What is assigned from the Assignor to the Assignee in the Christian Brothers Automotive agreement?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
NOW, THEREFORE, for good and valuable consideration, including without limitation the covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
- Assignment and Assumption. Assignor does hereby SELL, ASSIGN, TRANSFER and DELIVER to, and vest in, Assignee, to the extent permitted by law, all its right, title and interest in and to the Assigned Interest. Assignee hereby assumes complete and absolute responsibility and liability for all the Assumed Liabilities (as defined below). All Assignor's liabilities, duties and obligations arising directly or indirectly in connection with and/or related to the Assigned Interest will be collectively referred to from time to time as the "Assumed Liabilities." All Assignor's rights, titles and interests in and under the Franchise Agreement and/or the other documents and agreements entered into or to be entered into in connection with the Franchise Agreement will be collectively referred to from time to time as the "Assigned Interest." This assignment is made for good and valuable consideration, is coupled with an interest, and is therefore irrevocable.
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, the Assignor sells, assigns, transfers, and delivers to the Assignee all its right, title, and interest in and to the Assigned Interest, to the extent permitted by law. The Assignee assumes complete responsibility and liability for all the Assumed Liabilities. The Assigned Interest includes all of the Assignor's rights, titles, and interests in and under the Franchise Agreement and other related documents. This assignment is made for good and valuable consideration, is coupled with an interest, and is therefore irrevocable.
In simpler terms, when a Christian Brothers Automotive franchisee (the Assignor) transfers their franchise to another party (the Assignee), they are giving up all their rights and benefits under the original Franchise Agreement. This includes the right to operate the Christian Brothers Automotive business, the rights to the location, and any other benefits outlined in the agreement. Simultaneously, the Assignee takes on all the responsibilities and debts associated with the franchise.
This transfer is not easily reversible, as the document states the assignment is irrevocable and requires the consent of Christian Brothers Automotive Corporation. The franchisor, CBAC, consents to the assignment contingent upon the Assignor's and Assignee's execution and delivery of the agreement, along with any other documents requested by CBAC. This ensures that the new franchisee is bound by the same terms and conditions as the original franchisee, and that Christian Brothers Automotive maintains control over who operates its franchises.
Upon assignment of the Franchise Agreement, both CBAC and the Assignor are released from their obligations and duties under the Franchise Agreement, except for any Continuing Obligations as defined in specific articles of the agreement. This means that the original franchisee is generally free from further responsibilities once the transfer is complete, provided they have met all their prior obligations. The new franchisee steps into their shoes, assuming all responsibilities and liabilities going forward.