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Pak Mail Franchise Cost & Fees

Date of Incorporation: 1984
Franchising Since: 1984
Headquarters: Centennial, Colorado

Business Description: Pak Mail Centers of America, Inc., a Colorado corporation, is offering franchises for the operation of a business which offers a variety of packaging, shipping, mailing, communications and information products and services.

Franchise Offer: The franchisor offers the following kinds of Pak Mail franchises:

  1. Pak Mail Center: Offers the standard variety of packaging, shipping, mailing, communications and information products and services.
  2. Conversion Franchise: A franchise established by converting an operating packaging and shipping center to a Pak Mail Center.
  3. Development Agreement: If the franchisee qualifies, he or she can be granted the right to develop four or more Pak Mail Centers within a designated geographic area under our Development Agreement.

In addition, the franchisor sells master licenses for certain geographic areas outside of the United States.

Financial Assistance: Franchisees are eligible for expedited and streamlined Small Business Administration loan processing through the SBA’s Franchise Registry Program. Pak Mail does not offer, direct or indirect financing arrangements to franchisees. Pak Mail does not guarantee any lease or other obligations for franchisees.

Training and Assistance: Within 90 days before the opening of a Center, franchisees and their principal operator must attend and complete the initial training program. Training consists of eleven days of training in the corporate office in Centennial, CO, two days of on-the-job training at a designated Pak Mail Center operated by a franchisee, and three additional day on-the-job training at the franchisee’s Center at or around the time the first Center opens for business. Pak Mail may provide additional training at their National Convention.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets the company owns, or from other channels of distribution or competitive brands that the company controls. Franchisee will receive an approved Protected Territory defined as approximately a one and a half mile radius around the Franchised Location. The radius may be adjusted depending on the population and demographics of the geographical area surrounding the Franchised Location.

Term of Agreement and Renewal: The initial length of the franchise term is 10 years. The franchisee has the option to renew for one additional 10-year term.

Obligations and Restrictions: The franchisor does not require the franchisee to participate personally in the direct operation of the Center. If the franchisee does not participate in the day-to-day operation of the Center, a manager (Principal Operator) must be designated to be responsible for the direct on-premises supervision of the Pak Mail Center at all times during its hours of operation. The franchisee or the Principal Operator must successfully complete the mandatory initial training program for a Pak Mail Center. The franchisee and its managers, including the Principal Operator; must enter into a confidentiality and noncompetition agreement with the franchisor. The franchisee may sell only those products and services approved by the franchisor and may not use the Center or the Franchised Location for any purposes other than the operation of a Pak Mail Center. The franchisee must sell the products and services approved by the franchisor, but certain additional products and services approved by the franchisor may be sold, at the franchisee’s option.

Estimated Number of Units: 380

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $29,950 $29,950
Initial National Convention Fee $1,000 $1,000
Build-Out Program (retail center) $56,500 $60,500
Networked POS System $8,500 $10,550
Website $300 $360
Equipment and Office Supplies $1,225 $2,650
Vehicle $1,000 $10,000
Opening Inventory $4,575 $7,750
Security Deposits, Utility Deposits, Business Licenses $2,500 $4,000
Initial Marketing Materials $1,500 $1,500
Additional Funds - 3 months $25,000 $40,000
ESTIMATED TOTAL $132,050 $168,210
Other Fees
Type of Fee Amount
Royalty 5% of Royalty Based Revenues, but not less than $417 per month beginning in month 13 after Center opens, and not less than $625 per month in beginning in month 25 after the Center opens and every month thereafter.
Advertising Contribution 2% of Royalty Based Revenues.
Local Markeing Fee 2% of Royalty Based Revenues.
Cost of Inspection and Audit Varies according to franchisee’s location; audit penalty is $500 per month for failure to provide the franchisor with information to audit the franchisee’s records.
Software for freight forwarding, fulfillment and shipping management $350 per month.
Internet Service Provider Ranges from $50 to $200 per month.
Electronic communication services $160 a year.
Domain Name Registration Fee Ranges from $10 to $25 per year.
Transfer Fee The greater of $7,500 or 25% of the then current initial franchise fee plus $5,000 for every undeveloped franchise under a Development Agreement.
Successor Franchise Fee $2,500
Training Program Expenses Costs associated with attending mandatory training sessions; additional training fees currently range from $100 to $500 per day, but are subject to increase based on increasing costs.
Costs and Attorneys' Fees Will vary depending on nature of the dispute.
Indemnification Under Franchise Agreement Will vary depending on nature of the claim against the franchisor.
Month-to-Month Holdover Franchise Fee $350 per month.
Payments for Items Supplied by Us Will vary.
Business Insurance Premiums Will vary depending on franchisee location and insurer.
National Convention Fee Currently $60 per month, but is subject to increase based on increasing costs.
Interest Lesser of 1.5% per month or highest rate of interest allowed by law with interest compounded.
Late Fee for Late Reporting $50 per month for late reports and $100 per month for late quarterly financial statements and tax returns.
Additional Assistance $350 per day plus expenses.

The above information has been taken from the FDD of Pak Mail. Year of FDD: 2016

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