Third store adds opportunity for The UPS Store franchise owner

FAYETTEVILLE  —  Owning a third franchise of The UPS Store has been all about the scale for Kevin Fallis. 

The economies of scale, not the postal scale.

“There are great benefits to having more than one store,” says Fallis, who acquired his third franchise at 201 W. Genesee St. in Fayetteville in August 2011. “Two is better than one, and three is better than two.”

Gaining efficiency on supplies and staffing are among those benefits, according to Fallis. For example, having a third store makes it easier to buy boxes in bulk to avoid a delivery charge, he says. And, staffing is more efficient because employees can rotate among the stores, he adds.

“We staff the business in such a way that the employees are flexible,” he says. “We will use them where we need them. You can run the business effectively with fewer people.”

Fallis’ franchises employ a total of 12 people. That’s down from a peak of 16 when he first purchased the Fayetteville store, which had five employees at the time.

Although he suspected he was overstaffed after he acquired The UPS Store in Fayetteville, Fallis says he did not lay off any employees. He watched how his franchises ran with 16 employees, and he chose not to replace workers who were leaving until he felt the business had contracted to the correct number of staffers.

That right amount is currently 12, including Fallis, he says. But he would eventually like to hire a manager for his DeWitt store, which is located at 4465 E. Genesee St. 

Fallis is currently acting as the manager for that store. He has no timeline for hiring the new manager because he does not want to do so until he feels the business has grown enough to support the added position.

In addition to his stores in Fayetteville and DeWitt, Fallis owns a franchise at 118 Julian Place in Syracuse. It was his first franchise, which he purchased in 2007 from its owner, Nora Gallagher, who was moving out of the Syracuse area, he says.

Then Fallis says he had the chance to acquire the franchises in Fayetteville and DeWitt in 2008 from Marshall Reisman. Fallis opted to acquire the DeWitt store only.

“At the time I wasn’t comfortable going from one to three,” he says. “I just thought it was a little too much to take on.”

Fallis seized a second opportunity to acquire the Fayetteville franchise in 2011 when its owner, Wade Wadsworth, opted to sell it. Wadsworth, who acquired the franchise after Fallis passed on it in 2008, owns other franchises of The UPS Store in the Albany area. Wadsworth decided to sell the Fayetteville franchise because it was too far away from his other stores, according to Fallis, who declined to reveal the financial terms of any of his acquisitions.

The Fayetteville franchise is helping Fallis target total revenue growth of 6 percent to 8 percent in 2012 among his three stores. He would only be aiming for about 2 percent growth without the Fayetteville franchise, he says.

“Fayetteville is equal to the other two put together,” says Fallis, who declined to share revenue totals. “That is the largest volume of the three.”

Acquiring The UPS Store in Fayetteville was a boost to Fallis’ franchises’ printing business, he says. He considers digital printing his company’s biggest growth opportunity.

After purchasing the Fayetteville store, Fallis leased new printing equipment with a value of over $70,000 for it, he says. He is using the store as his franchises’ printing hub, meaning large-volume, high-quality, and specialty printing projects are done there. The other two stores can handle smaller projects, he says.

Other potential sources of revenue growth are direct-mail advertisements and freight, according to Fallis. The UPS Store franchises can administer direct mailings to potential customers and ship freight of less than one truckload, he says. Many of their services are aimed at small businesses, he adds.

“People tend to think that all we do is ship products and small packages,” he says. “In reality, there are a lot of other things we do. We want to help other small businesses like us do things that they need to grow.”

Fallis has not relocated any of his franchises since acquiring them. The Syracuse store is in 1,000 square feet of space in a building Fallis owns. The DeWitt store takes up 2,100 square feet he leases from DeWitt Plaza Development Co., and the Fayetteville store leases 2,800 square feet in a building owned by an individual who prefers to remain private, according to Fallis.

The franchise fee for The UPS Store is $29,950 with ongoing royalty fees of 5 percent, according to Entrepreneur.com. The site lists franchise agreements as renewable with 10-year terms.       

