What is excluded from the definition of 'Net Revenues' for a Batteries Plus Bulbs franchise?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
- BP FA (FTC) 03/28/25 D. "Net Revenues" means the aggregate amount of all sales of goods and services (including service charges in lieu of gratuity), whether for cash, on credit or otherwise, made or provided at or in connection with the Store, including off-premises sales and monies derived at or away from the Store. The term "Net Revenues" does not include: (1) any federal, state, municipal or other sales, value added or retailer's excise taxes paid or accrued by Franchisee; and (2) adjustments for net returns on salable goods and discounts allowed to customers on sales. Net Revenues will not be adjusted for uncollected accounts.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, "Net Revenues" are defined as the total income from sales of goods and services at the store, whether those sales are for cash or credit, including sales made off-site. However, the agreement specifically excludes certain items from this calculation.
Specifically, the following are not included in "Net Revenues": (1) any federal, state, municipal, or other sales, value-added, or retailer's excise taxes that the franchisee pays or accrues; and (2) adjustments for net returns on salable goods and discounts allowed to customers on sales. The FDD is explicit that "Net Revenues" will not be adjusted for uncollected accounts.
This definition of "Net Revenues" is important because it is the figure used to calculate royalty fees and other payments to Batteries Plus Bulbs. By excluding taxes and certain adjustments, the franchise agreement provides a clearer picture of the revenue on which these fees are based. However, franchisees should be aware that uncollected accounts are not deducted, meaning they will still pay royalties on sales for which they have not yet received payment.