In this FDD Talk 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 The UPS Store franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for The UPS Store franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned The UPS Store outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of The UPS Store’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017, 2016, and 2015 average, median, high, and low adjusted gross sales for the top-performing 10%, bottom-performing 10%, and all traditional UPS Store Centers in the United States and Puerto Rico that were in operation during the entire 2017, 2016, or 2015 calendar years, and reported their gross sales during the entire year

• 2017, 2016, and 2015 average, median, high, and low adjusted gross sales from the Corporate Retail Solutions Program for the top-performing 10%, bottom-performing 10%, and all traditional UPS Store Centers in the United States and Puerto Rico that were in operation during the entire 2017, 2016, or 2015 calendar years, and reported their gross sales during the entire year

Section I – Background Information

16 Things You Need to Know About The UPS Store Franchise

Launches New National Campaign

1.  In early September 2018, The UPS Store launched a new national advertising campaign to demonstrate the full range of products and services The UPS Store locations offer beyond packing and shipping. From copying and printing, to notarizing and shredding, the new campaign encourages small business owners and entrepreneurs to tap into The UPS Store for all of their business and back office needs.

2.  Michelle Van Slyke, senior vice president of sales and marketing for The UPS Store, said, “When you own a business, you have a lot of responsibilities. With our breadth of services, our locations save time for business owners by offering what they need in one place. We understand the challenges small business owners face and they are looking for a resource they can rely on. With our new campaign, we put it all out there, we are deliberately listing out the services offered to share that we provide so much more than just shipping.”

3.  The new “Beyond Shipping” campaign was inspired by a nationwide research effort which revealed that small business owners know The UPS Store takes care of shipping, but were surprised to discover the extensive range of business services the locally owned and operated locations offer.

4.  Lighthearted and humorous, the fully integrated campaign featured fast-paced commercials and videos showcasing the breadth of existing services available at The UPS Store as every “ing” a small business owner might need. The ads were set in fun, everyday places and situations such as the grocery store, a first date, an office party, and even on a roller coaster.

5.  With over 4,700 The UPS Store locations across the United States, the multi-channel campaign was focused on increasing the number of people who came into The UPS Store to use its wide array of services beyond just packing and shipping. Three 30-second television commercials were aired during primetime programs across major networks and cable channels over the month of September. The campaign also included digital, print, radio, and social videos that were rolled out on brand-owned digital channels and beyond.

Celebrates 10th Anniversary of Toys for Tots Literacy Program with $100,000 Giveaway

6.  Back in October 2018, The UPS Store announced that it would be donating $100,000 worth of books to children-focused non-profit organizations across the U.S. to commemorate the 10th anniversary of the Toys for Tots Literacy Program. The UPS Store said that it would give away $10,000 worth of Scholastic books to 10 schools or non-profit organizations in support of children’s literacy in low-income and disadvantaged communities.

7.  People were invited to nominate qualifying charitable and philanthropic groups until December 15. Nominations were submitted online with a brief statement about how the organization will help the Toys for Tots Literacy Program meet its mission to provide books to economically disadvantaged children. The UPS Store selected the winners based on the following criteria: (1) school/organization serves disadvantaged children; (2) school/organization has a clearly defined mission and values; and (3) school/organization demonstrates a need for youth educational resources.

8.  Tim Davis, president of The UPS Store, said, “The UPS Store believes in the tremendous role that literacy plays in setting up children for success in the future. This book giveaway for ten impactful, deserving organizations is the perfect way to celebrate our 10th year anniversary of the Toys for Tots Literacy Program.”

9.  The UPS Store has been the exclusive corporate supporter for the Toys for Tots Literacy Program since its inception in 2008. The UPS Store network of franchises and customers across the nation has helped raise $4.6 million for the program equating to nearly 40 million books. Every book and financial donation during the annual holiday drive benefits local children in need or the libraries, schools, and existing programs that serve them. Additionally, 100 percent of each dollar donated at The UPS Store locations is used to purchase books.

10.  According to retired Lt. Gen. Pete Osman, president and CEO of the Marine Toys for Tots Foundation, “For a child living in poverty, if a parent has reading materials in the house and takes time to read to the child, the child’s reading proficiency and abilities will accelerate. Together, we have been able to distribute more than 39 million books to less fortunate children across the country. We are so grateful for our partnership with The UPS Store in making a difference in these communities that need it most.”

11.  At the end of January 2019, The UPS Store announced the winners of the Toys for Tots Literacy Program contest. Each of the following non-profit organizations will be receiving $10,000 worth of books from Scholastic:

• Boys & Girls Club of Southeast Louisiana, New Orleans, LA;
• Bridge of Books, Rumson, NJ;
• CCs Early Learning Head Start, Wasilla, AK;
• Dayton Elementary School, Dayton, MT;
• Every Child A Reader in Escambia (ECARE), Pensacola, FL;
• Freedom Readers, Myrtle Beach, SC;
• Mary Wood Weldon Memorial Library, Glasgow, KY;
• Poston Road Elementary, St. Martinsville, IN;
• Read Aloud West Virginia, Charleston, WV; and
• Ready Readers, St. Louis, MO.

12.  The UPS Store received over 1,000 submissions. A selection committee reviewed all nominations and chose the 10 recipients based on their mission to serve children in underserved communities, especially by providing educational resources and enrichment.

