What does Section 9 of the Batteries Plus Bulbs Franchise Agreement, 'Franchise Fees', detail?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of the Royalty and Service Fee (as defined in Section 9(B) below), the sale is made at the earlier of delivery of the product or service, or receipt of payment.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
Based on the 2025 Batteries Plus Bulbs Franchise Disclosure Document, Section 9(B) defines how the Royalty and Service Fee is determined. Specifically, the sale is considered to have occurred at the earlier of when the product or service is delivered or when payment is received. This clarification is important for franchisees as it dictates when Batteries Plus Bulbs calculates the fees owed to them.
For a prospective franchisee, this means that royalty and service fees are due as soon as either the product/service is provided or payment is received, regardless of whether the transaction is fully completed. This could impact the franchisee's cash flow management, as they need to account for these fees promptly.
Understanding this definition is crucial for accurate financial planning and reporting. Franchisees should ensure their accounting practices align with this definition to avoid discrepancies or disputes with Batteries Plus Bulbs regarding fee calculations.