What happens if a Batteries Plus Bulbs franchisee fails to maintain the required insurance?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount (See Note 1) | Due Date | Remarks |
|---|---|---|---|
| Audit | Cost of audit plus 1½% interest per month from due date. | 30 days after billing | Payable only if audit shows an understatement of at least 2% of Net Revenues for any month. |
| Interest Expenses | Lesser of 18% per year or the maximum rate permitted by law | When due | Payable if you do not timely pay Royalty and Service Fee, NMF Fee, Digital Marketing Fee, or other amounts owed to Batteries or our affiliates. |
| Management Fee | Up to $500 per day plus cost and overhead | When due | Payable if you are in default under the Franchise Agreement and we elect to operate the Store until the default has been cured. |
| Insurance | Cost of insurance | Payable before opening | If you fail to obtain and maintain required insurance, we may immediately obtain insurance and you must promptly reimburse us for insurance, including late charges. |
| Software Support | Varies, currently $472 per month | Payable monthly | May increase up to 10% each calendar year. See Item 11 |
Source: Item 6 — Other Fees (FDD pages 18–24)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs Franchise Disclosure Document, if a franchisee fails to obtain and maintain the required insurance, Batteries Plus Bulbs has the right to immediately obtain insurance coverage on behalf of the franchisee. The franchisee is then responsible for promptly reimbursing Batteries Plus Bulbs for the cost of this insurance, which may include late charges. This requirement is listed under 'Other Fees' in Item 6 of the FDD. The 'Insurance' fee is due before opening the store.
This policy ensures that all Batteries Plus Bulbs locations maintain continuous insurance coverage, protecting both the franchisee and the franchisor from potential liabilities. It is a fairly standard practice in franchising for franchisors to mandate and, if necessary, secure insurance on behalf of franchisees to uphold brand standards and mitigate risks.
For a prospective Batteries Plus Bulbs franchisee, this means understanding the specific insurance requirements outlined in the Franchise Agreement is crucial. Failure to comply can result in Batteries Plus Bulbs stepping in to secure coverage, with the franchisee bearing the financial burden, potentially including additional late charges. This could impact the franchisee's operational costs and profitability. It is important to clarify with Batteries Plus Bulbs what the typical cost of insurance is and what the specific coverage requirements are to avoid unexpected expenses.