The UPS Store vs FedEx Kinko’s

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”

  1. “2007 is the first year in MBE’s 27 year history that this once proud franchise will show negative store number growth. That is, more stores will close than will open.”

    J. Brown, I’d heard that things were not going well. Could you share the source of the information above, please?

    As to my post to Iraq War Veteran, I hoped to make it clear that there are many things he needs to find out, that all is not what it seems, especially if one’s primary source of information is a UPS/MBE “handler.” That said, if after having done a lot of digging into sites like this, and Blue Mau Mau, if he’s still inclined to go forward, there are existing stores for sale at fire sale prices. Just possibly, if one could get into a well-located, established store for a fraction of the cost of a new one, and work tirelessly, it is not inconceviable that a person could make a modest living. IMHO, of course. But is that what our veteran wants–or deserves?

  2. Press Release Source: Platinum Shield Association

    Platinum Shield Association Says Early Promises False and Seeks Day in Court With UPS to Make Future Secure
    Tuesday January 22, 9:00 am ET
    Martinez selling off family assets as UPS franchise revenues decline year after year

    FRESNO, Calif., Jan. 22 /PRNewswire/ — When Dale Martinez opened the first of his four Mail Boxes Etc. (MBE) stores in suburban Reedley in 1995, he looked forward to building a family-based business that would make his life a reflection of the “American Dream.”
    Today, that dream has turned into a nightmare of conflict with United Parcel Service (NYSE: UPS – News), and Martinez’ once profitable shipping and business support enterprise has changed dramatically following the 2001 acquisition of MBE by Atlanta-based UPS and its launching of the competing UPS Store brand in 2003.

    “We’re hanging on at this point,” said Martinez, a Reedley native and graduate of local schools who served as a helicopter crew chief during the Vietnam War. “But to keep the other stores going, we will probably sell one of the four sometime this spring. Martinez earlier changed the name of two of his stores from Mail Boxes Etc. to Pack & Ship Authority (PSA), when UPS demanded that MBE franchisees whose franchise agreements had expired immediately adopt the UPS Store identity. Martinez chose to go independent with two of his stores.

    “The initials, PSA (Pack & Ship Authority), are the same as a group I belong to, the Platinum Shield Association,” he added, “and that group of over 130 store owners filed a lawsuit against UPS in 2003. Our group of MBE store owners wants UPS to make restitution for our losses that resulted from their launching of the competing UPS Store.”

    The UPS Stores have also brought suit against MBE and UPS for misrepresentations made to convince franchisees like Martinez to convert their MBE Centers to The UPS Stores. UPS Store franchisees won a major court decision last October, when a California appellate court overturned a lower court and certified their lawsuit against UPS as a class action. At present there are four lawsuits filed against UPS by various store owner groups across the country based on the forced conversion of the successful Mail Boxes Etc. business model to the failed UPS Store model. If successful, the end result could be the undoing of this conversion of approximately 3,400 UPS Store franchise locations.

    In the almost five years since the lawsuit was filed, Martinez and many other Platinum Shield Association members have been forced to sell property, mortgage their homes and make other financial sacrifices to keep their stores open and fund their legal effort. “I cashed in my retirement plan, and we have reduced our workforce to keep the stores open and to keep the lawsuit alive,” he said.

    “I wanted to build a successful franchise business and create something to leave to my children as a legacy. I thought I was living the American Dream when I made this purchase, but now it has become the American nightmare for me and my family,” Martinez continued.

    “My American Dream was shattered when in 2003 UPS announced that MBE stores could not renew their franchise as MBE and must renew as UPS Stores.” Now it is very different, and all of us store owners want to just get our chance to face UPS in court, and let the world know what they did to bankrupt the store owners like me. Maybe this year will be that time,” he said.

    An example of UPS’ strategy, Martinez noted, was their seeking Temporary Restraining Orders (TRO) against him and 12 other franchisees around the country in early 2006. UPS claimed that the former MBE franchisees violated the MBE trademark after they were forced to become independent because already existing Yellow Pages ads still linked the independent stores with the name MBE. MBE sought to obtain TRO’s in federal court, and force the immediate closure of the stores. That effort failed in every instance.

