All Feed Back NEEDED looking at potential fed ex turn key routes to purchase

[qcarter]

Hey everyone! I am currently researching multiple types of fex ex routes. I have met with 3 different sellers all with 4 or 5 routes for sale. The one I am currently in the process of proceeding forward and now in the stages of doing all due diligence necessary in hopes that this will lead to a good investment and purchase. As of now, i have acquired settlement sheets, expenses and in the process of setting up a meeting with the account to review information more in depth. If there is any guidance I could recieve from anyone on this forum to help me make sure I cover all the my bases I would greatly appreciate any and all help. I know it can vary from state to state. I am also looking for anyones opinion on if this is a smart purchase and if people know where fedex may be heading in the future? You can obviously read a million different opinions on the internet. Thanks in advance!
Qcarter

 

[whenIgetthere]

Run away as fast as possible.

 

[qcarter]

Is that for all forms. This is not PSA routes. They are already ISP ones. Could someone elaborate as to why this is a bad decision?

 

[qcarter]

Run away as fast as possible.

Could you help elaborate why. Ive been trying to read past and present posts on this page but at this rate it will take a life time lol. Any advice based on the ISP routes.

 

[kickpackage1]

Hey everyone! I am currently researching multiple types of fex ex routes. I have met with 3 different sellers all with 4 or 5 routes for sale. The one I am currently in the process of proceeding forward and now in the stages of doing all due diligence necessary in hopes that this will lead to a good investment and purchase. As of now, i have acquired settlement sheets, expenses and in the process of setting up a meeting with the account to review information more in depth. If there is any guidance I could recieve from anyone on this forum to help me make sure I cover all the my bases I would greatly appreciate any and all help. I know it can vary from state to state. I am also looking for anyones opinion on if this is a smart purchase and if people know where fedex may be heading in the future? You can obviously read a million different opinions on the internet. Thanks in advance!
Qcarter

Have you asked the owners of these routes why they are selling ? The answer should be it is a SCAM but they will not tell you that because you will be buying their Headache ...Like the other reply to your post wrote . RUN

 

[qcarter]

He has owned his routes for 25 years. He is currently still has 5 for sale but sold his other ones looking to retire. That was what I was told when asked the reason for selling.

 

[qcarter]

Listen if anyone can give me more advice as to how this business operates as far as ISP ROUTES I would greatly greatly appreciate. I already know the terms of his contracts and reviewed his numbers as far as yearly gross, yearly expenses, expected net due to the last 5 years and so fourth. I would like to know why I should run? Actual advice please. I am a 29 year old women with a family. I am pretty bussiness savy and I make sure to cover all my bases before investing money into any type of bussiness. I understand drivers dislike their jobs due to management. This owner helps his drivers, gives bonuses, gives incentives etc. And I would maintain his work ethic to highest degree. I know the drivers dont make all that much and its a job for them until they find something better. He has currently kept some of his current drivers for the past 3 years. No its not great but I understand why they decide to move on. I besides the hours and headaches because that comes with any bussiness you own.

 

[kickpackage1]

He is retiring from 25 years of the bulls### fedex has been feeding him is what he is what he is retiring from ,look at the year of the trucks, check all maintenance reports,if the trucks are fairly old do not even touch them if you think you are buying a business to have free time on your hands and be free to do what you want to then I suggest you turn and do not look back RUN because once you buy those routes Fedex Owns you

 

[qcarter]

A

He is retiring from 25 years of the bulls### fedex has been feeding him is what he is what he is retiring from ,look at the year of the trucks, check all maintenance reports,if the trucks are fairly old do not even touch them if you think you are buying a business to have free time on your hands and be free to do what you want to then I suggest you turn and do not look back RUN because once you buy those routes Fedex Owns you

Alright thank you. I was investing while my father would take over as manager. It was a dule arrangement so we would still have family time. Is this because your a fed ex route owner??? Trucks vary in age, some older some semi newer all are free and clear so no payments.

 

[STFXG]

If you aren't able to drive yourself then stay away. Too much risk. Run.

 

[qcarter]

If you aren't able to drive yourself then stay away. Too much risk. Run.

What is the risk if i am not driving and my dad as manager could? If there are 5 isp routes and it nets in the middle 200's i wouldn't walk away with a decent salary being owner/investor? I will learn the routes just like anyone else with the intent to kniw my bussiness best.