13.  Tim Davis, president of The UPS Store, Inc., said, “As a company committed to the cause of children’s literacy, The UPS Store, Inc. is thrilled to support the non-profit organizations and schools selected for our Literacy Recognition Program. These non-profit organizations exemplify a shared vision of helping children succeed through education, with a special emphasis on the importance of learning to read.”

Company History

14.  The UPS Store began as Mail Boxes Etc., which was established in 1980 by Gerald Aul, Pat Senn, and Robert Diaz in Carlsbad, California. Mail Boxes Etc. was started as an alternative to the U.S. postal service. Eventually, Mail Boxes Etc. grew into a global franchise offering pack and ship, logistics, communications, and marketing services to businesses and consumers.

15.  In 2001, Mail Boxes Etc., Inc. was acquired by UPS and two years later, The UPS Store concept was introduced. Approximately 3,000 Mail Boxes Etc. stores were rebranded into The UPS Store and began offering lower (around 20% on average) UPS-direct shipping rates. Today, Mail Boxes Etc. still has international locations, while The UPS Store operates out of the United States, Canada, and Puerto Rico.

Entrepreneur’s Franchise 500

16.  The UPS Store ranked No. 5 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of The UPS Store franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on The UPS Store’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  4,479
• Outlets at the End of the Year:  4,548
• Net Change:  +69

2016

• Outlets at the Start of the Year:  4,548
• Outlets at the End of the Year:  4,593
• Net Change:  +45

2017

• Outlets at the Start of the Year:  4,593
• Outlets at the End of the Year:  4,669
• Net Change:  +76

Company-Owned

2015

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2016

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2017

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

Part 1 – The UPS Store’s Financial Performance Representations (Average and Median Adjusted Gross Sales of All Centers, Top 10% and Bottom 10% of Centers)

This historical financial performance representation contains:

1.  the actual, average, annual adjusted gross sales and the actual, median, annual adjusted gross sales during each of the 2017, 2016, and 2015 full calendar years of all The UPS Store Centers in the United States and Puerto Rico that:

• (i) operated at “Traditional” sites;

• (i) were in operation during the entire 2017, 2016, or 2015 calendar years, and reported their gross sales during the entire year;

• (iii) were in operation as of January 1 of the 2017, 2016, or 2015 calendar years, and then operated until at least sometime in December of that calendar year, and reported their gross sales for the entire timeframe during which they operated; and

• (iv) opened sometime during January of the 2017, 2016, or 2015 calendar years, and then operated until at least sometime in December of that calendar year, and reported their gross sales for the entire timeframe during which they operated.

2.  as a component of that system-wide adjusted gross sales information, the actual, average, annual adjusted gross sales and the actual, median, annual adjusted gross sales during each of the 2017, 2016, and 2015 full calendar years of the top-performing and bottom-performing (in terms of adjusted gross sales) 10% of the franchised The UPS Store Centers in the United States and Puerto Rico that:

• (i) operated at “Traditional” sites;

• (ii) were in operation during the entire 2017, 2016, or 2015 calendar years, and reported their gross sales during the entire year;

• (iii) were in operation as of January 1 of the 2017, 2016, or 2015 calendar years, and then operated until at least sometime in December of that calendar year, and reported their gross sales for the entire timeframe during which they operated; and

• (iv) opened sometime during January of the 2017, 2016, or 2015 calendar years, and then operated until at least sometime in December of that calendar year, and reported their gross sales for the entire timeframe during which they operated.

3.  A UPS Store Center’s adjusted gross sales in a particular year are included in the calculation of the system-wide average adjusted gross sales during the 2017, 2016, or 2015 calendar years (subject to the qualifiers above) even if:

• (i) that Center’s ownership changed during the calendar year; or

• (ii) the Center did not operate during one or both of the other calendar years represented in this historical financial performance representation.

4.  The UPS Store Centers whose annual average adjusted gross sales and annual median adjusted gross sales are included in the calculation reported below are located only at “Traditional” sites.

• Traditional sites are highly visible locations in strip shopping centers or high foot-traffic downtown areas in urban, suburban, and rural markets.

• The UPS Store offers franchises for Centers at Non-Traditional sites under its Non-Traditional FDD. The characteristics of Non-Traditional sites vary significantly. The UPS Store included in this financial performance representation the results of only Traditional The UPS Store Centers because the Traditional site model is the only Center model it offers under this disclosure document.

5.  The UPS Store has not independently audited the financial information reported by franchisees.

Definition of Terms

1.  “Adjusted Gross Sales” are defined as a franchisee’s total gross sales (not including sales taxes collected from customers), plus “gross commissions earned” less certain permitted “exclusions.”

2.  “Gross Sales” is the total of all revenue derived from products and/or services sold by or through a Center during the franchise term, whether evidenced by cash, services, credit, property, barter, electronic funds transfer, or other means of exchange, and whether or not the products and/or services are sold in any other Center. “Gross Sales” includes UPS shipping costs that a franchisee receives from its customers.

3.  “Gross Commissions” is the total amount of all commissions actually earned by a franchisee during the franchise term on account of those transactions occurring at the Center in which the franchisee acts as agent for certain vendors or service providers specified in the Manuals, for example, UPS Drop-Off Program compensation.

4.  Examples of permitted “exclusions” are Counter Manifest System Processing Fees and deposits toward products to be sold or services to be rendered.

Year 2017