The UPS Store Tackles Untapped Towns

The UPS Store Tackles Untapped Towns

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Mail Boxes Etc., was founded in 1980 as a convenient alternative to the post office. In a market with great demand but little supply, the company blossomed and caught the attention of UPS, which was looking establish a own retail presence. UPS acquired Mail Boxes Etc. in 2001, and since rebranding the stores with the The UPS Store name in 2003, the company has grown to be the nation’s largest franchisor of retail shipping, postal and business service centers.

“One of the reasons we launched The UPS Store was because almost everyone was familiar with the UPS brand, and the market was rife with opportunities for us to expand into the retail space, especially using the UPS name,” explains Chris Adkins, Vice President of Franchise Development for The UPS Store.

While launching the new brand the company also expanded its line of products and services to better serve small business owners, who make up the majority of their customers. Along with their well-known services of shipping and packaging, the company began to also focus on copying, online printing solutions, document services, and an array of printing services, with the goal to meet the needs of small business owners.

In many cases The UPS Store has become a “back office” for small business owners in need of business support services. “We help with everything from creating marketing materials to providing mailboxes with street addresses. We work to create custom solutions for every small business owner we come in contact with, even handling logistics and distribution on a small basis out of our stores,” Adkins says.

Striving to go above and beyond when servicing small business customers, a website was recently launched to fill the gap of solutions not offered in store. By partnering with various small business service providers, The UPS Store offers unique discounts to small business customers on services such as IT support, website creation, legal services, and marketing solutions. “We want to offer as much help as possible to small business owners, both in our physical store locations, and online,” Adkins explains.

The UPS Store was never designed to be a corporate owned entity of stores. Since Mail Boxes Etc. began franchising in 1980, all locations have been franchise owned and operated. Today there are over 4,400 UPS Store locations operating worldwide.

What Does it Take to be a The UPS Store Franchisee?

“UPS Store franchise owners are a diverse group, coming from many walks of life,” Adkins explains. “The key commonalities they share, and what the company looks for in potential franchisees, is an entrepreneurial spirit, customer service attitude, a strong stance on sales, and a dream of owning their own business.”

The cost of opening a UPS Store franchise varies based on location and size and type of center. The total initial investment cost for a new The UPS Store center ranges from $148,734 to $347,241*, plus required working capital. Prospective franchises are also required to verify a minimum of $60,000 to $100,000 in liquid assets, an amount on the low end when compared to the start up costs alone of other franchises and businesses.

The UPS Store has established a growth plan including discounts and incentives for current franchisees interested in becoming multi-unit owners. Through partnering with the Veterans Transition Franchise Initiative program (VetFran), The UPS Store has also awarded 150 franchises to first-time veteran buyers since 2004. As their way of saying “thank you” for serving the country, the company offers qualifying veterans $10,000 off the franchise fee of a new The UPS Store location and 50 percent off the initial application fee. Veterans now operate more than 250 The UPS Store locations in the U.S.

The Steps to Owning

The UPS Store has made it easy to learn about their franchising process. Educational webinars are held twice a week, where prospects can learn more about franchising with The UPS Store. After attending a webinar, prospects are invited to complete a non-binding confidential application, and then speak with a local representative to learn the steps involved with being awarded and operating a The UPS Store. If the applicant decides to move forward, they will then submit an application fee and if approved, they can begin searching for a location.

Once a center is secured, new franchisees undergo comprehensive training. The award winning training program, as recognized by the American Society for Training and Development, is designed to help franchisees develop business knowledge, day-to-day operational skills, and the critical thinking needed to own and operate a The UPS Store center. The program includes web-based training and two weeks of in-store learning under a certified trainer. New franchisees also attend training at “The UPS Store University” in San Diego. Once their center opens, franchisees can expect ongoing support from a local support team, continuing headquarter- led educational opportunities, and a wide variety of marketing support and solutions.

Moving into Untapped Territory

The latest development The UPS Store has launched is its Main Street Model. Focused on opening new locations in smaller towns and rural communities, this idea came into light years before being recently redesigned to offer incentives to franchisees looking to purchase locations in smaller communities.

Launching this past April, the initiative was a part of an effort to bring the same suite of products and outstanding customer service to under served markets. “The key aspect of the model is that any service or product we offer at a traditional store in a suburban setting can be accessed by a small business owner in a rural location,” Adkins says.

The concept originated through research conducted by area developers and updated marketing studies showing the untapped locations. “We put up perimeters. We don’t want a UPS Store in a rural setting closer than 15 miles from a suburban store,” Adkins explains. “There needs to be a large enough geographic group of small business owners to capture the revenue needed to be successful.”

Today The UPS Store offers a reduced franchise fee and up to 40 percent savings on other start up costs to attract prospects who want to open their own business servicing customers in small communities. By lowering the franchisee free from $29,950 to $9,950 residents of small town communities can more easily become part of The UPS Store network. Franchisees of Main Street Model locations are also allowed flexibility in their operations; for example, their store hours may be adjusted to correspond with the rest of their town, and / or their store size may be smaller.

The first Main Street Model location opened in Jackson, Ohio with locations in Montana, Texas, California, and Colorado following quickly behind. “We’re gaining traction. We already have so many people interested,” Adkins says.

This year, The UPS Store hopes to open 15 to 20 stores under the Main Street Model. Through continual online marketing, and regular market evaluations with mapping and demographic software, Adkins says the company is marketing the opportunity to communities where they believe a store will be successful. “We’re excited about the model. When you launch a new model like we’ve done and have already opened five stores since April 30 [2013], that’s tremendous. We are aiming to expand everywhere there’s a market opportunity available within the US,” Adkins says.

Out with the Norm, and in with Non-Traditional Units

For the past several years The UPS Stores’ primary efforts have been focused on developing non-traditional units. These locations differ from standalone locations and those in strip malls, and are strategically located in existing high traffic areas of convenience.

Last year The UPS Store experienced their biggest growth in non-traditional units, opening 30 new stores in only 12 months. “Places are coming to us asking us to put a UPS Store in them,” says Adkins, adding that there are now six non-traditional The UPS Store locations within Caesars properties.

The first non-traditional store opened in 1987, at American University in Washington, DC. This year, Jackson State University became a franchisee of a non-traditional location. “The University saw many people leaving campus to use other vendors for services; now these services are provided on campus through The UPS Store, and the franchisee can reap the benefits,” Adkins explains.

While there is a different revenue stream between traditional and non-traditional units, the atmosphere is also different in the sense that The UPS Store owner and employees work in relationship with the other business. Non-traditional locations are also only typically offered to existing owners, as the company prefers franchisees to have experience being a store owner before owning a non-traditional location.

Selling the Dream

From their humble beginnings as Mail Box Etc. to becoming the industry leader in the postal and business services franchise industry, The UPS Store has been recognized as a leader in the world of franchising. 2013 marks the 23rd consecutive year The UPS Store has achieved the top spot in the “Postal and Business” category of Entrepreneur Magazine’s Annual Franchise 500 list.

“We’re selling a dream to customers. People want to own their own business, and we provide the platform to do so. We allow them to be in business for themselves, but not by themselves,” Adkins says. “We not only offer support, but we help our franchisees learn how to run a successful business.”

The UPS Store also hosts two weekly webinars open to the public. Watch webinars live or at your own convenience and submit any questions you may have.  To sign up, visit www.theupsstorefranchise.com/events.

For more information about the new Main Street Model:
www.theupsstore.com/mainstreet

 * These figures are subject to change. See Franchise Disclosure Document for current amounts. 

-Jessica Spoto