UPS/MBE Franchisee Fights Shipping Giant for Her Survival
February 29, 2008 – 9:15 amWhen Bridgette Waller opened her Mail Boxes, Etc. (MBE) franchise here 14 years ago, she was so successful that the company made her the star of a television commercial complete with a tagline, “Can your mailbox do that?”
Waller’s first years as a Mail Boxes Etc. franchisee were so profitable that she won numerous company awards and was even featured in an article in Black Enterprise Magazine. But when UPS bought Mail Boxes Etc. in 2001, the financial bubble burst for Waller. The sales and profits for her once successful store were never to return, as UPS abandoned the profitable MBE franchise brand.
“At first UPS promised us that a new business model would realize improved sales and profits for everyone,” said Waller. “But it soon became clear to all of us that the only ones in this new relationship to make money would be UPS.”
The years following the acquisition by UPS continued to be difficult financial ones for Waller.
When her franchise agreement expired in 2006, UPS refused to allow her to renew as an MBE despite such renewal being specifically allowed in her franchise agreement. The only option UPS gave her was to convert to the largely unprofitable UPS Store brand or go out of business. Therefore, she made the painful decision to remain in business as the independent “Xpress Ship & Notary.” Then she received a phone call from her doctor that changed her life forever. Waller was diagnosed with breast cancer!
“I am an optimistic person by nature,” said Waller. “But when I was forced to go independent it was like starting all over again. I lost 14 years of branding as a Mail Boxes Etc. store and overnight my customers were confused. They thought I had gone out of business as I had to create a new business I named Xpress Ship & Notary, located at 215 East Orangethorpe Blvd., Fullerton. With my breast cancer diagnosis coupled with the forced business change — I realized I was faced with two of the most serious challenges of my life.”
Going independent and battling cancer together has made the last two years difficult ones for Waller and her family. “We have cashed in our savings, sold property and a car, and we have refinanced our home in an effort to keep the business operating,” she added.
Waller is one of 130 former or current MBE franchisees who organized as the Platinum Shield Association (PSA) in 2003 and filed suit against UPS for alleged illegal actions and intentionally misleading statements by the shipping giant. That lawsuit, now in Los Angeles Superior Court, gives Waller and her fellow PSA members hope that they will soon have their day in court to challenge UPS’ action. Waller pointed out that UPS Store franchisees won a major court decision last October, when a California appellate court overturned a lower court and certified their law suit against UPS as a class action.
At present there are four lawsuits filed against UPS by various store owner groups across the country based on the forced conversion of the successful MBE business model to the failed UPS Store model. If successful, the end result could be the undoing of this conversion of approximately 3,400 UPS Store franchise locations.
“We know from speaking to other franchisees that are fighting UPS that this company will pull every bullying tactic in the book to put us out of business. They filed frivolous TRO’s (temporary restraining orders) for trademark violations in Federal Court. It is the kind of tactic often used by big business to drain the small businessperson of all their financial resources so they can’t obtain justice in the courts. Unable to face us in a fair court fight, they rely on dirty tricks. They are totally indifferent to the pain and suffering that they have inflicted on their franchisees. Our lives are no more than collateral damage in their drive for more corporate profit,” stated PSA President Howard Spanier.
Waller remains hopeful, about her personal battle with cancer and about the potential legal victory over UPS. In the meantime she works long hours at her store and watches her two sons grow up; her older son is beginning to think about college and recently she took him to California State University - San Jose, to visit the campus and see where Waller attended college in the late 1970s.
“It was great seeing the school through his eyes,” she said, “and my greatest hope is to be able to afford to send my sons to college and see them graduate.”
7 Responses to “UPS/MBE Franchisee Fights Shipping Giant for Her Survival”
This is just the tip of the iceberg with this Franchisor. UPS has ruined the lives of many. UPS does not seem to realize that its “bully” tactics will not serve them well with the more than 400 Franchisee that are in lawsuits with them under both brand names.
By Cgpeanut on Feb 29, 2008
Of all the corporate scams, this has to be one of the saddest, and most unreported stories, mainly due to UPS advertising dollars controlling the media.
UPS really put these friendly neighborhood stores, many run by families, in their crosshairs, for greed alone.
In 2003, storeowners were faced with a decision on their life savings. The first was remain MBE, with it’s more profitable business model, and have UPS stores built all around you, while UPS systematically killed the most respected brand name in the industry. The second choice was to accept an unprofitable, unworkable, business model, which put all of your hard earned money over to UPS, and forcing you into indentured servitude under the terms of your franchisee agreement.
