UPS Store Franchise Startup Cost, Revenue and Profit Margin

The UPS Store franchise is one of the top franchises in the United States and Canada.

Ranked #5 in Entrepreneur Magazine’s top 500 franchises, the UPS Store franchise is looking for franchising opportunities across Canada and the United States. It all began as Mail Boxes Etc. Store and was founded by business partners Gerald Aul, Pat Senn, and Robert Diaz.

The concept of this business was meant to be an alternative to the United States Postal Service. It eventually became a subsidiary of UPS in 2001 and since 2003 began to rebrand as the UPS store. This franchise opportunity specializes in shipment, packaging, mailbox services, computer time rentals, as well as print & copy services.

As a franchisee, you stand to benefit from operating a profitable business model.

Today, the UPS Store franchise has over 4,000 franchise units across the United States and over 300 in Canada. The number is fast-growing and new franchisees are seizing this opportunity to become part of something big. Its many years of franchising (over 40 years) has made it a market leader.

Little wonder that its track record of consistent growth has made it be ranked among the top 5 franchises.

Financial Requirements

The UPS Store franchise has a set of requirements that prospective franchisees must qualify for. These include the initial investment, the liquid cash requirement and other ongoing fees.

Let’s discuss each of these briefly below;

  • Initial Investment

The total amount required to open a UPS Store franchise ranges from $138,433 to $470,031. This constitutes other costs such as working capital, real estate, business licenses, supplies, and equipment. The sum required for this investment will depend on multiple variables.

These range from the size of your location, where it is located as well as the type of center needed.

There are three types; the traditional UPS franchise locations, the rural locations, and the store-in-store locations. Cost of traditional locations range between $161,657 to $470,031. Rural locations range from $138,433 to $397,514 while the store-in-store locations will cost between $75,075 to $299,930.

i. What Are Store-In-Store Locations?

Questions are likely to arise when it comes to store-in-store locations. These refer to freestanding UPS Store set up within other stores. This concept earlier started in convention centers and hotels etc. However, the franchisor saw how successful it was and decided to expand to smaller businesses such as hardware stores and pharmacies.

This makes it even more convenient for prospective franchisees having existing stores. You can simply apply for the UPS Store-in-store franchise model. This creates an even greater opportunity to attract a new set of clients to your business.

  • Liquid Cash Requirement

The liquid cash requirement for all new prospective franchisees starts from $60,000 to $100,000. Like the initial investment, the amount you pay will depend on the type of center needed, location size and where it’s located. This is a crucial requirement that must be met before your franchise application proceeds a step further.

A prospective franchisee must not meet this requirement in cash alone. There are combinations of other sources like mutual funds, bonds, stocks, retirement funds or accounts as well as other non-borrowed sources. Financing sources are also available. Hang on as more on this (financing options) will be covered shortly.

  • Initial Franchise Fee

The initial franchise fee is what you need to join the UPS Store franchisee. Starting at $29,950, this is an up-front, one-time payment that is due at contract signing. So, does this cover any areas of your business? Absolutely! The initial franchise fee allows the use of the franchisor’s business systems, trademarks and name or brand.

There are ongoing fees which include royalty and ad royalty fees at 5 and 2.5% respectively.

  • Financing

As a UPS Store franchisee, you get access to several financing options. In one of such financing arrangements, the franchisor provides in-house financing covering inventory, equipment, and start-up costs. There’s also its (UPS Store) relationship with third party sources who provide financing covering areas like inventory, franchise fee, equipment and startup costs.

UPS Store franchisee has a special offer for veterans. As a way of honoring them for their services, vets get to enjoy a $10,000 discount off of the franchise fee. Plus a 50% discount off initial application fee.

Benefits Of Becoming A UPS Store Franchisee

This is the point of becoming its franchisee. Without clear and obvious benefits, there will be no point in becoming its franchisee. The UPS Store franchisees offer a ton of benefits. These include the chance to work with a reputable franchise, operating under a well-known brand as well as access to ongoing support. Let’s treat each of these briefly;

  • Reputation

As the top dog in the communications, postal and printing services category, the UPS Store franchise has made a huge impact in the industry. This reality impacts directly on its franchisees. Access to its customers as well as confidence in your ability to deliver is never diminished. Lest we forget, franchisees will be doing business with the 5th highest ranked franchise in Entrepreneur Magazine’s top 500 franchises.

  • Brand Name

UPS Store is a household name in the communications, mail and printing business. As one of the most recognized names known for reliability, this rubs off positively on your franchise. The trust the company has built over several decades automatically gets tied to your business.

  • Ongoing Support

The very day you qualify as a UPS Store franchisee, you benefit from a wide range of support. This support never stops but spans the entire period of your ownership. This covers an onsite training lasting 92 hours, training at its headquarters and lasting for about 80 hours as marketing support among other things.

READ: PostNet Franchising Tips

These are the basics you need to know about the UPS Store franchisee.

For further information on how to begin, simply fill and submit its online form. Within a short time, a representative contacts you for further questioning and a possible visit to finalize your application process.