UPS Store Owners Angry

Franchisees File Lawsuits Saying the Business Model Keeps Them in the Red

The Orlando Sentinel is now reporting on two class-action suits of franchisees who say that the Mail Boxes Etc. and UPS Store business model has been disasterous to franchisees' bottom-line. A March Los Angeles case, handled by celebrity O.J. Simpson's attorney, Robert Shapiro, represent owners of UPS Stores who have filed.

So why do the shipping stores no longer make money? It seems that when Mail Boxes Etc. franchisees started converting to The UPS Store after the buyout in 2001:

Customers no longer paid the stores directly for shipping, so the stores depended on payments from UPS for those packages, a development the franchisees in the suit said has "drastically reduced" the stores' profitability. "The margins . . . do not provide for a level of gross profit necessary to sustain the businesses and make them profitable . . . franchisees received only $0.65 per drop-off package while previously they had received as much as $5.00 and $6.00 and up for handling a typical package," the complaint reads.

Ouch! Then there is the other complaint filed May 2 in U.S. District Court in San Francisco that accuses UPS of overbilling its franchise owners for shipping rates.

The franchisors address such problems of diminishing mail service profits by pointing at other services for franchisees that need exploring, namely, copying and document services.

"There is still tremendous opportunity for our franchisees to grow that part of their business. UPS and Mail Boxes Etc. are committed to the success of each and every one of our franchisees. It's in their best interest and our best interest," said Rich Hallabrin, a spokesman for Mail Boxes Etc.

But the quick print industry has long spoken about how copy margins are so low that they often are loss price leaders to other document services such as finishing or design. Besides the problem in poor margins in copying, consumers associate UPS with shipping and not document work.

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UPS Will not pay my Damage claim done by UPS packer, what to do?

I have been fighting the UPS store on Elysian Fields in New Orleans for six months over a Damage claim, what do I do?

I had the employee at UPS (My first mistake) pack a Piece of Art I had sold for $9000.00. I usually pack everything myself but decided in case of any damage, I would let them be responsible. Well the packer neglected to put a covering over the painting and adhered the tape directly to the 80+ year old picture frame. When it arrived at the customers house and was unpacked the tape pulled off plaster and patina greatly devalueing the work of art. Six month later thay are still giving me the run-around. I have submitted all the paperwork several times and now they want their own local person to do it or they will not honor my claim or pay me. I think it is the owners responsibility of the Franchise and his insurance company but he claims no fault. Do I have to sue him? Is there a Lawyer in New Orleans I can talk too about this?

Insurance, Pack & Ship Promise

I would make sure that they put the proper amount of insurance on the shipment so take alook at your shipping receipt. It should be under "declared value". Find out if this store is part of the Pack and Ship promise (once the claim is approved you receive shipping and packing charges back as well as the value of the item). Additionally submit a complaint to customer service from the web site www.theupsstore.com. Goodluck!

You do know your dealing with a franchise and not UPS right?

Keep in mind you dealing with a franchise and not UPS. I would start with the bbb.

Also you might want to contact MBE corporate. (Mail Boxes Etc.)

Time for legal

This is a situation where you may need legal involvement. There is no harm trying to deal with the Better Business Bureau, but it is not likely to get you satisfaction. It is also worth trying to contact the franchisor and seek their assistance in resolving the dispute; that may get you a result without paying legal fees.

As you are likely aware, Louisiana is derived from the civil law system of France, and so you really need to speak with someone local as to your options under state law.

Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400

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This comment area is not a forum or bulletin board to write on whatever topic you want. The topic at hand is The UPS Stores / Mail-Boxes-Etc. lawsuits.

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MULTI DIMENSIONAL SCAM

craig

ups is misbilling ALL there customers not just the franchisee. The use of the laser scanners are inaccurate to say the least. UPS is relying on these readings to back charge the customer dim billing for light weight packages. This is after they take the package into their possession and pack it into successive trailers to get it to their "super hubs". There is NO oversite to the callibrating of these multi dimensional scanners, and when weights and measures arrived to try to inspect the "lasers" at the Willow Springs Illinois facility they were refused admittance. The lawyers came out in force and the "suits" from Atlanta flew in force.

