What was the warranty expense for Batteries Plus Bulbs for the year ended December 31, 2024?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
solution 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 warranty terms as well as their levels of expected returned merchandise to determine the Company's exposure regarding potent
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, the warranty expense for the years ended December 31, 2024, and 2023 was $3,040 and $3,005, respectively. This indicates that Batteries Plus Bulbs spent $3,040 (in thousands) on product warranty claims for the fiscal year 2024. These expenses are estimates made by the management team. The 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.
Batteries Plus Bulbs reviews the annual purchases made from these vendors and their related warranty terms as well as their levels of expected returned merchandise to determine the Company's exposure regarding potential warranty liability for each vendor's product. The accrual is recorded to match management's expected warranty exposure.
For a prospective franchisee, understanding the warranty expense is crucial as it reflects the potential costs associated with product defects or failures. It's also worth noting that warranty claims for the years ended December 31, 2024 and 2023 were $2,950 and $2,933, respectively. This information, alongside the details of how Batteries Plus Bulbs manages its warranty accruals, can help a franchisee assess the quality of products sold and the potential financial impact of warranty claims on their business.