UPS store franchise

Hassle-free business loans to start your UPS store franchise.

Business loans for franchises​

UPS is a franchised parcel delivery and business services company, providing packaging, courier, photocopying and host of other services to individuals and organisations. 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 business details

UPS is based in San Diego, California and they’ve been offering franchise opportunities since they first began in 1980. Instantly recognisable by their big brown trucks that operate across the UK, 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 in worldwide.

UPS store at a glance:

  • Stores: More than 5,000
  • Required Investor net worth: £150,000
  • Required investor liquid cash: £75,000
  • Min. investment: £220,000
  • Max. investment: £500,000
  • Standard franchise term: 10 years

Can I start a UPS franchise?

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.

How much does a UPS store franchise cost?

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:

  • Royalty fee: 5% of gross sales and commissions
  • Marketing fee: 1% of gross sales and commissions 
  • National advertising fee: 2.5% of gross sales and commissions
  • Advertising co-up dues: £100 to £500
  • Annual technology fee: £2,304 (city), £2,196 (rural)
  • Processing fee: £1,000 to £4,000
  • Renewal fee: £25,000

Estimated key costs to open a UPS franchise:

Key Costs GuideLowHigh
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
Other costs – three months£40,000£70,000

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Are UPS franchises profitable?

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 UK 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.

What is the failure rate for a UPS franchise?

Moderate to high. The failure rate for a UPS franchise is 12%.

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Why should you start a UPS franchise?

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. 

What are the franchise territory policies for UPS?

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.

What franchise resources does UPS offer?

UPS support for franchisees includes:

  • Training: Franchisees must complete a multi-phased UPS Store Franchisee Training Program that focuses on developing the business management, technical, conceptual and diagnostic skills necessary to grow the franchised business. The franchisee must also attend and successfully complete a Financial Management Training Program offered by an approved financial management training vendor no later than six months after the Franchise Agreement’s start date. At its discretion, UPS presents periodic supplemental or additional training programs and refresher courses for all franchisees and their supervisory employees.
  • Marketing support: UPS helps its franchisees with national and local advertising and marketing support. 
  • Third-party financing: UPS can provide financial support for investors but you may be able to secure more economical or flexible financing from the many independent funders who provide business loans to franchise operators.
  • Technology and innovation: The company offers technology support and access to proprietary software. 

What is the process for starting a UPS franchise?

It begins with an application. Start the process today.

Secure franchise funding with Swoop

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 the UK. Just tell us what you need and leave the rest to us.

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Written by

Chris Godfrey

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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