The use of inaccurate scanning affects each and every package from each and every 6 digit account that is processed by UPS. It is their new "REVENUE STREAM." WATCH YOUR BILLS.

UPS STORE = SCAM

THE UPS STORE IS THE BIGGEST SCAM SINCE ENRON...ACTUALLY UPS MAKES ENRON LOOK LIKE AN HONEST COMPANY...MIKEY ESKEW (UPS) & STEWIE MATHIS (MBE) ARE WELL AWARE OF THE TITANIC PROBLEMS WITH THIS FAILED BUSINESS MODEL.SINCE BOTH OF THESE COMPANIES HAVE PAINTED THEMSELVES INTO A CORNER BY NOT ACKNOWLEDGING THE PROBLEMS THAT THEY ARE TOTALLY AWARE OF, THEY CANT MAKE ANY CHANGES TO THE BROKEN BUSINESS MODEL THEY CLAIM "THE WHEELS HAVENT FALLEN OFF YET".THE ONLY RECOURSE THAT LEAVES US FRANCHISEE'S IS TO LITIGATE..KEEP IN MIND HUNDREDS & HUNDREDS OF MAIL BOXES ETC.'S AND UPS STORES ARE SUEING UPS/MBE.YET UPS/MBE SAYS NOTHING IS WRONG...THAT IS A PERFECT EXAMPLE OF UPS/MBE MATH..FIGURES DONT LIE...LIAR'S FIGURE...WITH ANY LUCK ONCE THE DUST SETTLES FROM ALL THE LITIGATION ESKEW & MATHIS WILL BE REPLACED BY BUSINESSMEN WHO ARE HONEST

Don't you just LOVE

the way UPS side-steps the 'problem' by diverting attention away from the lapses in their 'proven system' to putting the burden back on the franchisees to create additional cashflow to overcome the problem. Now 'who' was it that keeps telling the failed franchisees to take 'personal responsibility'? Yet another example of how the need to take 'responsibility' goes BOTH ways.

Rhino Super Center

Class Action Suits against UPS wrong information

Robert Shapiro represented a group for a very short time, but is no longer representing The UPS Stores. This information is incorrect

UPS Store Owners Angry

There is nothing like the prospect of losing everytbing while working 11 hour days for producing anger but UPS is a big and famous Brand that just acquired these stores from MBE to increase their market share and their profits. They can afford the biggest law firms to represent them and they can use the court procedural rules to "wait out" and "wear out" those who have survived to litigate. Those who have failed completely out of the picture were just "fleeced" and those who are supporting law suits with limited and scarce funds will start dropping off one by one as their personal finances become worse and they can't continue to afford to support the lawsuits. That guy who now lives in the Trailer Court is probably stuck there. Those who are still standing in the stores just breaking even or hoping for help to break even may have a long wait and if they eventually fail because they don't get any relief, they will not be able to access the courts because they won't have the financial resources to do so.

(I don't know much about the law. I have not been schooled in the law but in researching "franchise law" it appears to me that the ability of the franchisors to prevent "class actions" and to require ADR has permitted franchisors to always divide and conquer the franchisees "one by one")

UPS did indicate in their advertising and hype to sell the UPS Stores in 2003 as an "unprecedented opportunity" that "corporate service" i.e., copying and document services would be a new service that could be offered in The UPS Stores that would be proitable for franchisees.

On the basis of this hype, many new owners of UPS stores signed expensive leases for equipment that never paid off, even in terms of paying for the equipment leases, let alone producing profits. Fed-Ex Kinko, however, actively solicits corporations for this kind of business for the Fed-Ex Kinko stores and this is why UPS knowingly sacrifices its franchisees to its competititon with Fed-Ex Kinko. UPS-MBE have no capital investment in these stores and don't share in the failure of the individual stores who are fire-saled for nothing to standby franchisees to continue the visibility and the profits of MBE-UPS.

