franchise set-up costs

a financial commitment to your own future

Happy franchisee couple with parcels
the initial franchise fee

The franchise fee gives you exclusive rights to operate the expost scotland Mail Centre within the reserved territory  ( the whole of Scotland )  for a term of five years.   It covers the cost of training,  IT hardware,  specialist equipment,  sales & marketing,  all consumables for the first 12 months,  access to our bespoke software,  ongoing support and system development.

We know,  from the frequency of telephone and email enquiries,  that a virtual address near to Edinburgh,  Glasgow,  Dundee or Aberdeen would all generate a similarly high customer demand.   Although a high proportion of the population is concentrated in these four urban areas,  a particularly strong national identity largely overrides narrow geographical differences and makes an address anywhere in Scotland acceptable.

The initial franchise fee is payable once only and there are no annual licence charges.

franchise renewal fees

The most you will have to pay for a subsequent five year term is 25% of the initial franchise fee.


Pound coins showing the cost to operate our Edinburgh regional Mail Centre

operating costs

on-going & sales related costs

our royalties

Our income is limited to the royalties we receive from account sales and mail handling,  we only profit from your financial success!

Even though all marketing,  advertising,  sales,  customer support and administration is handled exclusively by our team at Philbeach on your behalf,  we only retain 30%  ( + VAT ) of the gross revenues as a Royalty,  with the balance credited to your account at the end of each month.

third party sales commission

We have several international direct sales campaigns in operation,  currently targeted at British expats.   The agreed commission rate per sale,  which is capped at £50.00,  only applies to 12 month accounts,  and is deducted from the account fee before our royalties are calculated.   No commission is payable on subsequent account renewals or operational revenues.

general overheads

If you intend to operate the Scotland Mail Centre yourself,  from home,  then you should have no additional workspace or staff related outgoings whatsoever in the first year.   The business is effectively overhead free,  aside from broadband internet and some form of commercial insurance  ( this may be required by law if you are trading as a Limited Company ).   For your guidance,  a minimum of £10,000 all risks cover is suggested for computer hardware,  mailsort furniture and consumables held in stock.

Whilst mail held at your Centre is insured at the rate of £1 per letter, £2 per large letter and £10 a parcel,  the limit on any single claim is £50 in aggregate,  and so we found that the most cost effective option was to self-insure.   Your Mail Centre management reports include a real-time update on the current insurance exposure.


The largest operational cost is,  by far,  the cumulative postage and courier charges incurred when forwarding your customers' mail,  but you don't pay them!   Whether you are forwarding a single letter to Southampton via the Royal Mail,  or despatching two 20Kg parcels to South Africa by DHL,  UPS or Parcelforce,  the costs are all covered by our credit accounts!

( call our development team for more information on 0333 789 0011 )

earnings & income

there are two main revenue streams

Five Pound notes - Franchise revenue for the Scotland Mail Centre

account sales

The income from the sale of new accounts,  and subsequent renewals,  constitutes the primary revenue stream for your business.
The sales projections below are drawn from the actual performance of expost scotland prior to the change in status.   Although the Mail Centre still hosts 44 active customers  ( representing a potential renewal value of £9,500 over the next 12 months )  it has been assumed that sales start 'from scratch'.   Every effort will,  of course,  be made to migrate existing customers to the new address!

account charges

3 month account:  £100
6 month account:  £180
12 month account:  £240

Average sale value:  £216
(Net of Royalties):  £137

account renewals

New account sales are augmented by renewals in subsequent years.   The average customer retention rate across our UK network is almost 80% and there is no evidence to suggest that this figure would be any lower in Scotland,  given that the new Mail Centre premises will also have 'residential' status.

operational revenues

As your Mail Centre accumulates customer accounts,  the income arising from mail handling fees,  scanning and surcharges  ( 'Operational Revenue' )  grows proportionately,  because the longer a customer holds an account with you,  the more mail they will process through the Centre each month.

handling charges

Letter handling:  £0.60
Large Letter handling:  £1.00
Parcel handling:  £3.00
Scanning:  £0.50
Surcharges:  £3.00


Although the Operational Revenue in our Head Office Mail Centre now exceeds that generated by Account Sales,  for the purposes of the projections it has been assumed that the mean Operational Revenue per active Account will equate to just 45% of the Sales value in year one,  rising to 85% in subsequent years as your customers' account usage matures.

A further element of Operation Revenue exists in the commercial rebates we receive from the Royal Mail and Private Couriers,  which you apply as a mark-up of 30% on their charges.   However,  this mark-up cannot be classed as a disbursement,  so if we to charge Royalties on it,  the entire postal cost would become subject to VAT.   Therefore,  this revenue stream has been entirely omitted from the financial projections.

financial summaries

36 month projections, scotland

Year 1  total account sales:  100
Year 2  total account sales:  140
Year 3  total account sales:  180
Cumulative accounts, year 3 end:  356

Franchise fee:  £30,400  (+ VAT)
Year 1   Projected revenue:  £20,050   ( net of Royalties )
Year 2   Projected revenue:  £48,500   ( net of Royalties )
Year 3   Projected revenue:  £81,100   ( net of Royalties )

billing & reconciliation

Calculator illustrating financial summaries for the new Scotland mailbox Franchise

ProPost incorporates a comprehensive accounting module that keeps track of every letter and parcel you handle,  every scan,  every customer credit,  royalty payment,  transaction fee,  surcharge and VAT;  then uses these data to present you with a real-time,  fully reconciled,  statement of account.   At the end of each calendar month,  the net revenue due is transferred from expost's client account,  directly into your real-world bank.