Can Batteries Plus Bulbs apply payments from a franchisee to amounts owed to its affiliates?

According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, Batteries Plus Bulbs has the authority to allocate payments received from a franchisee towards debts owed to either Batteries Plus Bulbs itself or any of its affiliates. This means that if a franchisee owes money to Batteries Plus Bulbs or to a related company, Batteries Plus Bulbs can use any payment from the franchisee to settle those debts.

This provision in the franchise agreement gives Batteries Plus Bulbs significant control over the application of a franchisee's payments. For a prospective franchisee, this means that if they have outstanding debts to Batteries Plus Bulbs or its affiliates, any payments they make could be applied to those debts first, potentially before other obligations are met. This could impact the franchisee's cash flow and ability to manage their finances effectively.

Franchisees should be aware of this clause and carefully manage their financial obligations to both Batteries Plus Bulbs and its affiliates to avoid any unintended consequences. It is important to maintain clear communication with Batteries Plus Bulbs regarding the application of payments and to understand the priority in which debts will be settled. This clause is not uncommon in franchise agreements, as it protects the franchisor and its related entities from financial losses.