FedEx contractor advice?

Discussion in 'FedEx Discussions' started by mc2r, Mar 30, 2013.

  1. mc2r

    mc2r New Member

    Hello everyone,

    I just joined this forum in hopes of getting inside knowledge and opinions. I searched around this website and did not find precisely what I am looking for, so forgive me if this has already been discussed and answered on another thread. I am thinking about purchasing 4-6 FedEx routes initially in my area and expand.

    On the surface, common sense tells me that contracting for FedEx is a good opportunity to generate constant revenue. Everything that I read so far about growth potential appears promising. However, I am finding a lot of listings from contractors trying to dump their routes. In fact there's quite a few routes available throughout the country. One of the brokers that I talked with sold me a dream about contracting for FedEx and was eager to link me up with his client selling a very profitable business with multiple routes. Is this something that I should be running from? What am I missing here?

    I am well aware of the recent lawsuits involving employee misclassification but I am not bothered by it. I've been a contractor for the past 12 years in a completely different field and done well. Of course, I still have plenty of due diligence to cover before even talking to a seller.

    From a business perspective with FedEx, please let me know what you guys think. If there's any FedEx contractors out there with multiple routes please share the pros and cons.


  2. serco

    serco Member

    When you buy these routes for the high prices people THINK their worth! (Over 60k) In a year or 3 you will be selling them to! Just cause others are buying them up and pretending to run profitable (after wages, taxes, and fuel, oh and now route pament too) does not mean they are making money. Ive seen it so may times is bothersome! Get a good deal on 1 at a time and learn the fedex tricks and ways, before investing on more than 1 route. Buying multiple routes is digging your own grave! Theres a learning curve to deal with fedex, take some time to learn from thbe rea contractors not just ones selling them!
  3. mc2r

    mc2r New Member

    Thanks serco... What are route payments? Is this something new?

  4. bbsam

    bbsam Moderator Staff Member

    serco gives very good advice. If I were going to buy a route, the first thing I would do is ask station management if they are an Independent Contractor or an Independent Service Provider state. Same concept but significantly different. Then get a sample contract/agreement from them and read through it carefully. If you have read carefully, there will invariably be serious questions that arise. Remember, FedEx wrote the document and they wrote it to favor themselves. Take your questions to an attorney. Pay very close attention to the answers given. Next, find an IC or ISP in the same building (but not the one you are buying from) and present him/her with your questions and the answers provided by the attorney. Often there is a chasm between what is written and what is practiced within a station. Sometimes the chasm favors the IC/ISP, sometimes not so much.

    If at this point it still seems like an attractive proposition, get the financials. Any IC/ISP who has any success in a decent manner can produce several years of taxes and cash-flow information within 24 hours. If he can't, turn it to your advantage. He's having a "fire sale" and almost has to get out. If this is the case, and you feel so inclined, a low-ball offer may be in order. Remember, you can always pay full price later if your offer is refused.

    The information is out there but proceed cautiously. I have found it to be profitable, but I got most of my routes for free over the years. Good luck.
  5. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Will station management give a sample contract/agreement to someone who is "just looking"?
  6. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    My bet is you have a better chance of seeing an original Honus Wagner baseball card.

    Anyways I can't see station management being privy to that, probably Fedex Legals job.
  7. bbsam

    bbsam Moderator Staff Member

    Almost assuredly. If they potentially will be dealing with the individual on a daily basis, it is in their best interest to have them enter with "eyes wide open".
  8. bbsam

    bbsam Moderator Staff Member

    Every Ops manager in our building has one.
  9. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    Ok, so I'm half wrong?

    Do they give them out to "just Lookers"?
  10. bbsam

    bbsam Moderator Staff Member

    Sure. There's is nothing "secret" about the agreement. Hell, any questionable part has probably been posted in legal decisions on the internet over they years. Before we transitioned from contractors to ISP's we were urged to have our attorney "review and explain". Again, it's one thing for Ground to have a revolving door of drivers, a revolving door of multiple route owning contractors is a far bigger headache. Might as well avoid that from the beginning if possible.
  11. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    Ok ok, so Upsates answer is yes then....

  12. STFXG

    STFXG Well-Known Member

    Yeah you can get one. But it won't show any of the financial information.
  13. bbsam

    bbsam Moderator Staff Member

    Not making a big issue out of it. It's just better for people to know what they are getting into.
  14. bbsam

    bbsam Moderator Staff Member

    Right. The potential buyer would get that from the seller.
  15. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    So there is nothing proprietary in the agreement/contract?
  16. bbsam

    bbsam Moderator Staff Member

    I don't believe so. The question came up a few years ago when my dog-bite-victim-driver was counter-sued by the homeowner for "trespassing". FedEx had no problem whatsoever with us handing the contract over to the driver's lawyer even though she was not a party to the contract.
  17. Gumby

    Gumby *

    You order a F****ng package its not trespass you invited that driver to your house................................................ You ordered the package it wasn't a gift Bite the dog and the owner next time!!!!!!!!!!!!
  18. bbsam

    bbsam Moderator Staff Member

    Homeowner lost...big time.:biting:
  19. Operational needs

    Operational needs Non desistas. Non exieras.

    Did the driver get a nice payout or a veeerrry nice payout?
  20. bbsam

    bbsam Moderator Staff Member

    $100k. Probably could have gotten more.