The UPS Store Franchise Owner’s Lawsuit Certified as Class Action

by Sean Kelly on October 20th, 2007

(FranchisePick.Com) The cautionary franchise tale of the Mail Boxes Etc. franchise and The UPS Store franchise continues. The UPS Store franchisee group Platinum Shield Association’s lawsuit against parent company UPS has been certified as a class-action lawsuit by a California court. A separate The UPS Store franchisee association, the Brown Shield Association, was filed against UPS last year.

The suit is being brought by former Mail Boxes Etc. franchisees who claim that UPS misled them into believing that the UPS Store model would be more profitable.

UPS bought Mail Boxes Etc. in 2001, and allegedly convinced the majority of Mail Boxes store owners to change their store names from Mail Boxes Etc. to The UPS Store. All new U.S. franchisees after 2003 were opened under The UPS Store brand name.

In the lawsuit, the former MBE franchise owners allege lawsuit claims that UPS withheld key information and documents (including results from tests that UPS conducted regarding the new UPS Store business model), from the franchisees in order to persuade them to convert the UPS Store concept. The suit alleges that those documents were withheld to prevent MBE franchise owners from to making an informed decision about the conversion of their stores.

The UPS Store franchise owners also allege that UPS, which sets the shipping rates for its stores, unfairly competes with its own franchise stores for business by offering cheaper rates to its direct-pickup customers.

The suit seeks rescission of the conversion to the UPS store model and unspecified monetary damages, the release said.

Source: Business First of Louisville

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