The UPS Store, a subsidiary of UPS, was founded in 1980 as Mail Boxes Etc and subsequently acquired by UPS in 2003. The company is headquartered in San Diego, California and has been widely considered as the top postal service and mailbox franchise in the country.
The UPS Store currently maintains 4,300 locations across the United States and Canada. The UPS Store franchises focus on selling a variety of office related and postal products, including mailbox services, printing, shipping, labeling, packaging and more. They offer various promotions for new franchise owners, including 10 percent off the initial franchise fee and 50 percent off the application fee for U.S. veterans.
UPS Store Franchise Costs and Expected Profit
The average cost to set up a franchise is between $159,000 and $434,000 for metro store locations, and between $130,000 and $273,000 for a location based outside a large city center. New franchisees must have liquid monetary assets of at least $60,000 to get started with The UPS Store, a requirement that can be met with a co-applicant. In addition to these costs, new franchise owners are expected to have enough savings to cover personal expenses during the first year of operation.
The UPS Store franchise owners can expect to make anywhere between $30,000 and $80,000 in net profit on a yearly basis. The total net profit depends heavily on location of the store. The UPS Store also takes an additional 8.5 percent of gross sales as an annual fee.
Pros of Owning a UPS Store Franchise
The main pro to opening up The UPS Store franchise is the low financial barrier to entry. Applicants also need much less liquid assets when compared to other franchise opportunities.
Training is provided by UPS both at their headquarters in San Diego and at the owner’s physical store location. The training period is very short, and the material is easy to learn.
The biggest downside to owning The UPS Store franchise is the hefty expenses required by the company after the store opens. In many cases, franchise owners have complained that a location would need to generate over $300,000 in annual revenue in order to gain a $30,000 net profit, which can be difficult to accomplish.
In addition to the annual fee collected by UPS, the company retains nearly all profits on shipping services, making it harder for the owner to turn a profit. A large amount of owners have also complained of having difficulty with breaking even or reporting a net loss over several years at a time.