UPS Store Franchise Cost, Owner Salary & Profit 2024

The UPS Store franchise offers a fantastic opportunity for entrepreneurs to open their own businesses with well-established brands.

With over 5,000 independently owned and operated locations in the United States and Canada, The UPS Store is one of the most recognizable names in retail shipping and packing services.

It is one of the 50 best franchises that you must own.

As a franchisee, you can benefit from an established system that has been refined over the years, allowing you to focus on growing your business while leveraging existing resources.

This article will provide an overview of what it takes to become a UPS Store franchise owner, including information about franchise fees, total investment costs, training requirements, restrictions, renewal options, and return on investment potential.

Read on to learn more about starting a The UPS Store Franchise!

UPS Store Franchise

Who is the Founder Of UPS?

The company known as UPS was founded in 1907 by James Casey and Claude Ryan. They started the American Messenger Company, which was later changed to United Parcel Service (UPS).

The modern-day UPS traces its roots to this small messenger service in Seattle, Washington.

Since its beginning, UPS has expanded greatly. It has grown into a global package delivery company with nearly 500,000 employees across the world.

Today, UPS is the world’s largest package delivery company and one of the most recognizable brands in the United States. Its growth and success are a testament to the strong foundation laid by its founders.

About UPS Franchise

About UPS Franchise

With a rich history of almost 40 years in franchising, The UPS Store is the world’s leading retail shipping, printing, and business service center franchise.

For an impressive 28 years, Entrepreneur Magazine has ranked The UPS Store #1 in its sector in its annual Franchise 500 list.

The UPS Store is a small business resource center that offers assistance and a wide range of services. It is designed to help various types of businesses and individuals.

Currently, The UPS Store network includes 350 independently owned franchise shops and is part of a global network of over 5,100 locations, including in the United States.

This vast network provides services to small-office/home-office (SOHO) businesses, corporate “road warriors,” and regular consumers, offering easy and value-added business services. The brand’s success and expansion reflect its commitment to providing essential services in a convenient and professional manner.

History Of UPS store Business

The history of The UPS Store is closely linked with the broader history of UPS (United Parcel Service) and the earlier brand Mail Boxes Etc. Here’s a detailed look at the history:

  1. 1907: Founding of UPS – James Casey and Claude Ryan founded the American Messenger Company in Seattle, Washington, which later became UPS.
  2. 1980: Birth of Mail Boxes Etc. – Mail Boxes Etc. was founded by Gerald Aul, Pat Senn, and Robert Diaz. This company specialized in shipping, printing, and business services, similar to what The UPS Store offers today.
  3. 2001: UPS Acquires Mail Boxes Etc. – UPS acquired Mail Boxes Etc., inheriting a vast network of retail locations offering various business services.
  4. 2003: Rebranding to The UPS Store – After acquiring Mail Boxes Etc., UPS rebranded the franchise network as The UPS Store. This move signaled a shift towards a broader range of business and shipping services.
  5. Ranking and Recognition – For 28 consecutive years, Entrepreneur Magazine has ranked The UPS Store #1 in its sector in the annual Franchise 500 list. This consistent recognition highlights the strength and innovation of the brand.
  6. Growth and Expansion – Since its rebranding, The UPS Store has grown significantly. It now includes 350 independently owned franchise shops in the U.S., and more than 5,100 locations globally.
  7. Services and Innovation – The UPS Store continues to expand its range of services, catering to small businesses, corporate professionals, and individual consumers. From printing to shipping to mailbox services, the stores offer a wide array of solutions.

UPS Store Franchise Model

UPS Store FranchiseValue
Total Investment$350,000
UPS Store Owner’s profit per yearApproximately: $100,000
Estimated time to profitability/ROI3.5 – 4 years
Number of UPS Stores in the US4,326 (as of December 2020)
UPS Store Franchise Cost$168,885 – $398,323
Franchise Fee$29,950
Franchise Term10 years, renewable
Monthly Royalty Fee5% of gross sales

How much does a UPS Store franchise owner make?

On average, a UPS Store franchise owner makes approximately $109,500 in profit per year.

To reach this level of income, the owner needs to generate about $365,000 in annual gross sales.

Sadly, not all stores achieve this success. In reality, around 60% of all UPS stores in the United States do not reach this break-even point and fail to generate a profit for their owners. This statistic emphasizes the challenges and risks involved in operating a UPS Store franchise.

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%365000.00
Franchise Royalty Fees4.38%(15968.75)
Cost of Goods Sold (COGS)21.87%(79843.75)
Labor (Variable)11.38%(41518.75)
Total (Expenses)70.00%(255500.00)
Net Profit30.00%109500.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.

How Much Does a UPS Store Franchise Cost?

