Aaron and Michael Fray weren't planning a
mutiny when they took over a shipping store with their friend
Gary Zhou last year.
But after moving to Newark and pumping
$185,000 into The UPS Store on Main Street, the trio said they
couldn't ignore the way they were being treated by United
Parcel Service.
So this spring, they started a Web forum for
disgruntled UPS Store owners.
The Brown Board grew so fast, it has become
an unwelcome anchor on the tightest ship in the shipping
business. Last month, the UPS subsidiary Mail Boxes Etc.,
which oversees the UPS Stores, issued a blunt warning to Aaron
Fray, Zhou and the other Brown Board directors: Because the
Brown Board's activities might threaten Mail Boxes Etc., the
board had better hire an attorney, wrote Mail Boxes vice
president Don Higginson, in a July 27 letter.
But the Newark store owners are not
intimidated by UPS because they have nothing to lose, said
Aaron Fray, who quit working as a securities lawyer in order
to buy his part of the store.
"We want to make this a win-win situation,
or else I'm going to be practicing law again soon," Fray said.
A UPS spokesman said the Brown Board is made
up of only a few store owners. Most UPS Store franchisees are
happy and profitable, UPS spokesman Steve Holmes said.
Brown Board members say that isn't true and
claim to have statistics showing that 60 percent of UPS Stores
are not profitable. The group has about 1,400 active
participants, said Brown Board president Larry Bowdoin.
UPS has one of the biggest nonfood franchise
networks in the country, with about 4,000 stores.
The Frays said they expected to easily turn
a profit when they bought the store in December. They soon
realized they were not making enough money, Aaron Fray, 29,
said.
Despite the troubles, 20-year-old Web
entrepreneur Gary Zhou said he saw enough potential to become
a partner in the business, especially if UPS could be
persuaded to change its franchising agreements with U.S.
stores.
UPS got into the retail store business in
2001, when it bought Mail Boxes Etc. Later, it asked Mail
Boxes owners to convert their stores to UPS Stores and sign
new franchise agreements, which most did.
Aaron Fray said those agreements give UPS
too much power. The company also offers discounts to customers
who pay for shipping on the UPS Web site. Those customers just
drop off their pre-paid packages at the stores, taking revenue
away from store owners, Fray said.
Holmes said UPS has tried to solve that
problem by cutting the difference between the online price and
in-store price. He said the company also agreed to end a
pickup charge UPS levied on each of its stores, saving owners
about $7 a week on average.
But owners like Zhou and the Fray brothers
are not satisfied.
"Right now, the store owner is like a pawn,"
Aaron Fray said.
Zhou, who also owns a small Web hosting
company, set up www.thebrownboard.com to help owners across
the country exchange information.
The efforts by the Frays and Zhou forced UPS
to pay attention to the store owners association, Bowdoin
said. Aaron Fray, who was the first person to put his name on
the Web site, has risked a lot by challenging UPS, Bowdoin
said.
"He was sticking his neck out there and
opening himself up to some difficult times," he said.
Contact Steven Church at 324-2786 or
schurch@delawareonline.com.
