Under what condition might Byrider Franchising Partners allow the CNAC finance division to operate through a separate entity?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
A Byrider Franchising Partners' Business includes two divisions: the Byrider sales division and the CNAC finance division. The Byrider sales division operates as a used vehicle retail sales dealership and the CNAC finance division operates as an auto financing provider. The two divisions are distinct elements that will be operated and funded solely by you. Byrider Franchising Partners may allow you to operate the CNAC finance division through a separate entity, but if Byrider Franchising Partners does, such entity will be required to sign the Acceptance and Assumption of Obligations (see Exhibit F). You must also operate a service center at the location of your Business ("Service Center"). The Service Center may only provide repair services for vehicles purchased from Byrider-branded businesses, unless Byrider Franchising Partners approves in writing for the Service Center to provide repair services to the general public. However, if you or your affiliate already operate a Service Center at a Byrider Business, you will not be required to operate another Service Center at your Business, so long as the existing Service Center is located within a reasonable distance to your Business, as determined by Byrider Franchising Partners.
Source: Item 1 — (FDD pages 11–13)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a Byrider business includes both a sales division and a CNAC finance division. Generally, both divisions are operated and funded directly by the franchisee. However, Byrider Franchising Partners may allow a franchisee to operate the CNAC finance division through a separate legal entity.
If Byrider Franchising Partners allows the CNAC finance division to operate as a separate entity, that entity will be required to sign an Acceptance and Assumption of Obligations agreement. This agreement likely outlines the responsibilities and liabilities the separate entity assumes in operating the CNAC finance division.
This flexibility could be beneficial for franchisees who prefer to structure their business in a specific way for legal, tax, or operational reasons. However, it's important to note that Byrider Franchising Partners' approval is required, and the separate entity must agree to the Acceptance and Assumption of Obligations. Prospective franchisees should carefully review the Acceptance and Assumption of Obligations agreement (Exhibit F) to understand the full implications before deciding to operate the CNAC finance division through a separate entity.