Recently I’ve been hearing radio ads promoting photocopy and bindery discounts at The UPS Store. Photocopy? Huh? If this isn’t an example of how to dilute your brand I need to go back to school. *cough*
Why do I say that? Because the UPS brand is all about delivering my package. It’s not about copying in color for only 39 cents a sheet. It’s not about the fact that they can also bind my presentation for me. It certainly isn’t about color prints vs black and white.
Looking back a few years, remember how when FedEx purchased Kinko’s they purposefully kept the Kinko’s name? That was a smart move on their part because for one, Kinko’s had a name. The two brands stand on their own.
When UPS purchased Mailboxes Etc. last year they didn’t get as good a deal. Mailboxes Etc. didn’t have mass market appeal and was more about your neighborhood post office box — not photocopying and printing. Despite this fact UPS is trying to be all things to all people. A big mistake. It won’t hurt them in the long run however they will only dilute the UPS name and waste time and money. UPS means shipping. It can’t also mean “color copies.”
What should UPS have done? They should have made a gutsy move to purchase Alpha Graphics and rebranded the stores as Alpha Graphics UPS. That would have kept both ideas separate in my mind and would have presented a business advantage.
Lastly, if Alpha Graphics had said no I still think it makes sense to purchase Mailboxes Etc., however what was done next should have been different. UPS should have come up with a clever name (something cool like Kinko’s) and launched a new photocopy center overnight.
We all know what this is really about. It’s not about photocopies and it certainly isn’t about helping small businesses print their next set of generic business cards. This is about major shipping services having a location. A place in people’s minds that they can reference any time they need to ship something. In this case, FedEx Kinko’s is doing everything right and UPS should focus on what they do best — shipping.
1,505 responses to “The UPS Store vs FedEx Kinko’s”
http://www.upsoverchargedme.com
Go There or be square!
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
[PROPOSED] COMPLAINT IN INTERVENTION
Plaintiffs allege all facts relating to themselves and their experiences based
on personal knowledge and all facts relating to other allegations based on
information, belief and the investigation of their counsel as follows:
I. INTRODUCTION
1. This is a proposed class action on behalf of all persons and entities
within the United States who have shipped packages with and received invoices
from defendant United Parcel Service (“UPS”), including (i) persons and entities
owning and operating UPS franchises across the United States under the Mail
Boxes, Etc. and UPS store brands; (ii) persons and entities owning and operating
“Third Party Retailers” of UPS shipping services (which includes Authorized
Shipping Outlets, UPS Alliance Locations located in Staples and Office Depot
retail locations, and Commercial Counters.); and (iii) persons and entities who
have accounts with UPS. Plaintiffs and members of the Class are referred to herein
as “Shippers.” Collectively, the proposed Class of Shippers includes
approximately 10,000 package shipment centers and over one million account
holders.
BARBER AUTO SALES, INC.,
individually and on behalf of all
persons similarly situated,
Plaintiff(s),
v.
UNITED PARCEL SERVICES, INC.,
Defendant(s)..
Civil Action No: 5:06-cv-04686-IPJ
JURY TRIAL DEMANDED
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2. The action arises from UPS’s measurement system used to determine
the “billable weight” of a package and for assessing “large package surcharges” on
certain packages. UPS systematically rebills Shippers based on the dimension of
the packages as measured by UPS’s laser measuring or camera scanning devices
(hereafter, “the Measurement Overcharge Scheme.”).
3. The measuring devices are generically referred to as Multiple
Dimension Measuring Devices.
4. Prior to January 1, 2007, the “billable weight” UPS charged Shippers
for ground delivery was based on a package’s “package measurement” (expressed
in inches as the package’s length plus girth) or actual weight. Since then, UPS has
used a “dimensional weight” rate structure for all shipments including ground,
which bases “billable weight” on the greater of “dimensional weight” (determined
by multiplying length times width times height, and dividing by a constant) or
actual weight.
5. After a Shipper has measured a given package to determine its
“package measurement” or “dimensional weight,” determined the package’s
“billable weight,” and assessed “large package surcharges” when warranted, it
calculates its shipping cost for the desired services. The package then goes to UPS
for shipping.
6. When the package arrives at a UPS hub at some point during the
shipping process, UPS “remeasures” the package using its Multiple Dimension
Measuring Devices. It then charges the Shipper for the difference between UPS’s
measurement and that of the Shipper.
7. UPS’s Multiple Dimension Measuring Devices measure the
dimensions of a package in a different fashion from that which UPS mandates that
Shippers use in its “Rate and Service Guide,” which is incorporated by reference in
UPS’s contracts with Shippers.
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8. In its Rate and Service Guide, UPS informs Shippers to measure the
dimension of packages by measuring along the package’s edges – even when the
packages are irregularly shaped and even when the package “bulges.”
9. According to the “Rate and Service Guide,” a measurement of .49
inches is to be rounded down, and a measurement of .50 inches is to be rounded
up. Accordingly, a false reading of as little as .01 inches can result in an
additional inch being added to a measurement. Each additional inch is
significant in that, in calculating “dimensional weight,” UPS uses the “cubic size”
of the package – which is length x height x width. Thus, while an 11 x 11 x 11
package has a cubic size of 1332 cubic inches, a 12 x 12 x 12 package has a cubic
size of 1728 inches. Likewise, an additional inch is significant for those packages
measured in terms of length plus girth, or: Length + [(2 x W) + (2 x H)]. Thus,
while an 11 x 11 x 11 package has a length plus girth “package measurement of 55,
a 12 x 12 x 12 package has a “package measurement” of 60.
10. On information and belief, the “tolerances” of the Multiple Dimension
Measuring Devices used by UPS are far greater than .01 inches, and are as high as
.25 inches. That means that if a Shipper properly measures one side of a package
at 11.25 inches, the Shipper would “round down” to 11 inches pursuant to UPS’s
Rates and Services Guide; on the other hand, UPS’s device might record a
measurement of 11.5 inches, which would then be “rounded up” to 12 inches.
11. Moreover, while Shippers are instructed to measure along the edges of
the package, on information and belief the Multiple Dimension Measuring Devices
measure along the highest points of each dimension; thus, if the package has a
“bulge,” the Multiple Dimension Measuring Device will record a higher
measurement than the measurement accurately recorded by the Shipper in keeping
with the Rate and Service Guide.
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12. UPS knew that the Multiple Dimension Measuring Devices are
inaccurate and not reliable.
13. Because of UPS’s systematically inaccurate measurement system,
final bills or account reconciliations from UPS contain improper adjustments that
impose higher charges for shipping on Plaintiffs and members of the Class.
14. In this lawsuit, Plaintiffs seek injunctive relief to remedy UPS’s
inaccurate and unfair measurement practices, and damages to compensate
Plaintiffs and the Class for the losses they have suffered.
