How does Batteries Plus Bulbs determine the amount a franchisee must contribute to a cooperative advertising program?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
nd in any fiscal year an amount greater or less than the aggregate contributions of Batteries Plus® stores to such account in that year. Franchisor will determine the strategy, content, implementation and other aspects of the Digital Marketing and Local Media Program. Upon written request, Franchisor will provide Franchisee an annual unaudited statement of the receipts and disbursements of any separate Digital Marketing and Local Media Program account for the most recent calendar year.
C. Cooperative Advertising. Franchisee will participate in, support and contribute to one or more regional or local cooperative advertising or marketing programs that Franchisor may establish in an area or region where Franchisee's Store is located as designated by Franchisor. If a cooperative is established, Franchisee must contribute an amount that Franchisor determines, up to a total of the greater of three percent (3%) of Franchisee's Store Net Revenues each calendar year or the Minimum Store Promotion Requirement; provided that Franchisee's obligations each calendar year under this Section 11(C) will be limited such that Franchisee's combined obligations under Sections 11(B) and 11(C) will not exceed the "Minimum Store Promotion Requirement" as described in Section 11(D) below. Franchisor reserves the right to designate regional and local advertising or marketing markets, to establish regional advertising or marketing councils and to establish the bylaws and other rules under which each cooperative will operate.
D. Local Advertising and Store Promotion. To the extent Franchisee's combined contributions respecting the Digital Marketing and Local Media Program and regional or local cooperative advertising or marketing programs due under Sections 11(B) and 11(C) above, together with amounts spent on "approved" Store advertising and promotion activities, during any calendar year are less than the "Minimum Store Promotion Requirement" (as defined below), Franchisee will spend additional amounts during such calendar year on "approved" Store advertising and promotional activities in Franchisee's local geographic area to satisfy the Minimum Store Promotion Requirement.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, franchisees are required to participate in and contribute to regional or local cooperative advertising programs established by the franchisor in their designated area. The amount a franchisee must contribute is determined by Batteries Plus Bulbs, up to the greater of three percent of the store's net revenues each calendar year or the Minimum Store Promotion Requirement. However, the franchisee's combined obligations for the Digital Marketing and Local Media Program and the cooperative advertising programs will not exceed the Minimum Store Promotion Requirement.
The Minimum Store Promotion Requirement is defined as a pro rata amount of $20,000 during the first calendar year based on the number of weeks the store is in operation. For the first full calendar year and each subsequent year, it is the greater of four percent of the store's net revenues from the previous year or $20,000. This ensures that franchisees invest a minimum amount in local advertising and promotion, with the specific amount varying based on the store's performance and operational duration.
Batteries Plus Bulbs retains the right to designate regional and local advertising markets, establish regional advertising councils, and set the bylaws and rules for each cooperative. Franchisees must also spend additional amounts on approved store advertising and promotional activities in their local area if their combined contributions to the Digital Marketing and Local Media Program, cooperative advertising programs, and amounts spent on approved store advertising are less than the Minimum Store Promotion Requirement. This structure allows Batteries Plus Bulbs to maintain control over advertising standards and ensure consistent brand promotion while requiring franchisees to invest in local marketing efforts.