When does Batteries Plus Bulbs recognize royalty and marketing fund revenue?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
Batteries Plus enters into individual and multiple-unit franchise agreements. Individual franchise agreements grant the individual the right to open and operate a franchise store in the franchisee's individual territory. Multiple-unit franchise agreements grant the franchisee the right to establish and own a specified number of Batteries Plus stores within a defined geographic area pursuant to a development schedule. The fees for the individual franchise agreement and a portion of the fees for the multiple-unit franchise agreement are payable upon execution of the agreement and are nonrefundable. The remaining fees for multiple-unit franchise agreements are payable upon execution of the franchise agreement for each store developed pursuant to the multiple unit franchise agreement.
Contributions to the Fund are recorded as other operating income of Batteries Plus and marketing expenditures of the Fund are recorded as an operating expense of Batteries Plus.
In 2024 and 2023, the National Marketing Fund contributions from franchisees and the related expenditures were reported on a gross basis in the consolidated statements of net income, in accordance with ASC 606.
Batteries Plus administers the Digital Marketing Program (the Program) which serves as a marketing coop for all Batteries Plus stores. The Program develops, initiates and executes digital marketing programs including, but not limited to, the development of electronic, or internet-based marketing activities for the mutual benefit of its contributors. The Program is not a separate legal entity and is included in the Company's consolidated balance sheets. The Program is managed by Batteries Plus.
Contributions to the Program are generally based upon 2.5% of store net revenues. A summary of the contributions to the program, which are restricted for digital marketing activities, and the expenditures from the Program is as follows for years ended December 31:
In 2024 and 2023, the Digital Marketing Program contributions from franchisees and the related expenditures were reported on a gross basis in the consolidated statements of net income, in accordance with ASC 606.
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, the company enters into individual and multiple-unit franchise agreements. The fees for individual franchise agreements and a portion of the fees for multiple-unit franchise agreements are payable upon the execution of the agreement and are nonrefundable. The remaining fees for multiple-unit franchise agreements are payable upon the execution of the franchise agreement for each store developed pursuant to the multiple unit franchise agreement.
Contributions to the National Marketing Fund are recorded as other operating income of Batteries Plus Bulbs. Marketing expenditures of the Fund are recorded as an operating expense of Batteries Plus Bulbs. For the years 2024 and 2023, the National Marketing Fund contributions from franchisees and related expenditures were reported on a gross basis in the consolidated statements of net income, in accordance with ASC 606.
Batteries Plus Bulbs also administers a Digital Marketing Program, which serves as a marketing coop for all Batteries Plus Bulbs stores. Contributions to this program are generally based upon 2.5% of store net revenues. These contributions are restricted for digital marketing activities. For the years 2024 and 2023, the Digital Marketing Program contributions from franchisees and the related expenditures were reported on a gross basis in the consolidated statements of net income, in accordance with ASC 606.