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The Payoffs of Owning a UPS Store Franchise

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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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What Makes Five Guys a Tasty Franchise Investment?

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The Origin of  Five Guys Burgers and Fries

The self-described ‘fast-casual high-quality’ burger restaurant was founded in 1986 by Jerry Murrell in Arlington, VA. Murrell is the chief executive and founder. The original concept was a burger joint, plain and simple. He started the first burger restaurant with his five sons, hence the name—Five Guys Burger and Fries. Murrell and his five sons have remained integral to the process throughout the entirety of the company’s growth.

The oldest son Jim helps oversee the entire operation while second in command (and age), Matt is in charge of opening new sites. Chad, next in line, does manager training across the 1400 locations in 8 countries while Ben is the IT guy. Tyler, the youngest, supervises the bakeries that supply Five Guys restaurants’ buns.

The Five Guys menu has not changed much over the years. Every franchise location offers various size burgers with a selection of 15 toppings. The company website boasts that there are over 250,000 ways to order a burger. Fries come two ways—Five Guys style or Cajun style. Hot dogs and veggie sandwiches are also available.  Other than the addition of milkshakes the menu selection has stayed true to the original wishes of Murrell and his sons.

Franchisees have attempted to expand the menu trying to offer additions like chicken sandwiches and coffee. After some trial and error, Five Guys has stood strong and maintained close as possible to core company concepts—burgers and fries.

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

Rapid Franchise Expansion

From the years 2006 to 2012 the company has grown 792% opening almost 1,400 locations in the U.S. and Canada. The franchise plans on continuing its spreading of the burger empire overseas. Locations have opened frequently in the United Kingdom and checkered across the rest of Europe.  200 of the locations are currently company owned with the latter 1,239 shops owned by franchisees.

In 2017, the company’s first quarter total income ended in $388.09 million. A typical Five Guys franchisee owns 10 to 15 restaurants which cost anywhere from $350,000 to $500,000 to open and on average make around 1.2 million in annual revenue. From this, an initial $25,000 franchise fee and 6% royalty fee is taken. The company has high standards—quality is everything, both in product and in the franchisee.

What Makes the Five Guys franchise appeal to the Masses?

Outside of intelligent business decisions, Five Guys has been recognized and awarded by varied media sources most notably the Washingtonian. In 2013, the franchise won the esteemed #1 Burger Chain Honor over Smashburger, In-and-Out, and Shake Shack.

Two famous political stories have added to the burger lore that already mystifies the company’s origins. The first is an order placed by the Pentagon for 15 burgers. Murrell spoke with an admiral explaining that the restaurant didn’t deliver and even went as far as hanging a 22-foot-long banner embroidering the words, “Absolutely No Delivery” over the restaurant. The admiral called Jerry Murrell personally telling him “Mr. Murrell, everyone delivers to the pentagon.”

Another anecdote in the franchise’s history is when former President Obama showed up a to a Five Guys in D.C. and ordered, “A cheeseburger with lettuce, tomato, jalapeños, and mustard.” Obama also ordered burgers for his team starting a series of articles about the love affair between the former president and cheeseburgers. This earned him the title President O’Beef back in 2009.  

What makes a strong and competitive franchise grow at the rate Five Guys has been able to? Strong brand, support, training, and consumer appeal.

What have other franchises in other industries share the same success story?

Splash and Dash Groomerie & Boutique  

  • Initial Investment: $110,750-$177,600
  • Net Worth Requirement: $350,000
  • Liquid Cash Requirement: $125,000
  • Franchise Fee: $48,500
  • Royalty Fee: 6.5%

Just as Americans go crazy for double cheeseburgers they do the same for their pets. In 2009, one man recognized the growing trends of dogs making their way from the backyard to the living room and began new concepts in the pet franchise.

Dan J. Barton became the founder and CEO of Splash and Dash for Dogs (now known as Splash and Dash Groomerie & Boutique). The company started as the answer to a market gap. Catering to pet parents who viewed their animals as more than just an animal. Barton himself was sick of taking his own dog, Mercedes, to industrial feeling big-box pet stores for grooming. The service was bad, the groomers were impersonal, and the pricing made it all seem not worth it. Barton began taking business concepts perfected in the Gym Franchising world and tweaking them for the pet industry.

The concept was simple. A convenient place that pet owners could trust to pamper and love their dog while they got a great cut and could purchase all the necessities of owning a dog. The stores smelled great. The service was warm and knowledgeable, Pets felt relaxed and the prices were fair.

Many became intrigued with opening a small business as a pet franchise owner during the Great Recession. The industry was impervious to the financial decline that was affecting the rest of the economy. The pet industry actually thrived during the recession growing 23.44% from the years 2008 to 2012. Not only was it a financially savvy decision, but franchisees found freedom in the haven of owning their own pet franchise—unrestrained by the limitations of corporate America.

From a franchisee perspective, it feels very similar to Five Guys—a model for success. Investing in Splash and Dash is a continuation of one’s professional development. Shop owners take their business minds, creative ideas, and passion for animals fused with proven business models to become leaders in their community.

With low investment fee, shop owners are able to break even after six months after opening. How is this done? With recurring revenue streams, uncompromising quality in service and products, and love. These core values create the atmosphere of every Splash and Dash location. When you sign on as a franchise owner, Barton and the corporate team help you along the whole venture.

Take it from the shop owner John, ” I spent 20 years in corporate America, and was completely burnt out. I was looking for something that I could do on a daily basis that made me happy. I love Splash and Dash because I spend my days being covered in slobbery puppy kisses and making my clients happy. There’s no better feeling than when you reunite an owner with their freshly groomed, clean furbaby! Also, the corporate office is always there when I need them – which is so important when you’re a new owner and learning as you go.”

 

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