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Earnings Claims of Top Franchises Revealed

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FDD Talk 2015: The UPS Store Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on June 17, 2015

in FDD Talk 2017: Service Franchises, Franchise Earnings, Shipping Franchise

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The UPS Store Photo by RetailByRyan95

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on The UPS Store franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a UPS Store franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of The UPS Store’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014, 2013, and 2012 average adjusted gross sales for the Top 5%, Top 10%, Top 20%, and All UPS Store Centers in the United States and Puerto Rico that were in operation during the entire 2014, 2013, or 2012 calendar years, and reported their gross sales during the entire year
  • 2014, 2013, and 2012 average adjusted gross sales from the Corporate Retail Solutions Program

Section I – Background Information

Increasing numbers of consumers are willing to go out of their way to patronize small businesses, according to a survey conducted by The UPS Store.

The survey, whose results were released in May 2014 during Small Business Week, showed that an overwhelming 94 percent of respondents believe that shopping at local small businesses is important. Furthermore, 90 percent of consumers taking the survey agreed that small businesses are an important part of the U.S. economy.

The findings indicate a 41 percent increase from 2013 to 2014 in the number of consumers who paid more to support a small business over a big-box corporation, and a 36 percent increase in the number of consumers who went out of their way to patronize a small business.

Salute to Small Businesses

The UPS Store continued its focus on small business in May 2015 with its Small Biz Salute campaign, which honored small business owners across the country for National Small Business Week. The weeklong observance included events in Seattle, Washington; Austin, Texas; and Atlanta, Georgia, featuring coffee shop promotions and evening happy hours.

In October 2014, The UPS Store launched a Small Business Portal with resources for small-business owners.

A small-business campaign, “Mailbox Confessions,” started in September 2014 with TV, print, radio and online digital content highlighting franchise owners and customers.

In January 2014, the chain observed National Mentoring Month with a focus on mentoring small-business owners. The UPS Store partnered with SCORE, a nonprofit that does small business education and mentorship, to help small-business owners learn how they can find mentors and benefit from them.

Chain Started As Post Office Alternative

The UPS Store Inc. was founded in 1980 as Mail Boxes Etc. Inc. The first location was opened in Carlsbad, California, by Gerald Aul, Pat Senn and Robert Diaz, who saw the store as an alternative to the post office.

The company was acquired by United Parcel Service (UPS) in 2001, and about 3,000 locations were rebranded as The UPS Store in 2003. During the following year, Mail Boxes Etc. Inc. sold more than 500 The UPS Store franchises in the U.S.

Mail Boxes Etc. Inc. changed its name to The UPS Store Inc. in 2012.

With nearly 4,500 stores in the U.S., Puerto Rico and Canada, The UPS Store locations provide packing, shipping, mailing, printing and business services.

Data Breach Affects 51 Franchises

Malicious software was found within the systems of 51 The UPS Store franchises in 24 U.S. states (about 1 percent of the company’s 4,470 locations), the company announced in August 2014. Customer names, mailing addresses, email addresses and payment information may have been exposed.

Most of the stores were affected between March 26 and August 11, although some evidence of malware was discovered as early as January 20. The UPS Store offered free credit monitoring and identity theft services to customers for one year for anyone who had used a credit or debit card at a UPS Store location. The company embarked on an internal review and retained an IT security team.

3-D Printing Expands

The UPS Store expanded its 3-D printing services in September 2014 as its 2013 pilot program of six stores expanded to 100 stores in 23 states and Washington, D.C. The UPS Stores use the Stratasys uPrint SE Plus professional-grade 3-D printer.

Small businesses, inventors, artists and others used the service during the pilot period. Prices vary depending on how complex the object is; a simple object can be printed in several hours, while a more complex object may take more than a day.

In August, professional golfer Lee Westwood, a UPS global brand ambassador, visited The UPS Store in New York City to promote the 3-D printing services for small businesses. Westwood put on a putting demo featuring a 3-D putter, a replica of his PING putter, created using the 3-D printing services at The UPS Store.

Online Printing Platform Added

The UPS Store started a nationwide online printing platform in January 2015, in collaboration with PrintSites. Customers can upload documents and materials via custom templates and pick up the print jobs at their nearest The UPS Store location hours later.

Section II – Estimated Costs

  • Please click here for detailed estimates of The UPS Store franchise costs, based on Item 7 of the company’s 2015 FDD.

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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