II. THE PARTIES
15. Plaintiff Persepolis Enterprise, is a Michigan corporation. It operates
UPS store No. 2742 pursuant to a franchise agreement with Defendant. Plaintiff
Peresopilis Enterprise has repeatedly notified UPS of improper dimension-based
price adjustments within 6 months of receiving the improper adjustments, and UPS
has often refused to correct the adjustments.
16. Plaintiff Berg Design Inc. (hereinafter, “Berg”) is an Oregon
corporation. Berg repeatedly notified UPS of improper dimension-based price
adjustments within 6 months of receiving the improper adjustments, and UPS has
often refused to correct the adjustments.
17. United Parcel Service, Inc. – Ohio (“UPS-OH”) is an Ohio
corporation with its principal place of business at 55 Glenlake Parkway NW,
Atlanta, Georgia 30328. At all times relevant hereto, UPS-OH provided package
pickup and delivery services in the central and western region of the United States.
It is referred to collectively, with the other United Parcel Service, Inc. entities, as
United Parcel Service, Inc., or “UPS.”
18. Defendant United Parcel Service of America, Inc. (“UPS-America”) is
a Delaware corporation with its principal place of business at 55 Glenlake Parkway
NW, Atlanta, Georgia 30328. At times relevant hereto, UPS-America owned and
Case 5:06-cv-04686-IPJ Document 42-2 Filed 09/24/2007 Page 5 of 29
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operated businesses providing pickup and delivery services for the transportation
of property. It is referred to collectively, with the other United Parcel Service, Inc.
entities, as United Parcel Service, Inc., or “UPS.”
19. Defendant United Parcel Service, Inc. (“UPS-New”) is a Delaware
corporation with its principal place of business at 55 Glenlake Parkway NW,
Atlanta, Georgia 30328. UPS-New is the parent corporation of and the successor in
interest to UPS-America. It is referred to collectively, with the other United Parcel
Service, Inc. entities, as United Parcel Service, Inc., or “UPS.”
20. United Parcel Service, Inc. – New York (“UPS-NY”) is a New York
corporation with its principal place of business at 55 Glenlake Parkway NW,
Atlanta, Georgia 30328. At all times relevant hereto, UPS-NY provided package
pickup and delivery services in the eastern region of the United States. It is referred
to collectively, with the other United Parcel Service, Inc. entities, as United Parcel
Service, Inc., or “UPS.”
III. JURISDICTION AND VENUE
21. Pursuant to 28 U.S.C. § 1332, as amended by the Class Action
Fairness Act of 2005, this Court has subject-matter jurisdiction over this
nationwide class action because the matter in controversy exceeds $5,000,000,
exclusive of interest and costs, and is a class action in which a member of the Class
of plaintiffs is a citizen of a state different from the defendants. See 28 U.S.C.
§ 1332(d)(2)(A). In addition, this Court has subject matter jurisdiction over Count
I of this Complaint pursuant to 28 U.S.C. §1331 and 18 U.S.C. § 1964(a) as a
federal question arising under RICO.
22. This Court has personal jurisdiction over the Defendant, and venue is
proper in this district, pursuant to 28 U.S.C. §§ 1391(a) and (c). Venue is also
proper in this district because many Class Members reside and/or do business in
this district.
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IV. FACTS
A. UPS and Its Relationship With Shippers
23. Founded in 1907 as a messenger company in the United States, UPS
has grown into a $42.6 billion dollar corporation by focusing on the goal of
enabling commerce around the globe. Today UPS is a global company with one of
the most recognized brands in the world. It has become the world’s largest
package delivery company and a leading global provider of specialized
transportation and logistics services. It manages the flow of goods, funds, and
information in more than 200 countries and territories worldwide.
24. In 2001, UPS ventured toward retail business by acquiring Mail
Boxes Etc., Inc., the world’s largest franchisor of retail shipping, postal and
business service centers. Within two years, approximately 3,000 Mail Boxes Etc.
locations in the United States re-branded as “The UPS Store” and began offering
lower UPS-direct shipping rates. The stores remain locally owned and operated,
and continue to offer the same variety of postal and business services.
25. Individuals who do not maintain their own accounts with UPS
typically ship their packages through either a franchisee or a Third Party Retailer.
In that circumstance, the individual deals only with the franchisee or Third Party
Retailer; the franchisee in turn deals with UPS and is UPS’s customer, or
“Shipper.”
26. If an individual takes a package to a UPS Store that is not a drop off
(pre-paid) package, the individual is then billed by the UPS Store. If an individual
ships a package at the UPS Store, the individual is the Franchisee’s customer. The
franchisee in turn is UPS’s customer (or “Shipper”) and UPS bills the franchisee.
27. Likewise, if an individual takes a package to a Third Party Retailer
and chooses to ship via UPS, the individual is then billed by the Third Party
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Retailer. The individual is the Third Party Retailer’s customer, and the Third Party
Retailer is the Shipper. UPS bills the Third Party Retailer.
28. Finally, if an individual or entity has an account with UPS, that
individual is the Shipper. The Shipper weighs and/or measures the package, and
places a shipping label on the package that is generated using software provided by
UPS. UPS then bills the accountholder at regular intervals for all packages
shipped during a particular time period.
29. With respect to all Shippers, UPS’s services are provided as stated in
the applicable “UPS Retail Rate and Service Guide.” (“Rate and Service Guide.”)
30. In addition, UPS’s relationship with franchisees and with Third Party
Retailers is governed by a document called UPS Tariff/Terms and Conditions
(“Terms and Conditions”) (formerly two separate documents). The latest versions
of the Rate and Service Guide, and the Terms and Conditions, can be found at
http://www.ups.com.
B. UPS’s Billing Methods Involve Consideration Of Both The Weight And
Size Of A Package
31. As detailed below, in order to assess the appropriate charges for
shipping a given package, the Shipper must determine, among other things, the size
and weight of a package.
32. In each case, the cost of the shipment depends in part on the “billable
weight” of the package.
33. In calculating the billable weight for all domestic and international
shipments, Shippers are instructed to first determine actual weight of the package,
rounded up to the next full pound.
34. Next, for all air shipments (domestic and international) and for
ground shipments (sent after January 1, 2007) where the “cubic size” of the
package is 5,184 cubic inches or greater, the Shipper must also determine the
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“dimensional weight” of the package, which is defined as “the amount of space a
package occupies in relation to its actual weight.”
35. To obtain the “dimensional weight,” the Shipper must first calculate
the “cubic size” of the package, which is L (length) x H (height) x W (width).
36. The “dimensional weight” for domestic shipments is defined as the
cubic size divided by 194. For international shipments, the “dimensional weight”
is defined as the cubic size divided by 166.
37. The “billable weight” is the greater of the actual weight or the
“dimensional weight” (with the caveat that for ground shipments where the cubic
size is 5,184 cubic inches or less, the “billable weight” is always the actual
weight).
38. All other things being equal (i.e., the type of service, and the zones of
travel), the greater the “billable weight,” the higher the Shipper’s cost for transport.