Many thanks to sites like this, which help UPS/MBE store owners (and former store owners) have a voice. The media outlets have certainly let us down. This is an American tradgedy.
By Jim B on Feb 29, 2008
UPS has better rectify the situation with the franchisees fast. They have sitting on top of this powder keg for several years now and they can’t ignore it anymore. I hope these brave souls who had the guts to fight the brown monster reveal the truths about UPS, the truths that keep them awake at night with fear.
By Gordon F Youngblood on Feb 29, 2008
Federal Court Accepts Franchisee Victims’ Amended Complaint Against United Parcel Service (UPS)
March 22, 2007
FOR IMMEDIATE RELEASE
CONTACTS:
L. Michael Hankes, Esq.
63 Commercial Wharf
Boston, MA 02110
(617) 723-1144
Los Angeles, CA
Peter C. Lagarias, Esq.
1629 Fifth Ave.
San Rafael, CA 94901
(415) 460-0100
Federal Court Accepts Franchisee Victims’ Amended Complaint Against United Parcel Service (UPS)
A group of small business owners (The Brown Shield Association, BSA) unites against shipping Goliath UPS, citing omissions, non-disclosure, unfair practices, breach of contract, and predatory practices for franchised locations.
Los Angeles, CA (March 22, 2007) - A substantially revised amended class action lawsuit against UPS was accepted earlier this month by the United States District Court – Central District of California. The amended complaint was filed by more than 220 franchisees of The UPS Store. The franchisees contend that, among other claims, UPS omitted and/or did not disclose relevant information to franchisees opening new The UPS Store locations and those franchisees switching from the MBE brand to The UPS Store brand; UPS made false claims about how well The UPS Store would perform financially; UPS competes and uses information from the franchisee to acquire customers for UPS directly, bypassing the franchisee altogether.
“Corporate greed is still alive and well in America” says Larry Bowdoin, President of the Brown Shield Association (BSA), and a franchisee himself in Alabama. ”UPS likes to call us a minor number of disgruntled franchisees. We’re just one group. What UPS doesn’t want you to ask is how many additional lawsuits from franchisees are there?”.
Bowdoin continued, “No franchisee could have forseen that our biggest competitor would have been our franchisor, UPS itself. There have been many instances of UPS luring away our [franchisee] customers, often with incentives, affecting the franchisees’ profits. UPS makes more money that way, with no regard to our bottom line. The more money per package that they get doing it that way adds up to tens of millions of dollars of extra profit for them. They don’t care that we have rent, employees, health care to pay for out of our own pockets”.
“Had information been fully disclosed regarding profitability, missing test market data, and unfair trade practices, the franchisees would have been able to see that UPS was pulling a fast one on us”, said Bob Strickland, VP of the BSA and a franchisee from Virginia. “This is not a viable business to be in,” he continued. “Instead, we have people filing bankruptcy, drying out their retirement accounts, maxing out their home equity line of credit - it’s a travesty. We’re fighting back for all of the exploitation that UPS has done to us”.
The BSA represents a wide range of franchisees from around the country.
By Robert Smithers on Feb 29, 2008
Its been years since this litigation started over the whole thing. They are just not getting close enough to taste the possibility of getting to the trial phase. I really hope the jury hits them hard, they deserve it. The filing of all these frivolous TROs and so on was just a stall tactic to delay the eventual (and costly) settlement payout. Same tactics insurance companies use to avoid paying claims.
By Keith on Mar 3, 2008
I am an mbe store small and could not afford to join in your suite. I now find myself fighting ups for breach of contract but fighting with the area franchiser. these people have no concept of integrity, or fairness in their busness dealings. i am going to sue the area franchiser and have completly stopped shipping ups. good luck to you all.
By Fred on Mar 19, 2008
How much damage the franchisees seeking and how much UPS is worth? I am looking to buy one in Vancouver BC Canada and if the parent company goes belly up or lose the suit, it will have bad repercussions. I have a friend who says he is happy with his arrangement (MBE to UPS Store) and making profits. But after reading the legal suits and negative comments about UPS, I have serious doubts about the company.
The most unethical thing UPS is doing is competing against their bread and butter franchisees and even wore by making them be their “drop off” centres taking away their chunk of revenues. My friend says he has royal customers who require careful crating to ship valuable articles and do not mind paying full costs.
The one he recommend is in office area more with corporate accounts. And now I see there is no money to be made other than becoming a slave after I pay and sign the contract. My friend was so content with his franchise, he was not aware of the legal suits everywhere in US. I wonder if there is a similar action happening in Canada.
Thanks for the different perspective and I would not even recommend to take a look at this franchise.
By J Ecoff on Mar 21, 2008