While Peachey is right - the expression comes from -'there is a lot to do' - shortened to 'there's a lot to do' (grammatically correct) which then substitutes 'a lot' with 'lots'. It is correct to say 'there's much to do'. So 'lots' is a substitute term for 'much'. Often people will say - 'there's lots to do so we better get started or we'll never get it (all) finished.'

It's one of these spoken forms which is becoming habitual but not technically correct. Sometimes "there's" is said before the speaker can even think if the next thing is singular or plural. Just be aware that it happens, and be ready to correct yourself if you do it. :)