So, to take one example from page 24 of the “Rate and Service Guide,” a package
shipped “Next Day Air Early A.M.” with a “billable rate” of 31 pounds priced at
Zone “108” would cost the consumer $161.10, whereas a 32 pound package would
cost $164.00.
39. Prior to January 1, 2007, the Rate and Service Guide required that
customers shipping by UPS ground compare actual weight to its “package
measurement,” or dimensions expressed in inches as girth plus length. Under that
rate structure, packages with dimensions of girth plus length equal to or less than
84 inches would be charged according to the package’s actual weight. However,
packages whose girth plus length exceeded 84 inches were charged the greater of
actual weight or a flat rate, depending on the package’s dimensional classification.
Thus, for domestic packages:
• Packages measuring greater than 84 inches and not more than 108 inches
were categorized as Oversize (“OS”) I packages and charged the greater of
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actual weight or a flat 30 pound rate;
• Packages measuring greater than 108 inches but not more than 130 inches
were categorized as OS II packages and charged the greater of actual weight
or a flat 70 pound rate; and
• Packages measuring greater than 130 inches and not more than 165 inches
were categorized as OS III packages and charged the greater of actual
weight or a flat 90 pound rate.
40. In addition, UPS assesses “Large Package Surcharges” of up to $45
for domestic services when its length plus its girth combine to equal greater than
130 inches but less than the “maximum UPS size” of 165 inches. In addition,
“large packages” are subject to a minimum “billable weight” of 90 pounds.
41. Packages that exceed 108 inches in length, or exceed a total of 165
inches in length and girth combined, are not acceptable for shipping. If such
packages are found in the UPS system, they are subject to an additional charge of
$50.
42. Finally, an “Additional Handling” charge of $8 is applied, inter alia,
to packages where the largest size exceeds 60 inches, or its second-longest side
exceeds 30 inches.
43. Accordingly, in many instances small differences in size
measurements lead to increased charges for UPS package shipments.
C. UPS Instructs Shippers on How To Measure Packages
44. UPS instructs Shippers on how to measure and weigh packages in its
Rate and Service Guide.
45. In particular, Shippers are instructed to determine the width, length
and height of packages by measuring along the edge of packages. With respect to
“irregularly shaped packages,” Shippers are advised to “[t]reat the irregularly
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shaped package as if it were a regular rectangular box,” and to “[m]easure the
length, width and height of the package from its extreme points.”
46. UPS further instructs Shippers: “For each measurement, round any
fraction to the nearest whole number (for example 1.00 to 1.49 will be considered
1, and 1.50 to 1.99 will considered 2).” That instruction applies whether
measuring for cubic size or for length plus girth.
47. In addition, in calculating dimensional weight (the “cubic size”
divided by 194), Shippers are instructed to “increase any fraction to the next
pound.”
48. These dimensions are the key to all the various dimension-based
charges discussed above; once the Shipper determines the size, length and width,
computer software determines, among other things, the “billable weight” and
whether any size-based surcharges or exclusions are mandated.
49. Plaintiffs have followed the UPS Retail Rate and Service Guide in
determining the dimensions of a package as have many thousands of Shippers.
50. Indeed, some Shippers and Class Members are in the business of
shipping packages, and they have no incentive to undercharge their customers as
undercharging their customer would cut directly into their profits.
51. Once those Class Members have determined the proper charges, they
collect the charges from their customers. If UPS “adjusts” the charges upwards,
Class Members have no way of recouping the resulting charges from their
customers.
52. In fact, to further efforts to ensure that Shippers enter the correct
measurements—and thereby avoid increased charges from UPS—many Shippers
pre-program their software to automatically generate the measurements of
packages they typically use for Shipping. UPS publishes on its web page a
document entitled “Avoid Shipping Charge Corrections” in which it encourages
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Shippers to pre-program their package sizes, and in some instances UPS assists
those Shippers to do so. Thus, for example, when Shippers repeatedly use likesized
packages, UPS encourages or will pre-program that Shipper’s software so
that the Shipper does not need to repeatedly enter (or measure) packages they send.
However, and despite those efforts, as a result of UPS’s Multiple Dimension
Measuring Devices, members of the Class that took advantage of this preprogramming
were still often assessed adjusted charges by UPS because those
devices improperly measured the packages.
D. UPS Re-Measures Packages Using A Different Methodology Than The
Methodology It Mandates For Class Members And Frequently Adjusts
The Measurements In Its Own Favor
53. When the shipped package arrives at a UPS hub, UPS remeasures
each package using its Multiple Dimension Measuring Devices. Based on its
measurement, UPS often “adjusts” the charges upward from those assessed by the
Shipper and these “adjustments” are reflected when UPS invoices the Shipper.
54. Even a small error can have severe consequences since, as discussed
above, UPS instructs Shippers to “round up” at .50 inches and to “round down” at
.49. Thus, a difference as small as one-hundreth of an inch can result in a
“rounding up” of a single dimension of a package (either the height, length or
width), with significant results to the Shipper. For example, for a package with
true dimensions of 43” in length, 23.49” in height, and 20” in width:
True Dimensions
43 x 23.49 x 20
True Dimensional weight
(domestic)
101.96 lbs
Charged at 102 lbs
True Length + Girth
129 inches
Charged at OS 2 rate
Erroneous Dimensions
(addition of .01 inch to
height)
43 x 23.50 x 20
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Erroneous Dimensional
weight (domestic)
106.39 lbs
Charged at at 107 lbs
Erroneous Length + Girth
131 inches
Charged at OS 3 plus Large
Package Surcharge
55. UPS’s measuring devices may make an erroneous calculation for any
one of several reasons.
56. First, on information and belief, UPS’s measuring devices are, at best,
only accurate to within 1/5 of an inch, or 1/10 of an inch, and are not accurate to
within 1/100 of an inch. For this reason alone, UPS’s measuring devices are not fit
for the purpose for which UPS uses them.
57. Second, if the package has a “bulge” in the center, UPS’s measuring
devices will come up with longer dimensions than the Shipper, who measures
along the edge of the package in keeping with UPS’s instructions in the Rates and
Services Guide. Moreover, many “bulges” develop in between the time the
Shipper measures the package and the time UPS re-measures the package at its
hub.
58. Third, the Multiple Dimension Measuring Devices may be improperly
calibrated or otherwise improperly maintained. It is impossible for state and local
Weights and Measures department to ascertain whether the machines are properly
maintained since UPS takes the position that it is immune from state regulation in
this area.
59. Finally, the packages are placed by employees on fast-moving
conveyor belts; if the package is not properly placed, the resulting measurement
may be inaccurate.
60. To make matters worse, the inaccurate measurements are performed
by UPS at a time and place that make it virtually impossible for Plaintiffs and
putative Class Members to challenge the inaccurate measurements.
