UFOC
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Sample UFOC
RANCHISE OFFERING CIRCULAR
*%2
OF CO^?0
BATTERIES PLUS, L.L.C.
A Wisconsin Limited Liability Company
925 Walnut Ridge Drive, Suite 100
Hartland, WI 53029
(262) 912-3000
Batteries Plus, L.L.C. offers individual and multiple unit franchises for the operation of Batteries Plus® stores ("Stores"), selling batteries and battery-related items for the retail consumer and commercial accounts.
The initial fee varies depending upon whether you are acquiring the rights to an individual Store or the rights to operate more than one Store within a designated territory. The multiple unit territory fee is $9,000 for each Store that you agree to establish under a Multiple Unit Franchise Agreement. This territory fee for each Store will be credited against the applicable initial franchise fee for that Store. The initial franchise fee under an individual Store Franchise Agreement is $30,000. If vou acquire the right
fee for the three Stores, js S70.000. If vou acquire the rights Multiple Unit Franchise Agreement, the tota] ipjtial franchise fee for the forec Stores is 70.000. The estimated initial investment for a single unit Store ranges from SI79.300176.485 to $315.300.327.485. These figures are approximate and vary from location to location and do not include real estate (land and building) costs.
RISK FACTORS:
1. THE FRANCHISE AGREEMENT AND MULTIPLE UNIT FRANCHISE AGREEMENT REQUIRE THAT ALL DISPUTES BE SUBJECT TO NON-BINDING MEDIATION IN HARTLAND, WISCONSIN, THEN BINDING ARBITRATION IN MILWAUKEE, WISCONSIN. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT. IT MAY ALSO COST YOU MORE TO MEDIATE OR ARBITRATE WITH US IN WISCONSIN THAN IN YOUR HOME STATE.
2. EXCEPT FOR FRANCHISES SUBJECT TO ILLINOIS OR NORTH DAKOTA LAW, THE FRANCHISE AGREEMENT AND MULTIPLE UNIT FRANCHISE AGREEMENT REQUIRE THAT ANY DISPUTE NOT SUBJECT TO ARBITRATION WILL BE LITIGATED IN THE STATE OR FEDERALS COURTS IN WAUKESHA COUNTY WISCONSIN. OUT OF STATE LITIGATION MAY FORCE YOU TO EXCEPT A LESS FAVORABLE SETTLEMENT. IT MAY ALSO COST MORE TO LITIGATE IN WISCONSIN THAN IN YOUR HOME STATE.
3. THE MULTIPLE UNIT FRANCHISE AGREEMENT CONTAINS CERTAIN MINIMUM DEVELOPMENT REQUIREMENTS. EF YOU DO NOT ATTAIN OR MAINTAIN THESE REQUIREMENTS, THE FRANCHISOR MAY TERMINATE THAT AGREEMENT.
4. YOU WILL LOSE YOUR PROTECTED TERRITORY IF YOU FAIL TO MAINTAIN MINIMUM NET REVENUE REQUIREMENTS FOR TWO CONSECUTIVE YEARS AS FURTHER DESCRIBED IN ITEM 12.
5. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Information about comparisons of franchisors is available. Call the State Administrators listed in Exhibit G or your public library for sources of information.
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Registration of this franchise with the state does not mean that this state recommends or it has verified the information in this Offering Circular. If you learn that anything in this Offering Circular is untrue, contact the Federal Trade Commission and the state authority listed in Exhibit
The Effective Date of this Offering Circular is printed on page (vi) of this Offering Circular.
S9H
111
FRANCHISE OFFERING CIRCULAR
(New York Cover Page)
BATTERIES PLUS, L.L.C.
A Wisconsin Limited Liability Company
925 Walnut Ridge Drive, Suite 100
Hartland, Wl 53029
(262) 912-3000
Batteries Plus, L.L.C. offers individual and multiple unit franchises for the operation of Batteries Plus® stores ("Stores"), selling batteries and battery-related items for the retail consumer and commercial accounts.
The initial fee varies depending upon whether you are acquiring the rights to an individual Store or the rights to operate more than one Store within a designated territory. The multiple unit territory fee is $9,000 for each Store that you agree to establish under a Multiple Unit Franchise Agreement. This territory fee for each Store will be credited against the applicable initial franchise fee for that Store. The initial franchise fee under an individual Store Franchise Agreement is $30,000. If vou acquire the right
fee for the three Stores \s S70.000. If vou acquire the rights to build and operate three fttores upder a Multiple Unit Franchise Agreement. t\\e total "7'tJal franchise fee for the three Stores is 70.000. The estimated initial investment for a single unit Store ranges from $179.300176.485 to $31x300.327.485. These figures are approximate and vary from location to location and do not include real estate (land and building) costs.
