Batteries Plus: Litigation & Risk
Retail · FDD Items 3, 4 & 5
Moderate: Review
2 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 2
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 56 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 208
- Government-backed loans issued
- Charge-off rate
- 15.2%
- vs 16% franchise average
- 5-yr charge-off rate
- 14.3%
- Defaults
- 19 loans
- Loans charged off or defaulted
- Total loan volume
- $68.6M
- Avg loan size
- $330K
- Participating lenders
- 84
FDD Items 5, 6 & 17: What You Give Up
Contract Risk Indicators
- Mandatory arbitration
- Required
- Disputes resolved outside court, limits your legal options
- Jury trial waiver
- Not waived
- Non-compete
- 2 yrs
- Post-termination restriction on similar businesses
- Franchisor can compete
- Yes
- Franchisor can open competing locations in or near your territory
- Right of first refusal
- Yes
- Franchisor can match any purchase offer when you try to sell
- Governing law
- WI
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Batteries Plus v. Osmond Industries (FL, filed Aug 2025) - franchisor sued former franchisee for amounts owed. Ashwant Singh v. Batteries Plus (E.D. Cal / arbitration, commenced Dec 2023) - former franchisee alleged breach of contract, CA Franchise Investment Law violation, fraud; settled Sept 2025 with Batteries Plus paying $590,000.
What drove the 56/100 verdict
Risk Score Breakdown
- 01MINORDeclining unit count (-0.5% YoY) suggests system contraction despite mature brand presence
- 02HIGHDual litigation with both franchisor suing franchisees and franchisees suing franchisor indicates relationship friction and potential operational/contractual disputes
- 03MINORNet income of $105,544 on average revenue of $887,757 yields only 11.9% net margin — tight profitability relative to $252K-$493K initial investment and 5% ongoing royalties
- 04MEDNo Item 19 (Financial Performance Representations) disclosed — unable to verify franchisor's revenue/income claims or validate unit-level economics independently
- 05MINORHigh initial investment range ($252K-$493K) combined with modest net returns creates 2.4-4.7 year breakeven window with execution risk
Severity inferred from FDD text. Not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice. Consult a franchise attorney before signing any franchise agreement.