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Franchise Financing Options

What Happens When I Buy a Franchise?

When you buy a franchise, you’re investing in a brand and business model that’s already been established. A lot of the guesswork and trial and error that you’d have in building a brand from scratch are eliminated, allowing you to focus more on operations, serving the community and building up a loyal customer base.

Before investing in a franchise, you’ll need to conduct thorough research of the opportunity, including a detailed review of the financial and legal landscape and terms of commitment, with which an accountant and/or attorney can help. You’ll also need to review the Franchise Disclosure Document (FDD) which provides a vast amount of information to help you, as a prospective franchisee, make an informed decision about the franchise opportunity. While the FDD can vary among franchisors, there are 23 required sections or “items” ranging from business experience, litigation and bankruptcy, fees, product sourcing, financing and much more.

It’s also important to have an idea of what the first year in business will look like, to help set your expectations, prepare you to open and to continue growing within the community.

What Costs are Involved in Buying a Franchise?

Understanding the initial costs and any ongoing fees like rent, mortgage, equipment and royalties involved in buying a franchise is a crucial step in the path to becoming a business owner. Franchise costs are likely one of the first considerations when looking at viable franchise opportunities.

The UPS Store offers a variety of location types to fit the needs of potential retail owners, such as traditional locations, rural locations and store-in-store concepts. Startup costs vary based on the type of center, the size of the location and where the store is located, but below is the average range for the three types of The UPS Store locations.

  • Traditional Locations: $240,959 - $508,472*
  • Rural Locations: $206,423 - $459,136*
  • Store-in-Store Locations: $80,357 - $216,148*+

*Subject to change. See Franchise Disclosure Document for current amounts.
+Based on the Store-in-Store without an exterior entrance model.


Franchise Financing Options

Choosing the best franchise financing option is a key component of long-term profitability. As a business owner, you want to be able to achieve a better work-life balance and build a better financial future for yourself and your family, so make sure to research lending options carefully. Some lenders specialize in franchise financing, whereas others may have more generalized lending programs. Either way, you want to ensure you’re choosing the best financing option to suit your individual needs when opening a franchise.

To support potential retail owners, The UPS Store has teamed up with leading financial institution Guidant Financial to provide several financing options. Guidant Financial knows The UPS Store franchise business model and its operating systems and can help prospective franchisees determine the best franchise financing options for each of their unique situations.

The types of financing options available from Guidant Financial include 401(k) business funding, SBA loans, portfolio loans and unsecured loans. Below is a brief explanation of each.

401(k) Business Funding

If you have a 401(k) plan from a previous or existing employer, you may be able to buy a franchise with this money without having to pay tax penalties. The Employee Retirement Income Security Act (ERISA) protects the money from additional taxes when it’s used to start a business, which makes this financing option popular with franchises.

SBA Loan

Partially guaranteed by the government through the Small Business Administration (SBA), SBA loans are issued through a network of financial institutions that frequently work with small businesses. Since they are partially secured, they have less risk and better terms for small business owners.

Portfolio Loan

A portfolio loan is one that is retained by a lender as part of their investment portfolio as opposed to being sold off to another institution. Portfolio loans are advantageous to small business owners because they’re serviced directly by the lender, and often have more flexible terms.

Unsecured Loan

An unsecured loan is approved based on the creditworthiness of the borrower as opposed to being secured by collateral such as a piece of property. Terms of the loan are usually determined by the potential franchisee’s credit score.

Ways in Which The UPS Store Supports Financing

In addition to working with potential franchise owners to provide partner financing options, The UPS Store also has special discounts for veterans and minorities.


Close to 90 percent of veterans expect to start a second career after leaving the military. To honor and support veterans as they pursue business ownership, The UPS Store is waiving the $29,950 franchise fee for the first 10 eligible veterans to qualify between April 29, 2022 and November 11, 2022. Veterans and active service members have helped keep the American dream alive, and this financing support is designed to serve veterans in return, help achieve their dreams of business ownership.


In 2018, 31 percent of franchised businesses were minority owned, a 10 percent increase from the previous research from five years prior. The UPS Store supports and actively contributes to this growth in minority business ownership by offering first time buyers who are minorities a $15,000 discount off the franchise fee. The UPS Store strives to ensure that all groups, especially those who have been historically underrepresented, can pursue the dream of entrepreneurship.


Learn more about franchising with The UPS Store by contacting our franchise development team to discuss the possibility of owning your own retail location.