The UPS Store Franchise Cost & Fee, The UPS Store FDD & Franchise Information

The UPS Store

Date of Incorporation: 1980

Franchising Since: 1980

Headquarters: San Diego, California

Country: U.S.

Business Description: The UPS Store Centers ("Centers") are retail service businesses which 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 services such as fax. Centers are targeted to the needs of businesses of all size, small office/home office workers and busy consumers who are looking for timesaving services. Previously franchises for Centers were granted under the "Mail Boxes Etc." trademark but, starting in 2003 re-branding of the entire domestic system under the The UPS Store name began. UPS is the parent entity

Franchise Offer: The franchisor, Mail Boxes Etc. (“MBE”), grants The UPS Store franchises featuring shipping, packaging, postal, document services, and similar business and communication services. MBE has developed a service distribution network enabling national and international companies to utilize a The UPS Store franchisee’s Center for their shipping, packaging, postal, document services, and other business and communication needs.

Financial Assistance: MBE occasionally provides financing for qualifying prospective The UPS Store franchisees or prospective multiple franchisees under their guidelines. MBE offers equipment leases for the purchase of initial equipment and fixtures of up to $50,000. Multiple Center loans of up to $150,000 towards the purchase of additional Centers, and remodel loans of up to $60,000 for franchisees to remodel their Center are also available to those who qualify. If you qualify for any of these programs, you will be required to execute the current form of their Secured Promissory Note, and their current form of their Security Agreement for all franchisor financing programs. Outside of these financing options, MBE does not offer direct or indirect financing and does not guarantee a franchisee’s note, lease, or obligation.

Training and Assistance: MBE will offer a multi-phased The UPS Store Franchisee Training Program that focuses on developing the business management, technical, conceptual and diagnostic skills necessary to grow the franchised business. There are two basic parts: the In Store Experience, and the University Business Course. In addition, MBE may, from time to time, offer additional learning programs for ongoing education. MBE reserves the right, in their sole and absolute discretion, to require additional (i.e., post-opening) training for the franchisee and/or for the franchisee’s employees working in their Center(s).

Territory: The UPS Store franchisee will be permitted to operate their Center at a specific location acceptable to MBE. Except for renewal franchises and purchasers of existing franchised Centers, the franchisee is permitted to enter into a "Center Option Agreement" with the franchisor. In exchange for an option fee, the franchisee would be granted a protected option territory. Not all option holders become franchisees. This Center Option Agreement does not grant the franchisee any protected territory to operate a Center. If the franchisee did effectively exercise their option, they would sign a Franchise Agreement with a defined The UPS Store franchise Territory. The Franchise Agreement's territory would not necessarily match the franchisee’s option territory. In fact, it is likely that the franchise territory would be significantly smaller than the option territory.

Term of Agreement and Renewal: The term of The UPS Store franchise agreement is 10 years with an option to renew for additional terms of 10 years so long as the franchisee is in good standing. The fee for renewal is 25% of the then current franchise fee.

Obligations and Restrictions: MBE does not require the franchisee to participate personally as the direct, on-premises operator or supervisor of operations at the Center. Each Center's day-to-day operations must at all times be directly supervised by an on-premise Primary Operator. All Primary Operators must first successfully complete Mail Boxes Etc's Franchisee Training Program. The franchisee must use the premises solely for the operation of the Center; must keep the Center open and in normal operation for such minimal hours and days as may be specified by the franchisor; must refrain from using or permitting the use of the premises for any other purpose or activity at anytime without first obtaining the franchisor’s written consent, and must operate the Center in strict conformity with such methods, standards and specifications as the franchisor may from time to time require in the Operations Manual or otherwise in writing.

Total Number of Units: Nearly 5,000 units

Investment Tables:

Initial Investment:

Name of Fee	Amount
Initial Franchise Fee	$29,950
Initial Marketing Plan Fee	$7,500
Design Fee	$950
Center Development Fee	$5,000
Initial Training Fees	$4,500
Travel and Living Expenses While Training	$3,000 to $4,000/per person
Site Rent and Security Deposit	$4,500 to $18,000
Leasehold Improvements; Construction Costs; Signage; Furniture and Decor Items	$25,977 to $155,941
Computer	$11,095 to
Hardware/Installation/Freight	$11,965
Annual Technology Development and Support Fee	$850 to $950
Software	$5,024 to $5,110
Copiers and Printer	$1,555 to $3,305
Other Equipment	$3,218 to $4,000
Start-Up Supplies	$5,965 to $8,775
Utility Deposits	$900 to $3,000
Insurance	$1,000 to $5,000
Additional Funds - 3 months	$40,000 to $70,000
Total	$150,984 to $337,946

Ongoing Fees:

Name of Fee	Amount
Royalty	5% of STR**
"The UPS Store" Marketing Fee'	1% of STR
National Advertising Fee (NAF)	2.5% of STR
Advertising Co-op Dues	Varies from Area to Area. Average is $100-$500
Annual Technology Development and Support Fee	$950.00
Transfer Fee	The current Transfer Fee is $5,000.00 (The franchisor may periodically increase this fee).
Processing Fee	The current Processing Fee is $4,000.00 if no Finder's Fee is paid to the franchisor; $1,000.00 if a Finder's Fee is paid. (The franchisor may periodically increase this fee).
Renewal Fee	25% of the then-current initial franchise fee
Sales Fee	25% of then 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	$350
Incorporation Fee	$350
Family Transfer Fee	$1,250
Entity Name Change Fee	$350
Indemnification	Will vary under circumstances
Interest on financing offered by MBE	Financing of initial equipment: Prime rate plus 4% financing for the purchase of a second center: Prime rate plus 2% financing for MBE 2000 remodel of the Center: Prime rate plus 1%
Late Fee	$35.00 per month or 10%, whichever is greater
Design Fee	$250 to $950
Upgrade Review Fee	$500
Finder's Fee	The greater of $11,980 or 10% of the franchisee's Center's sales price
Finance Charges	Highest annual rate allowed under applicable law.

**STR includes all Gross Sales plus Gross Commissions from your Center, less Allowable Exclusions.

Date of FDD: 2010

The above information has been taken from the UFOC/FDD and online sources of The UPS Store.

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The UPS Store Franchise Cost & Fees

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