The startup cost for a UPS Store can change based on different factors like the size of the store, its location, the number of employees, and the type of outlet.

Here’s a breakdown of the costs:

  • Franchise Fee: The franchise fee for a UPS Store ranges from $9,950 to $29,950.
  • Traditional Store Investment: For a regular store, the investment can be anywhere between $168,885 to $398,323.
  • Rural Locations: In less populated areas, the investment might fall within the range of $166,659 to $309,045.
  • Store-in-Store Format: This particular setup would cost between $58,248 to $230,160.

Additionally, UPS Store franchisees are required to have $60,000 in liquid assets.

Average Sales / Revenue per Year

Average Sales / Revenue per Year
YearRevenueOperating ProfitNotes
2022$100.338 billion$13.1 billion3.14% increase from previous year
2020$84.62 billionNot mentionedBoosted by pandemic; reached 35th on Fortune 500’s list

UPS earns billions of dollars in revenue each year.

In 2022, UPS made $100.338 billion in revenue, which is a 3.14% increase from the previous year, and it showed an operating profit of $13.1 billion.

Even when many businesses were struggling in 2020, UPS thrived. The company generated $84.62 billion that year, and the pandemic actually boosted its revenue growth to $84.62 billion.

These strong financial results were so impressive that they helped UPS reach the 35th position on Fortune 500’s list for that year. UPS’s consistent performance and ability to adapt to changing circumstances have contributed to its success as one of the world’s leading package delivery companies.

The Advantages Of Owning a UPS Store Franchise

  • The UPS Store has been voted #1 in the business services market and has been honored as a top retail brand by The Business Journals’ American Brand Excellence Awards. This recognition highlights the company’s excellence in its field.
  • New franchise owners get valuable training. They spend ten days at The UPS Store University on the corporate site in San Diego as part of the training program. This ensures that they have the skills and knowledge they need.
  • The UPS Store is dedicated to providing the tools and support you need to run and develop your business. This commitment helps franchisees to succeed.
  • Ownership of multiple stores is common within the network. More than half of the franchisee network owns multiple locations. This fact reflects the opportunity for growth and success within the franchise system.

Training & Support From UPS Store

The UPS Store offers extensive training and support through its wide network of franchisee support services.

Franchise owners receive everything they need to grow and operate their new businesses.

Moreover, from the moment the doors open and beyond, they benefit from a four-week training course on The UPS Store’s business methodology at one of the corporate campuses. This is in addition to ongoing marketing support and client acquisition assistance.

UPS Store Failure Rate

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change

For Total Franchised outlets:

  • In 2019, the growth rate was (92)/4866×100≈1.89%
  • In 2020, the growth rate was (79)/4958×100≈1.59%
  • In 2021, the growth rate was (101)/5037×100≈2.00%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

Overall, the franchised outlets for the UPS Store grew from 2020 to 2022, showing a growth rate between 1.89% and 2.00%.

UPS Store Payback Period

With a total investment of $350,000 and a yearly profit of $109,500.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Total Investment / Yearly Profit = $350,000 / $109500 = 3.19 years

It would take around 3-4 years to pay back the initial investment for a UPS Store franchise based on these figures. But it depends on how you run the business. It could also take between 3-5 years to recoup the investment amount.

If opening a delivery franchise appeals to you, consider FedEx, Blue Dart, and Amazon Delivery franchises as viable options.

UPS Store Comparison

CompanyUPS Store FedEx
Founded In19801971
Initial Investment$186K – $508K $5,000-$40,000
Franchise-Fee$9,950-$29,950 $9,250
Total Outlet5,415670
Annual Revenue$84.62 Billion $94 Billion

Frequently Asked Questions 

Is It Profitable To Own A UPS Store?

According to The Balance, to earn $35,000 per year, a UPS Store franchise owner must achieve “$365,000 in gross revenue per year.”

Is It A Good Investment To Buy A Franchise?

Franchises are frequently asked if they are a good investment by prospective business owners searching for a safe bet.

Franchise firms, on average, have a success record of more than 90% and are more likely to last, according to research.

Does the UPS Store offer Franchise?

Yes, UPS Store provides a wide range of franchise opportunities to entrepreneurs.

How many locations does UPS Store have?

There are more than 5,500 stores of UPS Store in the locations of U.S. and Canada.

Who owns UPS Store?

The UPS Store locations are independently owned and are operated by franchisees of the UPS Store, Inc.

Who founded UPS Store?

The UPS Store is founded by two teenage entrepreneurs of the year 1907. Claude Ryan and Jim Casey opened the American messenger company.

Where is UPS Store Headquartered?

The UPS Store is headquartered in San Diego, California, USA.

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