RISK FACTORS:
1. THE FRANCHISE AGREEMENT AND MULTIPLE UNIT FRANCHISE AGREEMENT REQUIRE THAT ALL DISPUTES BE SUBJECT TO NON-BINDING MEDIATION IN HARTLAND, WISCONSIN, THEN BINDING ARBITRATION IN MILWAUKEE, WISCONSIN. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT. IT MAY ALSO COST YOU MORE TO MEDIATE OR ARBITRATE WITH US IN WISCONSIN THAN IN YOUR HOME STATE.
2. THE FRANCHISE AGREEMENT AND MULTIPLE UNIT FRANCHISE AGREEMENT REQUIRE THAT ANY DISPUTE NOT SUBJECT TO ARBITRATION WILL BE LITIGATED IN THE STATE OR FEDERALS COURTS IN WAUKESHA COUNTY WISCONSIN. OUT OF STATE LITIGATION MAY FORCE YOU TO EXCEPT A LESS FAVORABLE SETTLEMENT. IT MAY ALSO COST MORE TO LITIGATE IN WISCONSIN THAN IN YOUR HOME STATE. THIS FACTOR SHOULD BE TAKEN INTO ACCOUNT IN DETERMINING WHETHER OR NOT TO PURCHASE THIS FRANCHISE.
3. THE MULTIPLE UNIT FRANCHISE AGREEMENT CONTAINS CERTAIN MINIMUM DEVELOPMENT REQUIREMENTS. IF YOU DO NOT ATTAIN/MAINTAIN THESE REQUIREMENTS, THE FRANCHISOR MAY TERMINATE THAT AGREEMENT.
4. YOU WILL LOSE YOUR PROTECTED TERRITORY IF YOU FAIL TO MAINTAIN MINIMUM NET REVENUE REQUIREMENTS FOR TWO CONSECUTIVE YEARS AS FURTHER DESCRIBED IN ITEM 12.
5. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Information about comparisons of franchisors is available. Call the State Administrators listed in Exhibit G or your public library for sources of information.
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IV
Registration of this franchise with the state does not mean that this state recommends or it has verified the information in this Offering Circular. If you learn that anything in this Offering Circular is untrue, contact the Federal Trade Commission and the state authority listed in Exhibit G.
THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE PROSPECTUS, PROVIDED THE FRANCHISOR CANNOT USE THE NEGOTIATING PROCESS TO REQUIRE A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS WHICH ARE LESS FAVORABLE THAN THOSE STATED IN THIS PROSPECTUS.
The Effective Date of this Offering Circular is printed on page (vi) of this Offering Circular.
THIS NEW YORK COVER PAGE APPLIES ONLY TO FRANCHISEES WHO ARE RESIDENTS OF NEW YORK OR LOCATE THEIR FRANCHISE IN NEW YORK.
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J0O42005 BP UFOCJ^Sg B93 v4
FTC STATES EFFECTIVE: MARCH 31, 30Q42DQ5
ALABAM
A
ALASKA
ARIZONA
ARKANSA
S
COLORAD
O
CONNECT
ICUT
DELAWA
RE
DISTRICT
OF
COLUMBI
A
FLORIDA
GEORGIA
IDAHO
IOWA
KANSAS
KENTUCK
Y
LOUISIAN
A
MAINE
MASSACH
USETTS
MISSISSIP
PI
MISSOURI
MONTAN
A
NEBRASK
A
NEVADA
NEW
HAMPSHI
RE
NEW
JERSEY
NEW
MEXICO
NORTH
CAROLIN
A
OHIO
OKLAHO
MA
OREGON
PENNSYL
VANIA
SOUTH
CAROLIN
A
TENNESS
EE
TEXAS
UTAH
VERMONT
WEST
VIRGINIA
WYOMIN
G
FRANCHISE REGISTRATION STATES EFFECTIVE DATES
CALIFORNIA
HAWAII
ILLINOIS
INDIANA
MICHIGAN
MINNESOTA
NEW YORK
NORTH DAKOTA
RHODE ISLAND
SOUTH DAKOTA
VIRGINIA
WASHINGTON
WISCONSIN
April 5, 20(VL April 3, 2004= March 29, 2004. ?ftfM
- 2005
... 2005
im
- 2005
March 31. 30042005 April 5, 2004_______
March 31.2004 Anril 8. 2001 April 30. 2004 April 1,2001]
2005
,-2004
. 2005
-^Qfl5_ - 2005
., 2005
2005
VI
NOTICE REQUIRED
BY
STATE OF MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
(a) A prohibition on the right of a franchisee to join an association of franchisees.
