Displaced corporate workers, a smart business model and a growing proliferation of cordless-operated gadgets is powering a chain of all-battery franchises to expand by opening as many as 10 retail and tech centers in Connecticut over the next three years.
Batteries Plus hopes to open its first store in the Greater Hartford region in early 2011. John Twist, vice president of franchising and business development, met with 15 prospects in Hartford this week to discuss franchising opportunities. He expects to sign the firm’s first franchisee agreement in Connecticut by the end of this year.
“We receive about 400 to 450 inquires a month from people around the country who are interested in owning a Batteries Plus franchise,” said Twist.
“We’ve had a number of people from Hartford express interest in our company,” said Twist. “Hartford is one of our key areas for development. It’s a great demographic with a strong population, good business density and healthy average household incomes.”
So far, the Hartland, Wis.,-based company has not secured any investors or identified specific properties in Connecticut.
The 425-unit chain, which designs, assembles, test and sells 40,000 different types of batteries for everything from cellular phones and water meters to aircraft and warehouse forklifts, is also eyeing New Haven and Fairfield counties for possible expansion, said Twist.
Batteries Plus stores occupy space in stand-alone buildings or strip mall centers, where end cap positions are desirable and common. Last year, the company sold 50 million batteries.
The company will have 500 chains nationwide by the end of 2011 and there is plenty of room for more. “The U.S. can support at least 1,100 stores,” said Twist.
The $24 billion battery industry is poised to reach $33.6 billion by 2012 as consumers continue to use handheld and cordless devices such as mp3 players, laptop computers, camcorders, digital cameras and cell phones.
Batteries Plus opened 31 stores in 2008, 43 in 2009 and project to open 56 in 2010. The company also reported double-digit same store retail sales for the fourth consecutive year.
“Over the last two years, we have been opening an average of one store a week,” says Twist. “We believe the Batteries Plus opportunity attracts entrepreneurs who want to stay away from struggling concepts.”
The company targets investors with a minimum net worth of $300,000 and $100,000 working capital available. “We want to make sure our operators are not highly leveraged when they get into this business,” said Twist.
About half of all franchisees that signed agreements with Batteries Plus in 2008, 2009 and this year tapped into some form of retirement account, such as a pension, 401(k) plan or savings, to finance their new business, said Twist.
As other retailers struggle with declining sales — or shutter their doors entirely — Batteries Plus is thriving. Twist believes part of the retailer’s resiliency comes from a combination of new technologies hitting the market and consumers holding onto their gadgets longer.
For example, sales of laptops have overtaken traditional desktop PCs, according to market research firm iSuppli Corp. in California. While laptops sell for as little as $300, battery replacements generally run about $100-$150.
“Devices need replacement batteries, which are typically not easy to find within most retailer’s assortments,” said Twist. “The propensity of cost-conscious consumers to retain their devices longer rather than buying new ones is helping to drive our success in a challenging economy.”
Batteries Plus franchisees, which serve consumers and commercial clients and government agencies, typically have sales of $773,000 annually, Twist said.
A typical store runs anywhere between 1,600 to 2,000-square-feet, takes 90 to 120 days to open and stocks as many as 900 battery types. Franchisees can assemble and repair any battery on-site; they also have access to local distribution warehouses and suppliers.
INFO BOX
Company: Batteries Plus
Contact: John Twist, vice president of franchising and business development
Address: 925 Walnut Ridge Drive in Hartland, Wisc. 53029
Phone: 800-274-9155
Website: http://www.BatteriesPlus.com
Total Investment: $159,300 to $313,000
Required Net Worth: $350,000
Working Capital: $100,000
Franchise Fee: $37,500
Ongoing Royalty Fee: 4 percent, paid monthly
Terms: 10 years, renewable
In-House Financing Available: No
SBA Assistance: Yes
Vet Discount Available: Yes
Training: Three weeks at company headquarters followed by 15 days as needed at franchisee’s location.
