FedEx Routes: Buyer FAQs
When it comes to profitable business opportunities, you can’t go wrong with buying a FedEx route. However, if you are new to the world of route ownership, you likely have several questions.
To start, we recommend browsing the KR Capital blog to learn about route contracts, operational procedures, and general information on what it’s like to own a route. This will help you develop a realistic idea of the job and make an informed decision before moving forward.
For your convenience, we’ve also gathered the most common buyer FAQs, below:
- How do you buy a FedEx route?
The process of buying a FedEx route involves multiple steps.
First, you’ll need to determine the features of your ideal route. This includes the location and size, along with the type of FedEx business you are looking for: pick-up and delivery (P&D) or linehaul. Each type of route has their pros and cons, so be sure to take the time and compare your options. Doing so will help narrow down your search and save time in the long run.
Next, you can begin the actual buying process. The first step is to browse available FedEx routes for sale on KR Capital or bizbuysell.com. If there are no routes that suit your interests, you can submit a buyer info request form to be notified when routes that meet your criteria become available.
Once you find a route to purchase, you’ll need to:
- Complete due diligence (financial and operational review)
- Become incorporated as a C corporation or S corporation
- Obtain financing
- Sign a purchase agreement
- Complete an in-person review
- Obtain FedEx approval
For a seamless buying experience, we recommend working with an experienced FedEx broker like KR Capital.
- Do you need prior logistics experience to buy a FedEx route?
No, you do not need prior experience in logistics (or a related industry) to become a FedEx route owner. You also do not need experience driving trucks or commercial vehicles.
But that’s not to say that FedEx does not have stringent requirements for new contractors. To become a route owner, you’ll still need to meet certain criteria. You can learn more about the FedEx contractor eligibility requirements here.
- Can you finance a FedEx route?
Yes, you can finance a FedEx route. This is helpful if you are unable or unwilling to buy a route with your own cash.
Your options include:
- Small Business Association (SBA) loan (most common option)
- Retirement savings
- Home equity line of credit
- Private lenders
- Conventional loans
- How much can you make owning a FedEx route?
On average, the annual profit for a FedEx route is between $30,000 to $40,000. However, the exact amount you can make owning a FedEx route varies greatly, depending on factors such as route location, fleet quality, and route type (P&D vs. linehaul).
- How long does the FedEx approval process take?
Generally, the FedEx approval process takes upwards of 30 to 60 days. This is due to the comprehensive nature of the approval process and the multiple layers that exist within FedEx. In order to receive FedEx approval, you’ll need to provide several items, including a Request for Information (RFI or “business plan”) and corporation documents.
The exact length of time will depend on several factors, such as the time of the year and the thoroughness of your documentation.
- Can you own more than one FedEx route?
Yes, you can own multiple FedEx routes. Expansion (either organically or by acquisition) is an excellent way to grow your route business.
It’s worth noting that FedEx has scale cap restrictions on a per-terminal basis. This scale cap, which may range between 10 to 20% of any given terminal, is designed to avoid over-reliance on any given contractor at a certain terminal.
Interested in buying a FedEx route? KR Capital is here to help.
The above buyer FAQs are the most common inquiries we have received. But if you have additional or specific questions, please don’t hesitate to reach out.
Ready to own a FedEx route business? Contact us today at (503) 664-0753 or complete our contact form today.