(b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
(c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
(d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) the term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise.
(e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision.
THIS MICHIGAN NOTICE APPLIES ONLY TO FRANCHISEES WHO ARE RESIDENTS OF MICHIGAN OR LOCATE THEIR FRANCHISES IN MICHIGAN.
(f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
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VII
(g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:
(i) The failure of the proposed transferee to meet the franchisor's then-current reasonable qualifications or standards.
(ii) The fact that the proposed transferee is a competitor of the franchisor or sub franchisor.
(iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
(iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
(h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
(i) A provision which permits the franchisor to directly or indirectly convey, assign, or otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision has been made for providing the required contractual services.
The fact that there is a notice of this offering on file with the attorney general does not constitute approval, recommendation, or endorsement by the attorney general.
Any questions regarding this notice should be directed to the Department of Attorney General, State of Michigan, 670 Law Building, Lansing, Michigan 48913, telephone (517)
373-7117.
JOfrttflOji BP IJFOr ?.y,):
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BATTERIES PLUS, L.L.C.
A Wisconsin Limited Liability Company
925 Walnut Ridge Drive, Suite 100
Hartland, Wisconsin 53029
(262)912-3000
INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED BY THE FEDERAL TRADE COMMISSION
TO PROTECT YOU, WE'VE REQUIRED YOUR FRANCHISOR TO GIVE YOU THIS INFORMATION. WE HAVEN'T CHECKED IT, AND DON'T KNOW IF IT'S CORRECT. IT SHOULD HELP YOU MAKE UP YOUR MIND. STUDY IT CAREFULLY. WHILE IT INCLUDES SOME INFORMATION ABOUT YOUR CONTRACT, DON'T RELY ON IT ALONE TO UNDERSTAND YOUR CONTRACT. READ ALL OF YOUR CONTRACT CAREFULLY. BUYING A FRANCHISE IS A COMPLICATED INVESTMENT. TAKE YOUR TIME TO DECIDE. IF POSSIBLE, SHOW YOUR CONTRACT AND THIS INFORMATION TO AN ADVISOR, LIKE A LAWYER OR AN ACCOUNTANT.
THERE MAY ALSO BE LAWS ON FRANCHISING IN YOUR STATE. ASK YOUR STATE AGENCIES ABOUT THEM.
EFFECTIVE DATE: See Effective Date on Page (vi) Above.
FEDERAL TRADE COMMISSION WASHINGTON, DC 20580
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IX
ITEM
TABLE OF CONTENTS
PAGE
1. THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES........................................................._.......................................1
2. BUSINESS EXPERIENCE......................................................................................................................................................................................3
3. LITIGATION......................................................................................................................................................................-............................................5
4. BANKRUPTCY............................................................................................................................._................................-..........................._...............5
5. INITIAL FRANCHISEE FEE............................................................_..................................................................................................................5
6. OTHER FEES.......................____................................................................................................................................................................................6
7. INITIAL INVESTMENT............................................................................................................................................._.........................................S
8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES..............................................................._......_.........44-J2
9. FRANCHISEE'S OBLIGATIONS..................................................................................._......_......................................._..........................44L1
10. FINANCING......................._....................................................................................................................................................................................4-6,12
11. FRANCHISOR'S OBLIGATIONS........._............................................................................................................................................._....4$12
12. TERRITORY...................................................................................................._..........................................................................................._..........342^
13. TRADEMARKS................................................................................................................................._......_.........________............................Z3-2&
14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION........................_________.............._.................2S2J
15. OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS293H
16. RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL...................................................____.............................003J,
17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION.............................................................S03J,
18. PUBLIC FIGURES..............................................................................................................................................................................................343J
19. EARNINGS CLAIMS.........................................................................................._..............................................................................................3^3^
20. LIST OF OUTLETS.................................................................._..........................................................................................................................^3J
21. FINANCIAL STATEMENTS.........................................................___......................................................................................................594J3
22. CONTRACTS............................................................................................................................................_.............................................................m&
23. RECEIPT............____...........................................................................................................................................................................................394J2
EXHIBITS
EXHIBIT A - Statement of Average Net Sales/Merchandise Margin Percentage
EXHIBIT B - Financial Statements
EXHIBIT C - Multiple Unit Franchise Agreement
EXHIBIT D - Franchise Agreement fand exhibits1)
EXHIBIT E - List of Franchise Stores and Former Franchisees
EXHIBIT F - List of Franchise Brokers/Lead Referral Sources
EXHIBIT G - List of State Administrators; Agents for Service of Process
EXHIBIT H - State-Specific Addenda
EXHIBIT I - Disclosure Acknowledgment Agreement
EXHIBIT J - Receipt
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XI
ITEM1
THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES
To simplify the language in this Offering Circular, "we" and "Batteries1' means Batteries Plus, L.L.C, the franchisor. "You" means the person who buys the franchise. If a corporation, partnership or limited liability company buys a franchise, "you" also may refer to the shareholders of the corporation, partners of the partnership or members of the limited liability company.
