Interstate Batteries
Date of Incorporation: 18 January 2000
Franchising Since: May 2000
Address: Iowa
Description: The Interstate All Battery Center specialises in the sale of batteries and offers custom battery pack building, including battery packs for batteries that do not have a standard replacement.
Franchise Offer: Two types of franchise:
i). Establish and operate an Interstate All Battery Center retail store
ii). Offer Interstate Batteries independent distributors to complement their existing business with the operation of an Interstate All Battery Center retail store.
Financial Assistance: The franchisor may offer to finance all or part of the franchise fee and certain other costs incurred in connection with the opening of the retail store. The maximum amount that may be financed through the franchisor is $125,000, at the Prime Rate of interest in the state of Wisconsin, over a term of 36 months. If the franchisee obtains financing through the franchisor, it is required for the franchisee to sign a promissory note.
Training and Assistance: The initial management training program includes 4 persons: the franchisee, the Operating Principal, the general manager, and any other person. The training program must be successfully completed before the opening of the store. The training course lasts 4 weeks and includes classroom and hands on training. It takes place primarily at the corporate location in Dallas, Texas.
Territory: The franchisee is granted a non-exclusive right to open and operate an Interstate All Battery Center within a defined territory. The franchisee has limited exclusivity in the defined territory for the first six months of operation.
Term of Agreement and Renewal: Term of the Franchise Agreement is 10 years. The franchisee can renew the franchise twice in additional increments of 5 years. The franchisee must give notice of intent to renew and sign a renewal addendum.
Obligations and Restrictions: The franchisee is not required to personally supervise the day-to-day operations of the retail store. There must be at least two trained managers, and the center must at all times, be under the direct, on-premises supervision of a manager who has successfully completed the training program. If the franchise is owned by more than one individual, an "Operating Principal," must be designated.
Total Number of Units: 55 franchised units at the end of the year 2008
Investment Table:
Initial Investment:
| Name of Fee |
Low |
High |
|---|---|---|
| Real Estate |
Variable |
Variable |
| Franchise Fee |
$30,000 |
$30,000 |
| Training |
$3,000 |
$5,000 |
| Existing Account Acquisition Payment |
$0 |
$45,000 |
| Furniture, Fixtures, Signage & Equipment |
$30,000 |
$40,000 |
| Delivery Vehicle |
$2,500 |
$5,000 |
| Computer Software |
$800 per site |
$800 per site |
| Computer Hardware |
$10,000 |
$17,000 |
| Initial Inventory |
$15,000 |
$35,000 |
| Additional Funds - 3 months |
$60,000 |
$80,000 |
| Total |
$158,500 |
$265,000 |
Ongoing Fees:
| Name of Fee |
Amount |
|---|---|
| Royalty Fee |
5% Gross sales |
| National Advertising Fund |
1.5% Gross Sales |
| Local Store Marketing Expenditures |
Greater of percentage of Gross Sales (currently 4%) and annual minimum expenditure ($45,000 for the first Operating Year, $40,000 the second Operating Year, and $30,000 each subsequent Operating Year) |
| Existing Account acquisition payment |
Estimated to range from $0 to $45,000 |
| Telesales Fee |
$20,400 per year plus commission (15% of gross profit on all new account initial orders.) |
| New software fee |
$1,000-$5,000 |
| Manual Replacement Fee |
$1,000 |
| Interest |
The lesser of the maximum rate permitted by law or 1.5% per calendar month, from the date due until paid |
| Collection costs and expenses |
The franchisors reasonable costs and expenses |
| Training |
$500 per week per trainee |
| Transfer |
$2,000 |
| Indemnification |
The losses and expenses incurred by Interstate All Battery Franchising and Development or their affiliates |
| Audit |
Reasonable cost of audit or inspection |
| Computer Update and support Fee |
$2,400 per year (first payment pro-rated) |
| Remodeling |
Amount necessary to be in compliance with Interstate All Battery Franchising and Development standards for appearance of Center |
The above information has been taken from the UFOC/FDD of Interstate All Battery Center.
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