What was the warranty expense for Batteries Plus Bulbs for the year ended December 31, 2023?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
eserves are established based on estimates from available information. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management believes that any financial responsibility that may be incurred in settlement of such claims and lawsuits beyond amounts not previously provided for would not have a material effect on the Company's consolidated financial condition, results of operations or cash flows.
Warranty
Management's estimate of the accrual for product warranty claims is based upon a review of the Company's vendors, the purchases made from these vendors and their warranty terms. Management reviews the annual purchases made from these vendors and their related wa
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs's 2025 Franchise Disclosure Document, the warranty expense for the year ending December 31, 2023, was $3,005 (in thousands). This figure represents the company's estimated accrual for product warranty claims. Batteries Plus Bulbs calculates this accrual based on a review of its vendors, the purchases made from those vendors, and the vendors' warranty terms.
Specifically, Batteries Plus Bulbs management reviews annual purchases from vendors, their related warranty terms, and expected levels of returned merchandise. This comprehensive review helps them determine the company's potential warranty liability for each vendor's product. The accrual is then recorded to match management's expected warranty exposure.
For a prospective franchisee, understanding warranty expenses is crucial. It reflects the potential costs associated with product defects or failures that Batteries Plus Bulbs is responsible for covering. The FDD also notes that the warranty claims for the year ended December 31, 2023, were $2,933 (in thousands).