The Franchisor
Batteries is a Wisconsin limited liability company formed on August 30, 1996. Our principal place of business is at 925 Walnut Ridge Drive, Suite 100, Hartland, Wisconsin 53029; telephone number is (262) 912-3000. Our agents for service of process are disclosed in Exhibit
a
Our Business Experience and Predecessor
Batteries was formed as a result of a conversion of Batteries Plus, Limited Partnership, a Wisconsin limited partnership ("BP Limited Partnership"), in August 1996. BP Limited Partnership, our predecessor, was formed on September 11, 1991 (it is no longer active). Batteries previously operated as a division of the limited partner, Packerland Automotive Group, Inc., and opened its first retail Batteries Plus® store on November 17, 1988.
We operate retail battery stores under the name "Batteries Plus" ("Stores") and sell franchises for the operation of Batteries Plus® Stores. We operate 14 Stores that are substantially similar to the franchised Stores. BP Limited Partnership offered franchises for Stores from April 1992 to August 1996. We have offered franchises for Batteries Plus® Stores since August 1996. Neither Batteries, nor our affiliate or predecessor, has ever offered franchises for any other type of business. A Store will have an inventory of between 800 and 1,100 different types of batteries and related products available for the customer for everything from calculators to aircraft.
Our Affiliate
Ascent Battery Supply, L.L.C, a Wisconsin limited liability company ("Ascent") is our affiliate and wholly-owned subsidiary that acquires batteries and other related products from suppliers for redistribution to Batteries Plus® franchisees through designated or approved third-party suppliers. Ascent was formed under the name "Tarron, L.L.C." on January 21, 1999. On January 1, 2003, the entity changed its name to "Ascent Battery Supply, L.L.C." Ascent's principal business address is 925 Walnut Ridge Drive, Suite 100, Hartland, WI 53029 (see Item 8 for further discussion).
Market and Competition
A Store will have an inventory of between 800 and 1,100 different types of batteries and related products available for the customer for everything from calculators to aircraft. The
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1
typical customer includes virtually any individual who needs batteries and related products for home or automobile use as well as any business (commercial accounts) that needs batteries and related products in the operation of their business. We also have established a national accounts program through which we and our franchisees can service commercial accounts operating through multiple unit locations jp tw0 Qr more states. (See Item 12 for more in formation. 1
Your competition will include other retailers of automotive parts, accessories and supplies, including auto supply stores, department stores, discount stores and general merchandise stores and other franchises offering different lines of batteries. The concept of having a one-stop battery store offering the consumer a complete line of batteries had not been previously developed until we started our concept.
Franchise Offered
If you are a Multiple Unit Franchisee, you will receive the exclusive right to open a certain number of Stores over a defined period of time in a defined area, as we determine, on the basis of the market potential and the size of the designated area. The term of your Multiple Unit Franchise Agreement generally will not be longer than 3 years and will require you to purchase or lease the approved location of the first store within 6 months from the date of your Multiple Unit Franchise Agreement and open your first Store within 9 months from the date of your Multiple Unit Franchise Agreement and open your second Store within 24 months from the date of your Multiple Unit Franchise Agreement.
If you are an individual unit franchisee, you will receive the right to own and operate a Store at a location we approve, offering the products and services we approve and using our formats, designs, methods, specifications, standards, operating and marketing procedures and the "Licensed Marks" (as defined in Item 13) including "Batteries Plus" (collectively, the "System").
Laws. Licenses and Permits
You should be aware of zoning ordinances and regulations in your proposed territory. In certain areas of the country and affected municipalities, you may be prohibited from installing automobile batteries outside your Store.
Many states have enacted statutes that regulate the sale and disposal of batteries sold at your Store. All states prohibit retailers from discarding nickel cadmium batteries, as they must be recycled. You should check your state statutes to determine the measures you must take to comply with legislation in your state. In addition, several states impose environmental taxes on nickel cadmium batteries. We fully expect that regulations eventually will be adopted throughout all states requiring the recycling of nickel cadmium batteries. We are a sublicensee of the National NiCad recycling program. Spent batteries are sent to IMETCO (a recycling company funded by various battery manufacturers) for recycling.
