What deposit is required when authorizing Christian Brothers Automotive to find an outside buyer?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| closing of the sale. | |||
| Transaction Fee (Note 8) | The greater of 7% of the gross value of the business transaction or $50,000, payable as follows: (i) a non refundable deposit equal to the greater of $10,000 or 1% of the listed price of the Franchised Business paid when you sign our Transaction Fee Agreement, and (ii) the balance of the transaction fee is payable upon the closing of the transaction between you and the buyer. | Due upon closing of your selling transaction, except for the initial payment of the greater of $10,000 or 1% of the listed price of the Franchised Business. | If you authorize CBAC to find you a buyer or CBAC provides you a buyer from its interested candidates. This transaction fee is in addition to the above described transfer fees. The transaction fee is non refundable. The transaction fee deposit is to cover costs associated with financial due diligence, marketing and lead generation, among other items. |
Source: Item 6 — OTHER FEES (FDD pages 17–25)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, if a franchisee authorizes Christian Brothers Automotive to find an outside buyer, the franchisee must sign a Transaction Fee Agreement and pay a non-refundable deposit. This deposit is equal to the greater of $10,000 or 1% of the listed price of the franchised business. This deposit is due when the franchisee signs the Transaction Fee Agreement.
This deposit covers costs associated with financial due diligence, marketing, and lead generation. The remainder of the transaction fee is earned and payable upon the closing of the transaction between the franchisee and the buyer. This is in addition to the transfer fee due to Christian Brothers Automotive, which is currently $30,000 per business.
For a prospective franchisee, this means that if they decide to sell their Christian Brothers Automotive franchise and want the franchisor's assistance in finding a buyer, they should be prepared to pay this deposit upfront. The deposit is non-refundable, regardless of whether a sale is completed. The total transaction fee is the greater of 7% of the gross value of the business transaction or $50,000.