 

[It will be fine]

She says her dad would manage. I take that as he could drive.
Look at maintenance, plan on it increasing yearly depending on the truck age. Look at his records. If he's been looking to sell for a while he may have been letting some preventative work slide. Have a trusted mechanic check the trucks for you.
If you're in ISP already, I expect the arrangement to be steady for the next few years at least. Ask if any other stations are planning on opening in your area, it may move some of your routes.
No one here can say if it's a good deal without all the numbers and even then a lot will depend on your local labor market.

 

[STFXG]

What is the risk if i am not driving and my dad as manager could? If there are 5 isp routes and it nets in the middle 200's i wouldn't walk away with a decent salary being owner/investor? I will learn the routes just like anyone else with the intent to kniw my bussiness best.

Do you have driving experience currently?

You'll make a good return on 5 routes if those numbers are true.

With no experience it's a big learning curve. You'll find out what it's really like come December. Hands off owners usually don't do as well. As long as you can jump in the truck and do any route yourself you will do fine.

Ride along on all the routes prior to purchase. Spend a week, one day with each driver, to get a feel for the area. You need to see first hand why you're jumping in to.

 

[bbsam]

What is the risk if i am not driving and my dad as manager could? If there are 5 isp routes and it nets in the middle 200's i wouldn't walk away with a decent salary being owner/investor? I will learn the routes just like anyone else with the intent to kniw my bussiness best.

5 routes will not net in the mid 200s.

 

[qcarter]

T

She says her dad would manage. I take that as he could drive.
Look at maintenance, plan on it increasing yearly depending on the truck age. Look at his records. If he's been looking to sell for a while he may have been letting some preventative work slide. Have a trusted mechanic check the trucks for you.
If you're in ISP already, I expect the arrangement to be steady for the next few years at least. Ask if any other stations are planning on opening in your area, it may move some of your routes.
No one here can say if it's a good deal without all the numbers and even then a lot will depend on your local labor market.

Thank you. Yes my dad can drive and this terminal just opened 1 month ago. Brand new. So he just moved to this one which in fact helps him because now he cut down his travel time for all routes. Its cut it more then half. Mechanic is in place to go over trucks. Appreciate your actual advice.

 

[Grounddown]

HD or ground routes? How many years left on his contract? One person might not be enough to cover routes when the drivers go south on you. You will have zero free time. Any problems that come up needed to be solved 5 minutes ago.

 

[qcarter]

Do you have driving experience currently?

You'll make a good return on 5 routes if those numbers are true.

With no experience it's a big learning curve. You'll find out what it's really like come December. Hands off owners usually don't do as well. As long as you can jump in the truck and do any route yourself you will do fine.

Ride along on all the routes prior to purchase. Spend a week, one day with each driver, to get a feel for the area. You need to see first hand why you're jumping in to.

Thank you. Yes definitely need to cross all T's and dot all I's. I checked his numbers and going over his books with a fine tooth come to make sure all "expenses" are true to date and even averager from past 2 years. All trucks are paid off so i will set aside money besides maintence costs as if i had truck payments to plan for future trucks. Thanks for advice. Greatly appreciated. If you have anythinf else i am all ears

 

[qcarter]

5 routes will not net in the mid 200s.

Just going based on what it says and his accounts books. Starting from settlement sheets and adding up the averages. Then backing out all his expenses on average. But i will make sure to have my accountant reviews all paper work.

 

[qcarter]

HD or ground routes? How many years left on his contract? One person might not be enough to cover routes when the drivers go south on you. You will have zero free time. Any problems that come up needed to be solved 5 minutes ago.

The are 5 ground routes. He can pick up hd if he wants to on saturdays if other contractors are overloaded but not obligated. He said they all work well together in the terminal. He has 5 drivers in place and I will have a backup list of drivers already cleared by fedex and my dad as driver manager. He just signed a 2 year contract in February.

 

[It will be fine]

Couple more things to check.
Work comp, get his ex-mod and loss history. If he's been operating with minimal losses for years he'll be paying a lower rate than you'll get with a new company. If you ever plan on being in or near a truck, insurance will rate you as a driver, that's an extra $10Kish that he's probably not paying with himself as the only manager.
Capacity. See how busy his guys are. Both ways too, I've got routes that look pretty empty leaving but come back full. If you need to add another route soon, it will eat into your margin fast.