What conditions must be met for Christian Brothers Automotive to approve a transfer of the franchise?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
If you sell your operating company, the purchaser must be approved by CBAC prior to any transfer of the franchise license being allowed. You must submit a written request to CBAC to transfer your franchise license. You must pay us a non-refundable amount of $10,000 when we approve in writing a term sheet or letter of intent signed by you and the buyer. You must pay an additional non-refundable sum of $20,000 at the closing of the sale. All fees described in this note are Unapproved Expense Items, meaning these fees do not fall into the category of Approved Expense Items.
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- If you authorize CBAC to find an outside buyer one who does not currently own and operate a Christian Brothers Automotive franchise, you will be responsible for paying CBAC a transaction fee, which is the greater of 7% of the gross value of the business transaction or $50,000. Upon authorizing CBAC to find an outside buyer for you, you must sign a Transaction Fee Agreement (Exhibit F to the Franchise Agreement) and pay CBAC a non-refundable deposit equal to the greater of $10,000.00 or 1% of the listed price of the Franchised Business.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 59–62)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, a franchisee needs to meet certain conditions to transfer their franchise. First, the purchaser of the operating company must be approved by Christian Brothers Automotive before the franchise license transfer is allowed. The franchisee must submit a written request to Christian Brothers Automotive to initiate the transfer process.
Additionally, the franchisee is required to pay a non-refundable fee of $10,000 when Christian Brothers Automotive approves a term sheet or letter of intent signed by both the franchisee and the buyer. Upon the closing of the sale, an additional non-refundable sum of $20,000 must be paid. Therefore, the total transfer fee due to Christian Brothers Automotive is $30,000.
If the franchisee authorizes Christian Brothers Automotive to find an outside buyer who is not an existing Christian Brothers Automotive franchisee, the franchisee will be responsible for paying Christian Brothers Automotive a transaction fee. This fee is the greater of 7% of the gross value of the business transaction or $50,000. Upon authorizing Christian Brothers Automotive to find a buyer, the franchisee must sign a Transaction Fee Agreement and pay a non-refundable deposit equal to the greater of $10,000 or 1% of the listed price of the franchised business. The remainder of the transaction fee is due upon the closing of the transaction and is in addition to the transfer fee.