We have summarized all facts about The UPS Store franchise cost for all potential investors in the postal service business. Also, we reveal data about average gross revenues and profit margin that these stores deliver in order to calculate how much salary the owner can expect to make per year.
- The UPS Store (United Parcel Service), with its more than 5,000 locations, is a postal service industry-leading brand in the U.S. and Canada.
- Opening The UPS Store franchise will cost investors between $185,306 and $474,193.
- This company’s franchised locations make on average $607,750 of gross sales per year with 10% of the profit margin.
- The UPS Store franchise owner can make approximately $60,000 yearly by operating an average earning location.
- To be approved as the new location developer, franchise applicants must have $75,000 in Liquid Assets(Cash).
How Much Does The UPS Store Franchise Cost
Starting The UPS Store franchise will cost investors between $185,306 to $474,193 in total. In this estimation are included all expenses that will occur before opening day.
Will starting cost be on the lower or higher end of our estimation, depending primarily on the geographical location and how many square feet the franchise location will have?
The UPS Store franchises generally occupy 800 to 1,800 square feet, so a significant portion of starting cost will go for leasehold improvements expenses!
These improvements will cost new franchise owners between $112,996 and $237,551. These expenses are so high because the investor will need to finance the installation of modular fixtures, exterior signage, electrical modifications, and other constructional works!
The UPS Store Franchise Cost List:
- Initial Franchise Fee: $29,950
- Leasehold Improvements: $112,996 to $237,551
- Initial Marketing Plan Fee: $7,500
- Computer Hardware Installation: $5,927 to $10,595
- Software: $5,489
- Center Development Fee: $5,000
- Site Rent and Security Deposit: $4,500 to $18,000
- Initial Training Fees: $6,000 to $6,800
- Travel and Living Expenses During Initial Training: $3,000 to $4,000/per person
- Design Fee: $2,100
- Annual Technology Development and Support Fee: $2,052
- Site Survey: $1,500
- Optional Locker Fixture: $0 to $12,535
- Optional Locker Annual Subscription Agreement: $0 to $1,428
- Digital Media: $3,027 to $5,974
- Printer Lease: $1,059 to $3,474
- Keyless Entry: $844
- Other Equipment: $8,499 to $32,246
- Start-Up Supplies: $6,180 to $9,155
- Utility Deposits: $900 to $3,000
- Insurance: $1,000 to $5,000
- Working Capital (first three months): $40,000 to $70,000
- ESTIMATED TOTAL INVESTMENT COST: $185,306 to $474,193
This franchising company has launched “The UPS Store Rural Program” for investors who live in rural areas of small town/city communities. So franchise applicants who qualify for the Rural Program can expect lower starting costs than those mentioned above.
How to Cover Initial Investment Cost
The UPS Store, as a company, offers in-house financing to cover the initial fee, equipment, and inventory costs. The investor will need to search for third-party financing options for all other starting expenses.
The UPS Store Franchise Fees
The UPS Store applicants can expect that immediately after closing the franchise agreement with this franchisor, they will need to pay an Initial Fee of $29,950 and an Initial Application Fee of $7,500.
The good news for franchise applicants is that the Initial Application Fee is one-half refundable!
List of all one-time UPS Store franchise fees:
- Initial Fee: $29,950
- Initial Application Fee: $7,500
- Center Development Fee: $5,000
- Design Fee: $2,100
- Site Survey Fee: $1,500
- Initial Marketing Plan Fee: $7,500
- Franchise Proprietary Software License Fee: $4,750
Which Group of Investors Has Right To Initial Fee Discount
Under its “Rural Program,” this franchisor offers a discount on the Initial Fee and Initial Marketing Plan Fee cost to investors who will operate this franchise in small-town/rural areas!
This Initial Fee for investors who meets small-town/rural areas criteria is only $9,950, and Initial Marketing Plan Fee is $4,000 for centers developed under the Rural Program. So an investor who is eligible to meet these criteria will save $23,500, which is a noticeable saving.
The UPS Store franchise applicants who are members of an “Underserved Group” (Asian, Black, Hispanic, Native American, or from the LGBTQ+ community) pay a $14,950 Initial Fee for their first center (reduced from $29,950).
As a participant in the VetFran Program, this franchisor provides an approximate 30% discount on Initial Fee to veterans. So former and current U.S. Armed Forces members who meet this program’s requirements will need to pay this fee of $19,950; for this group of investors, the Initial Application Fee cost is only $3,750.
