Why can't Batteries Plus Bulbs estimate the construction costs for a building?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
Although most franchisees lease the premises for their Store, a small number of franchisees will purchase the land and construct the building for their Store. The cost of purchasing unimproved land will vary depending on location, availability of utilities and other factors and cannot be estimated by us. The construction costs for the building also will vary significantly depending on many of the same factors mentioned above as well as the size of the building and the availability of financing. Due to these many factors and a lack of historical information on which to base an estimate, we cannot estimate the cost of the building.
(13) Typical locations for your Store are smaller free-standing, multiple use and strip center locations. Assuming that you will lease the premises for your Store, you will need to make certain leasehold improvements to the leased premises to comply with our approved plans and specifications. Leasehold improvements include lighting, flooring, partition walls, interior signage and vehicle graphics. We anticipate that you will negotiate the cost of leasehold improvements as part of your rental expense. The exact cost or impact on your rental expense will depend on several factors, including the condition of the premises, whether you elect to do more than the minimum required renovations, the landlord's agreement to reimburse you for certain improvements, the size and
location of the premises for your Store and other economic factors. Although we do not recommend that you purchase the land and building for your Store, you will incur significantly greater costs in developing your Store if you choose to do so. All construction materials and fixtures must comply with our specifications. Although we estimate that you will need to lease premises of approximately 1,000 to 1,600 square feet for a Store, you may need larger premises in some situations. You will incur greater start-up costs if you cannot negotiate the cost of leasehold improvements as part of your rental expense. You are responsible for any architectural plans that you may be required to submit.
Source: Item 7 — Estimated Initial Investment (FDD pages 24–29)
What This Means (2025 FDD)
According to Batteries Plus Bulbs's 2025 Franchise Disclosure Document, the franchisor cannot provide an estimate for building construction costs due to the variability of factors influencing these costs. These factors include location, availability of utilities, building size, and financing availability. Since these elements can fluctuate significantly and Batteries Plus Bulbs lacks sufficient historical data to create a reliable estimate, they do not offer one.
For a prospective Batteries Plus Bulbs franchisee, this means that if you plan to purchase land and construct a building for your store, you will need to conduct your own due diligence to determine these costs. This may involve consulting with local contractors, real estate professionals, and financial advisors to get accurate estimates based on your specific location and building plans. This contrasts with the more common scenario where franchisees lease their premises, in which case they can negotiate leasehold improvements with the landlord.
Batteries Plus Bulbs emphasizes that choosing to purchase land and construct a building will result in significantly higher development costs compared to leasing. Franchisees are responsible for ensuring all construction materials and fixtures comply with the brand's specifications, adding another layer of complexity to the process. Given the wide range of potential costs, it is crucial for prospective franchisees to carefully consider their financial resources and risk tolerance before deciding to build rather than lease a location. Batteries Plus Bulbs recommends discussing this decision with a business advisor.