UPS Franchisees file a complaint
More than 200 owners of UPS Stores across the country have filed a complaint against UPS and its franchiser, Mail Boxes Etc.
The franchise owners said in a filing in U.S. District Court in Los Angeles that they haven’t been able to make money because UPS undermined them by using the branded stores as drop-off points for prepaid packages and forcing the owners to focus on providing document and printing services.
The complaint, filed in April, claims the business model of the UPS Stores has been disastrous to franchisees’ bottom lines.
UPS bought Mail Boxes Etc. in 2001, and many franchises converted to UPS Stores about two years later.
The UPS Web site permits customers to print out their own shipping labels and pay online for delivery. Then they can drop the packages — for free — at a UPS Store.
Those formerly profitable 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.
It can take months, and sometimes years, for a complaint to be certified as a class-action suit, and for the lawsuits to be resolved.
A separate complaint filed May 2 in U.S. District Court in San Francisco accuses UPS of overbilling its franchise owners for shipping rates.
The former franchise owners aren’t so sure that document services can make up their losses.
The UPS Store franchise owners say they are just hoping to get back some of the money from their initial investments, which for some was more than USD 150,000.
