The Payoffs of Owning a UPS Store Franchise

Investors looking for reasons to invest in the UPS store franchise will not have to look far. The UPS store is a pervasive and welcomed force in the packaging services industry rivaling the United States Postal Service and Federal Express. The company incorporated in 1980 completing a long evolution starting in the early 20th century.

The store is responsible for more than just shipping. UPS Stores also handle printing business cards, letterhead, posters, flyers, and other general business services like notaries. Currently, UPS handles both U.S. domestic packages and international packages shipping to over 220 countries and territories across the world.

With 4,600 independently owned locations, even the brown color of the UPS trucks have become more than a figurative symbol of the UPS brand power. What can brown do for you? The franchises’ “road warrior” truck-force is widely visible. The omnipresence of the brown trucks alone makes UPS’ brand power recognizable by small business and international corporations alike.

The slogan is now, “United Problem Solvers,” changing two years ago from the “We Love Logistics” slogan that launched in 2010. According to Forbes 500 list, the company’s market cap is at $91.3 billion as of May 2017. There are over 4,600 franchise locations in the UPS store franchise.

Initial Investment: $159,224-$434,521
Net Worth Requirement: $150,000
Liquid Cash Requirement: $60,000-$100,000
Franchise Fee:$29,950
Royalty Fee: 5%

The History Behind The Company

Since incorporating in 1980, the UPS Store franchises have been serving small business communities for the past 37 years, under this company name. (Although they have been operating for much longer under various company names and business models). They are the seventh-largest employer in the U.S. with 362,000 domestic employees and 444,000 global employees.

Of course, it wasn’t always the United Parcel Service. The company was originally called American Messenger Company originating in 1907. The company’s current headquarters is based in San Diego, California, but the company’s first parcel delivery service was in Seattle, Washington. During this budding era, the company was known as American Messenger Company.

This was back in 1907 when most deliveries were made on foot. Bicycles were used for longer trips. Fast forward six years, the Model T Ford became the company’s first delivery vehicle. At this point, the company was operating under the name Merchants Parcel Delivery.

In 1916, the company resettled in Oakland, California and changed its the name to the now known–United Parcel Service. With technological innovations like the conveyor belt system, UPS was able to expand to deliver up to 125 miles outside of Los Angeles. The delivery service did not stop there.

In 1975, the now UPS Store was able to begin servicing 48 states in the U.S. and began establishing operations in Canada. Ten years later UPS Next Day Air Service was launched for all 48 states and included delivery to Puerto Rico.

From 2001 to 2003, the UPS Store franchise acquired Mail Boxes Etc. and officially re-branded 3,000 locations as the UPS Store, but has been franchising locations since 1980.

What Makes Owning a UPS Store Franchise Location so Appealing?

A UPS store is a one-stop-shop for small business owners and employees. All general business service needs are handled by all UPS locations making the franchise convenient for customers, and essential for other small business owners.

The entire UPS store franchise also has the most advanced technology in its segment. The franchising network engages with the most contemporary and highly developed digital information systems in the world. This technology makes it possible for franchisees to deliver more than 13 million packages, documents, and pieces of mail daily. The tracking system that UPS uses is also state-of-the-art. The company’s system enables customers to track every packages’ location.

This year Entrepreneur Business Magazine listed the UPS store #1 in the postal and business services category. Since UPS first earned this ranking, the company has not budged from the position in 27 years. The UPS store franchise is a nationally recognized franchise brand with a myriad of media outlets. The famous brown trucks weave seemingly across the globe delivering anything from pianos to happy birthday letters.

Down Sides to the UPS Store Franchise

As with all franchise opportunities, there is no guarantee of success. Securing profits is a question of how hard franchisees work, the support and training corporate supplies, and talented marketing. It has been reported by The Balance, that it takes a UPS Store franchise “$365,000 in annual gross sales” for a franchise owner to yield a “$35,000 a year income.” The same report states that “about 60% of all US stores do not break even.”

The breakdown of this means that a UPS Store Franchise would have to make over $30,000 in monthly sales for an owner to receive any profit. However, those looking to purchase a franchise should take figures like these with a grain of salt. Forbes has ranked the company as #70 in profit based on accurate key metrics.

Basically, franchising–like all business–has no guarantee of making money. Franchise owners can profit hugely and expand, or close their doors within five years. Success is contingent on making the right business decision and this includes choosing the right franchise.

Here are some other franchises worth researching.

Splash and Dash Groomerie & Boutique

Although Splash and Dash franchise operates in a completely different industry than the UPS Store franchise, both companies emerged as leaders in their respective industry through similar means.

Splash and Dash is a pet spa retail store with a mom-and-pop feel with big-box capabilities. The franchise recently ranked #59th on Entrepreneur’s Franchise 500 list. A comprehensive evaluation on areas of costs, fees, size and growth, franchisee support, brand and financial strength, and stability led the company to earn the ranking.

The pet franchise has also ranked on other business magazines like INC 500 List and has been featured in countless media outlets. The company has been franchising since 2004 with a 1200% three-year growth rate. The swiftly growing pet industry is also to thank for Splash and Dash’s success with a growth rate of 269% from 1994 to today.

What advantages does Splash and Dash Groomerie & Boutique have over the competition?

The pet franchise has access to cutting edge terminal software. This technology streamlines every function of business making it easy for shop owners to profit. Support and training are also vital for both franchises. Splash and Dash retains talented shop owners trained to develop franchise locations that will succeed. Another vantage point shop owners in the Splash and Dash franchise enjoy is recurring revenue. Business models that utilize recurring revenue both secure profits and allow for franchise owners to break even with the goal of six months after soft opening.

Initial Investment: $152,000-$360,300
Net Worth Requirement: $500,000
Liquid Cash Requirement: $150,000
Franchise Fee: $25,000
Royalty Fee: 6%

Whether you are looking for an internationally delivering parcel business, or see yourself in the pet care franchise, an opportunity to own your own small business is the dream you can make a reality.

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