The UPS Store Franchise Cost & Fees

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Description

Year Business Began: 1980 Franchising Since: 1980Headquarters: San Diego, CaliforniaEstimated Number of Units: 4,980Franchise Description: The UPS Store, Inc. is the franchisor. UPS is the parent entity. The UPS Store Centers are retail service businesses which offer mail and parcel receiving, packaging and shipping services through various carriers and provide a wide range of other authorized products and services, including notary, printing, copying, office supplies and communications (such as fax) services. Centers are targeted to the needs of businesses of all size, small office/home office workers and busy consumers who are looking for timesaving services. Previously franchises for Centers were granted under the “Mail Boxes Etc.” trademark. The franchisor grants The UPS Store franchises for Centers to be operated at Traditional and Non-Traditional locations. Non-traditional locations include colleges, universities, hotels, resorts, military bases, convention centers, airports, self-storage facilities, inside other retailers, office buildings, bus or train stations, and outlet or regional malls. The franchisor also offer an updated Rural Program (to be marketed as the “Main Street” Franchise Model) for Centers to be developed and operated in a rural area or small town/city community.Training Overview: The franchisor offers a multi-phased The UPS Store Franchisee Training Program that focuses on developing the business management, technical, conceptual and diagnostic skills necessary to grow the franchised business. Following an introductory Web-based training, there are two basic parts to the New Franchisee Training Program: (1) the In Store Experience Parts I and II, each of which is five days at a local/regional Certified Training Center and taught by a Certified Trainer; and (2) the University Business Course, which is 10 days in San Diego at The UPS Store University (includes three days of Print Services Training). In its discretion, the franchisor will present periodic supplemental or additional training programs and refresher courses for all franchisees and their supervisory employees (mandatory or optional, in its discretion).Territory Granted: Franchisees will be permitted to operate their Center at a specific location acceptable to the franchisor. The Franchise Agreement will have an attached map and written description that will describe a geographic area surrounding the Center. There is no minimum territory size the franchisor will grant a franchisee. The Territory size depends on market factors in the area. Franchisees will not receive an exclusive territory.Obligations and Restrictions: The franchisor does not require franchisees to participate personally as the Center’s direct, “on-premises” operator or supervisor of operations. However, each Center’s day-to-day operations must at all times be directly supervised by an on-premise Primary Operator. All Primary Operators must first successfully complete the New Franchisee Training Program. At least one supervisory employee who works full-time at the Center must attend and successfully complete all parts of the Print Services Training program and a Financial Management class. Franchisees must use the premises solely for the operation of the Center; must keep the Center open and in normal operation for such minimal hours and days as may be specified by the franchisor; must refrain from using or permitting the use of the premises for any other purpose or activity at anytime without first obtaining the franchisor’s written consent; and must operate the Center in strict conformity with such methods, standards and specifications as the franchisor may from time to time require in the Operations Manual or otherwise in writing.Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees are in good standing, they can renew for successive periods of 10 years each on the then-current version of the Franchise Agreement.Financial Assistance: The franchisor occasionally provides financing for qualifying prospective franchisees or prospective multiple center owners under its guidelines. The franchisor reserves the right to add, change, or delete any financing programs at any time. