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UPS/MBE problems?
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<blockquote data-quote="Maineiac" data-source="post: 88597" data-attributes="member: 5161"><p>60% of the franchise network is below breaking even. That means that they cost more to run than they take in. This is before the owner takes a draw to pay for things like food for his family. Out of the remaining 40% that are profitable, 90% of those are marginably profitable. This is why there are lawsuits involving hundreds of store owners. Many, if not most of the stores involved in these suits are in the profitable 40%. The unprofitable ones cannot afford the cost of litigation.</p><p> </p><p>The fact that there are 15 stores around you is part of the problem. Oversaturation does not affect UPS negatively, but there are many stores out there that have seen dramatic declines in revenue because a new store has opened just straddling the edge of their territory.</p><p> </p><p>15 stores and 3 owners? I doubt it, that is definitely is not the norm. The norm is the owner owns 1 or 2 stores and they typically work their store. There have been cases where stores have been abandoned by franchisees who typically invest over $200,000 to open a store and the area franchisee have convinced another franchisee to take over operations for as little as $1. </p><p> </p><p>These stores used to be more profitable than they are now, but that was before UPS got involved and changed the business model. Improperly operated? Tell that to someone who ran a profitable MBE for 15 years. A lot of people jumped into this game after the rebranding in 2003 and bought into this based on the UPS brand. No profit right away can be explained as something to be expected, after 3 years - many owners are now realizing the truth, that the profitability will never come. </p><p> </p><p>You think a UPS Store is a great investment - ask the owners of over a thousand of these stores that are for sale right now why they can't find a buyer? Ask one of those 3 owners around you how thrilled they are with their investment and what they think of UPS.</p></blockquote><p></p>
[QUOTE="Maineiac, post: 88597, member: 5161"] 60% of the franchise network is below breaking even. That means that they cost more to run than they take in. This is before the owner takes a draw to pay for things like food for his family. Out of the remaining 40% that are profitable, 90% of those are marginably profitable. This is why there are lawsuits involving hundreds of store owners. Many, if not most of the stores involved in these suits are in the profitable 40%. The unprofitable ones cannot afford the cost of litigation. The fact that there are 15 stores around you is part of the problem. Oversaturation does not affect UPS negatively, but there are many stores out there that have seen dramatic declines in revenue because a new store has opened just straddling the edge of their territory. 15 stores and 3 owners? I doubt it, that is definitely is not the norm. The norm is the owner owns 1 or 2 stores and they typically work their store. There have been cases where stores have been abandoned by franchisees who typically invest over $200,000 to open a store and the area franchisee have convinced another franchisee to take over operations for as little as $1. These stores used to be more profitable than they are now, but that was before UPS got involved and changed the business model. Improperly operated? Tell that to someone who ran a profitable MBE for 15 years. A lot of people jumped into this game after the rebranding in 2003 and bought into this based on the UPS brand. No profit right away can be explained as something to be expected, after 3 years - many owners are now realizing the truth, that the profitability will never come. You think a UPS Store is a great investment - ask the owners of over a thousand of these stores that are for sale right now why they can't find a buyer? Ask one of those 3 owners around you how thrilled they are with their investment and what they think of UPS. [/QUOTE]
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