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61. Because of the flaws in the Multiple Dimension Measuring Devices,
and because they measure packages in a different manner than that which UPS
mandates for Shippers, it is improper and unfair to use the laser measurement as a
basis for adjusting the Shippers’ invoices in UPS’s favor.
62. UPS has systematically rebilled Plaintiffs and members of the Class
based on its inaccurate measuring system. This has cost Plaintiffs as much as
hundreds of dollars on a monthly basis.
63. On information and belief, UPS only uses the faulty laser
measurements to its own advantage. UPS does not, for example, provide a credit
to Shippers when the Multiple Dimension Measuring Devices measure a package’s
dimensions at less than the actual measurements.
E. Attempting to Dispute Adjustments is Futile
64. The Shipper only becomes aware of the “adjustment” when it receives
its invoice from UPS. By that time, unless the package was lost or returned, it is
extremely difficult, and often impossible, for the Shipper to contest the charges,
particularly when the Shipper no longer has access to the specific package shipped.
65. Since the introduction of the Multiple Dimension Measuring Devices,
Plaintiffs and Class Members have often complained about UPS’s “adjustments,”
with limited to no success.
66. Some Shippers were told in January of 2007 or thereafter that UPS
would withdraw its price adjustment as a one-time “courtesy;” after that, UPS’s
standard response has been that the lasers are infallible and no adjustments will be
made.
67. Other Shippers were instructed that only two adjustments per 180 day
period are permitted. This is unconscionable given that many Shippers receive
many small adjustments in weekly invoices. These charges can amount to
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hundreds of dollars a month, and according to UPS’s policy they cannot be
contested once two adjustments have been made.
68. It is difficult and frustrating for Shippers to contest adjustments to
their bills. UPS’s vague and unclear policies are not clearly communicated to
Shippers. Shippers are required to endure lengthy and cirquitous phone calls being
transferred from one customer service agent to another.
69. In some instances, UPS responded to Shippers’ complaints by placing
them on a “no adjustments” list which prevented those Shippers from having any
further overcharges refunded or otherwise cleared, further rendering futile any
effort to contest the overcharge.
F. UPS Is Aware That Its Measuring System Is Inaccurate
70. The inaccuracies of the UPS system is known to UPS and has recently
been criticized by its own Franchisees:
Platinum Shield Association Says United Parcel Service
Charges Unfairly Because of Improper Measurements of
Packages
Monday April 30, 1:53 pm ET
NEW YORK, April 30 /PRNewswire/ — Officials of the
Platinum Shield Association (PSA), whose members own
and operate United Parcel Service (NYSE: UPS – News)
franchises across the United States under the Mail Boxes
Etc. brand, charged today that UPS imposes higher
shipping costs on franchisees due to UPS’ manipulation
of the dimensional weight system used to determine
package size and weight for shipping.
‘This is significant, because the franchisees find it almost
impossible to dispute the increased costs with UPS once
the package is in UPS’ control,’ said Joe Wightman, a
UPS/MBE franchisee in New York. “More importantly,
we believe this situation may affect all UPS shipping
customers,” he added.
Wightman quoted a recent memo the UPS Store Area
Franchise Developer sent to UPS franchises, which
confirmed that UPS is changing the shipping weight of
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packages: “If you as a franchisee are being hit with
substantial UPS billing adjustments for restated
dimensions of your store’s shipments, and you are
convinced that your original dimensions are accurate …
Look carefully at your bill to see if UPS changes the
dimensions of these boxes and increases the billed
amount based upon their laser scanning based audit.”
Wightman pointed out that this places the franchisees in
an impossible position, because they are in dispute with
their shipping vendor, which also owns their franchise.
Wightman characterized the issue as an inexcusable
abuse of UPS franchisees, many of whom are already in
an unprofitable circumstance. “UPS scans the packages
with its own lasers after the box is out of our hands and
then restates the charges. How is this equitable? Our
experience suggest that the restating of shipping costs to
higher levels results from the impact of packages being
deformed after being piled on each other by UPS during
transit and not by any conscious measurement errors by
the franchisees. How can UPS justify such a practice?”
Wightman added that his organization, PSA, believes
Federal and state government agencies should intervene
to insure shipping consumers that the amount they are
being charged is fair and accurate.
71. UPS representatives have also acknowledged that the measurement
system may be inaccurate.
G. Illustrative Examples of UPS’s Faulty Measurement System
72. The following examples of Plaintiffs experiences illustrate the
damages caused by UPS’s faulty measurement system and the need for UPS to
reform the system.
73. Plaintiff Berg designs and sells, among other things, strollers. Berg
orders custom made boxes to ship its products to customers. One particular box,
the triple box, was designed to fit at the upper cusp of UPS’s OS 2 billing rate in
order to avoid the Large Package Surcharge imposed on those subject to the OS 3
rates.
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74. For many years UPS erroneously charged Berg OS 3 rates for
shipping the triple box, plus a Large Package Surcharge. At one point, UPS issued
Berg a rubber stamp he was to use in order to avoid these errors. That stamp read,
in part: “ATTEN: This pkg., when shipped, met UPS standard size requirements
not exceeding 130” in length & girth combined.”
75. Berg’s problems with UPS’s overcharges of the triple box increased in
2005 and 2006. Despite using the same boxes for years, UPS continued to
overcharge Berg’s shipments. Many of Berg’s invoices show that the incorrect
overcharges were a result of UPS’s incorrect measurement of one side of the
package by as little as one inch. Indeed, over the course of one particular nine
month period, UPS measured the same box, containing the same product, with at
least 8 different measurement combinations.
76. Berg frequently complained to his account representative about the
overcharges. In response, UPS occasionally reversed the overcharges and often
times ignored the complaints. UPS sent representatives to Berg’s business to
program his package sizes into UPS’s software but the improper overcharges
continued. Ultimately, in response to Berg’s complaints, UPS placed Berg on a
“No Adjustments” list meaning UPS would no longer adjust any alleged incorrect
charges made to Berg, despite his objections or complaints.
77. In reviewing actual bills received by Plaintiff Persepolis Enterprises, a
franchise owner of a “UPS Store,” there are many instances of packages that were
measured by the franchise owner in accordance with UPS directions and then later
being rebilled or adjusted by UPS as a larger package.
78. A few examples are as follows:
DATE MEASURED BY
FRANCHISE OWNER
MEASURED BY
UPS LASER
AMOUNT CHARGED
BACK TO OWNER
5/30/06
15X11X11
17X16X16
$12.63
Case 5:06-cv-04686-IPJ Document 42-2 Filed 09/24/2007 Page 17 of 29
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8/3/06
52X24X14
51X27X14
$31.43
11/27/06
20X12X12
20X20X20
$3.52
12/18/06
20x20x12
20X20X13
$3.64
2/12/07
30X30X8
30X30X10
$4.22
2/16/07
22X15X7
22X16X8
$4.42
79. The above table was constructed from a random sampling of dozens
of charge back amounts from just one of over 4,000 UPS stores. The amounts
charged for all other UPS account holders is unknown at this time, but certainly
have the probability of cumulatively running into the millions of dollars.
