Under the Batteries Plus Bulbs agreement, are the franchisor's rights absolute?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the provisions contained in this Agreement, Franchisor grants Franchisee a franchise (the "Franchise") to own and operate a Batteries Plus® Store at a site approved by Franchisor and to use the Licensed Marks in operating the Store.
Franchisee cannot alter the premises or appearance of the Store, or make any unapproved replacements of or alterations to the fixtures, equipment, furniture or signs of the Store without Franchisor's prior written approval. Franchisor may, in its discretion and at Franchisee's sole expense, correct any alterations to the Store not previously approved by Franchisor.
Franchisee agrees that it will not, without Franchisor's prior written approval, offer at the Store any products or services not then authorized by Franchisor for Batteries Plus® stores, nor will the Store or the premises which it occupies be used for any purpose other than the operation of a Batteries Plus® store in compliance with this Agreement.
Franchisee agrees that the Store will only offer for sale batteries, light bulbs, phone screens, key fob and other repair components and related products (or categories of products) and services which Franchisor has approved as being suitable for sale and meeting the standards of quality and uniformity for the System and are purchased from suppliers approved by Franchisor (which may include Franchisor and/or its affiliates).
Franchisor periodically may modify the lists of approved products (or brands or categories of products) and suppliers, and Franchisee will comply with such modified lists of approved products and suppliers.
Subject to earlier termination as provided herein, this Agreement is for a term commencing on the date executed and expiring on the last day of the last Development Period as stated in the Development Schedule. Franchisor (for itself and its affiliates) retains the right: (1) to itself own and operate, and to grant other persons the right to own and operate, Batteries Plus® stores at locations outside the Designated Area, who may offer products and services within the Designated Area, and on conditions as Franchisor deems appropriate; (2) to sell within and outside the Designated Area the products and services authorized for sale at Batteries Plus® stores under trademarks and service marks other than the Licensed Marks through similar or dissimilar channels of distribution and pursuant to conditions Franchisor deems appropriate; (3) to sell the products and services authorized for sale at Batteries Plus® stores under the Licensed Marks through dissimilar channels of distribution (i.e., other than the operation of full-service retail Batteries Plus® stores), including by electronic means such as the Internet and by websites established by Franchisor, and pursuant to conditions Franchisor deems appropriate within and outside the Designated Area; and (4) to advertise the System on the Internet (or any other existing or future form of electronic or digital commerce) and to create, operate, maintain and modify, or discontinue the use of a website using the Licensed Marks.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, the franchisor retains specific rights, indicating that the franchisee's rights are subject to certain limitations and the franchisor's discretion. Batteries Plus Bulbs retains the right to operate or franchise other stores outside the franchisee's designated area, even allowing these stores to offer products and services within the franchisee's designated area. They can also sell products and services under different trademarks through various channels of distribution, and sell products/services under the Licensed Marks through dissimilar channels like the internet. Batteries Plus Bulbs also retains the right to advertise the system on the internet and manage its websites.
Batteries Plus Bulbs also maintains control over approved products and suppliers. Franchisees must only offer products and services approved by Batteries Plus Bulbs and sourced from approved suppliers, which may include Batteries Plus Bulbs itself or its affiliates. Batteries Plus Bulbs can modify the lists of approved products and suppliers, and the franchisee must comply with these changes. Approved suppliers, including Batteries Plus Bulbs, may also obtain a security interest in the products sold to the franchisee.
Furthermore, franchisees are restricted in how they operate their Batteries Plus Bulbs store. Franchisees cannot alter the store's premises or appearance without prior written approval from Batteries Plus Bulbs, and Batteries Plus Bulbs has the right to correct any unapproved alterations at the franchisee's expense. Franchisees also cannot offer any products or services not authorized by Batteries Plus Bulbs, and the store must be used solely for the operation of a Batteries Plus Bulbs store in compliance with the franchise agreement. These stipulations ensure uniformity and quality control across all Batteries Plus Bulbs locations, but also limit the franchisee's autonomy in making independent business decisions.
These provisions demonstrate that the rights of Batteries Plus Bulbs franchisees are not absolute and are subject to significant franchisor control. Franchisees must adhere to the franchisor's standards and decisions regarding store operations, product offerings, and supplier relationships. Prospective franchisees should carefully consider these limitations and understand the extent of control Batteries Plus Bulbs retains over the franchise operation.