UPS Franchisees protest during Annual Meeting
As some 50 UPS franchisees from around the country picketed in a light rain outside Wilmington’s Hotel DuPont Thursday (May 10) during UPS’ annual meeting, several shareholder-franchisees directed questions about their concerns to CEO Mike Eskew.
During the question and answer period, Joe Wightman, who owns a Mail Boxes Etc. franchise in New York, asked Eskew why it is that UPS’ 4,000-plus-store retail franchise network of UPS Stores and Mail Boxes Etc. (MBE) is invisible in the UPS annual report and in the presentation Eskew made at the shareholders meeting May 10 in Wilmington. Wightman suggested that it is due to the “abysmal” failure of UPS’ effort and the unhappiness of its franchisees.
Eskew’s response, which Wightman said appeared rehearsed, was that he (Eskew) checked the source for Wightman’s report last year claiming that 60% of the UPS network is unprofitable, and Eskew replied that the information is not accurate. He did not say what his “source” was. Platinum Shield Association (PSA) Board member and UPS shareholder Glenn Sturgis then pointed out to Eskew that the 60% figure came from a written report by UPS’ Franchise Advisory Council, which includes UPS and MBE management as well as its UPS Store franchisees.
Eskew also did not respond as to why the UPS franchise network is not mentioned in UPS reports or presentations. Wightman added that during UPS’ shareholder meeting, several references were made to the company celebrating its 100th anniversary, and how UPS would move forward in a partnership between the company, its employees and customers. “Not once did CEO Eskew or any other UPS officer mention the franchisees, nor thank them for the contribution they make to UPS’ success,” Wightman said.
“Our demonstration Thursday was an effort to bring attention to the plight of many UPS franchisees,” Wightman said. “It also protests the deceptive way UPS conducted and reported profitability results to MBE franchisees, in order to induce these franchisees to convert to the UPS Store brand.
“Whether CEO Eskew acknowledges it or not, perhaps as many as 60% of UPS’ 4,400 franchisees are having serious financial difficulties,” he added; “a real indicator of the larger problem of franchisee profitability is that UPS added only 29 new stores from 2005 to 2006, because potential new franchisees have real questions about investing in such a flawed system.”
In addition to the Platinum Shield Association demonstrators who carried signs and banners outside the Hotel DuPont, other UPS franchisee group members who participated in the action were the Brown Shield Association, the Brown Board Owners Association and IAMCO. Collectively, the groups represent some 350 UPS franchisees whose lawsuits — one in Federal court and two in California courts — accuse UPS of intentional misrepresentation, concealment and breach of contract, intentionally failing to disclose performance and financial data, in addition to multiple violations of franchisee laws, among other allegations.
“We will continue to seek a dialogue with Mr. Eskew and the other senior officers of UPS,” Wightman added, “but in the meantime we also plan to continue our efforts to inform UPS shareholders, employees and customers about these issues.”