V. CLASS ACTION ALLEGATIONS
80. Plaintiffs bring this action pursuant to Fed. R. Civ. P. 23 on behalf of
a Class defined as:
All U.S. persons and entities who either (i) own and
operate United Parcel Service (“UPS”) franchises under
the Mail Boxes, Etc. and UPS store brands, or (ii) own
and operate “Third Party Retailers” of UPS shipping
services (which includes Authorized Shipping Outlets,
UPS Alliance Locations located in Staples and Office
Depot retail locations, and Commercial Counters) or (iii)
have accounts with UPS and have received an upward
adjustment from UPS based on UPS’s remeasurement of
a package.
81. Excluded from this Class are (a) Defendant and any entity in which
Defendant has a controlling interest, and its legal representatives, officers,
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directors, assignees and successors, (b) any co-conspirators, and (c) any
governmental entities. Also excluded from the Class is any judge or justice to
whom this action is assigned, together with any relative of such judge or justice
within the third degree of relationship, and the spouse of any such person.
82. The Class consists of hundreds of thousands of individuals or entities
throughout the United States, making individual joinder impractical, in satisfaction
of Fed. R. Civ. P. 23(a)(1). The disposition of the claims of the Class Members in
a single class action will provide substantial benefits to all parties and to the Court.
83. The claims of the representative Plaintiffs are typical of the claims of
the Class, as required by Fed. R. Civ. P. 23(a)(3), in that the representative
Plaintiffs are entities who, like all Class Members, regularly ship packages and
were subject to a UPS billing adjustment. Such representative Plaintiffs, like all
Class Members, have been damaged by Defendants’ misconduct.
84. The factual and legal bases of Defendants’ misconduct are common to
all members of the Class and represent a common thread of misconduct resulting in
injury to Plaintiffs and all members of the Class.
85. There are many questions of law and fact common to the Class and
those questions predominate over any questions that may affect individual Class
Members, within the meaning of Fed. R. Civ. P. 23(a)(2) and 23(b)(3). Common
questions of law and fact include, but are not limited to, the following:
(a) Whether UPS uses Multiple Dimension Measuring
Devices as part of a system of “remeasuring” packages it receives
from Shippers;
(b) Whether the “remeasuring” system is inaccurate, and
appropriate for the purpose for which it is used by UPS;
(c) Whether UPS has systematically adjusted bills or
accounts based on this system;
(d) Whether “adjustment” to bills based on that system are
lawful;
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(e) The amount of damages owing to the Class; and
(f) whether and to what extent injunctive or other equitable
relief is available.
86. Certification is also appropriate under Fed. R. Civ. P. 23(b)(2)
because UPS’ Measurement Overcharge Scheme has impacted the Class in a
similar fashion such that final injunctive relief or corresponding declaratory
relief with respect to the Class as a whole is appropriate.
COUNT I
VIOLATIONS OF 18 U.S.C. § 1962(C)
87. Plaintiffs, on behalf of themselves and all others similarly situated,
reallege and incorporate herein by reference each of the allegations contained in
the preceding paragraphs of this Amended Complaint.
88. Plaintiffs, the members of the Class, and the Defendants are
“persons,” as that term is defined in 18 U.S.C. § 1961(3).
89. The following manufacturers of the Multiple Dimension Measurement
Devices used by Defendants are each “persons,” as that term is defined in 18
U.S.C. § 1961(3): (a) Mettler, Toledo, Inc., headquartered are in Columbus, Ohio;
(b) Sick AG, whose North American headquarters are in Minneapolis, Minnesota;
and (c) Quantronix, Inc., headquartered in Farmington, Utah. These entities, as
well as all other manufacturers of Multiple Dimension Measuring Devices used by
UPS, are sometimes collectively referred to herein as “the Manufacturers.”
90. At all relevant times, in violation of 18 U.S.C. § 1962(c), the
Defendants conducted the affairs of certain association-in-fact enterprises
identified herein, the affairs of which affected interstate commerce through a
pattern of racketeering activity.
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The UPS-Manufacturer Enterprises
91. The RICO “enterprises” are associations-in-fact consisting of (a) one
of the Manufacturers of the Multiple Dimension Measuring Devices used by UPS,
and (b) UPS, including its directors, employees and agents. These associations-infact
are sometimes collectively referred to herein as the “UPS-Manufacturer-
Enterprises.” Each of the UPS-Manufacturer Enterprises is an ongoing and
continuing business organization consisting of both corporations and individuals
that are and have been associated for the common or shared purposes of (a)
disseminating and using Multiple Dimension Measuring Devices for the
measurement of the Class Members’ packages and (b) deriving profits from these
activities. Each of the enterprises had a common purpose of perpetuating the use
of Multiple Dimension Measuring Devices for the measurement of Class
Members’ packages so as to maximize the profits of the participants in the
enterprises. UPS has this as a purpose because it profits from the use of devices,
which (i) result in false overcharges to Plaintiffs and the Class; and (ii) allow UPS
to remeasure huge numbers of packages in a very short period of time with a
minimal number of employees. The Manufacturers have this as a purpose because
they desire to sell as many of their devices to UPS as they can, regardless of
whether or not the machines are sufficiently accurate for the purpose for which
they are used by UPS. In short, each of the participants in the UPS-Manufacturer
Enterprises has the common purpose of making money.
92. The Manufactures were willing participants in the Enterprises, shared
a common purpose with UPS, and agreed to a structure wherein UPS made
decisions as to which Multiple Dimension Measuring Devices would be purchased,
the manner in which they would be used, and the software with which they would
interface to generate invoices making “adjustments” to the charges assessed by
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Shippers. This structure was the basis in which each of the enterprises was
structured and its affairs conducted.
93. The UPS-Manufacturer Enterprises are identified as follows:
(a) The UPS – Mettler, Toledo Enterprise
(b) The UPS—Sick, AG Enterprise
(c) The UPS—Quantronix, Inc. Enterprise
94. The UPS-Manufacturer Enterprises also include all other
manufacturers of Multiple Dimension Measuring Devices used by UPS.
UPS’s Use of the U.S. Mails and Interstate Wire Facilities
95. UPS engaged in and affected interstate commerce because it engaged
in the following activities across state boundaries: The transmission of false and
misleading invoices and invoice “adjustments” based on inaccurate measurements
made by Multiple Dimension Measuring Devices; and the collection of monies
based on the same.
96. During the Class Period, the UPS Defendants’ illegal conduct and
wrongful practices were carried out by an array of employees, working across state
boundaries, who necessarily relied upon frequent transfers of documents and
information, products, and funds by the U.S. mails and interstate wire facilities.
