UPS IS CURRENTLY RANKED #4 IN THE FRANCHISE 500 – ARE YOU CERTAIN YOU CAN TRUST INDUSTRY REVIEWS?
Lately we have had several requests to review the UPS franchise, is it a good franchise to own? Let’s take a look.
Taken from their 2017 FDD the Cost to open a UPS Store franchise ranges from $177,955 to $402,595. Royalties are 5% marketing is 1% national ad fee is 2.5%. We’ll get into some more fees a bit later on.
To clarify the business relationship – The UPS Store, Inc. is the franchisor and UPS is the parent entity. UPS franchised stores are retail storefronts which offer mail and parcel services as well as other assorted services like notary,copying, office supplies, printing and others.
UPS is a very well known brand name – and like we have said in other videos with franchises like Subway or Quiznos, a big name does not necessarily mean security and wealth for its franchisees. Please don’t think just because a franchise is well known that you don’t need to perform due diligence.
The UPS Store franchise has been no stranger to Litigation over the years. when MailBoxes etc switched to UPS way back in 2003 they were sued class action style based on the assertion that this rebranding violated California, New York and Illinois franchise laws. Many, many franchisees were very unhappy when this change took place and the consensus seemed to be that their potential for profits were severely undermined and that UPS had essentially cheated them. As a result of that suit ultimately 10 years later 143 franchisees were awarded $4.2 million. The claims of the class action suit were not part of the settlement and remain pending.
If you take a close look within the pages of the UPS franchise 550 page franchise disclosure documents, there are almost 10 pages of lawsuits concerning in legal terms things like breach of contract, fraud, negligent misrepresentation and similar. In non legal terms a lot of franchisees felt they were royally screwed by UPS.
Not to be outdone UPS of America then sued a bunch of their own franchise owners in 2014 for things like trademark infringement, breach of contract, unfair competition, and failure to comply with post termination provisions of their franchise agreements. The franchise owner defendants denied all claims and filed a counter suit against UPS. Last I heard the franchise owners and their 11 stores had been ordered to pay UPS franchising 1 million dollars.
There are other lawsuits against the UPS franchise including allegations of overcharging for notary services, civil theft, slander, fraudulent use of personal identification without consent, even some RICO act (Racketeer Influenced and Corrupt Organizations). In defense of UPS they do state they intend to vigorously defend against these allegations. (continued at http://www.franchise.city/ups-franchise-review