The UPS Store Franchise Costs & Profits (2024)

Quick Summary

The UPS Store, a subsidiary and franchising name of the renowned United Parcel Service (UPS), has established itself as a leading franchisor in the retail service industry. Initially founded in 1980 as Mail Boxes Etc., it was acquired by UPS in 2001 and rebranded to The UPS Store, now headquartered in San Diego, California.

This franchise network specializes in offering various services designed to meet the diverse needs of businesses of all sizes, home office workers, and time-conscious consumers. 

The UPS Store franchises are found in traditional locations, like strip malls and busy downtown areas, and non-traditional spaces like universities, military bases, and airports. 

The former franchise system has also introduced the "Main Street" model for rural or small-town communities, expanding its reach and accessibility.

With over 5,000 units nationwide, The UPS Store continues to evolve and grow, maintaining its status as a one-stop shop for shipping, printing, and packing needs.

Key Takeaways

• The UPS Store is a franchise with over 40 years of prominence, ranked #4 in Entrepreneur’s “Franchise 500” list in 2024, offering a well-established brand and reputation.

• With over 5,570 locations as of 2023, The UPS Store provides a wide range of services including shipping, printing, and notary services, making it a comprehensive business service center.

• Franchisees undergo extensive training, including web-based sessions, in-store experience at Certified Training Centers, and an intensive course at The UPS Store University in San Diego.

• Initial investment costs for opening a UPS Store franchise vary by location, with traditional stores costing between $247,306 and $476,993, and ongoing royalty fees at 5% of gross sales.

• The UPS Store franchise owners' income varies significantly, with top 10% stores averaging $916,057 in gross sales, while about 60% of U.S. stores may not break even, highlighting the importance of location and operational efficiency.

Table Of Contents

Is The UPS Store A Franchise?

Yes, The UPS Store operates as a franchise and has been a prominent franchise option for over 40 years. In 2024, The UPS Store was ranked #4 in Entrepreneur’s magazine's “Franchise 500” list. 

Each UPS Store is independently owned, offering the advantage of utilizing a well-established brand name and reputation to draw in customers.

However, prospective franchisees are required to follow stringent guidelines provided by the franchisor and may incur significant fees for the right to operate under The UPS Store logo and brand. Despite these factors, The UPS Store franchising still presents a viable choice for aspiring small business owners, providing certain inherent benefits from the outset.

How Many UPS Franchise Stores Are There? 

The UPS Store stands as a prominent franchise across the United States, with over 5,570 locations nationwide as of 2023, making it easily accessible no matter your location.

Renowned primarily for its shipping and packaging solutions, The UPS Store also provides extensive services, including printing, copying, mailbox rentals, and notary public services.

Its evolution into a business service center has positioned The UPS Store as an all-encompassing destination for various small business requirements. This convenience and array of business services have cemented its status as a go-to option for customers seeking efficient and reliable service.

What Training Is Required To Open A UPS Store? 

To ensure the success of its franchisees, The UPS Store provides an extensive and multi-phased training program for those ready to franchise or ownership, focusing on the essential business management and technical, conceptual, and diagnostic skills needed to grow a franchised business effectively.

The training begins with an introductory web-based session, followed by the New Franchisee Training Program, divided into two main parts. 

The first part comprises the In-Store Experience, split into two five-day sessions held at a local or regional Certified Training Center under the guidance of a Certified Trainer. 

The second part is the University Business Course, an eight-day intensive training at The UPS Store University in San Diego. This course includes three days dedicated to Print Services Training.

Additionally, the designated primary operator must complete a Financial Management Training Program an approved vendor provides within six months of the franchise agreement’s effective date.

To keep franchisees and their supervisory employees abreast of the latest developments and skills, The UPS Store may also offer periodic supplemental or additional training programs and refresher courses, which could be mandatory or optional, at its discretion.

How Much Does It Cost To Open A UPS Franchise? 

Opening a UPS Store franchise is an investment in a widely recognized brand, but the cost varies based on the store's location and size. 

The UPS Store has several store types that franchisees can own and operate, depending on their location and territory the store will be operated in. The cost to open a UPS location will vary based on the type of store, with average costs per location being: 

• Costs for traditional location centers range from $247,306 to $476,993.

• Investment for rural location centers falls between $218,148 and $419,226.

• Combined non-traditional venue types require an investment of $110,049 to $448,918.

• Smaller, store-in-store, non-traditional location centers cost between $101,818 and $310,779.

This includes the franchise fee and other startup costs and expenses like equipment and initial marketing.

Additionally, franchisees are required to pay an ongoing royalty fee, which is 5% of the store's gross sales. Beyond these costs, there are operational expenses to consider, such as rent, utilities, and insurance. 

Franchise owners can expect a net profit in the range of $60,000 to $120,000 per franchise term, with an estimated period of 3 to 5 years to recover the initial franchise investment.

What Is The UPS Franchise Franchise Fee?

The initial franchise fee to open a UPS store location is $29,950. 

In addition to the initial franchise fee and initial application fee amount, franchisees are required to pay several fees to the franchisor. These ongoing fees include:

• A 5% royalty fee on gross sales.

• A 1% marketing fee.

• A 2.5% national advertising fee.

This rate is relatively low compared to the typical franchise structure, which often includes a 6% royalty, a support fee, a 3% national brand fund, and about 3% in various other fees.

How Much Does A UPS Franchise Owner Make A Year? 

The income of UPS Store franchisees and owners can differ based on UPS Store center location, services offered, overhead, and the type of store the franchisee or owner operates.

In 2019, for stores in non-traditional locations, the average gross sales for a single UPS Store stood at $521,316, as reported by 4561 locations.

The top 10% of these stores achieved impressive gross sales averaging $916,057, showcasing the potential for high profitability. 

On the other end of the spectrum, the bottom 10% of stores reported gross sales of about $252,427. This disparity highlights the impact of location and operational strategies on the financial success of individual UPS Store locations and franchises.

Notably, approximately 60% of stores in the U.S. don't break even, requiring consistent monthly sales above $30,000. Success in this business often demands industry experience. 

To increase their chances of profitability, over half of the 52% of franchisees manage multiple locations. These can include unconventional sites like hotels, convention centers, or grocery stores.

Franchise Empire’s Thoughts

The UPS store is iconic, and your ability to own one is probably more realistic than most of the big flagship franchises.

You’ll often see UPS store resales available on the market.

I’ve heard from folks that there are a lot of fees, and UPS store is very particular about how they want things run.

Plus they have agreements with places like Amazon where you are a glorified drop off center. You get nickels, if not pennies, for people to just simply drop off their boxes.

I think the real money and opportunity is to go out and network with local business owners and get print jobs, and different marketing projects that create the real financial opportunity.

I would talk to A LOT of existing franchisees before diving into something like the UPS store.

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Disclaimer: This article is for informational and educational purposes only, and should not be considered as professional advice. We don't guarantee the accuracy or completeness of the information. It's not a recommendation or offer to buy or sell any financial products and doesn’t apply to specific personal circumstances. You should evaluate the risks and merits yourself before making any financial decisions based on this content.