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Business Description

To simplify the language in this disclosure document, “we” and “Batteries” 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. Batteries is a Wisconsin limited liability company formed on August 30, 1996. Our principal place of business is at 1325 Walnut Ridge Drive, Hartland, Wisconsin 53029; telephone number is (262) 912-3000. Our agents for service of process are disclosed in Exhibit E.

Prior Experience

The first retail Batteries Plus® store opened in November 1988. We operate retail stores selling batteries, light bulbs and related items, and offering device repair and related services under the name “Batteries Plus Bulbs” (“Stores”) and sell franchises for the operation of Batteries Plus Bulbs® Stores. Until October 2012, all Stores were operated under the mark “Batteries Plus.” From October 2012 until December 2016, all franchisees transitioned from operating their Stores under the mark “Batteries Plus” to the mark “Batteries Plus Bulbs.” All Stores now operate under the “Batteries Plus Bulbs” mark. As of December 31, 2018, we operated 78 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 Bulbs® or Batteries Plus® Stores since August 1996. Square Brands International, LLC (“Square Brands”), a Wisconsin corporation, is the parent company of Batteries, and Batteries Plus Holding Corporation (“BP Holding”), a Georgia corporation, is the parent company of Square Brands. Square Brands and BP Holding share our principal business address. On July 6, 2016, BP Holding was merged with and into BPB Acquisition Corp., with BP Holding surviving the merger and remaining a Georgia corporation (the “Transaction”). As a result of the Transaction, BP Holding is now controlled through affiliated companies by Freeman Spogli & Co. (“Freeman Spogli”), a private equity firm whose principal business offices are located at 11100 Santa Monica Boulevard, Suite 1900, Los Angeles, California 90025. We have no predecessors required to be disclosed in this Item. Other than as described below, neither Batteries, nor any parent, affiliate or predecessor, has ever offered franchises for any other type of business.

Business 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) under a “Franchise Agreement” including “Batteries Plus Bulbs” (the “System”).

Initial Fees

We offer an individual unit franchise and territory development rights under a multiple unit franchise. The “Initial Franchise Fee” for an individual unit franchise is $37,500 for each Store. The Initial Franchise Fee is due when you sign the Franchise Agreement and is not refundable under any circumstances. If you sign a Multiple Unit Franchise Agreement, the “Multiple Unit Territory Fee” is $10,000 for each Store you agree to establish under the “Development Schedule” described in the Multiple Unit Franchise Agreement. The Multiple Unit Territory Fee that you pay for each Store will be credited against the applicable Initial Franchise Fee for that Store. The Multiple Unit Territory Fee and the Initial Franchise Fee must be paid in certified funds or by wire transfer and are not refundable under any circumstances. We provide a program which allows for the payment of a discounted Initial Franchise Fee if you are willing to commit to open two or three Stores. The total Initial Franchise Fee for the two Store program is $67,500. The Initial Franchise Fee for the first Store is $37,500 and the Initial Franchise Fee for the second Store is $30,000. Under the two Store program, you would pay us $47,500 when you sign the Franchise Agreement for the first Store and the Multiple Unit Franchise Agreement, $37,500 of which is the Initial Franchise Fee for the first Store and $10,000 of which is the Multiple Unit Territory Fee for the second Store. The balance of $20,000 for the second Store would be due upon signing the Franchise Agreement which will be done the earlier of when you deliver the complete site report for the Store or 9 months prior to the date by which you must open the Store pursuant to the Development Schedule, whichever occurs first. The total Initial Franchise Fee for the three Store program is $87,500. The Initial Franchise Fee for the first Store is $37,500 and the Initial Franchise Fee for each of the second and third Stores is $25,000. Under this program, you would pay $57,500 when you sign the Franchise Agreement for the first Store and the Multiple Unit Franchise Agreement, $37,500 of which is the Initial Franchise Fee for the first Store and $20,000 of which is the Multiple Unit Territory Fee for the second and third Stores. The balance of $15,000 for each of the second and third Stores would be due when you deliver the complete site report for each Store or 90 days before you must open that Store under the Development Schedule, whichever occurred first. If you participate in this program in order to receive a discounted multiple Store Initial Franchise Fee, the Multiple Unit Territory Fees are not refundable under any circumstances. In addition to the Initial Franchise Fee, you will pay us a “Retail Management System” access and development fee that includes access to the designated software, and licenses for the store web security software, network Retail Management System connectivity fee, and anti-virus software protection. (See “Retail Management System” under Items 7 and 11 for further information.) The Retail Management System access and development fee and related expenses that you currently must pay us is $19,625. You also must pay us a fee of $10,000 for access to the “Omni-Channel Program.” We may waive this fee upon renewal for certain franchisees who had signed a Franchise Agreement by March 15, 2015. The Omni-Channel Program is designed to promote the sale of products and services through one or more electronic channels of distribution. You must pay the then-current amount of these fees on or before the date you open your Store for business. These fees are not refundable under any circumstances. Franchisees purchase most of the initial inventory of batteries, light bulbs and related products, and device repair products from Ascent (although such products may be available from other sources). The inventory costs for items you purchase from Ascent range from $44,000 to $56,000. Separately, you must pay Ascent approximately $2,700 to $4,850 for certain Store signage, point of purchase materials, supplies and related items. Finally, you must purchase some of your equipment from Ascent. The equipment costs will range from approximately $7,150 to $8,650. In addition, you must pay a non-refundable New Store Marketing Campaign contribution ranging from $10,000 to $20,000 depending on the Designated Market Area (“DMA”) where your Store is located (as published by The Nielsen Company). If your Store is located in one of the top 70 DMAs, you must pay a New Store Marketing Campaign contribution equal to $20,000. If your Store is located in the 71st to 140th DMA, you must pay a New Store Marketing Campaign contribution equal to $15,000. If your Store is located in any of the other DMAs not referenced above, you must pay a New Store Marketing Campaign contribution equal to $10,000. You must pay a portion of this contribution to us and the balance of the contribution to our designated vendors, as we direct. The New Store Marketing Campaign contribution will be due as obligations are incurred, beginning before you open your Store and continuing for up to 180 days following Store opening. We and the vendor will use the New Store Marketing Campaign contribution to conduct local Store opening promotions in your market.