Laws in all states require the collection of lead-acid batteries and most states have laws that require a point-of-sale notice, deposit or battery disposal fee for lead-acid batteries. Most of the state lead-acid battery laws were designed to remove automotive or starting, lighting and ignition ("SLI") batteries from the solid waste stream. Because many of these state laws were written using broad language, they often unintentionally encompass some types of sealed lead-
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acid ("SLA") batteries. In addition, several states have enacted laws requiring similar information pertaining to Ni-Cad batteries. The laws covering Ni-Cad batteries specifically target dry cell nickel-cadmium batteries.
SLI spent batteries are classified as a hazardous waste and regulated by the Environmental Protection Agency. The Environmental Protection Agency adopted the Universal Waste Rule (the "Rule") to encourage recycling and proper disposal of certain common hazardous waste and to reduce the regulatory burden on businesses that generate these wastes. Universal wastes include batteries which are generated by small and large businesses. Our recycling policies comply with the Rule and with the Mercury-containing and Rechargeable Battery Act ("Battery Act") adopted in May 1996. The policies are disclosed in our Operations Manual. Our policies address proper handling, storage and disposal of universal waste batteries. You may only send waste batteries to a universal waste handler, or a destination facility or a foreign destination. Our Operations Manual lists the potential battery consolidators and disposal facilities. You also should check your state and local authorities for a listing of battery consolidators and disposal facilities. The Battery Act pre-empts state law by automatically subjecting certain types of batteries to the Rule.
Each Store must comply with these laws, and we urge you to become familiar with these specific laws and regulations governing the operation of a Store in your state. You also should check your state and local authorities to determine if there are additional requirements.
ITEM 2 BUSINESS EXPERIENCE
Chief Executive Officer: Russell Reynolds
Mr. Reynolds has been Chief Executive Officer of Batteries since July 2001. From February 2000 to June 2001, he was Chief Operating Officer for Batteries. Mr. Reynolds also has been a member of the Operating Committee for Batteries since February 2000.From Juno 1994 to February 2000, Mr. Reynolds was Vice President and General Manager of the Automotive Battery Division for GNB Technologies in tho United States, Australia, New Zealand and the-Chief Operating Officer: Thomas E. Knab. Jr.
Mr. Knab has been Chief Operating Officer of Batteries since April 2002. From June 1991 to April 2002, he held various positions with BankOne Corporation in Appleton, Wisconsin, including that of Senior Vice President, Group Executive and Market President, from January 1999 to April 2002.
Chief Financial Officer: Craig Cooper
Mr. Cooper has been Chief Financial Officer of Batteries Plus since February 2003. From April 2002 to February 2003, he was Group Vice President, Integration for Corporate Express, a Bloomfield, Colorado-based business office products company. Mr. Cooper held various positions with US Office Products, a Washington, DC-based office products distribution
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company, from 1995 to April 2002, including that of Interim Divisional President from January 2001 to April 2002.
Vice President of Franchise Administration and Development: Linda Grota
Mrs. Grota has held various positions at Batteries since August 198S, including that of Vice President of Franchise Administration from July 1996 to May 1999 and from January 2000 to September 2001. and Vice President of Franchise Administration and Development since September 2001.
Vice President lTOhief Information Officer: Michael Lehman
Mr. Lehman has boon Vice President of Information Technology of Batteries since December 2000. From January 2000 to December 2000, he was Information Systems Director for Batteries. From October 1995 to January 2000, he was Infomiation Systems Director for Ultra Mart in Menomonce Falls, Wisconsin-Vice President of Marketing and Merchandising: Lee D. Hessenthaler
Mr. Hessenthaler has been Vice President of Marketing and Merchandising of Batteries since November 2002. From January 2000 to October 2002, he was Director of Marketing for Kasch Merchandising, Inc., a Mequon, Wisconsin based wholesale distributor of consumer products. From August 1996 to July 1999, Mr. Hessenthaler was Vice President of Marketing for Northland Cranberries, hie, a Wisconsin Rapids, Wisconsin based grower, processor and marketer of cranberries.
Mr. Lehman has held various positions at Batteries since January 2000. including that of Chief Information Officer since March 2004.
Vice President of Corporate Store Performance: James T. Lauterbach
Mr. Lauterbach has been Vice President of Corporate Store Performance of Batteries since July 2002. From November 1993 to July 2002, he was District Manager for OfficeMax, Inc. in Brookfield, Wisconsin.
