Batteries Plus: $865K Average Sales vs. $197K-$465K Franchise Cost

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Batteries Plus franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Batteries Plus franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Batteries Plus outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Batteries Plus franchise opportunity

Section V – Presentation and analysis of Batteries Plus’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average merchandise margin for the 560 franchised Batteries Plus Stores that were in operation for the entire 12-month period ended December 31, 2022

• 2022 average merchandise margin for retail and commercial customers for the 594 franchised Batteries Plus Stores that were open as of December 31, 2022

• 2022 average retail and commercial revenue as a percentage of total revenue for the 594 franchised Batteries Plus Stores that were open as of December 31, 2022

• 2022 impact of commercial net revenue and retail cross-selling activity on overall average net revenue based on the results of the 560 franchised Batteries Plus Stores that were in operation for the entire 12-month period ended December 31, 2022

• 2022 average and median retail, commercial, and total sales ticket amount based on sales activity during the 2022 Fiscal Year for the 560 franchised Batteries Plus Stores that were in operation for the entire 12-month period ended December 31, 2022

• 2022 average, median, highest, and lowest net revenue for the 112 corporate, 560 franchised, and 672 corporate and franchised Batteries Plus Stores that were in operation for at least 12 full months as of December 31, 2022

• 2022 average net revenue, cost of goods sold, gross profit margin, wages and compensation, selling expense, delivery expense, facilities and office, admin expense, marketing, royalties, and EBITDA for the 106 company-owned Batteries Plus Stores that were in operation for at least 12 full months as of December 31, 2022 and that the franchisor’s affiliate owned for the entire 12-month period

Section VI – Key ratios, comparables, computations, and analyses for the Batteries Plus franchise opportunity (exclusive content for Platinum subscribers)

Section I – Batteries Plus Franchise Costs

• Batteries Plus franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $15,000 to $49,500
• Real Estate:  Amount Not Specified
• Leasehold Improvements:  $0 to $80,000
• New Store Marketing Campaign Contribution:  $13,000 to $20,000
• Equipment and Fixtures:  $28,000 to $52,000
• Signage:  $6,900 to $15,700
• Inventory:  $30,500 to $77,600
• Miscellaneous Supplies:  $2,000 to $5,000
• Prepaid Expenses and Deposits:  $0 to $13,500
• Retail Management System:  $39,000 to $41,000
• Omni-Channel Access Fee:  $10,000
• Training:  $200 to $2,900
• Miscellaneous Pre-opening Expenses:  $1,800 to $8,000
• Delivery Vehicle:  $1,000 to $18,500
• New Store Commercial Support – 3 Months:  $0 to $11,900
• Additional Funds – 3 Months:  $50,000 to $60,000
• Total Estimated Batteries Plus Franchise Costs:  $197,400 to $465,600

Section II – Batteries Plus’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Batteries Plus’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,500
• Royalty and Service Fee:  5% of total Net Revenues on all products and services
• National Marketing and Promotional Fee:  1% of total Net Revenues
• Digital Marketing Program Contribution:  up to the greater of 3% of Net Revenues or the “Minimum Store Promotion Requirement”
• Advertising/Marketing Cooperative(s):  amount determined by Batteries Plus or by local cooperative (with Batteries Plus’ approval) but cannot exceed the greater of 3% of Net Revenues or the “Minimum Store Promotion Requirement,” when combined with Digital Marketing Program contributions
• Minimum Store Marketing Obligation:  you must spend amounts each calendar year on “approved” Store advertising and promotional activities in your market to the extent your combined contributions respecting the Digital Marketing Program and advertising cooperative are less than the “Minimum Store Promotion Requirement”

Section III – Number of Franchised and Company-Owned Batteries Plus Outlets

Franchised

2020

• Outlets at the Start of the Year:  643
• Outlets at the End of the Year:  605
• Net Change:  -38

2021

• Outlets at the Start of the Year:  605
• Outlets at the End of the Year:  590
• Net Change:  -15

2022

• Outlets at the Start of the Year:  590
• Outlets at the End of the Year:  609
• Net Change:  +19

Company-Owned

2020

• Outlets at the Start of the Year:  85
• Outlets at the End of the Year:  95
• Net Change:  +10

2021

• Outlets at the Start of the Year:  95
• Outlets at the End of the Year:  112
• Net Change:  +17

2022

• Outlets at the Start of the Year:  112
• Outlets at the End of the Year:  112
• Net Change:  0

Section IV – News Updates on the Batteries Plus Franchise

• Batteries Plus Projects Fifth Consecutive Record-Breaking Year in 2024

• Batteries Plus Closes 2023 with Strong Business Partnership Growth

• Batteries Plus Finalizes 6-Unit Franchise Agreement for Charlotte Expansion

• Batteries Plus Ranks on Franchise Times 2023 Top 400 List

• Batteries Plus on Track for More Expansion With 45 New Stores in 2023

• Batteries Plus Prepares for a Groundbreaking 2023

• Batteries Plus Ranked No. 311 on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Batteries Plus Franchise (Item 19, 2023 FDD)

• Under Part 1, the franchisor has provided merchandise margin and percentage of net revenue in total and by customer type based on franchise-owned Stores.

