|
Feature Article, April 2005
Branding Brown
UPS Store lives up to its brand name, delivering services to customers across the country with 5,000 locations planned by 2007.
Entrepreneur magazine has ranked the UPS Store franchise Number 1 in the postal and business services category for 15 consecutive years now. And in 2005, the UPS Store ranked 5th among all franchise opportunities.
“We were awarded these based on the following factors: financial strength, stability, growth rate and size of system,” says Phil Thomison, vice president of worldwide development and international operations for the company. “These certainly would be a reason that a landlord or shopping center owner would want the UPS Store as a part of their tenant list. Just having the UPS Store brand and the logo associated with a shopping center is extremely critical to a landlord.”
Mail Boxes Etc., Inc. franchises The UPS Store and Mail Boxes Etc. brands, which together form the world’s largest franchise network of retail shopping, postal and business service centers. Since its founding in 1980, the company has added more than 200 new locations a year. Today, The UPS Store and Mail Boxes Etc. centers comprise more than 5,000 franchised locations around the world. Master licenses for international franchise locations cover nearly 80 countries.
UPS purchased Mail Boxes Etc. in April 2001, and after extensive testing with both brands, the company made a decision to re-brand the current Mail Boxes Etc. locations in the U.S. to the UPS Store.
“That was on a voluntary basis, since we are a franchise network,” says Thomison. “Approximately 90 percent of those locations chose to switch over to the UPS Store brand, and we’ve been moving forward with the UPS Store brand ever since. But we continue to support both brands.”
The company put a consistent retail rate in place with the new brand, which in essence meant lower prices and a more consistent shopping experience for the consumer.
The UPS Store and Mail Boxes Etc. locations both offer a full range of business services, including full-service packaging, shipping through UPS and other carriers, mailbox services, black-and-white and color copying, laminating, binding, collating, faxing, office/packing supplies, mail receiving and forwarding, and notary services. The center interior is designed to promote a comfortable, yet professional business environment, with a contemporary appearance geared toward heightening awareness of products and services.
Traditional UPS Store locations, which range in size from 1,200 to 1,800 square feet, are found in suburban and rural anchored shopping centers, highly visible retail corridors or stand-alone locations, such as supermarkets, pharmacies and mass merchandisers. They can also be found in urban and downtown financial business districts.
In the past, Mail Boxes Etc. has always had a presence with special-venue locations, and special-venue site development has grown steadily with UPS Store locations in airports, college campuses, convention centers, hotels, military bases, convenience marts/gas stations, self-storage facilities, and urban renewal areas and empowerment zones.
“We really put emphasis on special venues in the year 2004 after the re-branding,” notes Thomison. “We knew it opened up additional opportunities to go into some different markets because of the lower rates. And the different services we could offer through the UPS Store really helped us track the different demographic consumer base.”
There are currently 3,700 UPS Store locations and 300 Mail Boxes Etc. locations across the country. Outside the U.S., there are 1,000 more. The company aims to have the UPS Store national network reach 5,000 locations by the year 2007.
“We also intend to continue to look into individual locations in different markets where we may not have the presence that we need,” Thomison says.
The interest from potential franchisees has been one of the company’s biggest challenges, with inquiries increasing 90-plus percent since the re-branding. In addition to requiring certain financial qualifications, the company is careful to award the right owners the right opportunities in the network. Since the re-branding, the interest in multiple center ownership has increased about 67 percent. The UPS Store Mail Boxes Etc. franchise network is more than 1.5 times larger than all of its competitors combined.
“There’s obviously a competitive landscape out there that we deal with on a day-to-day basis,” notes Thomison, “but with over 5,200 locations worldwide, we are certainly a significant player and a leader within this retail shipping and business services network.”
— Susan H. Fishman
Postal Annex Pumps Up
So how has the merger of UPS Store and Mail Boxes Etc. affected the competition? It’s affected Postal Annex’s business to the positive, both in franchise sales and in store revenues, according to Mike Watorski, vice president of franchise development.
“There’s a halo effect,” he says. “With that acquisition came intensified advertising and promotion of the brand. But we also ship UPS, so there isn’t a giant difference between them and us except that we’re multi-platform. We ship both UPS and Fed Ex, as well as U.S. Mail.”
Though the Mail Boxes, Etc./UPS Store franchise is bigger than Postal Annex, Postal Annex is bigger in San Diego, hometown to both companies, and is growing by leaps and bounds. Over the last few years, the company has added 40 franchises to the system each year and would like to see an addition of 60 franchises this year.
“A lot of our growth is occurring from referrals from our franchisees,” says Watorski. “We think it’s a pretty special testimonial that our franchisees are sending qualified customers to us because they’re interested in the business model that we offer.”
According to Watorski, the pack-and-ship business, in general, is in great demand due to the continued migration from brick-and-mortar, office-based business to home-based business. And franchisees usually lean toward Postal Annex because the company has been around for 20 years and does a great job with support, he says.
With 297 locations open, Postal Annex has about 312 stores in the system that are in process. The company concentrates solely on grocery-anchored shopping centers.
“One of our best neighbors is a coffee user, like Starbucks, because it draws the type of clientele that we’re looking for,” notes Watorski. “We really want to be in an area that is mid- to high-income because there needs to be some expendable income available to those who use our services. Everybody is not our customer.”
Postal Annex tries to focus on areas it would like to see expand, such as San Diego, where the company has 70 stores. The East Coast has also seen some concentrated efforts in Florida and Jersey. Now, the company would like to focus on Orange County and Los Angeles County, where there aren’t as many stores. Currently, Postal Annex is promoting vacant spaces that have been pre-approved for Postal Annex and is interested in helping landlords who have an independent, non-affiliated pack-and-ship store reach its potential by re-modeling to the Postal Annex model.
“We found there are a lot of third and fourth generation owners of these pack-and-ship stores that we can help by offering them a better plan to focus on numerous profit centers so they can grow and get support,” Watorski says.
— Susan H. Fishman |
©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.
|