The Ups Store Ongoing Royalties and Estimated Cost of Leasing Store Space
The owner of the UPS Store franchise is obligated to pay the franchisor from its franchised business gross revenue 5% for Royalty Fee, 1% for Ad/Marketing Fee, and 2.5% for National Advertising Fee cost.
Also, there is $2,052 of the annual cost related to the Technology Development and Support Fee!
Also, we must mention expenses regarding leasing commercial space; this usually costs franchise owners between $1,500 to $6,000 per month.
The UPS Store franchise royalties fees list and estimated cost of rent:
- Royalty Fee: 5% of gross revenue
- The UPS Store Ad/Marketing Fee: 1% of gross revenue
- National Advertising Fee: 2.5% of gross revenue
- Technology Development and Support Fee: $2,052 per year
- Leasing Commercial Space Estimated Cost: $1,500 to $6,000 per month
The cost of leasing space for operating The UPS Store franchise varies from state to state. We recommend that franchise applicants check the average leasing expense in the territory where they plan to open this franchised business to see how much expense they can expect regarding this!
The UPS Store Franchise Profit
On average, the UPS Store franchised locations earn $607,750 in gross sales per year with a 10% profit margin. So, the franchise owner can expect to make approximately $60,000 per year by operating an average earning location.
However, this is just the average that this company location produces when we combine all locations!
The franchise applicant must know that the gross sales level will depend on how good the store place is and their ability to make the most of their franchised business.
In 2020, the top 10% earning UPS Store franchise had produced on average $1,044,417 of gross sales, and the bottom 10% has sales that are on average $365,191 per year per store!
From these stats, we can assume that new franchise owners can expect to earn between $36,000 and $104,000 of profit annually!
How We Calculate The UPS Store Franchise Owner Salary
The data about gross sales generated by The UPS Store locations comes directly from this franchisor, that is, from their Franchise Disclosure Document. So this is the most accurate data we can find because all information about sales level is collected directly from existing franchisees.
According to Macrotrends, The UPS net profit margin is 10.92%. When we apply this percentage to the average gross sales of these company locations, we conclude how much the franchise owner’s salary is.
- $607,750(Average Gross Sales)/ 10% profit margin = $60,700
Is Owning The UPS Store Franchise Profitable
Although the $60,000 of annual salary that UPS Store franchise owners can expect can seem low initially, investors must be aware that this is more than the average that the franchising industry usually delivers.
Yes, you will not become a millionaire by owning this franchised business. Still, this can be a pretty good investment for people who like to be in contact with customers and search for opportunities to become their own boss.
Today this company is presented in more than 220 countries around the world with 2020 revenues of $84.6 billion, which is this brand’s highest ever revenue. This franchising concept is on an upward trajectory, and potential investors can expect this to continue in the future.
Let’s reveal how this company’s franchises have performed in terms of profitability during the last three years.
Average Gross Sales for All UPS Store Franchises by Years:
- 2020: $607,750
- 2019: $521,316
- 2018: $494,418
Average for Top 10% of Earners:
- 2020: $1,044,417
- 2019: $916,057
- 2018: $876,809
Bottom 10% of Earners:
- 2020: $365,191
- 2019: $304,394
- 2018: $291,072
We can see from this data that this company’s average gross sales are growing year to year, which indicates that they can adapt to current market demands. So the potential owner can expect that this business will deliver more profit in the future than is the case now.
The UPS Store Franchise Requirements
Franchise applicants need to have $75,000 in Liquid Assets(Cash) if they want to be approved as the new location owner; this is the main capital requirement that every investor in The UPS Store will need to fulfill.
This franchisor requires that their franchised location must be operated full-time by a “Primary Operator,”; which can be a franchise owner or employee who has completed all parts of our New Franchisee Training Program.
All Primary Operators must attend and complete the Financial Management Training and Print Services Training programs.
There is no requirement regarding past work experience, which means that franchise applicants can even be investors who don’t have a background in the postal service business.
Length of The UPS Store Franchise Agreement
The UPS Store franchise agreement has ten years duration; after that, franchise owners who want to continue running a business under this brand trademark will need to pay a Renewal Fee, which is 25% of the Initial Fee cost.
The UPS Store New Franchisee Training Program
The UPS Store Franchisee Training is consisted of:
- Web-Based Training
- In-Store Experience
- University Business Course
The UPS Store franchisees will have 92 hours of on-the-job training and 77.5 hours of classroom training. The training takes part in a center located at this company headquarters in San Diego, CA, and certified trainers conduct it.
The investor will need to find an excellent location to operate a successful franchise of The UPS Store. So this will be the best business option for entrepreneurs who have detected a lack of this type of service provided in the area where they want to start a new business venture.