Director of Growth and Store Development Executive: Bonn is M. FifichorMichael $. Jankowski
Mr. FischeiJankowski has been Director of Growth and.Store Development Executive of Batteries since September ^004. From June 2003. From September 2003 to March 2003, he was Regional Sales Manager for Folding Guard Company in Chicago, Illinois.Mr. Fischer was employed in automobile sales with Concours Motors in Milwaukee, Wisconsin from March 2002 to Soptombor 2002.From January 1996 to January 2002, he was Regional Sales Vice President/Glnhal Accounts for Rite Hite Coiporation2f)03 to September 2004, he was a Fjeld Consultant for Batteries. From November 1998 to Mav 2003. Mr. Jankowski was Senior igcr/Assistant Vice President for Perot Systems/CSRfi in Milwaukee, Wisconsin.
31)442005 BP I SPOT. y>XHtt
Franchise Development M^fflager-ancLSiipport Executive: Wavne Nelson
Mr. Nelson has held yarjous positions at Batteries since July 2002. including that of Franchise Development and Support Executive since November 2004. From August 1999 to July 2002. he
;e Development Executive: Rod Tremelling
Mr. Tremelling has held various positions at Batteries since September 1994, including that of Franchise Development ManagorExecutive since April 2003.November 2004.
Secretary/Treasurer: Mark F. Hein
Mr. Hein has been Secretary/Treasurer of Batteries and a member of our Operating Committee since August 1996. He also has been Secretary, Treasurer and Director of BP Holdings, Inc. (f/k/a Packerland Automotive, Inc.) since August 1996.
Member of Operating Committee: Alan J. Epstein
Mr. Epstein has been a member of the Operating Committee of Batteries since August 1996. He also has been an attorney with the firm of Jackawav. Tyerman. Werthheimer. Austen. Mandelhaum & Mops. P.C. (f/k/a Armstrong. Hirsch, Jackoway, Tyerman & Wertheimer, P.C.) in Los Angeles, California since May 1990.
Member of Operating Committee: Theodore R. Rolfs
Mr. Rolfs has been a member of the Operating Committee of Batteries since August 1996 and has been partner of Crimson Capital Company, located in Milwaukee, Wisconsin, since January 1993.
Chairman Emeritus: Ronald C. Rezetko
Mr. Rezetko has been Chairman Emeritus of Batteries since July 2001 and a member of our Operating Committee since August 1996. He was Primary Manger and Chief Executive Officer of Batteries from August 1996 to June 2001.
Franchise Brokers: See List on Exhibit F
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ITEM 3
LITIGATION
No litigation is required to be disclosed in this Offering Circular regarding us, our personnel disclosed in Item 2 or any predecessor or affiliate of ours. Any litigation required to be disclosed in this Offering Circular regarding any franchise broker is disclosed in Exhibit F - the Franchise Broker Exhibit.
ITEM 4
BANKRUPTCY
No person previously identified in Items 1 or 2 of this Offering Circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code required to be disclosed in this Item.
ITEM 5
INITIAL FRANCHISEE FEE
We offer an individual unit franchise and territory development rights under a multiple unit franchise. The initial franchise fee"Inilial Franchise Fee'' for an individual unit franchise is $30,000 for each Store. If you sign a Multiple Unit Franchise Agreement, the multiple unit territory fee"Ivju|tfp|e Unit Territory Fee" is $9,000 for each Store you agree to establish under the Development Schedule. The multiple unit territory feejVhiltipte Unit Territory Fee that you pay for each Store will be credited against the applicable initial franchiso fee for that Store. The multiple unit territory fee and the initial franchise fcolnitial Franchise Fee for that Multiple Unit Territory Fee and the Initial Franchise Fee must be paid in certified fund; wire transfer and are not refundable under any circumstances. We provide a program which
commit to open
allows for the payment of a discounted Initial Franchise three Stores. The tota] Initial Franchise Fee for this program is S70.00< vou would1 pay $48.000 at the time you sign the Franchise Agreement for the first Multiple Unit Franchise Agreement. S30.000 of which is the Initial Frar .000 of which is the Multiple Unit Territory Fee foi
sign Frai
vou participate in thJS-piQgram in orde Initial Franchise Fee, the Multiple Unit Territory Fees are not circumstances.
ited multiple Store refundable under any
In addition to the initial franchise fee, you will pay us a computer access and "POS System" development fee of $Sr2958.990 related to your use of the_Counterpoint<R) Proprietary Software and a computer access fee of $1.495 related to your use of the Pro Source Proprietary Software. (See "Point-of-Sale System" under Items 7 and 11 for further information.) You must pay this feeihese fees on or before the date you open your Store for business. ThisThese computer access and POS System development -feeisfees are not refundable under any circumstances.
