What are 'Continuing Obligations' in the context of the Christian Brothers Automotive Franchise Agreement assignment?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the assignment of the Franchise Agreement, CBAC and Assignor will be released from their obligations and duties under the Franchise Agreement except for any Continuing Obligations. "Continuing Obligations" shall include any obligations intended by CBAC and Assignor to survive the termination of the Franchise Agreement, including, but not limited to Articles 5, 6, 7, 15, 16, 21, 23 and 24 of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, 'Continuing Obligations' refer to specific duties that both Christian Brothers Automotive and the franchisee (Assignor) must uphold even after the Franchise Agreement is terminated during an assignment. These obligations are designed to survive the termination of the agreement, ensuring certain responsibilities and protections remain in place.
Specifically, the Franchise Agreement outlines that upon assignment, both Christian Brothers Automotive and the Assignor are released from their general obligations and duties. However, this release excludes the 'Continuing Obligations,' which encompass obligations intended to survive the termination. The FDD specifies that these include, but are not limited to, Articles 5, 6, 7, 15, 16, 21, 23, and 24 of the Franchise Agreement.
For a prospective Christian Brothers Automotive franchisee, this means that even after assigning their franchise to another party, certain responsibilities outlined in the specified articles of the Franchise Agreement will still apply. It is important to carefully review these articles to understand the nature and scope of these continuing obligations, as they could involve ongoing liabilities or responsibilities even after the franchise has been transferred.