What are 'Continuing Obligations' in the context of a 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' are specific responsibilities that the assignor (the original franchisee selling their business) remains liable for even after the franchise agreement is transferred to an assignee (the new franchisee). These obligations are designed to survive the termination of the Franchise Agreement.
The Franchise Agreement outlines that upon the assignment of the agreement, Christian Brothers Automotive and the assignor are released from their duties, except for these Continuing Obligations. The FDD specifies that these obligations include, but are not limited to, Articles 5, 6, 7, 15, 16, 21, 23, and 24 of the Franchise Agreement.
For a prospective franchisee, this means that if they are purchasing an existing Christian Brothers Automotive location, they should carefully review the specified articles in the Franchise Agreement to understand what obligations the seller will continue to be responsible for after the sale. This could include ongoing financial responsibilities, legal liabilities, or other requirements that extend beyond the transfer date. Understanding these Continuing Obligations is crucial for both the seller and the buyer to ensure a smooth and legally sound transfer of the franchise.