Financing

We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation. Batteries Plus Bulbs® franchisees may be eligible for expedited Small Business Administration (the “SBA”) loan processing through the SBA’s Franchise Registry Program, www.franchiseregistry.com.

Franchisee Revenue and Profit

Under Section I below, we have provided an unaudited statement of average net revenue, merchandise margin, and percentage of net revenue in total and by customer type based on franchised - owned Stores operating as of December 31, 2018. Under Section II below, we have provided unaudited statements of net revenue, expenses, and EBITDA for company-owned Stores. Information for franchiseowned Stores has been taken from their respective Retail Store Management systems. We have not audited or verified these reports nor have we asked questions of the submitting franchisees to determine whether they are in fact accurate and complete, although we have no information or other reason to believe that they are unreliable. We do not know whether the information was prepared consistent with generally accepted accounting principles. I. Unaudited Statement Of Average Net Revenue, Merchandise Margin, Net Revenue Percentage Increase, And Percentage Of Net Revenue By Customer Type of Franchised Stores Except for where specifically noted in Statement 1D below, the following statements are based on information reported by all franchise-owned Stores in operation as of December 31, 2018. There were 662 total Stores open as of December 31, 2018. Of these Stores, 3 Stores were closed for relocations in 2017 and remained closed for all or part of 2018 and 2 are small market test stores that we currently do not offer under this Disclosure Document. The remaining 657 Stores are referred to as “All Stores”. Of All Stores, there were 633 Stores that were in operation for the entire 12 month period ended December 31, 2018 (referred to as “Same Stores”), and 24 Stores opened during 2018. As noted, each category included in this statement specifies whether Same Stores or All Stores are included. Some Stores have attained the results described above in Sections I and II. Your individual results may differ. There is no assurance you will do as well. We will, on reasonable demand, provide to you written substantiation for all information illustrated in this Item 19. Other than the preceding financial performance representation, we do not make any financial performance representations. 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 that outlet. If you receive any other financial performance information or projections of your future revenue and/or income, you should report it to the franchisor’s management by contacting Linda Grota, Batteries Plus, L.L.C., at 1325 Walnut Ridge Drive, Suite 100, Hartland, Wisconsin 53029, (262) 912-3000, the Federal Trade Commission, and the appropriate state regulatory agencies.