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Business Description

Interstate Battery Franchising & Development, Inc. ('IBFAD') is a Delaware corporation with its principal place of business at 4301 121st Street, Urbandale, Iowa 50323. IBFAD offers the franchise rights described in this Disclosure Document. In this Disclosure Document, 'IBFAD,' 'we,' 'us,' and 'our' means Interstate Battery Franchising & Development, Inc. and 'you' means the person who is granted a license to operate the franchised business. If the franchisee is a partnership, 'you' means the partnership and each of the partners individually. If the franchisee is a corporation or limited liability company, 'you' means the corporation or limited liability company and all of its owners. We incorporated in Delaware on January 18, 2000. We operate only under our corporate name and under the name 'Interstate All Battery Center(s).' If we have an agent in your state for service of process, we disclose that agent in Exhibit B to this Disclosure Document.

Prior Experience

IBSI formed RAD in December 1999 for the purpose of acquiring the assets of John Willemsen Corp. ('JWC'), an Iowa corporation which previously operated the 'Battery Patrol' business. The closing of the acquisition occurred on December 21, 1999. JWC was located at 1901 E. University, Des Moines, Iowa 50316. JWC began selling batteries commercially in 1981 and opened its first retail facility in 1985 under the name 'Battery Warehouse.' JWC changed the name of the business to 'Battery Patrol' in 1994. In 1997, JWC formed Battery Patrol Franchising, LLC, a Minnesota limited liability company, to begin offering franchises. The acquisition by RAD included all of JWC's ownership interest in Battery Patrol Franchising, LLC. We consider JWC/Battery Patrol to be our predecessor for purposes of this Disclosure Document. Battery Patrol Franchising, LLC is not an active company. RAD initially operated the acquired retail stores under the name 'Battery Patrol,' but subsequently converted its operations to incorporate the 'Interstate' name. (The conversion involved changing the signs and inventory mix of Battery Patrol stores to meet the specifications for an Interstate All Battery Center (a 'Center').) RAD subsequently transferred its interests in its retail stores to All Battery Centers, Inc. ('ABC'), a Texas corporation formed by IBSI to operate the company-owned Interstate All Battery Centers. ABC is located at 12770 Merit Drive, Suite 1000, Dallas, Texas 75251. As of April 30, 2019, ABC and its affiliates operate 7 'company-owned' Centers. IBFAD itself does not operate any stores. IBFAD has offered 'Interstate All Battery Center' franchises since May 2000 and has licensed distributors to sell certain Basic Products, as defined below. These distributors are referred to as ???????????????Licensed Dealers.' As of April 30, 2019, we have 165 Licensed Dealers. Our predecessor, Battery Patrol Franchising, LLC, offered 'Battery Patrol' franchises from May 1997 to December 1999. Neither we nor our predecessor nor any of our affiliates have ever offered franchises in any other line of business. Our ultimate parent company, IBSI, our affiliate, Interstate Batteries, Inc. ('IBI') (successor to Interstate Battery System of America, Inc. under a restructuring completed effective April 30, 2013), whose principal place of business is 12770 Merit Drive, Suite 1000, Dallas, Texas 75251, and their predecessors have been in the business of marketing and distributing automotive, marine, and other batteries under the 'Interstate' name and mark for more than 65 years. IBSI markets Interstate Batteries products through a nationwide network of more than 300 independent and affiliated distributors to service stations, repair shops, auto parts stores, lawn and garden centers, marinas, general retailers, and certain end users throughout the U.S. Until the acquisition of JWC, IBSI did not directly or indirectly own or operate retail 2 Interstate Battery Franchise & Development, Inc. Franchise Disclosure Document | 2019 69291226.2 stores. Neither IBSI nor any other affiliate of IBSI will be a party to your Interstate All Battery Center Franchise Agreement, and IBSI will not have any obligations to you under that agreement.

Business Offered

Interstate All Battery Centers specialize in the sale of batteries to both commercial users and consumers. The Centers may not sell or offer for sale any product that we have not approved. All Centers must carry certain Interstate products, as well as other brands and types of batteries that we specify from time to time. The Centers also offer custom battery pack building, including battery packs for batteries that do not have a standard replacement. A typical Center occupies approximately 1,200 to 1,800 square feet, and may be either a stand-alone building or a strip shopping center location. The Centers operate under a distinctive set of specifications, procedures, and business methods (collectively, the 'System'). We have described our mandatory and suggested specifications and procedures for the operation of a Center in a set of confidential operating manuals (the 'Manuals'). We will loan you one set of the Manuals for your Center. The things that differentiate our Centers include, among other things, the inventory of products; our distinctive exterior and interior design, decor, color scheme, fixtures, and furnishings; and our standards and specifications for operations, equipment, supplies, and marketing. We have the right to change these or any other elements of the System. All Centers must use prescribed software that records sales, accounts receivable, inventory information, financial information, and new and updated customer profiles (the 'Software'). The Software is proprietary, but we do not own it. The computer system that we require for the Centers is highly customized and cannot be modified, efficiently and without degradation to the operation of the Software, to work with your existing computer hardware. Based on our affiliate's experience with Interstate All Battery Centers and Battery Patrol stores, we have found that it is inefficient and costly to reconfigure the hard drive and other equipment on an individual basis, and to maintain and to support varied systems. Therefore, you must purchase the computer hardware on which the Software is loaded from us. The installation period of the network varies by market.

Initial Fees

Initial Fees. The initial fee, or license fee, is $37,500 if you will operate a new Center. The initial fee is not refundable. You must pay the license fee in full when you sign the Franchise Agreement. Under the Branch Addendum, you must also pay an init

Financing

We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. We do not make any financial performance representations about a franchisee's future financial performance or the past financial performance of company-owned, licensed dealers or franchised outlets. 34 Interstate Battery Franchise & Development, Inc. Franchise Disclosure Document | 2019 69291226.2 We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of the outlet. If you receive any other financial performance information or projections of your future income, you should report it to Paul McCarthy, Development Manager, at 12770 Merit Drive, Suite 1000, Dallas, Texas 75251, the Federal Trade Commission and the appropriate state regulatory agencies.