3QO4200J BP tJFOC 3 2 CiP:l6S689Kv4
ITEM 6 OTHER FEES
NAME OF FEE
AMOUNT (See Note J)
DUE DATE
REMARKS
Royalty and Service Fee
4% of total Net Revenues. (See Note 2)
Payable monthly, funds transfer on or before the 10th day of the month following month in which sales were made.
Income and Sales Taxes
BaHeriesWe may collect from you the cost of all taxes arising from our licensing of intellectual property to you in the state where your Store is located, as well as any assessment on fees and any other income we receive from you._____________________
Payable monthly wkhbx same, time a^ royalty feesand
Only imposed if state collects these taxes or assessments.
National Marketing and Promotional Fee ("NMF Fee")_________
L% of total Net Revenues
Payable by
transfer at same time as
royalty and service fee.
Used for national marketing and promotional activities. See Item 11
Local Advertising
Minimum amount, when combined with cooperative advertising expenses, is 4% of total Net Revenues^ but must spend a minimum of $2^00022,222 in first year of
^\r\j*mMQn wiMi fifl-Vj«i-tw hf^r
VJ l JC TO W VTITi T\ 111 I -ir'Tj vij "i*J if\^
spent in 9O-dav12,0 davs of opening campaign.__________
Minimum amount must be spent during each calendar year (except for 90-day requirement for gyandStore opening campaign).
See Note 3
Advertising Cooperative
Maximum of 4% of Net Revenues
Established by Batteries or franchisees
Contributions to Advertising Cooperative are used for regional and local advertising and are credited to your obligation to spend 4% of Net Revenues on local advertising. See Note 3
tucai auvci using. oce inuic . Limited to a single 6-month extension per Store (if we allow extension). Credited back to you if Store opens by extension deadline.____________________
Development Schedule Extension Fee (See Note 4)
$2,500 per Store for a 6-month extension
Payable when you request an extension to the Development Schedule under the Multiple Unit Franchise Agreement.
Franchise Agreement Extension Fee (See Note 5)
$2,500 for a 6-month extension
Payable when you request an extension of time in which to open the Store.
Limited to a single 6-month extension to the time period in which to open the Store fif we, allow extens|pnV____________
Change of Location Fees
$^0003
Payable before we review the proposed new Store site.
Payable if you desire to change the location of your Store. A^so. see Note 7___________________
Transfer Fee
existing
ft flflM if.I
^5.000
Before completion of transfer.
See Note 6
39042005 BP UFOC .V23.-05
NAME OF FEE
AMOUNT (See Note 1)
DUE DATE
REMARKS
Renewal Fee
$2t000i.
Before renewal of Franchise Agreement.
Remodeling Expenses
Will vary under circumstances
When incurred
See Note 7
Costs and Attorneys' Fees
Will vary under circumstances
When incurred
We may recover costs and reasonable attorneys' fees if you lose in a dispute with us.
Audit
Cost of audit plus VA% interest per month from due date.
30 days after billing
Payable only if audit shows an understatement of at least 2% of Net Revenues for any month.
Insurance
Cost of insurance
Payable before opening
If you fail to obtain and maintain required insurance, we may immediately obtain insurance and you must promptly reimburse us for insurance, including late charges._____________________
Software Support
Varies, currently $200 per month
Payable monthly
See Item 11
National Acccamts^' ^
Eriigrarn Fees- "\ ^■,.' ."
paries, rnav include administrative fees or product surcharge oh certain sales, ctepejKhn? on structure of . program.-'.';, -' ;." '-"
MUs
; on fee
Notes:
(1) Except where otherwise noted, all fees are payable to Batteries and are non-refundable.
(2) "Net Revenues" generally means the aggregate amount of all sales of goods and services (including service charges in lieu of gratuity), whether for cash, on credit or otherwise, made or provided in connection with the Store, but excluding taxes paid or accrued by you.
(3) If you do not spend at least 4% of the Store's Net Revenues during the calendar year for cooperative or local advertising wl^ch we have approved jn advance,, you will deposit with us the difference between what you should have spent for advertising during the calendar year and what you actually spent for advertising during the calendar year. We will deposit these monies in the NMF Fund (see Item 11 for discussion of NMF Fund).
(4) This fee is credited to the initial franchise fee of the applicable Store if we grant ap extension of time and vou open that Store by the extension deadline.
(5) This fee is credited to you ifjye.grant an extension of time and you open the Store by the extension deadline. This fee (and the extension request) applies only if you have not signed a Multiple Unit Franchise Agreement.
3*H2^2i BP UFOC ja
(6) You pay this fee when the Franchise Agreement or a substantial portion of the assets of the Store or any controlling interest in you is transferred. No transfer fee is due if the transfer is to an immediate family member.