97. The nature and pervasiveness of the Measurement Overcharge
Scheme, which was orchestrated out of UPS’s corporate headquarters, necessarily
required headquarters to communicate directly and frequently by the U.S. mails
and by interstate wire facilities with the various regional facilities and “hubs”
where the measurement of Class Members’ packages occurs. In addition, UPS
representatives used U.S. mails and interstate wire facilities to communicate with
Plaintiffs and members of the Class about the improper overcharges.
98. The precise locations of Defendants’ “hubs,” and dates of Defendants’
uses of the U.S. mails and interstate wire facilities (and corresponding RICO
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predicate acts of mail and wire fraud) are known to UPS, and are so voluminous
that they cannot be alleged without access to these Defendants’ books and records.
However, Plaintiffs can generally describe the occasions on which the RICO
predicate acts of mail fraud and wire fraud occurred, and how those acts were in
furtherance of the UPS’s Scheme, and do so below.
99. The Defendants’ use of the U.S. mails and interstate wire facilities to
perpetrate the Measurement Overcharge Scheme involved millions of
communications throughout the Class Period including, inter alia:, (a) UPS’s
sending of invoices containing false invoices and “adjustments” based on the
dimensional measurements recorded at its hubs by the Multiple Dimension
Measuring Devices; (b) Written and oral communications with Plaintiffs and Class
Members who complained about the overcharges; (c) Written and oral
communications from headquarters to regional facilities and hubs directing the
responses to customers who complain about the overcharges; (d) Written and oral
communications directed to state regulatory agencies, UPS’s franchisee
association, and news media that fraudulently misrepresented the Multiple
Dimension Measuring Devices were accurate and proper for the use to which they
are put by UPS; and (e) Receipts of money sent on tens of thousands of occasions
through the U.S. mails and interstate wire facilities – the wrongful proceeds of the
Measurement Overcharge Scheme.
Conduct of the RICO Enterprises’ Affairs
100. During the Class Period, UPS exerted control over the UPSManufacturer
Enterprises and, in violation of Section 1962(c) of RICO, UPS has
conducted or participated in the conduct of the affairs of those RICO enterprises,
directly or indirectly, in the following ways:
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(a) UPS has determined which Multiple Dimension Measuring
Devices it will purchase, and which software it will use to interface with
those devices;
(b) UPS has directly controlled the manner in which the
measurement devices are used, including, inter alia, how the machines will
be installed, maintained and calibrated, how the personnel using the devices
will be trained, and how charges will be assessed to Shippers;
(c) UPS and its employees have full control over the operation of
the measurement devices;
(d) UPS has controlled and participated in the affairs of the UPSManufacturer
Enterprises by using a fraudulent scheme to measure packages
and bill Shippers, including implementation of a rate structure that facilitated
the goals of the Measurement Overcharge Scheme; and
(e) Each of the Manufacturers has allowed UPS to exert control
over the Enterprises knowing that UPS was using their measurement devices
in an inappropriate and fraudulent manner. Each Manufacturer did so
because the sale of its equipment to UPS was, and is, a major part of its
business.
101. Each of the UPS-Manufacturer Enterprises had a hierarchical
decision-making structure headed by UPS.
102. In violation of Section 1962(c) of RICO, UPS has conducted the
affairs of each of the UPS-Manufacturer Enterprises by assessing charges to
Shippers based upon the false measurements generated by the Multiple Dimension
Measuring Devices.
103. Defendants engaged in the Measurement Overcharge Scheme with the
intent to defraud Plaintiffs and members of the Class. Defendants knowingly
measured packages incorrectly and enforced their rate structure in a manner that
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would enduce Plaintiffs and members of the Class to pay higher rates than their
packages otherwise should have been subject to.
UPS’s Pattern of Racketeering Activity
104. UPS has conducted and participated in the affairs of the abovereferenced
UPS-Manufacturer Enterprises through a pattern of racketeering
activity, including acts that are indictable under 18 U.S.C. § 1341, relating to mail
fraud, and 18 U.S.C. § 1343, relating to wire fraud. UPS’s pattern of racketeering
likely involved millions of separate instances of use of the U.S. mails or interstate
wire facilities in furtherance of the Measurement Overcharge Scheme. Each of
these fraudulent mailings and interstate wire transmissions constitutes a
“racketeering activity” within the meaning of 18 U.S.C. § 1961(1)(B).
Collectively, these violations constitute a “pattern of racketeering activity,” within
the meaning of 18 U.S.C. § 1961(5), in which UPS intended to defraud Plaintiffs
and members of the Class.
105. The Shipping Overcharge Scheme ensured that Plaintiffs and
members of the Class would be over-billed for the packages they shipped with
UPS.
106. Each of the Plaintiffs were assessed, and paid, overcharges based
upon false dimensional measurements based on UPS’s use of Multiple Dimension
Measuring Devices.
107. By intentionally using measurement devices that it knows are
inaccurate and improper for the purposes for which it uses the devices, then billing
Shippers based on the inaccurate measurements, UPS engaged in a fraudulent and
unlawful course of conduct constituting a pattern of racketeering activity.
108. UPS’s racketeering activities amounted to a common course of
conduct, with similar pattern and purpose, intended to deceive Plaintiffs and
members of the Classes. Each separate use of the U.S. mails and/or interstate wire
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facilities employed by UPS was related, had similar intended purposes, involved
similar participants and methods of execution, and had the same results affecting
the same victims, including Plaintiffs and members of the Classes.
Damages Caused by UPS’s Shipping Overcharge Scheme
109. UPS’s violations of federal law and its pattern of racketeering activity
has directly and proximately caused Plaintiffs and members of the Class to be
injured in their business or property because Plaintiffs and members of the Classes
have paid many millions of dollars in improper overcharges based upon UPS’s use
of Multiple Dimension Measuring Devices.
110. UPS sent billing statements through the U.S. mails or by interstate
wire facilities in furtherance of their Shipping Overcharge Scheme. Plaintiffs and
members of the Class have made inflated payments for Shipping based on and/or
in reliance on false measurements.
111. On information and belief, UPS continues to measure packages using
imperfect Multiple Dimension Measuring Devices and to apply a rate structure
designed to allow UPS to take advantage of those imperfections in order to collect
improper overcharges from its customers. UPS continues to improperly
overcharge members of the Class for shipping charges. These ongoing violations
of RICO continue to harm members of the Class in that, among other things,
franchise owners and Third Party Retailers are unable to recoup these additional
costs from clients and UPS acts to make efforts to complain or contest the
overcharges futile. Individual account holders are equally harmed in that UPS acts
to make their efforts to complain or contest the overcharges futile and, frequently,
those Class Members no longer have access to the packages once shipped.
Accordingly, Plaintiffs and members of the Class seek appropriate injunctive
relief, without which UPS will continue to engage in the above-described illegal
conduct.
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112. Under the provisions of Section 1964(c) of RICO, UPS is liable to
Plaintiffs and members of the Class for three times the damages that Plaintiffs and
the Class Members have sustained, plus the costs of bringing this suit, including
reasonable attorneys’ fees.
