The Q&A is mainly on The UPS Store’s latest program, Main Street franchise model, allowing qualified franchisees to save up to $80,000 in initial capital requirement opening a store in rural area vs. franchisees with location in urban area. Here is the Q&A – enjoy!
Hi Michelle – many thanks for the rare opportunity to have a little Q&A session with you.
I am intrigued in your Main Street franchise model, and I wish I had access to the same model when I was entering franchising back in 2004 (I was a franchisee of a business service center and established my store in a sub-urban area.)
Please kindly answer the following questions so that Noobpreneur.com readers can learn more about The UPS Store’s new program:
Question (Q): I think your Main Street franchise model is brilliant. What is the main reason The UPS Store takes the move to go suburb/rural?
Answer (A): As part of our ongoing commitment to small business owners, The UPS Store developed the Main Street franchise model to help support local business with services typically only found in larger cities. Nearly 95% percent of the United States is rural open space, and just under one in three Americans lives in an area that would be considered non-urbanized. These markets are unfortunately really underserved by business services, which can limit the ability of small business owners to startup and grow businesses. This new model makes it easier for franchisees to open locations and therefore better serve the growing small businesses of rural areas.
Also, because our stores are locally owned, our franchise owners have a unique understanding of the needs of businesses in their communities. Small business owners in rural communities will benefit from having expert local resources at The UPS Store who understand the needs and challenges of conducting business in their neighborhood.
Q: Can you elaborate your program a bit more? Other than lower startup costs what benefits franchisees can enjoy opening a The UPS Store in the suburbs?
A: In addition to the lower franchise fee and lower start-up cost, this new model offers the same products and services as our traditional store, however the design and build-out requirements are made to keep costs low and allow franchisees to take advantage of available real estate.
Q: Stores in rural areas are typically less-trafficked, meaning less potential revenue for a The UPS Store franchisee. I assume overall profits will be significantly impacted by this. Is this the case, or do you have any interesting findings from your market research that prove the otherwise?
A: We are taking each Main Street location on a case by case basis. We want to set our franchisees up for success, so we’ll do our homework on each location to ensure the community can support it. With this model, we also have more flexibility with the operating structure.
For example, if a reduction of hours of operations is desired to fit a location and the area demographics, the franchisee can change the operating hours via a deferral process including a rationale for the request, e.g. hours of neighboring tenants, type of shoppers and weekly/hourly traffic pattern. These types of requests will help with the off-set of lower populations and less traffic.
Q: What about franchisee support? Will there be a different set of terms between your big city franchise model and Main Street franchise model?
A: Not at all. A Main Street franchisee will receive the same support from the headquarters as a traditional model franchisee. Although the location and population may be smaller, the franchisee needs will be the same, regardless of location and we will help each franchisee every step along the way.
Q: Any future plans and opportunities you would like to share with Noobpreneur.com readers?
A: We’re continuing to focus our business on the changing needs of today’s small business owners. Our products and services have grown to include much more than packing and shipping—our offerings now include professional printing, direct mail, computer services, mailboxes, and more.
And since we have these great offerings, we want to ensure that the products and services that The UPS Store offers are available when and where people need them. In today’s world that often involves travel and people doing business on the go. Because of this we’re working on expanding our non-traditional footprint, by adding more The UPS Store locations in places like convention centers, hotels and universities.
Many thanks for your time!