    Fresno-based U.S. District Court (Eastern District of California) Judge Oliver W. Wanger dismissed the UPS action against Martinez. As noted in the court proceedings he told the UPS attorney, “You haven’t even served these people. I have no jurisdiction over them. Until you serve a summons and complaint, you don’t have personal jurisdiction over a party, counsel. Didn’t you learn that in law school?” Judge Wanger further expressed his displeasure, “He who seeks equity must come into the court with clean hands and he who seeks equity must do equity, and so there’s no basis to issue a TRO today. This looks like an ambush.” Howard Spanier, President of the Platinum Shield Association, commented, “UPS has unlimited financial and legal resources and knows full well that their ‘mom and pop’ franchisees do not. UPS subsequently lost or withdrew each of these TRO motions in all 13 federal jurisdictions. Clearly, this desperate and frivolous ambush by UPS was for the sole purpose of forcing these small franchisees to spend money on legal fees that they could otherwise use to support their families. Shame on them.”

    Looking to the future, Martinez said he hopes the lawsuit will give him and his Platinum Shield Association colleagues “our day in court” soon. In the meantime he tries to remain upbeat, and continues to work with his family to provide local customers the service he has always prided himself on giving to everyone who comes into any of his four stores.

    The stores are located at 1630 Manning Ave., Reedley; and 7084 North Cedar Ave., 2037 West Bullard Ave. and 2339 Kern St., all in Fresno.

    Source: Platinum Shield Association

  3. First off (1) UPS purchased MBE before FedEx purchased Kinkos, It was FedEx trying to keep up with UPS. (2) Mail Boxes Etc. always had copy capabilities but that was just a small part of what a Mail Boxes Etc did, Mail Boxes Etc. has been and still is one of the worlds best performing franchises.
    As for who got the better deal, I am positive its UPS, Seeing as FedEx Kinkos which I will agree did a better job of branding the business, has had to make drastic changes to its business model due to poor performances nationwide. (WHY?) because people go into a FedEx Kinkos many times expecting them to be like UPS Stores, where the customers are treated right, we serve our customers with great products and treat them right, because were a franchise and the people running the stores are out for their own interests and take pride in what they do, they aren’t some digital imager who dreamed of something more but ended up working shifts at FedEx Kinkos. Where as a FedEx kinkos is self service? whats that about most people dont know how to work a basic copy machine and their suppose to just wiz at shipping FedEx? Many UPS Stores dont even fear the competition of a FedEx Kinkos because our stores are being equip with a new line of printing and document equipment. Yet we still take the time to appreciate the customers and help them fill out paperwork, pack boxes, get their mail, and make copys. Prior to UPS takeover Mail Boxes Etc. was growing world wide at enormous speed because of its commitment to quality and customer satisfaction. Since UPS has taken over, its grown even large and expanded into new markets. The UPS Store have not suffered the same setbacks as FedEx Kinkos.
    Thirdly the last time I checked FedEx Kinkos color copys were 49 cents while ours were only 39 cents, maybe because we not only can handle what they can, we also have a wide variety of other products like Freight, Money Orders, Mail Boxes (which are a great source of Income), Wifi Svs, Office Supplies, Specialty Supplies, and many more.
    To wrap up UPS has outfitted its growing company with support staff to train franchisees new tools to help their businesses, brought advertising to a community level which has really helped the business, and set up training to educate people in the proficiency in digital printing and imaging.

  4. I spent one full year researching The UPS Store concept and I just stumbled upon this site while doing some research on another business opportunity, now that I made my own independent decision that I was not going buy into this business.

    Now that I read through it I probably could have saved myself several months work and the money spent I with my accountant.
    I’ve spent 30 years in the print and publishing business, 10 years of that as a consultant specializing in electronic imaging and digital print and 6 years running companies for absentee owners.

    I was looking for something that I could invest in and hopefully build my own business for a change instead of building other people’s businesses. A lot of what is said here is true based on my own research and observations. I traveled around to 6 different cities and “dropped in” at different UPS Store sites for a year before I finally decided to make a contact to get into their business.

    I quickly became frustrated in the fact that after making a submission for franchise information on the web after 2 months I got no response from corporate. Seems no one was interested at corporate. So I decided to ask around some of the local stores to see if anyone was interested in selling.

    WOW! After my initial excitement at the amount of purchase opportunities, I picked a couple that interested me, did some research on the area demographics in some locations that I perceived would be a good and made some serious inquiries with the owners.