COUNT II
BREACH OF CONTRACT
113. Plaintiffs incorporate by reference the preceding allegations as if fully
set forth herein.
114. UPS’ Multiple Dimension Measuring Devices incorrectly measured
and continue to incorrectly measure packages shipped by Plaintiffs and members
of the Class, resulting in measurements greater than the packages’ true
measurements. UPS charges and continues to charge Plaintiffs and members of the
Class higher rates based on those incorrect measurements including, frequently,
“large package” charges.
115. Throughout the Class period, Plaintiffs and members of the Class
were contractually obligated to pay shipping rates as set out in the rate and service
guide and under UPS’s published rate structures. At the same time, UPS was
contractually obligated to charge no more than those same rates, to deal with
Plaintiffs and the Class Members in good faith and fairly, and to properly and
accurately measure packages using an adequate, properly calibrated, and tested
method with sufficiently low tolerances.
116. UPS had a contractual obligation to honor and accept as correct the
weight or size of packages that were correctly measured based on the UPS Rate
and Service Guide.
117. In measuring any package, UPS’s measurements would have to be
determined using the same instructions that the Class Members are required to use.
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118. Moreover, UPS has an obligation to deal fairly and in good faith with
its Shippers. This obligation includes, at a minimum, (1) ensuring that Shippers
rights are considered and protected; and (2) using only accurate, properly
maintained measurement devices that are (3) suitable for the purpose for which
UPS uses the devices.
119. UPS has breached its obligation to Shippers.
120. As a result, Shippers have been damaged.
VI. PRAYER FOR RELIEF
WHEREFORE, Plaintiffs respectfully prays as follows:
A. Certification of the Class pursuant to Fed. R. Civ. P. 23(b)(2) and/or
(b)(3);
B. For judgment against Defendant on its claims together with an award
of all damages available under such laws;
C. Treble damages pursuant to 18 U.S.C. § 1964(c);
D. Preliminary and permanent injunctions enjoining UPS from any
further racketeering activity;
E. Appropriate attorney’s fees, pursuant to 18 U.S.C. § 1964; and
F. For such other and further relief as the Court deems just and proper to
remedy Defendant’s unjust enrichment.
DEMAND FOR JURY TRIAL
Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiffs demands a trial
by jury on all issues so triable.
DATED: _____________________, 2007.
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The misguided anoynmous says:
zzzzzzzzzzzzzzzzzzzzz…I guess then you didn’t have any proof to answer my specific question?
You were given proof, you just choose to ignore it, sorry sleepy, go back to sleep for twenty years and maybe when you wake up, it will make sense to you.
Aw, poor “Anonymous,” does this mean you’re gonna be napping with all the rest of your aliases, too? Guess digesting all those facts was more than you could handle…
Let’s be clear about one thing and that is the anonymous person who keeps on spewing crap clearly has never been a store owner only a mouth piece for corporate.
Since selling my franchise at a modest loss fortunately and going thru most of my savings I have recently been hired locally at $10.00 hour plus full bene’s by a large company.
I now am working shorter hours and making $10.00 more and hour than I was at my store plus full bene package. It really is a strange feeling replenishing my savings again not to mention getting rid of all the headaches of funding that racket called The UPS Store franchise.
I just hope that anyone who is even entertaining the thought of buying one of these $267k write offs ask their sales person how many stores they own if they are so lucrative or even if they can provide a decent living for their families. I have a feeling not many salesman own any.
They make more money selling them and then reselling them when the owners have had enough of losing money week in week out.
so much for the handful of positive owners.
http://www.positiveperspective.org/
hahahahahahahahahaha
What a negative site that one is!!!
Sour grapes! – Just couldn’t keep it open for those with a positive perspective, both of them!
If that $463k represents STR (subject to royalty) then he is selling the store to you for about $100,000 less than FMV. If he hasn’t purchased the store himself recently, something is not right about the price. Perhaps his “sales” are inflated.
Assuming $463,000 STR, he is probably overstating his income. If he works 60 hours a week, he likely nets about $60,000 per year. If he’s semi-absentee, about half of the net would go to additional staffing. MBE requires that you either work at the store yourself or hire a manager.
If he is netting $100,000, he has to be above the norm in one or more profit centers other than shipping. His mailboxes would have to constitute significantly more than 10% of total revenue. Or he would have substantial document service revenue.
You could make money with this store if you are willing to put in the hours. However, rememember to deduct any loan payments from your net before you determine how much you will put into your pocket each month.
Let me guess. He is selling his store to pursue other business opportunities or for personal reasons. What a crock! If he is netting $100,000 off that STR he is either living off credit cards or not paying his bills.
He has owned it 4 years this month. It’s been in operation for 9, 2 as UPS Store. Financials all look good and he has checks showing 99k in 2006 and 102k in 2005, paid directly to him as income, dividends (Corp.) and personal.
He’s a Realtor doing well in that field and has a new baby. He’s been working about 15 hours per week for the last year and a half (verified with several sources).
My main concern is that UPS will be cutting shipping, or other, fee % to franchisees. Anyone have anything on that?
Not Sure,
Please read my posts above; for what it’s worth, I think I have been fairly non-biased… (i.e. I told a prospective owner that I did not recommend buying a store when he or she provided us the numbers to review)…
Assuming that this store still has a decent growth potential, I think it is a very good opportunity for you. Depending on how the contract is written, you may have to pay transfer fees, etc (negotiations between you and the seller). Also, you will have to pay UPS a certain amount for the franchise rights (Not the same as buying a new store, but ask the area franchisee rep). Lastly, you may have to pay a certain amount to update the image of the store.
To answer your specific question, I don’t foresee UPS changing margins or fees in a material manner. In the past three years, ground margins improved slightly and drop-off fees to stores improved a little as well; unfortunately, technology costs increased.
Also, UPS has barely scratched the surface with integrating the UPS Store concept in the holistic advertising effort. I hope to see that improve.
One big word of caution. You might be able to get away with 15 hours/week, but you need to be ready to run the store in case an employee quits. We don’t have many employees… so when one quits, it is a big deal.
Hope that helped. Let me know if you have any more specific questions.
Not sure, one thing is for sure. You are being lied to. It is not possible for this person to have owned the store for 4 years this month and have only been a UPSS for 2 of those years.
All stores transferred after March of 2003 (which was 4 1/2 years ago) had to become UPS Stores effective upon transfer, they could not remain MBE upon change in ownership. So, it appears you were lied to. Would you want to believe anything else told to you by a proven liar?
Not sure, if you were told that this person bought this store “4 years ago, this month”, and that it has only been a UPS Store for 2 years, you were lied to, plain and simple.
Every store transfer since March of 2003 (4 1/2 years ago) came with the requirement that it become a UPS Store immediately upon transfer. Thus, if you were told that the store has been open 9 years and two as UPS, you have been told a blatant lie, unless this store is in Canada.
