UPS is a franchised parcel delivery and business services company, providing packaging, courier, photocopying and host of other services to individuals and organizations. Operating in more than 75 countries across the globe, their stated aim is to aid and empower small business owners within their local community.
UPS is based in San Diego, California and they’ve been offering franchise opportunities since they first began in 1980. Instantly recognizable by their big brown trucks that operate across Canada, the company succeeds by providing a fast and convenient alternative to traditional postal services. Ranked as the #1 franchise in delivery and business services 34 years in a row, they currently have over 5,000 franchised stores worldwide.
UPS store at a glance:
You can if you can meet the minimum net worth and liquid cash requirements of $150,000 and $75,000 respectively. You must also be able to carry a median start-up cost of more than $350k. The good news is that UPS allows investors to operate their franchise as a passive investment – appointing or hiring a ‘primary operator’ to take care of the daily running of the business.
The initial investment costs to start a UPS store franchise range from $220,000 to $500,000, which ranks as moderate to high. Start-up costs vary according to your store location and if you operate a rural or regular city-based operation. The initial franchise fee also varies, going from $9,950 to $29,950. UPS offers a franchise fee discount to military veterans.
After opening, you are required to pay an array of ongoing fees and charges. They include:
| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $9,950 | $29,950 |
| Initial marketing plan fee | $4000 | $7,500 |
| Design Fee | $2,100 | $2,100 |
| Center development fee | $5,000 | $5,000 |
| Initial training fees | $4,650 | $6,800 |
| Travel and living expenses during training | $3,000 | $4,000 |
| Leasehold improvements (store set up) | $103,000 | $230,000 |
| Computer systems | $12,600 | $15,300 |
| Software | $3,400 | $5,400 |
| Other costs – three months | $40,000 | $70,000 |
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They can be, but you may need more than one UPS store to make a solid income. According to market sources, it takes about $365,000 in annual gross sales to produce a modest $35,000 per year income for the average UPS store owner. About 60% of all Canadian stores do not break even. In other words, you won’t see any real profit until your UPS Store does over $30,000 in sales every month. One solution to this dilemma is to own more than one store. Approximately 52% of UPS Store franchisees have multiple locations.
Moderate to high. The failure rate for a UPS franchise is 12%.
Big brand awareness and sturdy corporate support bode well for investors who take the plunge and buy a UPS franchise. The potential for remote ownership is another plus point. However, keep in mind that net profits in the parcels industry are traditionally very low.
Franchisees are permitted to operate their UPS store at a specific location acceptable to the company. The Franchise Agreement includes a map and written description that describes a geographic operational area surrounding the store, but it is not an exclusive territory. There is no minimum territory size the franchisor will grant a franchisee and the territory size depends on market factors in the area.
UPS support for franchisees includes:
It begins with an application. Start the process today.
Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new parcels delivery business like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across Canada. Just tell us what you need and leave the rest to us.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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