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $9,950 $29,950 Initial Marketing Plan Fee $4,000 $7,500 Design Fee $1,075 $1,075 Center Development Fee $5,000 $5,000 Initial Training Fees $4,600 $6,500 Travel and Living Expenses While Training (per person) $3,000 $4,000 Site Rent and Security Deposit $1,000 $18,000 Leasehold Improvements; Construction Costs; Signage; Furniture and Decor Items $66,775 $178,563 Computer Hardware/Installation/Freight $7,756 $10,082 Annual Technology Development and Support Fee $1,199 $1,299 Software $4,864 $6,186 Copiers and Printer $1,425 $20,142 Other Equipment $8,180 $22,871 Start-Up Supplies $6,180 $9,155 Utility Deposits $200 $3,000 Insurance $1,000 $5,000 Additional Funds – 3 months $40,000 $70,000 Estimated Total* $166,659 $398,323 * The estimated initial investment range covers Traditional Centers (from the rural program up to regular). Please see the FDD for more details. Non-Traditional Center investment costs are covered in a separate FDD. Other Fees Type of Fee Amount Royalty 5% of STR (STR includes all Gross Sales plus Gross Commissions from the Center, less Allowable Exclusions) “The UPS Store” Marketing Fee’ 1% of STR. National Advertising Fee (NAF) 2.5% of STR. Advertising Co-op Dues Varies from Co-op to Co-op. Range is $100-$500 Annual Technology Development and Support Fee $1,299 (new Center franchise and transfers); $1,199 (Rural Center);$1,199 per Center if franchisees are purchasing their 2nd or greater franchise, as long as all their Centers pay this fee annually in a lump sum (and not in installments) Transfer Fee The current Transfer Fee is $5,000 (The franchisor may periodically increase this fee). Processing Fee The current Processing Fee is $4,000 if no Finder’s Fee is paid to the franchisor; $1,000 if a Finder’s Fee is paid. (The franchisor may periodically increase this fee). Sales Fee 25% of then current initial franchise fee. Insurance Amount of unpaid premiums. Audit Cost of audit ($475 minimum) plus 18% interest or the highest rate allowed by law on underpayment. In addition, the franchisee must pay a late fee of $25 per week. Audit Non-Prepared Fee $500 per type of document (as specified in Operations Manual) not supplied upon auditor’s request but in no event greater than $2,500 per occurrence, and cost of audit (including reasonable expenses incurred by auditor) if rescheduled. Non-Transfer Ownership Change Fee $500 Incorporation Fee $500 Family Transfer Fee $1,450 Entity Name Change Fee $500 Indemnification Will vary under circumstances. Interest on financing offered by Franchisor Financing of initial equipment: prime rate plus 4%. Financing for the purchase of a second center: prime rate plus 2%. Financing for the TUPSS 2000 remodel of the Center: prime rate plus 1%. Late Payment Fee $35 per month or 10%, whichever is greater. Equipment or Equipment Lease and Computer Hardware/Software Maintenance Varies. iShip Processing Fee $0.20 per transaction. Upgrade Review Fee $500 Finder’s Fee The greater of $11,980 or 10% of the Center’s sales price Finance Charges Highest annual rate allowed under applicable law. Design Fee $250, $660 or $1,075 Non-Compliance Fee Currently $250, but the franchisor may charge up to $1,000 Tax Reimbursement Out-of-pocket cost reimbursement. Customer Concern Reimbursement Out-of-pocket cost reimbursement. The above information has been compiled from the FDD of The UPS Store. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty 5% of STR (STR includes all Gross Sales plus Gross Commissions from the Center, less Allowable Exclusions)
“The UPS Store” Marketing Fee’ 1% of STR.
National Advertising Fee (NAF) 2.5% of STR.
Advertising Co-op Dues Varies from Co-op to Co-op. Range is $100-$500
Annual Technology Development and Support Fee $1,299 (new Center franchise and transfers); $1,199 (Rural Center);
$1,199 per Center if franchisees are purchasing their 2nd or greater franchise, as long as all their Centers pay this fee annually in a lump sum (and not in installments)
Transfer Fee The current Transfer Fee is $5,000 (The franchisor may periodically increase this fee).
Processing Fee The current Processing Fee is $4,000 if no Finder’s Fee is paid to the franchisor; $1,000 if a Finder’s Fee is paid. (The franchisor may periodically increase this fee).
Sales Fee 25% of then current initial franchise fee.
Insurance Amount of unpaid premiums.
Audit Cost of audit ($475 minimum) plus 18% interest or the highest rate allowed by law on underpayment. In addition, the franchisee must pay a late fee of $25 per week.
Audit Non-Prepared Fee $500 per type of document (as specified in Operations Manual) not supplied upon auditor’s request but in no event greater than $2,500 per occurrence, and cost of audit (including reasonable expenses incurred by auditor) if rescheduled.
Non-Transfer Ownership Change Fee $500
Incorporation Fee $500
Family Transfer Fee $1,450
Entity Name Change Fee $500
Indemnification Will vary under circumstances.
Interest on financing offered by Franchisor Financing of initial equipment: prime rate plus 4%. Financing for the purchase of a second center: prime rate plus 2%. Financing for the TUPSS 2000 remodel of the Center: prime rate plus 1%.
Late Payment Fee $35 per month or 10%, whichever is greater.
Equipment or Equipment Lease and Computer Hardware/Software Maintenance Varies.
iShip Processing Fee $0.20 per transaction.
Upgrade Review Fee $500
Finder’s Fee The greater of $11,980 or 10% of the Center’s sales price
Finance Charges Highest annual rate allowed under applicable law.
Design Fee $250, $660 or $1,075
Non-Compliance Fee Currently $250, but the franchisor may charge up to $1,000
Tax Reimbursement Out-of-pocket cost reimbursement.
Customer Concern Reimbursement Out-of-pocket cost reimbursement.