If that is not enough, consider, $250,000 at risk venture capital should command a return of 30% or $75,000 minimum just for the investment before considering the value of your time spent in the business.
Also, consider, if you buy the store, you will be committing to pay royalties for ten years plus you will be locked into a mandatory ten year store lease that could cost you more than the business itself. Add in required equipment and fixture expenses and you really have closer to a $1,000,000 commitment and you will be required to personally guarantee these amounts, you cannot shield yourself from loss by incorporating, the personal guarantees will prevent that.
Have you seen royalty reports, p&l’s etc. for the last 4 years??? – Have you seen the bronze award for 2006 that would have been awarded if the subject to royalty was over $375,000! – run, don’t walk from this one!
I have recently reviewed over 30 Existing The UPS Store’s from New York City to California. Having interviewed Store Owners and Area Franchise Representatives, they use “ANI” as an indicator of ROI. Why?
In addition, could anyone please tell me why the Area Franchise Representatives are trying to sell stores in their territories, when they do not know the proper financial info? i.e. I reviewed the “Trial Balance Sheets” (looked like a jigsaw puzzle) of one store which recorded about $850,000 in “Sales”. $550,000 were “money order purchases”. I deducted this amount from the $850,000, leaving actual annual sales of $300,000. This deduction occurred following the review of the Tax Returns (received 30 days after receiving the Trial Balance Sheet and comparing notes. The owner of the store included the $550,000 as “Cost of Goods” on their tax returns. I asked the Area Franchise Representative (after spending about $1,500 to investigate this The UPS Store) why didn’t you tell me that the “Sales” were inflated? His Answer: “I don’t know”, yet he was the one brokering the “Deal”. Who handles the accountability of these Area Franchise Representatives? Are they permitted by MBE, Inc./UPS to broker stores in their territories? Are they scamming potential purchasers by making statements that the store’s annual sales are inflated over $550,000? What are your experiences with these Representatives?
Being a former owner of 2 stores I find it hard to believe that a store in a town of 15K by itself much less with 2 mom & pop shops can produce 463K str.
One thing that seems to be missing is that the revenue numbers you listed add up to about $37,513 less than the sales are purported to be. This could make a big difference in the ROI.
Also, are you sure that the expenses include depreciation of equipment so that you will be able to buy new equipment.
Has a transfer audit been completed, and what is the cost of bringing up to current standards?
Have you checked on the rent and whether it will double when you take over. The low rent could have been a non-transferable sweetheart deal between landlord and realtor, prior owner!
What is your contigency plan if Fedex-Kinko’s decides to put a small footprint store in your area. I believe there is already a staples in the next town over.
I also believe the sales numbers might include some sales from the other business the owner owned for part of the year. Check on that.
If the rent can be locked in for ten years, this would help keep the break even down and if the volume numbers are real, your cash flow could be in the range you mentioned. Don’t forget to consider the risk and return on ventured capital plus your time investment before assuming the deal is a good one. Also, find out if the manager is willing to stay long term!
Do a little soul searching and be sure you are willing to have your vendor set your costs and retails as well as dictate what you will wear, what music you will listen to, what hours you will be open and how fast you greet each customer!
Also consider if you want to be closely aligned with a shipper who wants you to change the business to mail boxes and business services allowing them to siphon off all of the shipping profits. Will your town support the necessary growth in mail boxes rented. History has shown that mail box services seem to be more in demand and easier to charge higher rates for in urban areas, not small towns.
Lastly, see if you can work in the business for a few weeks to make sure it is something you want to do prior to making a ten year commitment.
One thing that seems to be missing is that the revenue numbers you listed add up to about $37,513 less than the sales are purported to be. This could make a big difference in the ROI.
Also, are you sure that the expenses include depreciation of equipment so that you will be able to buy new equipment.
Has a transfer audit been completed, and what is the cost of bringing up to current standards?
Have you checked on the rent and whether it will double when you take over. The low rent could have been a non-transferable sweetheart deal between landlord and realtor, prior owner!
What is your contigency plan if Fedex-Kinko’s decides to put a small footprint store in your area. I believe there is already a staples in the next town over.
I also believe the sales numbers might include some sales from the other business the owner owned for part of the year. Check on that.
If the rent can be locked in for ten years, this would help keep the break even down and if the volume numbers are real, your cash flow could be in the range you mentioned. Don’t forget to consider the risk and return on ventured capital plus your time investment before assuming the deal is a good one. Also, find out if the manager is willing to stay long term!
Do a little soul searching and be sure you are willing to have your vendor set your costs and retails as well as dictate what you will wear, what music you will listen to, what hours you will be open and how fast you greet each customer!
Also consider if you want to be closely aligned with a shipper who wants you to change the business to mail boxes and business services allowing them to siphon off all of the shipping profits. Will your town support the necessary growth in mail boxes rented. History has shown that mail box services seem to be more in demand and easier to charge higher rates for in urban areas, not small towns.
Lastly, see if you can work in the business for a few weeks to make sure it is something you want to do prior to making a ten year commitment.
Your mailbox rental figure seems very low. Perhaps that’s where the extra 36,000 belongs. I’m a relatively new store and my mailbox revenue is well above the amount he is reporting.
The store with less than 15M population could never produce those results. Its kind of like the theory of the car dealer in the small town that everyone buys one car he would go out of business. Plus the fact that their are two
stores in town.
Someone is pulling someones leg. or leggs.
I see that anonymous is still straight ahead and forged for tone.
Has anyone heard about the UPS lawsuit? Have they done anything?
Anyone that knows anything but gossip care to comment?
Thanks
No one who knows anything about any lawsuit is not gonna post about it.
I have verified all sales and expenses through bank records, checks, receipts, etc., so net of appx. 100k is accurate. The only thing I am concerned about is whether UPS has the ability to force a franchisee to discount the other profit center margins, which is where the majority of the profits flow from. Any help there? Thanks.
Talk to the UPS/MBE people who are trying to sell you this store and ask them what is and will be being promoted in the national media buy, present and planned, (along with other promo materials,) and at what price point(s). You may have noticed the current ads running for color copies….
Thanks for all the info. I’m comfortable going ahead in this location, after my due diligence. Now all I have to decide is can I let someone else tell me how to run my business. After owning a number of successful non-franchised small businesses, that’s the nut I have to crack to move forward. Thanks again, over and out.
I hope you get everything you deserve.
Hard to say, NotSure. With Eskew resigning, chances are more changes are afoot.
A new CEO typically likes to replace the old staff with persons loyal to him or her. That probably means that Stuart Mathis will resign soon. I would imagine that anyone with a brain in San Diego is passing time between massages by sending out mass resume mailings.
Chances are you will see a new cast of characters in San Diego (or Atlanta if UPS decides to consolidate the operation) by the time that store closing season rolls around in January.