How is 'Gross Profit Margin' defined for Batteries Plus Bulbs stores?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. "Gross Profit Margin" means Net Revenue less the Cost of Goods Sold.
- A. "Net Revenue" means the average Net Revenues of the company-owned Stores for the applicable month during the 2024 calendar year. "Net Revenge" means all revenues received from the sale of goods and services, whether for cash or by check, credit card or trade, in connection with the Store, less sales tax, discounts and customer refunds and returns.
- B. "Cost of Goods Sold" is the average of all company-owned Stores' product costs, including the cost of the product, discounts earned, cost of customer repairs, recycling charges, restocking fees, purchase price variances, redistribution costs, core recovery, tech center supplies, freight in, warranty expense, bulb breakage, and coupon discrepancy. Cost of Goods Sold does not include inventory shrinkage and inventory scrap. Franchisees' Stores may perform similarly but will be impacted by differences in product category sales mix, inventory management and operational execution.
Source: Item 19 — Financial Performance Representations (FDD pages 53–70)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, Gross Profit Margin is defined as Net Revenue less the Cost of Goods Sold. Net Revenue includes all revenues from the sale of goods and services, whether paid in cash, check, credit card, or trade, related to the store, minus sales tax, discounts, customer refunds, and returns.
Cost of Goods Sold includes the average of all company-owned stores' product costs, encompassing the cost of the product itself, discounts earned, customer repair costs, recycling charges, restocking fees, purchase price variances, redistribution costs, core recovery, tech center supplies, freight in, warranty expense, bulb breakage, and coupon discrepancies. However, Cost of Goods Sold does not account for inventory shrinkage and inventory scrap.
For a prospective Batteries Plus Bulbs franchisee, understanding this definition is crucial for assessing the potential profitability of their store. By carefully managing both Net Revenue and Cost of Goods Sold, franchisees can directly impact their Gross Profit Margin. Factors such as sales strategies, inventory management, and operational efficiency will play a significant role in determining the final Gross Profit Margin achieved by individual franchise locations.