    All were quite willing to sell for various reasons I felt were feasible. However when it got down to what they wanted to sell them for and what they where worth the divide between the two was quite large. I found this in several locations and needless to say I was quite disappointed. After being in the printing industry for 30 years and a specialist in electronic imaging and digital print it was quite disturbing to also find out that as an owner I would not be able to purchase from former vendors that I have relationships because they where not on the approved “corporate” list. That caveat would limit my creation of the kind of digital print shop I wanted to include with the shipping. I felt that if I was to be an independent owner I should have some input as to how improve the revenue stream.
    The UPS Stores are NOT a print center. I speak with knowledge and experience. Compared to Kinko’s and some of the others, they are still in the dark ages of putting digital information on paper. Just because you are 10 cents cheaper doesn’t mean you are a truly digital copy center. Granted their in store personal touch is somewhat better than Kinko’s but in a digital age speed and ease of use being able to drop that job off from my desk and have it shipped without being there means I can ask 10 cents more without having a Walmart greeter in my store.

    The deal killer was after looking at financials from several stores I had under consideration, I was dumfounded. Since I’m not an accountant I paid mine to tell me if I was missing something. After racking up several shekels in time with him (now I think it was money well spent, though at the time I was pissed) his comment to me was “Are you wanting to buy a job or buy a business?” “I thought you wanted to buy a business.”

    I am not going to engage in UPS bashing but I would seriously recommend to anyone considering this or any other franchise to go talk to a lot of owners, buy them lunch or dinner outside the business, then if you decide to get serious hire a good business accountant. Let them pick though the fine print. If you are like me, you don’t mind working hard, but it’s to make some money and not just to pay the bills.

  5. Almost bitten you are right on the money. The UPS STORE is nothing more than working your ass off for nothing. UPS claimed that the MBE modle was broken and the rebranding to the UPS STORE has put the store owners right in the grave. Does anyone know what franchisor (other than UPS/MBE)directly and intentionally competes with it’s franchisees. On top of that UPS sets the franchisees margins so it can undercut them on the internet pricing and then have the gaul to send that customer to the store so UPS does not have to make the pickup and the compensation for that is 1 penny on the dollar plus a deduction of royalties on top of that! ANYONE INTERESTED IN A UPS STORE FRANCHISE NOW?

  6. Trudy B

    The shame is that as an outsider and a person who used to consult when I first investigated the concept is was along the lines of a study I had done for my last employer to grow their business.

    When I decided I wanted to work for myself instead of putting money in another absentee owners pocket, I thought that with the name recognition of a recognized company and my knowledge of digital print I could put together a profitable enterprise.

    To my dismay, it turned out to be another absentee owner who had no grasp of the market and how it was changing. I have found out in my research for a business that a lot of franchises suffer the same lack of grasp of reality when it comes to their franchisees knowledge of their segment of the market.

    My former employer was never at the business, and in the end made his decision to not change his business even though I had pages of data to backup my recommendation not to mention I was working at the plant everyday. I saw the hand writing and got out. 14 months later, he shut the doors.

    What I see in this instance is that the owners are in their stores 6 days a week and THEY know their market and most the ones I talked to had ideas on how they wished they could make changes but an “absentee owner” was making the decisions.

    For me that was a tragedy. To supposedly own a business, have ideas how to grow the business, but because that idea may be outside the real “absentee owner” corporate rules, I had to settle for struggling to make a living based on their ideal setting, with them having no idea what was best for my market. And to add to that insult…pay a large chunk of my gross to them for the privilege.

    If I was consulting for these guys, I’d say get out of the your office a little more and get to know your franchisees a little better and their real life problems. Use that feedback to help make their bottom lines better. After all they lay the golden eggs you collect. Everybody is happy if you each get an egg instead of one of you.

  7. AB,

    The saddest fact about this franchise is that the franchisor works for the Brown Stain, not us. Even if someone in San Diego could pull themselves out of the massage room for an hour or two and visit an actual store, it wouldn’t matter. They would still be pushing programs that make money for Brown and drive us further in debt.

  8. Press Release Source: Platinum Shield Association

    Denver UPS/MBE Franchisee Blames UPS for Destroying Her Business Plan With Inferior Model
    Tuesday March 25, 9:00 am ET
    Suzy Meadows owns both UPS franchise brands and knows MBE was better

    DENVER, March 25 /PRNewswire/ — Suzy Meadows had a plan. After a successful career in the oil and gas industry, Meadows and her husband, Joel, in 1991 chose Mail Boxes Etc. as their future, and over the next decade it worked. In fact, it worked so well that the couple once owned and operated a chain of five Mail Boxes Etc. (MBE) stores in the Denver area.


    Then in 2001, Suzy and Joel Meadows’ plan received a near-fatal blow when Atlanta-based United Parcel Service (NYSE: UPS – News) purchased Mail Boxes Etc. and replaced the successful MBE business plan with an unprofitable system under which, as Suzy Meadows said, “only UPS makes any money.”