• Under Part 2, the franchisor has provided unaudited statements of net revenue for franchised and company-owned Stores.

• Under Part 3, the franchisor has provided an unaudited statement of net revenue, expenses, and EBITDA for company-owned Stores.

• The information below is based on performance during the period from January 1, 2022 through December 31, 2022 (“2022 Fiscal Year”).

• Information for franchise-owned Stores has been taken from their respective Retail Store Management systems. The franchisor has not audited or verified these reports.

Part 1 – January 1, 2022 to December 31, 2022 Unaudited Statement of Average Merchandise Margin and Percentage of Net Revenue by Customer Type of Franchised Stores

• The following statements are based on information reported by all franchise-owned Stores in operation during the 2022 Fiscal Year.

• There were 609 total franchised Stores open as of December 31, 2022. Of these Stores, 2 are small market test stores that Batteries Plus currently does not offer under the Disclosure Document, 3 Stores temporarily closed or were not open the minimum required hours during the 2022 Fiscal Year, and 10 Stores began offering commercial sales at the end of 2022 but did not collect revenue in 2022. The remaining 594 franchised Stores are referred to as “All Stores.”

• Of the 594 All Stores, there were 560 franchise-owned Stores that were in operation for the entire 2022 Fiscal Year (the “Same Stores”). The Same Stores do not include 6 Stores acquired by Batteries Plus’ affiliates during the 2022 Fiscal Year, 31 Stores that closed during the 2022 Fiscal Year, or 34 new Stores that opened during the 2022 Fiscal Year, but do include 5 Stores that franchisees purchased from Batteries Plus’ affiliates during the 2022 Fiscal Year.

A.  Statement of Average Merchandise Margin for Same Stores

• This statement includes information on the average Merchandise Margin percentage for Same Stores for both retail and commercial customers for the 2022 Fiscal Year. This statement includes information from Same Stores only (560).

• For purposes of this statement, the term “Net Revenue” means all revenues received from the sale of goods and services, whether for cash or by check, credit card, or trade, in connection with the Store, less sales tax, discounts, and customer refunds and returns.

• For purposes of this statement, the term “Merchandise Margin” is Net Revenue less product cost. Product cost is the cost of the product only and does not include other cost of goods sold such as freight, warranty expense, or inventory shrinkage.

• “Merchandise Margin Percentage” is Merchandise Margin divided by Net Revenue multiplied by 100.

2022 Same Store Merchandise Margin

• Number of Stores:  560
• Merchandise Margin Percentage:  52%
• Customer Type:  Retail and Commercial

B.  Statement of Average Merchandise Margin for All Stores

• This statement includes information comparing the total average Merchandise Margin percentage for All Stores retail Net Revenue with the total average Merchandise Margin percentage for All Stores commercial Net Revenue for the 2022 Fiscal Year.

• This statement includes information from All Stores (594).

2022 All Store Merchandise Margin by Customer Type

Retail Customer

• Stores:  594
• Merchandise Margin:  58%

Commercial Customer

• Stores:  594
• Merchandise Margin:  39%

C.  Statement of Average Retail and Commercial Percentage of Net Revenue for All Stores

• This statement includes information comparing average retail Net Revenue and commercial Net Revenue as a percentage of total average Net Revenue for All Stores for the 2022 Fiscal Year. This statement includes information from All Stores (594).

2022 All Store Percentage of Net Revenue by Customer Type

Retail Customer

• Stores:  594
• Percentage of Net Revenue:  69%

Commercial Customer

• Stores:  594
• Percentage of Net Revenue:  31%

D.  Impact of Commercial Net Revenue Percentage and Cross-Selling Activity on Overall Average Net Revenue

• The statement below examines the impact of Commercial Net Revenue and retail cross-selling activity on overall Average Store Net Revenue based on the results of all 560 franchised Same Stores that were in operation for at least 12 full months as of December 31, 2022.

• The data included below is based on sales activity for the 2022 Fiscal Year.

