Where are 'cause' defined as non-curable defaults in the Christian Brothers Automotive Franchise Agreement?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
anding any other provision of this Agreement, if Franchisee's default is by its
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
nature incapable of being cured, this Agreement may be immediately terminated by
Franchisor.
14.02 Termination Without Right to Cure. Notwithstanding anything to the contrary contained
herein, Franchisee understands and agrees that the occurrence of any of the following
events, circumstances, or courses of conduct constitutes a material default under this
Agreement, and Franchisor will have the right, but not the obligation, to immediately
terminate this Agreement without giving any notice or opportunity to cure to the
Franchisee, except as specifically provided in the respective subsection:
(a) Franchisee or the Franchised Business is declared bankrupt or becomes insolvent;
or all or a substantial part of the assets thereof are assigned to or for the benefit of
any creditor; or Franchisee admits its inability to pay its debts as they become due;
or a petition in bankruptcy is filed against Franchisee which is not immediately
contested or which is not dismissed within 120 days from its filing.
(b) Franchisee fails to operate the business for five (5) consecutive days during which
the Franchisee is required to operate the business under the terms of this
Agreement.
(c) Franchisee fails to meet any Minimum Performance Requirement set forth in
Section 10.17 of this Agreement.
(d) Franchisor and the Franchisee agree in writing to terminate the Agreement.
(e) Franchisee makes any material misrepresentation relating to the acquisition of the
Franchised Business or engages in conduct which, in the exercise of Franchisor's
sole and exclusive business judgment, reflects materially and unfavorably upon the
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
operation and reputation of the Franchised Business, Franchisor's reputation, the
Marks, the System, services and/or products.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 59–62)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, certain events can trigger immediate termination of the franchise agreement without an opportunity for the franchisee to correct the issue. These non-curable defaults are outlined in Section 14.02 of the agreement.
The specific events that constitute a non-curable default include: the franchisee declaring bankruptcy or becoming insolvent, failing to operate the business for five consecutive days, failing to meet the Minimum Performance Requirement as detailed in Section 10.17 of the agreement, both the franchisor and franchisee agreeing in writing to terminate the agreement, the franchisee making any material misrepresentation relating to the acquisition of the Franchised Business or engaging in conduct that reflects unfavorably upon the operation and reputation of the Franchised Business, Franchisor's reputation, the Marks, the System, services and/or products, and the franchisee knowingly making a material misrepresentation relating to the operation of the Franchised Business, knowingly maintains false books or records, or knowingly submits any false statements or reports to Franchisor.
These stipulations mean that a Christian Brothers Automotive franchisee needs to be extremely diligent in managing their business and finances. Failure to meet performance standards, maintain accurate records, or any misrepresentation can lead to immediate termination. The franchisee should be aware of these potential pitfalls and ensure they have systems in place to prevent these defaults from occurring. It is also important to note that the franchisor has the right, but not the obligation, to immediately terminate the agreement upon the occurrence of any of these events.