For Batteries Plus Bulbs, does the definition of 'Competing Business' include e-commerce or internet-based businesses?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Covenant Not To Compete During Term. Franchisee (and each Principal Owner) will not, during the term of this Agreement, directly or as an employee, agent, consultant, partner, officer, director or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, having any interest in, or assist any person or entity engaged in any business (including any e-commerce or internet-based business) that distributes, sells or otherwise deals in, at wholesale or retail, any battery, light bulb or related products, any device repair, key fob repair or replacement, or other services offered at a Batteries Plus® store, or any other related business that is competitive with or similar to a Batteries Plus® store, except: (i) with Franchisor's prior written consent; or (ii) the ownership of securities listed on a stock exchange or traded on the over-the-counter market that represent one percent (1%) or less of that class of securities.
- C. Post-Term Covenant Not To Compete. Franchisee (and each Principal Owner) will not, for a period of two (2) years after this Agreement expires or is terminated or the date on which Franchisee ceases to conduct the business franchised under this Agreement, whichever is later, directly or as an
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, the definition of a 'Competing Business' does include e-commerce or internet-based businesses. Specifically, during the term of the franchise agreement, franchisees are restricted from owning, operating, or being involved with any business, including e-commerce or internet-based businesses, that sell similar products or services to Batteries Plus Bulbs. This encompasses businesses that distribute or sell batteries, light bulbs, related products, device repair, key fob repair or replacement, or other services offered at a Batteries Plus Bulbs store.
This restriction applies if the e-commerce or internet-based business is competitive with or similar to a Batteries Plus Bulbs store. There are limited exceptions to this covenant, such as with the prior written consent of Batteries Plus Bulbs, or the ownership of publicly traded securities representing a small percentage (1% or less) of a company's stock.
After the franchise agreement expires or is terminated, similar restrictions apply for a period of two years. During this post-term period, franchisees are prohibited from engaging in a competing business, including e-commerce, within a specific radius of their former store or any existing Batteries Plus Bulbs store. This is designed to protect the Batteries Plus Bulbs brand and prevent franchisees from using their knowledge gained during the franchise term to directly compete against the system.
These covenants are typical in franchising to protect the brand and prevent unfair competition. Prospective franchisees should carefully consider these restrictions and how they might impact their future business endeavors, especially if they have existing e-commerce interests or plan to develop them after leaving the Batteries Plus Bulbs system.