• The chart shows the Average Net Revenue for the 560 Same Stores based on the percentage of total Store Net Revenue devoted to Commercial Net Revenue. That chart shows Average Net Revenue for those Same Stores with Commercial Net Revenue exceeding 35% of total Net Revenue as well as the Average Net Revenue for those Same Stores with Commercial Net Revenue at or below 35% of total Net Revenue.

• The chart also shows the Average Net Revenue for the 560 Same Stores based on the Average Add-On Margin per each transaction. Average Add-On Margin is the amount of Merchandise Margin added to a single transaction other than the primary item the customer purchased.

More Than 35% of Total Net Revenue Is Commercial Sales

• 2022 Median Net Revenue:  $1,015,883
• 2022 Average Net Revenue:  $1,182,370
• Range of Net Revenue:  $302,944 to $7,176,010
• 2022 Average Merchandise Margin:  $561,174
• Number of Stores:  131
• Number and Percentage of Stores Above Average Net Revenue:  49 (37.4%)
• Average Store Age as of December 31, 2022:  16.1

Less Than or Equal to 35% of Total Net Revenue Is Commercial Sales

• 2022 Median Net Revenue:  $677,394
• 2022 Average Net Revenue:  $768,118
• Range of Net Revenue:  $212,802 to $2,540,963
• 2022 Average Merchandise Margin:  $414,427
• Number of Stores:  429
• Number and Percentage of Stores Above Average Net Revenue:  175 (40.8%)
• Average Store Age as of December 31, 2022:  13.7

More Than $1.50 Average Add-on Margin per Transaction

• 2022 Median Net Revenue:  $932,746
• 2022 Average Net Revenue:  $1,057,560
• Range of Net Revenue:  $304,764 to $7,176,010
• 2022 Average Merchandise Margin:  $546,942
• Number of Stores:  190
• Number and Percentage of Stores Above Average Net Revenue:  67 (35.3%)
• Average Store Age as of December 31, 2022:  13.3

Less Than or Equal to $1.50 Average Add-on Margin per Transaction

• 2022 Median Net Revenue:  $665,033
• 2022 Average Net Revenue:  $766,154
• Range of Net Revenue:  $212,802 to $3,409,225
• 2022 Average Merchandise Margin:  $398,335
• Number of Stores:  370
• Number and Percentage of Stores Above Average Net Revenue:  151 (40.8%)
• Average Store Age as of December 31, 2022:  14.8

E.  Sales Ticket Amount

• The data included below is based on sales activity during the 2022 Fiscal Year for the 560 Same Stores.

• The “Sales Ticket Amount” is the Net Revenue per transaction for items (products) sold in the Store (excluding coupons, core charges, labor charges, and related items).

• The chart below includes the Average and Median Sales Ticket Amount for retail customers, commercial customers, and combined retail and commercial customers.

Retail Sales Ticket Amount

• Average:  $48.72
• Median:  $47.28
• Number and Percentage of Stores Above Average:  247 (44%)

Commercial Sales Ticket Amount

• Average:  $234.08
• Median:  $205.25
• Number and Percentage of Stores Above Average:  202 (36%)

Total Sales Ticket Amount

• Average:  $64.07
• Median:  $60.13
• Number and Percentage of Stores Above Average:  216 (39%)

Part 2 – Unaudited Statements of Average Net Revenue for the 2022 Fiscal Year

A.  Corporate Stores

• The table below includes the Average Net Revenue for the 2022 Fiscal Year for all 112 corporate Stores that were in operation for at least 12 full months as December 31, 2022, including 6 corporate Stores that were acquired from franchisees during the 2022 Fiscal Year.

• Number of Corporate Stores:  112
• Average Net Revenue:  $1,000,878
• Median Net Revenue:  $936,689
• Highest Net Revenue:  $2,774,705
• Lowest Net Revenue:  $451,904
• Number and Percentage of Stores Above Average Net Revenue:  46 (41%)

B.  Franchised Stores

• The table below includes the Average Net Revenue for the 2022 Fiscal Year for the 560 franchised Same Stores that were in operation for at least 12 full months as of December 31, 2022.

• Number of Franchise Stores:  560
• Average Net Revenue:  $865,024
• Median Net Revenue:  $750,380
• Highest Net Revenue:  $7,176,010
• Lowest Net Revenue:  $212,802
• Number and Percentage of Stores Above Average Net Revenue:  223 (40%)

C.  Corporate and Franchised Stores

• The table below includes the Average Net Revenue for the 2022 Fiscal Year for the combined Stores (560 franchised Same Stores and 112 corporate Stores) that were in operation for at least 12 full months as of December 31, 2022.