    “And the reason I can say that is we have one of each — an MBE store in Cherry Creek that still makes money under the old Mail Boxes identity, and a converted UPS Store in Denver that does not,” Suzy said. In an orchestrated presentation rolled out across the country in February 2003, UPS told franchisees the MBE model was broken and could only be fixed by converting to the UPS Store model.

    As this program spread, the Meadows had three stores in Denver, and were forced by UPS to immediately convert two of the stores to the UPS identity. A potential sale of one fell through and for a time the couple ran two UPS units and the Cherry Creek MBE store. “UPS coerced us into converting the other stores, even though we later learned their demand was unjustified,” Suzy added.

    “The bottom line, so to speak, is that we have been able to compare the two business models side by side, for almost five years, and believe us, the Mail Boxes Etc. system UPS said was broken beats the UPS store in every respect,” Meadows declared.

    Across the U.S., many former MBE franchisees were given the same 2003 ultimatum by UPS: Convert to the UPS Store format within 30 days or risk paying a steep bill for later conversion. Furthermore, MBE was a dying brand. In order to sell a store or renew a franchise agreement, the store owner had to sign the UPS store agreement, which relinquished most of the owner’s control — most significantly retail pricing — to UPS and become a UPS store.

    “We had no real idea about the new business model,” she added, “and while UPS ran some market tests in St. Louis and Seattle, we franchisees never got any detailed reports on how those tests turned out and why their system was better than MBE’s. All we had was UPS’ constant claim that their system was better. Well, if that was true, why does UPS have a flat growth record (in stores opened) the last couple of years and a falling ranking in the U.S. franchise industry?”

    The contrast between MBE, which the Meadows had chosen for its strong but flexible business model, and UPS was evident from the outset, they said. “We very seldom, if ever, hear from regional UPS representatives,” Suzy Meadows noted, “and there is no opportunity to suggest changes in our franchise businesses. For a time after the conversion, they asked me to be a member of the Franchise Advisory Committee, but that turned out to be a powerless group, as UPS clearly did not want any input from us franchisees and eventually stopped communicating with us and cancelled the advisory committee meetings. Basically, when UPS purchased Mail Boxes Etc., they bought 4,000 mom-and-pop franchises and turned them into staffed UPS package drop off counters. They commandeered the investments of small business men and women, most of whom had financed their franchises with their pensions or by borrowing on the equity in their homes.”

    Today, the Meadows still have two stores, Mail Boxes Etc. of Cherry Creek, at 191 University Boulevard, and the UPS Store at 820 S. Monaco Parkway, both in Denver.

    “We’re still open and taking good care of our customers,” Suzy said, “but our store profitability has dropped significantly since UPS eliminated shipping discounts for MBE stores and surrounded our territory with UPS stores.”

    The anger and frustration shared by the Meadows and their MBE associates in a group called the Platinum Shield Association (PSA) led to these franchisees filing a lawsuit against UPS in 2003. That suit, one of four brought by various UPS franchisee groups, is now in Los Angeles Superior Court. Last October a California appellate court certified a national class action on behalf of the UPS Store franchisees.

    “Our primary goal is to get our day in court and make UPS answer for the way they have treated their franchisees since the acquisition;” Suzy declared, “many of our people have lost their savings, their homes and even their health just to stay in business since we started this legal action five years ago. It’s been a very tough time.”

    Suzy Meadows added that many of her customers still ask whether her Cherry Creek store is a UPS store, and she always replies with a firm, “No. Last holiday season, we probably shipped a total of over 2,000 packages, and only about 20 of them went via UPS. I guess that says we think UPS needs to change its ways.”

    Source: Platinum Shield Association

  9. We’ll it seems like this board, blog, whatever you called it has died. Along with about 500 UPS Stores that have defaulted on there SBA loans since 2001. Wow you add probably an additional 1500 that used there own money and there you have it.

    It seems UPS has broken the will of the majority of franchisee’s or they we’re fortunate to sell there location to the next victim, whatever the case buy an existing business with positive cash flow and no royalties you will be far better off.

    I wish you all well and keep dreamin.

  10. “It seems UPS has broken the will of the majority of franchisee’s”

    Maybe so, “upsdreamin.” But there are also many of us who soldier on. And if you keep up with developments (check blue mau mau), you will see that persistence pays.

  11. “UPS hasn’t broken anything. Fight on Franchisees!

    UPS’s day will come.”

