The Mail Box Etc. conversion to UPS Stores continues to generate bad PR for UPS. Mail Box Etc. stores were generating a living for most franchisees, but the UPS Stores emphasize UPS shipping services where the margins are very low. This was not a ruling on whether UPS misled the franchisees, but just a procedural ruling permitting the case to go to forward with a hearing on the merits.
United Parcel Service Inc. franchisees have won the right to sue the world’s largest package shipping firm as
a group over claims it misled them by saying that converting their Mail Boxes Etc. stores into UPS Stores would be more profitable.“This is a huge win,” said Howard Spanier, a Malibu, Calif., franchisee who said he converted his store last year, according to a statement Friday. The class action was certified Wednesday by a California appeals court, overturning a trial court ruling rejecting the franchisees’ request.
UPS, based in Sandy Springs, is accused of withholding critical documents about tests of the UPS Store business model it conducted in several U.S. cities. The franchisees claim the conversion was “disastrous” for some of the stores.
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Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
