Franchising with Full Disclosure

Posted on December 03, 2008 by Pete Kosowski

Interstate All Battery Center Bucks Industry Norms; Full Disclosure Policy Fosters Franchising

(DALLAS) – "How much money can I earn?" is one of the top questions that entrepreneurs and potential franchisees typically ask before they invest in a business, but more than 70 percent don’t receive an answer until after they sign on the dotted line. Interstate Batteries Franchise and Development, the franchisor of Interstate All Battery Center (IABC), says its full disclosure policy sets them apart from the majority of franchised concepts.

According to the FTC’s Franchise Rule, Item 19 in any franchise disclosure document (FDD) permits a franchisor to provide information about the actual or potential financial performance of its franchised-owned outlets. However, statistics from FRANdata’s franchise industry analysis indicate less than one third of all today’s franchisors offer earnings claims.

"Financial expectations are the top question we hear from interested franchisee candidates," said Eric Stites, Founder and President of Franchise Business Review, an independent market research company that specializes in franchisee satisfaction. "It boggles my mind that people invest in a franchise that doesn’t disclose earnings information."

In its Franchisee Satisfaction Index, Franchise Business Review’s survey of nearly 50,000 current franchisees gauges earnings satisfaction. "In our 2008 survey, we found the average satisfaction rating on financial expectations in the retail franchise sector was 57 percent," says Stites. "IABC franchisees note a 77 percent satisfaction rating, 20 percent higher than average, landing IABC solidly within the top quarter of this key category."

With high franchisee satisfaction, record growth and increasing revenue, IABC is poised to lead the retail battery category which analysts project will reach $73 billion by 2010.

"We subscribe to a full disclosure policy because we want IABC franchising partners to enter into the business with their eyes wide open and poised for success," said Justin Darland, director of franchise development for Interstate Batteries. "This commitment to transparency affects our entire signing process, from qualification to grand opening."1

About Interstate All Battery Centers Founded in 1952 and based in Dallas, Interstate Batteries is a privately held group of corporations, which includes a company with 305 distributors that service more than 200,000 dealers throughout the United States, Canada and select international locations. Interstate is the top-selling replacement automotive brand battery in North America, selling more than 15 million units annually. Interstate All Battery Centers currently has more than 115 stores in 38 states, Canada, Puerto Rico and The Dominican Republic.