The UPS Store is affiliated with Mail Boxes, Etc., one of the more successful franchises, and is also owned by UPS. This new franchise operation is growing rapidly.
The UPS Stores were born when UPS purchased Mail Boxes Etc. and offered the rebranding of these franchises to the UPS Stores. Since that time (2003) the number of stores has almost doubled. This franchise has been rated one of the best available by Entrepreneur magazine on the many factors that are important to a potential franchise owner.
The variety of services offered by UPS Stores, is allowing these store to make inroads against competitors. The UPS stores offer mail delivery boxes, mailing services, shipping services, copy services, faxing services and other printing type collating services using copy machines. This variety of services brings in a large number of different types of customers with different needs. This opens the franchise to many cash flow streams.
UPS name recognition
The name recognition of UPS would help any franchise owner because this name has a long history with the public. The backing of a significant corporation also lets the franchises enjoy the advertising campaign backed by a larger corporation These TV ads will help drive traffic to the UPS Stores. The UPS name recognition will help a new store get up and running quickly and create immediate cash flow. This factor has been one of the reasons that the UPS Store franchises are rapidly opening.
UPS Store franchise costs
The typically new franchise owner will need approximately $50,000 in liquid assets to acquire a franchise. This can vary by area the store will be located in. The startup cash required will be about $7500 with a total investment over time of a range from $138 thousand to $245 thousand. Mail Boxes Etc. will help with up to $50,000 financing for fixtures and equipment. The franchise fee at this time is about 29 to 30 thousand dollars.
The fees and services at a UPS Store
The fees charged to use the services at a UPS Store are competitive and in some cases significantly lower than the same service from another business. The combination of services that the UPS Store offers makes it convenient for the customer to get several routine jobs done in one place. A person can make a copy and then fax it to another party. Color copying used to be very expensive, but the new copy machines have allowed companies such as UPS Stores to price this service at a very reasonable level. Shipping, mailboxes and sending mail are also offered at these stores. This convenience of services makes these stores very useful to the customers. Business travelers can use these stores as temporary office when traveling.
UPS Store services compared with buying the equipment for your company
The cost of the services that UPS Stores provide can be compared with the cost of having the equipment on hand at the place of business of the customer. Since some of the services are not used all of the time at a business, the cost of the equipment would be a bad investment. If you only need color copies every now and then, a color copy machine would be an unjustified expense. The lower costs of doing color copies makes owning this equipment and the service cost an easy comparison. Other services may be just a convenience and not a significant cost difference. Each situation must be analyzed on its own merits.Basically the upfront cost must be compared with the annual expense the customer spends on the service.
A new UPS Store vs an existing one
This is always a consideration when buying a business or starting a new one. An existing business has a clientele that has a pattern of using the services. A new business will have to take the time to develop this client base. This can mean a real difference in cash flow for a period of time. The decision is the cost of the new business versus the cost of the existing business. If the difference in price is really large, the extra cash flow during the start up period may not make up the cost disparity. Each situation must be analyzed and compared with facts. The franchise company can give excellent stats on new companies and their growth.
The current owner of a franchise can supply financials on his business. This makes comparisons somewhat easier to do. There is also a Federal law that makes disclosure of information by a franchise company meet very strict guideline. These factors will show the potential owner which situation makes more sense from a financial comparison. The franchise company may have some contractual rules that must be followed when buying an existing franchise.
If you are considering a new store, remember that location is a critical consideration. The franchise company will have very good information on this aspect of a new store. You also should speak with a few other owners of the franchises.
The UPS name has great value to the franchise and will draw clients to the store. With all of the services that are offered in a store, this will also help to develop a steady base of customers. Businesses and individuals will all have reasons at one time or another to use the services that are provided.
The combination of services that are offered in a UPS Store will drive many different types of customers through the doors of the business. When they see the other services offered they would often find a reason to use others than what they came to the store for. This extra money spent is the direct result of the customer being in the store. Business people and individuals will remember the other services offered once they see what is offered when they visit the store. This new perspective of what can be done in the store will create a new customer use.
This UPS Store franchise has a solid business basis and should be seriously considered by a person seeking to go into business for themselves.
About the Author
Bill Henthorn formerly was principal broker and owner of a resort / commercial real estate brokerage in Honolulu which specialized in representing sellers in transactions up to $50MM.He currently serves as the marketing director of http://www.acquireo.com