These stories, like the above, tell the truth but do little good because when you click on the search column in the Orlando Sentinel for UPS ---up comes all of The UPS Store ads that are all over the Internet and in the media.

UPS maliciously continues to sell new franchises to unwary suspects who have been lulled into a sense of security by Fran/Vet and the SBA Registry and Entrepreneur and AARP's hype of them as a top investment opportunity. The President of UPS ignores the plight of The UPS Store franchisees at the Board Meeting and appears to blame the problem of the unprofitability on the franchisees. He appears to be very coniident and safe in his position.

This continued sale of franchises to new prospects is malicious and is a disgrace that the government condones and we cannot help but understand that the government of our great Capitalistic Democratic Republic is controlled by the big capitalist corporations who shape the public policy under which we live.

Is our Bill of Rights up for Sale?

2-Way Street

Hello Tinker: It's interesting to have you back and posting again. You seem to have steped right back in right were you left off. Of course we know I am but 1 of the 1's who advocate personal responsibility by the franchisee. Of course your are correct in that 'responsibility' must go BOTH ways.

I encourage EVERY franchisor to accept EVERY franchisee failure as their own. I respond to your post BECAUSE with your statement "diverting attention away from the lapses in their 'proven system' to putting the burden back on the franchisees to create additional cashflow to overcome the problem." you make it sound as if a Franchisee should simply sit back and wait on the franchisor to "Fix the Problem".

I encourage EVERY franchisee to FOLLOW THE SYSTEM. With that said, EVERY franchise is ultimate responsible for the Success or Failure of their unit. If additional profit centers are what is required, one must find/create additional profit centers. The UPS/MBE business model absolutely has its challenges ... however if you're already a zee you've got but two options --- Find a way to make it work or FAIL. Tinker, we know you understand this concept because you added profit centers, but your words sound as though you discount this very important option to success.

It would be GREAT if all one had to do was go to ZEE training, open up the business and make deposits at the bank. That however is not reality. As a Zee you are in business for yourself, and if you are not getting what you need from your Franchisor --- you must find it elsewhere or you die. AGAIN, as you say Personal Responsibility is a two-way street, but just because one lane is empty doesn't mean you should park and feed the meter.

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com

RELIEF

I believe that the UPS franchisees are, in the main, being represented by Dady & Garner. If that is correct, they could not be in better shape to deal with the problem. D&G are among the top 3 firms in the US to represent franchisees who have the guts to band together and try to do something about their abusive situations.

Richard Solomon
www.FranchiseRemedies.com

Attorney

The correct attorney is
L. Michael Hankes
Peter Lagarias
Rob Boulter

UPS STORE EQUALS

WORDS LIKE SCAM...PONSI...LIE'S...NON-DISCLOSURE..FALSE INFORMATION....FRAUD...THATS THE UPS STORE IN A NUT SHELL...SO FLAME AWAY!!!

PROVEN BUSINESS MODEL , NOT

DALE,

Your comments would apply if you were talking about a "proven" business model. UPS took a "proven" business model bought the brand name and they substituted a different model ( no way proven) and then sold it to "zee's" under the guise of the records and experience of the "broken" (their sell not mine) model.

guest 2

Clarifying the record for MR Solomon

Dady and Gardner were short time lawyers for Morgate VS MBE BC294647. They have not been involved in the case for the last 3 years. They had a very limited time frame in the history of this case. The lead Lawyers are from the law firm of Gordon & Rees, LLP

CORRECTION TO RELIEF

I BELIEVE IT IS THE COUNCIL OF HANKES & LAGARIAS THAT IS HANDLING MOST OF IT

Michael Hankes and Peter Lagarias

Guest is correct, Hankes and Lagaris are representing many of the old MBE stores.

