Franchisees React to UPS Convention: "It's All About Them, Not Us"

Reporter's Note: This article is a recounting of views expressed by various franchisees who attended the convention. Prior to publishing, calls were not returned from some attendees who might have had a different point of view from those reported. Several attempts were also made to interview President Stuart Mathis or other company officials, to no avail.

CEO Eskew, A No-Show, Delivered Message of "Transform and Adapt"

LAS VEGAS (Blue MauMau) - The theme at this year's convention for The UPS Store and Mail Boxes Etc. franchisees was "Focus on Opportunity," but some said they saw it more as focusing on opportunities for UPS than for the franchisees. The major event was gingerly displayed as a UPS/MBE event. (The adjacent photo shows that the company name is downplayed. It is discretely displayed in small font in the white footer on banner.)

Since the conclusion of the convention, chat rooms have been ablaze with negative reaction of the conference held at Caesar's Palace, July 22 - 25. According to one report, there were probably about 700 attendees out of a network with approximately 4,300 U.S. stores. 

Although UPS Chairman/CEO Mike Eskew was not present for the event, he spoke to the audience from Atlanta headquarters through a remote-type system during the first general session. While his short message went along the lines of asking operators to transform and adapt to new changes, he did acknowledge that UPS knew franchisees were having problems, without offering solutions.

Stuart Mathis, president of the UPS Store/MBE division, stated that FedEx Kinkos now feels The UPS Store units are their biggest competitor. According to one franchisee, Mathis proclaimed that UPS could beat them, and that they are already making a small dent with their increased document services sales. Kurt Kuehn, senior vice president of worldwide sales and marketing, addressed problems with the new eBay drop-off program, which has been a bone of contention with franchisees. He did state that the company could have done a better job communicating the eBay program to operators. In explaining that 70 percent of more than 220 million eBay users worldwide now ship through the postal service, he said this latest program would bring in more customers to franchise stores.

Kuehn told franchisees they could expect to double the eBay packages through their PayPal account, saying 99 percent of eBay shippers already have PayPal accounts. His message to the audience was that they should adapt by developing relationships with the eBay customers, even though they get some 30 percent off shipping charges. But he explained by embracing these customers, store operators can up-sell on packaging charges, such as on re-packaging items that might be fragile.

FAC Members Attempt to Address Concerns

On the second day of the convention, the Franchisee Advisory Council breakfast took place for franchisees to ask pertinent questions of the FAC members, which included some from UPS's management team. Once again, they confronted the FAC on the eBay program. In answer to why franchisees weren't informed ahead of time, management stated that it was a matter to be kept confidential, and that even Mathis had distanced himself from it. Mathis did, however, chime in at the breakfast meeting to say that there was no guarantee that something like the eBay program won't happen again.

Another asked about an FAC letter sent to Mathis, and he stated that he had received the letter recently. Sherrie Wehner, Vice President of Business Analysis and Product Development, asked the head of the FAC to share the letter with everyone.

Other questions were asked about the dimensional weight issue regarding UPS laser scanners. Franchisees are being backcharged for discrepancies found by the laser machines, which they say are next to impossible to collect from their customers. One franchisee shared with the group that he gets $1500 a month from drop-offs, but his shipping is going down. In answer to his concern, he was told that network-wide shipping is growing, and if the trend stops they will then take another look at it. Another expressed that he was already losing customers to eBay because of the lower rate.

Franchisee's Summation of Convention

"The convention was totally stage managed," according to one attendee. "Everything was unbelievably controlled. Most people there are new operators who bought in within the last two years or so." Another expressed that he will never attend another convention. "What did I get out of it? They admitted there were problems but didn't offer one single solution. They didn't even say they were working on fixing them."

But one store operator expressed his view by saying, "It's appropriate that UPS had its convention in Las Vegas, as many have probably taken the biggest gamble of their lives."