only problem, they don’t practice what they preach.
Would you believe UPS assesses rural surcharges on close to 70% of all US zip codes and many of those areas are not all that rural.
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