FAYETTEVILLE  —  Owning a third franchise of The UPS Store has been all about the scale for Kevin Fallis. 

The economies of scale, not the postal scale.

“There are great benefits to having more than one store,” says Fallis, who acquired his third franchise at 201 W. Genesee St. in Fayetteville in August 2011. “Two is better than one, and three is better than two.”

Gaining efficiency on supplies and staffing are among those benefits, according to Fallis. For example, having a third store makes it easier to buy boxes in bulk to avoid a delivery charge, he says. And, staffing is more efficient because employees can rotate among the stores, he adds.

“We staff the business in such a way that the employees are flexible,” he says. “We will use them where we need them. You can run the business effectively with fewer people.”

Fallis’ franchises employ a total of 12 people. That’s down from a peak of 16 when he first purchased the Fayetteville store, which had five employees at the time.

Although he suspected he was overstaffed after he acquired The UPS Store in Fayetteville, Fallis says he did not lay off any employees. He watched how his franchises ran with 16 employees, and he chose not to replace workers who were leaving until he felt the business had contracted to the correct number of staffers.

That right amount is currently 12, including Fallis, he says. But he would eventually like to hire a manager for his DeWitt store, which is located at 4465 E. Genesee St. 

Fallis is currently acting as the manager for that store. He has no timeline for hiring the new manager because he does not want to do so until he feels the business has grown enough to support the added position.

In addition to his stores in Fayetteville and DeWitt, Fallis owns a franchise at 118 Julian Place in Syracuse. It was his first franchise, which he purchased in 2007 from its owner, Nora Gallagher, who was moving out of the Syracuse area, he says.

Then Fallis says he had the chance to acquire the franchises in Fayetteville and DeWitt in 2008 from Marshall Reisman. Fallis opted to acquire the DeWitt store only.

“At the time I wasn’t comfortable going from one to three,” he says. “I just thought it was a little too much to take on.”

Fallis seized a second opportunity to acquire the Fayetteville franchise in 2011 when its owner, Wade Wadsworth, opted to sell it. Wadsworth, who acquired the franchise after Fallis passed on it in 2008, owns other franchises of The UPS Store in the Albany area. Wadsworth decided to sell the Fayetteville franchise because it was too far away from his other stores, according to Fallis, who declined to reveal the financial terms of any of his acquisitions.

The Fayetteville franchise is helping Fallis target total revenue growth of 6 percent to 8 percent in 2012 among his three stores. He would only be aiming for about 2 percent growth without the Fayetteville franchise, he says.

“Fayetteville is equal to the other two put together,” says Fallis, who declined to share revenue totals. “That is the largest volume of the three.”

Acquiring The UPS Store in Fayetteville was a boost to Fallis’ franchises’ printing business, he says. He considers digital printing his company’s biggest growth opportunity.

After purchasing the Fayetteville store, Fallis leased new printing equipment with a value of over $70,000 for it, he says. He is using the store as his franchises’ printing hub, meaning large-volume, high-quality, and specialty printing projects are done there. The other two stores can handle smaller projects, he says.

Other potential sources of revenue growth are direct-mail advertisements and freight, according to Fallis. The UPS Store franchises can administer direct mailings to potential customers and ship freight of less than one truckload, he says. Many of their services are aimed at small businesses, he adds.

“People tend to think that all we do is ship products and small packages,” he says. “In reality, there are a lot of other things we do. We want to help other small businesses like us do things that they need to grow.”

Fallis has not relocated any of his franchises since acquiring them. The Syracuse store is in 1,000 square feet of space in a building Fallis owns. The DeWitt store takes up 2,100 square feet he leases from DeWitt Plaza Development Co., and the Fayetteville store leases 2,800 square feet in a building owned by an individual who prefers to remain private, according to Fallis.

The franchise fee for The UPS Store is $29,950 with ongoing royalty fees of 5 percent, according to Entrepreneur.com. The site lists franchise agreements as renewable with 10-year terms.