Does the Christian Brothers Automotive agreement specify that the franchisee may not disparage the franchisor's clients?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
le to
Franchisor under this Agreement and at law.
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
- COVENANTS NOT TO COMPETE.
16.01 Best Efforts. During the term of this Agreement, Franchisee covenants and agrees to
expend its best efforts in the operation of the Franchised Business, and shall not engage in
any directly or indirectly conflicting or competing enterprises or any other activities which
would be detrimental to or interfere with the operation, reputation or goodwill of the
Franchised Business, the Franchisor, the System or any other of Franchisor's franchisees.
16.02 Exclusive Relationship; During the Agreement Term. Franchisee specifically
acknowledges that, pursuant to this Agreement, Franchisee will receive valuable,
specialized training and Confidential Information, including information regarding the
operational, sales, promotional, and marketing methods and techniques of Franchisor and
the System. Franchisee covenants that during the term of this Agreement, except as
otherwise approved in writing by Franchisor, Franchisee shall not, either directly or
indirectly, for itself, or through, on behalf of, or in conjunction with any person,
partnership, joint venture, organization or legal entity:
(a) Divert or attempt to divert any present or prospective vendor or Customer of any
Christian Brothers Automotive branded business or franchise to any competitor, by
direct or indirect inducement or otherwise, or do or perform, directly or indirectly,
any other act injurious or prejudicial to the goodwill associated with the Marks and
the System;
(b) Own, maintain, operate, engage in, be employed by, provide any assistance to, or
have any interest in (as owner or otherwise) any Competitive Business. A
"Competitive Business" shall be considered (i) any business which offers or sells
any product or service (or component thereof) which comprises or may in the future
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
comprise a part of the Services or the Franchised Business or which competes
directly or indirectly with the Franchised Business or any franchise of Franchisor;
and/or (ii) any business which is the same or substantially similar to the business
carried on at a franchise of Franchisor, namely a business which generates
substantially all of its revenue from the sale of Services or other products and
services similar to the Services or those offered in the Franchised Business or a
franchisee of Franchisor under the System.
16.03 After the Agreement and After a Transfer. Franchisee covenants that, except as otherwise
approved in writing by Franchisor, for a continuous uninterrupted period of three (3) years
commencing upon the date of: (i) a transfer permitted under Section 13 of this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Agreement, franchisees are restricted from actions that could harm the goodwill associated with the brand. Specifically, franchisees cannot divert or attempt to divert any present or prospective customer of any Christian Brothers Automotive branded business to a competitor. This includes any direct or indirect inducement or any other act that could be injurious or prejudicial to the goodwill associated with the Marks and the System. This is a fairly standard clause in franchise agreements, intended to protect the brand's reputation and customer base.
Additionally, Christian Brothers Automotive franchisees must conduct all advertising in a dignified manner, conforming to standards specified by the franchisor. Advertising must not detract from, reflect unfavorably upon, or denigrate the Marks, the System, the products, or Christian Brothers Automotive itself. This provision ensures that franchisees maintain a consistent and positive brand image in their marketing efforts.
Furthermore, the agreement states that if a franchisee engages in conduct that, in Christian Brothers Automotive's sole business judgment, reflects materially and unfavorably upon the operation and reputation of the Franchised Business, Christian Brothers Automotive's reputation, the Marks, the System, services and/or products, it constitutes a material default under the agreement. This gives Christian Brothers Automotive the right to immediately terminate the agreement without any prior notice or opportunity to cure the issue. While this clause does not explicitly mention disparaging clients, negative actions towards clients could be interpreted as reflecting unfavorably on the brand, potentially leading to termination.