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 2020 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 2020 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 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of The UPS Store’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019, 2018, and 2017 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 2019, 2018, or 2017 calendar years, and reported their gross sales during the entire year

• 2019, 2018, and 2017 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 2019, 2018, or 2017 calendar years, and reported their gross sales during the entire year

Section I – Background Information

15 Things You Need to Know About The UPS Store Franchise

Unveils New, Modern Store Design

1.  In mid-September 2020, The UPS Store unveiled a new and contemporary design of its retail stores, now available for its large network of franchise owners. The first set of fully redesigned stores, which include the first major change to the stores’ layout in two decades, have opened in several markets around the country.

2.  Tim Davis, president of The UPS Store, Inc., said, “In a rapidly changing business environment, The UPS Store seeks to create a place where business happens in real time. We’re elevating the retail experience to cater to today’s small business owner and consumer, while helping drive growth and profitability for our network of franchise owners.”

3.  The transformed look and layout create a more seamless in-store customer experience while reflecting the new demands of a world driven by tech and e-commerce. Compared to the previous design, the new stores are more open in their layout to highlight the breadth of services, brighter in both color and lighting and feature more digital elements than ever before.

4.  The new design is part of a continued strategy to help The UPS Store franchisees thrive in a highly competitive environment. In addition to its current network of franchisees, the new design will be standard for new franchise owners, and the retailer offers both a veteran incentive program and a minority incentive program for new franchisee candidates looking to enter the network.

5.  To thank and honor veterans for their service, the veteran incentive program provides $10,000 off the initial franchise fee. The UPS Store is committed to fostering diversity through the minority incentive program. First time minority franchisees are eligible to receive an approximate 50% discount off the franchise fee. Both veteran and minority franchisees who take part in these programs will develop their location under the new store design.

Offers Entrepreneurs a Chance to Win Up to $25,000

6.  Near the end of January 2020, The UPS Store and Inc. Magazine joined forces to find the country’s most knowledgeable small business owners through an exciting national business competition. Entrepreneurs and innovators from across the country were invited to enter the second annual Small Biz Challenge, a contest that offers eligible entrepreneurs a chance to win up to $25,000 and an editorial feature in an upcoming issue of Inc. Magazine and Inc.com.

7.  With more than 4,800 independently owned and operated franchise locations across the United States, The UPS Store, Inc. understands the hard work and know-how needed to run a business. The nationwide, live business competition will seek out and reward the most outstanding, well-rounded small business owners who can handle anything that comes their way.

8.  Michelle Van Slyke, senior vice president of marketing and sales for The UPS Store, Inc., said, “Our national network of The UPS Store locations serves small business owners in communities across the United States, and every day we see incredible entrepreneurs walk through our doors. The Small Biz Challenge is an opportunity to unite, recognize and reward the best and brightest in a very lively competition.”

9.  During National Small Business Month in May, the contest’s finalists were to play against one another in a competition in front of a live audience, showcasing their small business smarts. Robert Herjavec, investor on ABC’s hit TV show “Shark Tank,” and founder and CEO of Herjavec Group, was to serve as an expert to offer feedback and advice throughout the event to finalists and business owner attendees.

10.  Herjavec said, “As an entrepreneur, I understand the hard work, dedication and risk it takes to run a business and run it well. I am thrilled to participate with The UPS Store once again to recognize some of the most talented small business owners in the country, and help provide an opportunity for them to succeed on a high-profile stage testing their skills, poise and business acumen.”

11.  Unfortunately, due to the ongoing COVID-19 pandemic, The UPS Store has elected to cancel The UPS Store Small Biz Challenge Contest and Events for 2020.

Company History

12.  The UPS Store was originally founded as Mail Boxes Etc. in 1980 by Gerald Aul, Pat Senn, and Robert Diaz in Carlsbad, California. Mail Boxes Etc. was created to provide customers with an alternative to the U.S. Post Office. Over the next couple decades, Mail Boxes Etc. opened thousands of locations across the country. In 2001, the brand was acquired by UPS.

13.  Following the acquisition, UPS rebranded U.S. and Canadian Mail Boxes Etc. locations into The UPS Store in 2003. In 2009, MBE Worldwide S.p.A., a family-owned Italian holding company based in Milan, Italy, which started business in 1993 as the Mail Boxes Etc. Master Licensee for Italy and then subsequently Spain and Germany, acquired the worldwide network of MBE Service Centers (except centers in North America). Today, The UPS Store and international Mail Boxes Etc. operate as separate entities.

14.  Since becoming The UPS Store, the brand has become the world’s largest franchisor of retail shipping, postal, printing, and business service centers. There are now UPS Store locations all across the U.S., Canada, and Puerto Rico.

Entrepreneur’s Franchise 500

15.  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 2020 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 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

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

2019

• Outlets at the Start of the Year:  4,773
• Outlets at the End of the Year:  4,866
• Net Change:  +93

Company-Owned

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

2019

• 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, 2020 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 2019, 2018, and 2017 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 2019, 2018, or 2017 calendar years, and reported their gross sales during the entire year;

• (iii) were in operation as of January 1 of the 2019, 2018, or 2017 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 2019, 2018, or 2017 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 2019, 2018, and 2017 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 2019, 2018, or 2017 calendar years, and reported their gross sales during the entire year;

• (iii) were in operation as of January 1 of the 2019, 2018, or 2017 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 2019, 2018, or 2017 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 2019, 2018, or 2017 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 2019