(7) You must rofurbishremodel your Store on notice from us. Any refurbishing must comply with our then-current standards for Batteries Plus® Stores. The scope of refurbishing may range from simply painting the Store to completely refurbishing the entire Store, including replacement of fixtures, signs, supplies and equipment. BatteriesWe cannot estimate the current cost for a refurbishing project because the refurbishing requirements will vary from Store to Store. You may make these payments in whole or in part to the-pafhesrvarious third parties. If vou relocate vour Store, vou will incur certain
;ling expenses at the new Store premises in addition to paving us the relo
this Program but, as of March 31. 2004. we have not finali it rnay apply. You likely will pav these fees to us only participate ifl the National Accounts Program and vou sell products at vour St
ITEM 7
INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
|
''*;?-,: EXPENDITURES ';^ ' (SeeNate'iy |
ESTIMATED AMOUNT OR ESTIMATED LOW-HIGH RANGE (See Note 2) |
METHOD OF PAYMENT |
WHEN DUE |
TO WHOM PAYMENT IS MADE |
|
Initial Franchise Fee See Note 3 |
$70 000 to $30,000 See Note 3 |
Lump Sum |
When you sign the Franchise Agreement |
Batteries |
|
Real Estate See Note 4 |
See Note 4 |
See Note 4 |
See Note 4 |
See Note 4 |
|
Leasehold Improvements |
$18,000 to $50,000 See Note 5 |
As Agreed Upon |
Before Opening |
Landlord, Various Suppliers |
|
Equipment and Signs |
$35,000 to $50,000 See Note 6 |
As Agreed Upon |
Before Opening |
Various Suppliers |
|
Inventory and Supplies See Note 7 |
$42,000 to $55,000 |
As Agreed Upon |
As Ordered |
Various Suppliers |
|
Prepaid Expenses and Deposits See Note 8 |
$1,000 to $10,000 |
As Incurred |
Before Opening |
Various Third Parties |
|
POS System See Note 9 |
$4^30018.485 |
Lump Sum |
Before Opening |
Batteries and Various Suppliers |
3^ft42(X)5 BP UFOCJ2
|
EXPENDITURES " (See Note I) |
ESTIMATED AMOUNT OR ESTIMATED LOW-HIGH RANGE : (See-Note 2) |
METHOD OF PAYMENT |
WHEN DUE |
TO WHOM PAYMENT IS MADE |
|
Miscellaneous Pre-opening Expenses See Note 10 |
$2,000 to $4,000 |
As Incurred |
Before Opening |
Various Third Parties |
|
Opening Advertising and Promotion See Note 11 |
$44-000-to-$20,000jQ. $30,000 |
As Incurred |
As Ordered |
Third Party Advertising Service Venders |
|
y^hiclq |
$0 to $30,000 |
Varies |
As Incurred |
Third Party Automotive Dealer |
|
See Note 12 |
||||
|
Additional Funds - 3 months See Note 13 |
$20,000 to $50,000 |
As Incurred |
As Incurred |
Employees Suppliers |
|
TOTAL See Note 14 |
$179,300176,4ft $327i485.1 |
Notes:
(1) The typical size of a Batteries Plus® Store ranges from 1,200 to 1,800 square feet. For several items discussed below, your cost will increase as the number of square feet increases. The size of your Store is principally determined by requirements or restrictions that your landlord and appropriate municipality or zoning boards may impose, and availability and cost of leasable space. This Table reflects your estimated initial investment for a single Store operated under a Franchise Agreement. This information assumes that you will lease the premises for your Store.
(2) Except where otherwise noted, all fees that you pay to us are non-refundable. Third party lessors, contractors and suppliers will decide if payments to them are refundable.
(3) The initial franchise leolm'tial Franchise Fee paid is paid to us and is more fully described in Item 5. We also offer a discounted Initial Franchise Fee for franchisees committing to opep three Stores, as more fully described in Item 5.
(4) Although most franchisees lease the premises for their Store, a small number of franchisees will purchase the land and construct the building for their Store. The cost of purchasing unimproved land will vary depending on location, availability of utilities and other factors and cannot be estimated by us. The construction costs for the building also will vary significantly depending on many of the same factors mentioned above as well as the size of the building and the availability of financing. Due to these many factors and a lack of historical information on which to base an estimate, we cannot estimate the cost of the building.
(5) This estimate assumes that you will lease the premises for your Store. Typical locations for your Store are smaller free-standing, multiple use and strip mall locations. You will
-3*1042005 BP UFOC ■V2ifr'Q.'> 898 m4
10
The original documents were scanned as an image. The original file can be downloaded at the link above.