Do Contractors Pay a Franchise Fee to FedEx?

When you’re ready to buy a FedEx route, you may wonder if you have to pay a franchise fee. As a contractor, after all, you’ll be running a business backed by one of the leading logistics companies in the world.

But as it turns out, FedEx operates differently than traditional franchises. In fact, FedEx routes are not franchises at all.

What is a franchise, exactly?

A franchise is a business that uses an existing company’s business model and brand. This includes the goods and services that you sell, along with the design, marketing, and general method of operations.

To become a franchise owner, you must buy a franchise for a fee. You’ll also need to sign an agreement, which indicates how you will run the business. It’s imperative that you meet the obligations outlined in the contract.

There might be royalty fees as well. These royalties allow you to legally use the company’s name to do business.

Franchises operate in a uniform manner, too. Every franchisee must manage their business according to certain policies and regulations.

Here’s the difference between franchises vs. FedEx routes.

At first glance, owning a franchise and FedEx route might seem similar. In both scenarios, you benefit from the name and established reputation of a company. You also sign a contract and buy a route for a specific amount, which may seem like a franchise fee.

But FedEx routes are not franchises. As a FedEx route owner, you are essentially running a small independent business. This means you have complete control over the daily operations, which includes your business model.  

For example, when it comes to hiring and training employees, you can execute the process according to your employee handbook. But if you were a franchise owner, you’d be required to hire and train employees according to the franchisor’s rules.

This is not the case with FedEx. You service the route under your own business name, based on your own policies.

Since FedEx routes are not franchises, contractors do not have to pay franchise fees or royalties.

Ready to buy a FedEx route? Contact KR Capital.

Investing in a FedEx route is a fantastic business opportunity. What’s more, there’s the potential to scale and grow your business over time.

To get started, contact KR Capital. We can help you find FedEx routes for sale and provide guidance during the approval process. With our assistance, you’ll be on your way to becoming the proud owner of a FedEx route.

Call us at (503) 664-0753 or complete our online form today.