Ups Store Case Study

1491 Words 6 Pages
The UPS Store® is a franchising opportunity available in many areas across the United States. The company, originally Mail Boxes Etc., Inc., began over thirty-five years ago as a convenient alternative to the United State Postal Service (UPS Store, Inc., 2014d). In 2003, Mail Boxes Etc., Inc. became a wholly owned subsidiary of United Parcel Service of America, Inc. (UPS), making it the world’s largest franchisor of small business-oriented services (UPS Store, 2014a).
Each The UPS Store® franchise offers business-oriented services to small business owners. This includes a wide variety of printing, faxing, packaging, and shipping services (UPS Store, 2014b). In addition, The UPS Store® franchises provide small business owners with document
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Baron and Shane (2008) refer to this as enforced standardization. This standardization is what helps a company build its brand-name recognition. However, this standardization can also have dire consequences on an entrepreneur’s ability to be successful in some markets (Katz & Green, 2014). Therefore, a prospective franchisee must have a clear understanding of the standardization requirements of the franchise and understand how the specific standardizations will perform in his/her particular business …show more content…
Although the source is not necessarily reliable, the document provides a lot of useful information. In 2007, the initial franchising fee for the UPS Store® was $29,950, initial investment cost was well over $175,000, and total royalty costs were approximately 8.5 percent of gross revenue (FREEfranchisedoc, 2007). The most compelling part of this document, for me, was the information contained within the lawsuits section of the document. It lists fifty-six different lawsuits and provides details regarding the legal complaint and the ensuing outcome. After reading through some of the legal complaints, it is easy to understand that there are far more drawbacks associated with franchising opportunities than meets the eye or our textbook would lead us to believe. Placing a value on a franchising opportunity is very difficult and really depends on the situation. It seems, if an entrepreneur is purchasing a franchise directly from the franchisor, the cost of the franchise is what the franchisee has to pay in franchise fees and start-up costs. The franchisee must investigate the earning potential of the new venture to determine whether it is financially feasible to make a profit and whether it makes sense to make the initial

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