What components does Batteries Plus Bulbs aggregate when they are not specifically identified in the lease or monthly billing?

According to Batteries Plus Bulbs's 2025 Franchise Disclosure Document, the company aggregates lease and non-lease components when these are not specifically identified in the lease or monthly billing. These aggregated components include fixed common-area maintenance costs. This accounting practice affects how Batteries Plus Bulbs calculates its right-of-use (ROU) assets and lease liabilities.

For a prospective Batteries Plus Bulbs franchisee, this means that if the lease agreement or monthly billing does not clearly itemize certain costs like common-area maintenance, Batteries Plus Bulbs will combine these with the lease components for accounting purposes. This aggregation impacts the franchisee indirectly, as it influences how Batteries Plus Bulbs reports its financial obligations and assets related to the lease. However, when these components are identifiable, the company excludes these variable non-lease components for the purpose of calculating the ROU assets and liabilities. These variable lease payments are expensed as incurred.

It's important to note that when these components are identifiable, Batteries Plus Bulbs excludes variable non-lease components when calculating ROU assets and liabilities, and these variable lease payments are expensed as incurred. This distinction ensures that only fixed and non-identifiable costs are aggregated, while variable and identifiable costs are treated separately for accounting purposes. This approach aligns with accounting standards that aim to provide a clear and accurate representation of a company's lease obligations and asset values.