Do you want to start a courier business by buying UPS franchise? If YES, here is how much it cost to open a UPS franchise and their requirements.
UPS locations provide packaging, shipping, copy and print services, mailbox services, computer time rentals and more for small businesses and individuals. They have an estimated 5,075 franchise units and the franchises are located throughout the United States and in Canada. They have been franchising since 1980 and the company has their corporate head office at 6060 Cornerstone Ct. W. San Diego, CA 92121.
The UPS Store, Inc. is the franchisor. UPS is the parent entity. UPS Stores 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 sizes, small office/home office workers and busy consumers who are looking for time-saving services.
Previously franchises for Centers were granted under the “Mail Boxes Etc.” trademark. The franchisor grants franchises for Centers to be operated at Traditional and Non-Traditional locations. Traditional locations are located in highly visible locations in strip shopping centers or in high foot-traffic downtown areas.
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 outlets or regional malls. The franchisor also offers 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.
Financial Requirements and How Much It Cost to Open a UPS Franchise
Estimated Initial Investment
- 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: $4,650 – $6,550
- 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: $38,429- $166,252
- Computer Hardware / Installation / Freight: $6,881 – $12,455
- Annual Technology Development and Support Fee: $1,440 – $1,548
- Software: $5,357 – $6,207
- Printers: $1,346 – $96,399
- Other Equipment: $8,925 – $27,940
- 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: $138,433 – $470,031
Please note that the estimated initial investment range covers Traditional Centers (from the rural program up to regular).
Aside from the fees listed above, below are other fees you should keep in mind;
- 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: $1,548 (new Center franchise and transfers); $1,440 (Rural Center); $1,440 per Center if franchisees are purchasing their 2nd or greater franchise.
- 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 the 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: $1,750
- 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
- iShip Processing Fee: $0.22 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: $660 or $1,075 (plus $250 in the event of a change).
- 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.
How to Get or Open UPS Store Franchise
Although, acquiring a UPS Store franchise requires a relatively large initial investment, the amount of profit that you can bring in on a regular basis can make it worth your while. Once you’ve determined from the information above that you can meet the minimum financial requirements to become a franchisee, then complete the request information form on the company’s website and submit to UPS Store.
1. Once it has been determined that you meet the financial requirements and the area in which you wish to develop is available, you will then be considered an applicant for franchising with UPS Store. Whereupon, you will be contacted by a member of the company’s New Business Development Team who will help guide you through the remainder of the process.
2. Once a member of the New Business Development Team has contacted you and approved you to move forward in the franchising process, you will need to provide the following items;
- Company & Personal Financial Statements, Store Income Statements—(P&L) (Latest Annual & Interim)
- Business Operating Plan, Resume/Brief Biography
Completing the required steps does not guarantee acceptance into the UPS Store franchising system.
3. Before the company enters into a Development Agreement with you, they may be required to complete certain registration and disclosure processes as required by the governing authorities in your area of interest.