    Should we say that their “days” will come? Jan. 20, Feb. 17 and March 10.

  12. Chris, I know what one of the dates is. Could you tell us what they all are? I’m guessin’ that they are trial dates for the various lawsuits, but it would be good to know which is which. Thanks…

  13. Just a little back round about me I have worked in MBE/The UPS Store for over seven years and for two different owners and I am looking into purchasing a store for myself.
    You are so far off the mark it is funny, first off do a little research. UPS schooled FedEx on this deal, first off just look at the bottom line, UPS purchased MBE for only 192 million dollars in 2001 and FedEx purchased Kinkos for roughly twelve time that 2.4 billion dollarsin 2003. Secondly FedEx has already disposed of the FedEx Kinkos name and is now FedEx Home Office. Thirdly there are three times as many UPS Stores than than FedEx Home Offices. But now to the bread and butter. It is up to the franchise owner to do there own marketing and let people now what the purpose of there store is (i.e. your office away from home). I have managed a total of four stores and to be completely honest I average a $37.00 sale, that is through cross selling and up selling. I have nevered worked or managed a store that doesn’t turna profit of over $90,000.00. This is because I spend time and pitch every customer that comes into my store, I tell my six digit account customers I will give them 5% off the retail rate but when they will get 15% off directly off from UPS. The reason they choose me is because I always get their claims paid, I provide a thirty day billing, and I never forget a customers name. I use the line we are locally owned and operated. The list goes on and on, and when you tackle a big project say like a national convention you have the big familiar UPS logo on your business card to put the customer at ease. Just a message to every owner out there promote the three pound rule UPS is cheaper than USPS. Put FedEx Home Office out of Business

  14. Thank you, Chris. The results will be interesting, and telling.

    Stuart, if you are not a UPS mole/mouthpiece, you should have discovered by now that many of these stores are for sale at bargain prices, sometimes for pennies on the dollar, apparently. Do some research yourself.

  15. I have been in Franchising for almost 20 years and average success rate of any franchise system is about 85% compare to less than 50% (unless you have a very very new idea). I did some research and seems that The UPS Store success rate is way above 90%. Since the location, product and promotional material and plans are for the most part are the same across the chain, I have to believe that the owners are the main determining factor for the Success of their business. Running a business is not easy and not everyone can do it, so lets stop blaming everyone and everything for our failure and move on to something that we are better at and let people who how run and manage a small business do it,
    Also, big different between FedExKinko’s and The UPS Store. One is being operated corporately the other is a private Franchise.

  16. Hey John,
    How did you figure 90%? UPS hired the Boston consulting group and they found that 77% of the stores are failing. You are definetely a 20 year franchising man. Only a franchisor could respresent a total failure as a 90% success rate and with no proof to boot.

  17. Dave

    Any chance of getting a copy of that report as a owner I sure would like to see it. MBE is forceing an upgrade to our copy equipment that will cost us more money and they have the knowledge that 77% of the stores are failing. What do you call a company like that.

  18. There are 3 locations in my Florida tourist town, all owned by the same family. Total price—$85,000. They run them as a family operation, and paid an original price of $625,000. Total net for all 3? $45,000 per year. McDonald’s pays better.
    Very experienced business people, whom have now seen their retirement dreams and savings washed down the UPS hole.

  19. Hey Dave, thanks for the reply. The most simple way of measuring the success rate of a Franchise system is the store closer rate and I don’t believe 33% of stores of this Franchise have been closed(you can research that as i did). Profitability is a different matter. Small businesses are not profitable for a number of reasons, however in this case many elements are the same. While back I read a book which I recommend to all my friends and if you haven’t done so it would be a good idea to check it out, (The E Myth Revisited)
    Also, I have been on the both sides, Franchisee and Franchisor . Bob, while I feel for the family in your example(of course if it’s real) but I would definitely question their experience level as I have been around long enough to know buying a business for $625.000 and selling it for only $85.000 is not an easy task, what exactly took place, you don’t need to share but think about it.

  20. John,
    you dumbass, they are churned and turned at an unacceptable rate. if you did any research at all you would have found this to be true. John, you give yourself away. MBE was recomending that book to franchisees in 2001 and beyond.

  21. John, they do churn the stores…they sell the failed store to another “up,” without ever changing the store number, blaming the previous owner every time. So there is no “closure” shown…that’s why the real failure rate doesn’t show up. But, if you’re a UPS mole, you already know that. If not, do some serious homework.

    Incidentially, UPS will not release the results of the Boston Consulting Group research. Guess why?

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