Michael Webster PhD LLB
Misleading Advertising Law

Since you admit I know this concept

why do you then twist my words and their meaning with warped interpretation such as "you make it sound as if a Franchisee should simply sit back and wait on the franchisor to "Fix the Problem".

In this particular case, it's not about the market shifting, costs rising or any other type of natural business evolution. It's about a franchisor that due to THEIR OWN actions (acquisitions/restructuring) actually CREATED a devastating burden for their franchisees and rather than take RESPONSIBILITY for that by stepping up and working together with them; they actually just pass the buck and tell them to 'fix the problem'.

I give you enough credit to know that was what my comments referenced and thus the need for clarification was unnecessary. Perhaps you've missed our little talks so much that you wanted to create a little drama.............surely THAT can't be it.......can it? :)

Rhino Super Center

Guest 2

Guest2

First, Thank You for being Guest "2", it makes things a lot easier.

I understand your point and your feelings, and have never felt that the UPS, or MBE concept before it, had large scale viability or long term sustainability. UPS involvement only made/makes maters worse in my opinion because the OVERALL corporate success is not dependent upon franchisee success. Whereby MOST FRANCHISORS must have franchisee success to pay the bills, not so in the case of UPS.

With that said, if one is a UPS Store franchisee, they have but 3 Options:
1. QUIT. Failure is gauranteed. Liability is high. Investment is lost.
2. WAIT. In waiting for UPS to 'fix' the problem(s) the franchisee is going to invest more, and ultimately lose more (both money & time).
3. TAKE CHARGE. If one has money invested in a UPS franchise, one must develop a TAKE CHARGE strategy. Develop new profit centers. Reach new markets. You've got it, you've got to make the best of it. Expenses must be cut! Marketing must be increased. Sales must be increased. New profit centers must be developed. So on and so forth. Is it easy NO! Is it complicated NO! Reality is SINK OR SWIM!

And Guest 2 -- Between me you and the Fence Post --- There is no such thing as a "Proven Concept". Each market & each franchisee are different. Franchising is not a 'controlled' study, but rather a study of how to control the variables, of which there are many.

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com

Hankes and Lagarias are

Hankes and Lagarias are representing a group of MBE's.
Hankes and Lagarias are also representing the large group of UPS Stores known as Brown Shield Assoc.

Minister Hodge of UK says franchises are "proven concepts"

Will Fransynergy.com please send a copy of his post to Minister Hodge, Minister of Industry, The United Kingdom, who as recently as May 2007, indicated to the Parliment that franchises are a proven concept.

Proven Concepts ----UFOC ----Warning is Weak ---Whjy

Why did the FTC use the weak word "show" your papers to your attorney or financial advisor, something like this in their warning? Why didn't they come right out and say "do your due diligence with your attorney or financial advisor, etc"?

Did they want to avoid the term "due diligence" because they know that the disclosure of the actual risks of the franchised business plan is deficient in the UFOC's in terms of allowing franchisees to perform due diligence based solely on the UFOC disclosures?

Sir FranSynergy!

I'm actually waiting on the Queen to invite me to the palace so I can be Knighted along side the likes of Branson & Connery, at which time I will hand deliver it.

I seriously doubt that they have any interest in my thoughts, and we do not at this time have any business interest in the UK.

But you can certainly feel free to share any thoughts you wish with the Minister.

SIR FRANSYNERGY (in waiting) --------------------------- (long wait)-----------------zzzzzzzzzzzz

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com

Give people credit!

I think they give people enough credit to understand what SHOW means AND to understand that WE HAVEN'T CHECKED THIS --- YOU NEED TO.

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com

You're right

It will likely be a long wait, as I don't think that non-Britons can be addressed as "Sir," at least until you become a British citizen - which would be interesting because I believe you are a Texan and that's just plain funny. A British knight with a Texas accent - I am all for it.

Abso-bloody-lutely

Those Brits would probably find it to be Quite Beastly when I broke out with "ridin a gravy train with biscuit wheels" or "Happier than a gopher n soft durt".

Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com

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