Is The UPS Store a Good Franchise Opportunity?
February 2, 2007 by Sean Kelly
Filed under Business
Craig Hsueh over at Blue MauMau posted a story and a link to an article citing a study naming the UPS Store as the “Most Competitive U.S. Retailer”According to the article:
The UPS Store has the biggest competitive advantage among retailers in the United States this year, according to a new study released by the NRF Foundation, the research and education arm of the National Retail Federation….
…The UPS Store (NYSE: UPS – News) tops the list, followed by Dollar Tree, Dollar General, Walgreens, Kenneth Cole, Petco, Kohl’s, Target, Men’s Wearhouse and PetSmart….
The UPS Store franchise program has been embroiled in controversy and lawsuits from franchisees who contend their franchisor unfairly competes with its franchisees.
WHAT DO YOU THINK? IS THE UPS STORE A GOOD FRANCHISE OPPORTUNITY? Leave a comment and tell us what you think.
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Looking to purchase a UPS Store for resale in biz since 6 years.
Sales Close to 300 K
What price is right? I am in IT should i quit my career and go in this business?
Thanks.
Z.
What part of Ohio are you looking 2 buy?
It is around dayton area. Yeah I am complaining about it..thats true!, but I need to do something, i have no job and i want to atleast take care of my expenses. i know there won’t be much growth, but what else is out there that is consistent and has good store hours and is somewhat of a nice clean business. I was thinking of gas station, but its dirty, long odd hours penny business. About the litigations, i don’t care that much. local owners I talked to, don’t really care that much and just say that focus on ur business and sales. i mean i am not looking to strike rich, but u know just have a decent honest simple clean living. don’t have to worry about getting laid off and crap. Advise please??
how much is he asking?… what area?…. basically u buy a job.
Unbelievable that you could buy a UPS Store for $55,000 when it costs a NEW franchisee $275,000 to $350,000 to build a new store and to try to bring it to breakeven status —-but is it a good deal for you? What kind of return will there be for you? Will you be the manager and how much will you make for the six-day-a-week, 11-hour days? Are you buying from the first owner or is this a resale of a resale unit? Why is the owner selling?
Make sure you actually SEE the Business Tax Return of the Seller to confirm that gross was $300,000.00 and be sure to canvass the neighborhood and see where your competition is now, or where it may be in the future if this is an old neighborhood and new commercial space is being constructed, etc…
Good Luck to You.
thanks for reply, carol. Please comment further.
Here is the crosssection of the store:
Seller’s Asking Price: $55,000.00 ( Plus Buyers Fees )
•Opened: June 1, 1998
•Lease goes to: May 31, 2013
•Option(s) to renew: One for 5 years
•Adjusted Gross Sales:
2006 $352,051
2007 $344,241
2008 $302,764
Fees: (In Addition to the Asking Price)
•MBE Transfer Fee – (Buyer) $ 5,000.00
•Escrow Fees (1/2 Buyer & Seller) $ 2,000.00 (est.)
•MBE Processing Fee(Seller) $ 4,000.00
•In Center Training Fee(Buyer) $ 2,000.00
•MBE Training in San Diego – (Buyer) $ 2,500.00 (+ food & lodging)
Additional Person $1,250.00
•Sales Tax on Fixtures & Equipment(Buyer) $2,000.00 (est.)
•Fee to bring Center to 10 years on Franchise(Buyer) $ 750.00 (est.)
Total Buyers Fees $13,250.00 (In addition to the Asking Price)
Total Sellers Fees $ 5,000.00
MBE Required Upgrades
•Fixtures & Equipment Completed March 2009
Monthly Fixed Costs Include:
•Space Lease $3,885.00
•CAM (Bldg Maintenance) $ 970.00
•Insurance $ 229.00
•Phone (+Yellow Pages) $ 288.00
•Copier Lease $ 386.00
•Employee Salaries $ 2,800.00
•Payroll Taxes $ 900.00
•Utilities $ 300.00
•Ad Association Dues $ 250.00
Note: P&L”s are available on this Center upon the completion of the Buyers Application.
After a purchase contract is signed, a Letter of Intent and a $15,000.00 Deposit must be sent to MBE along with the Buyers Application in order for the buyer to be approved by the Home Office of the UPS Store. The deposit is returned if the buyer is not approved.
Buyer assumes the Leases on the Copy Machines
I would:
1) Make sure the deposit is refundable.
2) Have an accountant analyze the financials
3) Reconcile the finanacials with actual copies of all of payments to:
a. MBE (royalties, advertising, etc.)
b. UPS for Shipping