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B59/100FDD 2024

The UPS Store — Litigation & Risk

Retail · FDD Items 3, 4 & 5

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Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
3,051
Government-backed loans issued
Default rate
9.9%
vs <3% typical · system-wide
5-yr default rate
2.3%
Defaults
218 loans
Loans charged off or defaulted
Total loan volume
$654.1M
Avg loan size
$214K
Participating lenders
463

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
California
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial performance data disclosed — cannot validate revenue or profitability claims
  2. 02MINORWide investment range ($87,703–$496,745) suggests inconsistent unit economics or hidden costs
  3. 03MEDRoyalty structure not disclosed — potential for unexpected ongoing fee burden
  4. 04MINORNo unit growth data provided — unclear if system is expanding, stable, or contracting
  5. 05MINORHigh franchise fee ($29,950) relative to low-end investment suggests aggressive front-loaded costs
  6. 06MINORUPS Store operates in mature shipping/logistics market with declining mail volumes and increasing competition from digital alternatives

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.