• Number of Stores:  672
• Average Net Revenue:  $887,666
• Median Net Revenue:  $796,904
• Highest Net Revenue:  $7,176,010
• Lowest Net Revenue:  $212,802
• Number and Percentage of Stores Above Average Net Revenue:  272 (40%)

Part 3 – Unaudited Statement of Net Revenue, Cost of Goods Sold, Payroll, Marketing, Royalties, and Gross Profit for the 2022 Fiscal Year

• The statement in the table below discloses average annual Store Net Revenue, Cost of Goods Sold, and other expenses based on historical information for the 2022 Fiscal Year for the 106 company-owned Stores that were in operation for at least 12 full months as of December 31, 2022 and that the franchisor’s affiliate owned for the entire 12-month period (“Company-Owned Stores”).

• As of December 31, 2022, there were 112 corporate Stores in operation, but 6 corporate Stores were excluded because the franchisor’s affiliate purchased these Stores from franchisees during the 2022 Fiscal Year and did not own or operate these Stores during the entire 12-month period ended December 31, 2022.

• The statements below also do not include 1 corporate store that closed during the 2022 Fiscal Year or 5 corporate stores that were sold to franchisees during the 2022 Fiscal Year.

Number of Stores:  106

Net Revenue:  $991,004 (100.0%)

Cost of Goods Sold:  $485,823 (49.0%)

Gross Profit Margin:  $505,181 (51.0%)

Operating Expenses

• Wages and Compensation:  $164,642 (16.6%)
• Selling Expense :  $16,484 (1.7%)
• Delivery Expense:  $4,999 (0.5%)
• Facilities and Office:  $76,722 (7.7%)
• Admin Expense:  $12,844 (1.3%)
• Marketing:  $49,550 (5.0%)
• Royalties:  $49,550 (5.0%)
• Total Expenses:  $374,791 (37.8%)

EBITDA:  $130,389 (13.2%)

• “Net Revenue” means all revenues received from the sale of goods and services, whether for cash or by check, credit card or trade, in connection with the Store, less sales tax, discounts, and customer refunds and returns.

• “Cost of Goods Sold” is the average of all company-owned Stores’ product costs, including the cost of the product, discounts earned, cost of customer repairs, recycling charges, restocking fees, purchase price variances, redistribution costs, core recovery, tech center supplies, freight in, warranty expense, bulb breakage, and coupon discrepancy. Cost of Goods Sold does not include inventory shrinkage and inventory scrap. Franchisees’ Stores may perform similarly but will be impacted by differences in product category sales mix, inventory management, and operational execution.

• “Gross Profit Margin” means Net Revenue less the Cost of Goods Sold.

• “Wages” include wages (including overtime), sales incentive wages, and payroll taxes for all in-store employees. Included are wages for the Store manager. There are no wages included for any dedicated employee to conduct external commercial sales activities.

• The franchisor presumes that, in a single franchised Store, the owner-operator will either be the Store manager or will be responsible for the external commercial sales activity and will not receive a separate salary or draw from Store Net Revenues. Wages also do not include 401K contributions, group health insurance, paid time off, or commissions. Franchisees may experience similar wage expenses but will be impacted by staffing model decisions (which franchisees alone must decide), market driven pay rate differences, and individual Store staff performance.

• “Selling Expenses” include credit card fees, national account administration fees, and uniform expenses. Selling Expenses do not include business meals, travel expenses, and sample equipment.

• “Delivery Expense” includes vehicle gas, vehicle insurance expenses, and shipping expenses. Delivery Expense does not include vehicle repairs.

• “Facilities and Office” includes business insurance, building rent, CAM, property tax, security, snow removal and lawn care, utilities, and waste management. Facilities and Office does not include building repairs or equipment.

• “Admin” includes IT data lines, IT maintenance fee, supplies, and telephone expense.

• The company-owned Stores do not pay a royalty fee and are not required to spend 5% of Net Revenue on marketing (which includes the Digital Marketing Fee). Franchisees would have incurred these expenses. As a result, the franchisor has included these amounts in these tables as if the company-owned Stores had incurred these expenses in the stated amounts, “Royalties” and “Marketing” respectively.

• “EBITDA” is calculated by taking the Gross Profit Margin and subtracting the Total Expenses.

• The company-owned Stores included in Item 19 are substantially similar to the Stores for which the franchisor is offering franchises in the Disclosure Document, and their products and services are the same as those offered and sold by franchised Stores. These company-owned Stores reflect a wide range of demographics and business conditions found in urban, suburban, and single-store markets.

Section VI – Batteries Plus Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️