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 2019 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 2019 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 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD

• Section V – Presentation and analysis of The UPS Store’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018, 2017, and 2016 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 that were in operation during the entire 2018, 2017, or 2016 calendar years, and reported their gross sales during the entire year

• 2018, 2017, and 2016 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 that were in operation during the entire 2018, 2017, or 2016 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 Mission: Veteran Entrepreneurship

1.  In late May 2019, The UPS Store announced the launch of Mission: Veteran Entrepreneurship, a program offering significant financial incentives – valued at nearly $300,000 – for a select group of qualified U.S. military veterans to help open their own The UPS Store franchise location.

2.  The UPS Store, Inc. is proud to support America’s U.S. armed forces as they pursue starting their own business and as part of this effort, the company will waive the franchise license fees for 10 first-time veteran franchisees. The first 10 eligible veterans to submit a complete buyer’s application packet and initial application fee were awarded $29,950 in waived franchise fees. The UPS Store, Inc. accepted franchise application packets through Monday, November 11, 2019 (Veterans Day).

3.  Veterans are often some of the most qualified and successful prospective franchise owners, as franchising offers a unique business opportunity incumbent on strong leadership skills. According to the Veterans Transition Franchise Initiative (VetFran), at least 97 percent of franchisors believe that veterans would make excellent franchisees, with 70 percent hiring a veteran franchisee or employee in the last year alone.

4.  According to Tim Davis, president of The UPS Store, Inc. and a U.S. Marine Corps veteran, “The UPS Store, Inc. is deeply committed to helping veterans transition back into civilian life and achieve their dreams of owning a business. We are thrilled to launch Mission: Veteran Entrepreneurship and offer this financial incentive to those who have given and sacrificed so much for our country.”

5.  The pledge, announced at the 2019 International Franchise Association (IFA) Convention, builds on The UPS Store, Inc.’s ongoing participation in the Veterans Transition Franchise Initiative (VetFran) to provide discounts in franchise fees for qualified veterans, active military, and their spouses. Of the over 4,800 The UPS Store locations in the U.S. (at the time of the press release), more than 400 are owned by veterans and that number continues to climb.

6.  Isaac Gonzalez, a franchise owner and U.S. Marine Corps veteran, benefited from The UPS Store, Inc.’s financial incentives for veterans in 2011. The support helped him launch and sustain his own The UPS Store location near a military base in Ruther Glen, Virginia. Gonzalez said, “As a veteran, you hold lots of pride, something you get to carry out in your business as a franchisee. To be able to take that strong sense of responsibility and apply it to your business is really important.”

Wins Sweepstakes Award at 2020 Rose Parade

7.  At the beginning of January 2020, The UPS Store made its fourth appearance at the Rose Parade, winning the Sweepstakes Award for its inspiring float, “Stories Change Our World,” created to underscore the need to improve children’s literacy on the national stage and instill the spirit of hope.

8.  The Sweepstakes Trophy is presented to floats for the most beautiful entry, encompassing overall float design, floral presentation, and entertainment. This is the second year in a row that The UPS Store, Inc. won the parade’s prestigious top prize.

9.  Tim Davis, president of The UPS Store, Inc. said, “The UPS Store, Inc. is once again honored to receive this year’s Sweepstakes Trophy for our majestic float. We are incredibly grateful to the float builders, float decorating volunteers and The Tournament of Roses volunteers and staff in helping us highlight the importance of childhood literacy in a colorful way and in a national spotlight.”

10.  The UPS Store, Inc.-sponsored Rose Parade float, titled “Stories Change Our World,” made its way down Pasadena’s iconic 5.5 mile stretch of Colorado Boulevard. Designed by Fiesta Parade Floats, the majestic float showcased tamarin monkeys, an endangered species, alongside toucans, salamanders, butterflies, and parrots, to represent hope and strong community ties.

11.  At 35 feet tall and 55 feet long, the float featured thousands of fresh flowers with animated animals and three sparkling waterfalls, all of which were synchronized and powered by a state-of-the-art hydraulic system. The float was meticulously adorned with diverse floral varieties, from vibrant blue Statice blossoms to 25,000 dark pink Hot Lady roses.

12.  The fanciful float served as inspiration for the winning young authors of “Tell Your Tale,” a short story contest. Their stories are included in a special anthology book, in which 10,000 print copies were handed out at the Tournament of Roses Post Parade event through January 2. The book is also available for download online. Additionally, a number of the books are being distributed in braille to the Los Angeles area to support literacy for children that are visually impaired.

13.  The national retailer’s showing at the parade serves as the culmination of the annual Toys for Tots Literacy Program, created by The UPS Store, Inc., and the Marine Toys for Tots Foundation in 2008. The UPS Store network has collected more than $5.1 million and distributed over 41 million books to help children who need it most since the Toys for Tots Literacy Program began.

Company History

14.  The UPS Store was originally founded as Mail Boxes Etc. – which is still around today as a completely separate entity – in 1980 by Gerald Aul, Pat Senn, and Robert Diaz in Carlsbad, California. Aul, Senn, and Diaz started Mail Boxes Etc. to provide consumers with an alternative to the U.S. Post Office. Over the next few decades, Mail Boxes Etc. continued to grow and in 2001, UPS acquired Mail Boxes Etc., Inc.

15.  In 2003, UPS rebranded around 3,000 Mail Boxes Etc. stores. Over the next year, UPS sold more than 500 new The UPS Store franchise locations in the United States. Today, The UPS Store has become the world’s largest franchisor of retail shipping, postal, printing, and business service centers. There are UPS Store locations all across the United States, Canada, and Puerto Rico.

Entrepreneur’s Franchise 500

16.  The UPS Store ranked No. 5 on Entrepreneur’s 2020 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 2019 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 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

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

2018

• Outlets at the Start of the Year:  4,669
• Outlets at the End of the Year:  4,773
• Net Change:  +104

Company-Owned

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

2018

• 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, 2019 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 2018, 2017, and 2016 full calendar years of all The UPS Store Centers in the United States that:

• (i) operated at “Traditional” sites;

• (i) were in operation during the entire 2018, 2017, or 2016 calendar years, and reported their gross sales during the entire year;

• (iii) were in operation as of January 1 of the 2018, 2017, or 2016 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 2018, 2017, or 2016 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 2018, 2017, and 2016 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 that:

• (i) operated at “Traditional” sites;

• (ii) were in operation during the entire 2018, 2017, or 2016 calendar years, and reported their gross sales during the entire year;

• (iii) were in operation as of January 1 of the 2018, 2017, or 2016 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 2018, 2017, or 2016 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 2018, 2017, or 2016 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 2018