When is the down payment for a Christian Brothers Automotive franchise due?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay CBAC an initial franchise fee of $135,000 (the "Franchise Fee"). This Franchise Fee is paid in two installments. The first installment is in the amount of $85,000 (the "Down Payment") and is due at the earlier of your signing the Franchise Agreement or your signing the Receipt and Acknowledgement Letter Agreement (the "Letter Agreement"), a copy of which is attached as Exhibit H. The second installment is in the amount of $50,000 and is due 30 days
prior to receiving your Certificate of Occupancy, which is generally assumed to be approximately six weeks prior to store opening. If you are allowed to finance the second installment, depending on your personal circumstances and credit worthiness, it will be paid to CBAC upon the closing of your startup loan, which is typically closed 30 days prior to receiving your Certificate of Occupancy as this coincides with initial working capital needs. $13,500 of the Down Payment will be fully earned when paid and non-refundable in consideration of administrative and other expenses CBAC incurs and for lost or deferred opportunities to enter into the Franchise Agreement with others.
Source: Item 5 — INITIAL FEES (FDD pages 14–17)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, the initial franchise fee is $135,000, which is paid in two installments. The first installment, or down payment, is $85,000. This down payment is due at the earlier of signing the Franchise Agreement or signing the Receipt and Acknowledgement Letter Agreement.
The FDD also specifies conditions under which a portion of the down payment may be refundable. If Christian Brothers Automotive fails to identify land for purchase within one year of the Letter Agreement, the franchisee has 30 days to terminate the relationship and receive the down payment back, minus a $13,500 non-refundable portion. If a Termination Event occurs before Christian Brothers Automotive executes a contract for land acquisition, the franchisee may receive a portion of the down payment back after deductions for the $13,500 nonrefundable portion and reasonable costs incurred by Christian Brothers Automotive, not exceeding $38,500.
However, if a Termination Event occurs after Christian Brothers Automotive has executed a contract for land acquisition, Christian Brothers Automotive will retain the entire $85,000 down payment, which will be deemed non-refundable. A Termination Event includes not qualifying for necessary financing, choosing not to proceed with opening a Christian Brothers Automotive franchise on the land, or being unable to complete other obligations for owning and operating the franchise. If, prior to the opening date, Christian Brothers Automotive determines that any representations or warranties are inaccurate, the franchisee fails required training, fails a background check, or fails to perform duties, it is not considered a Termination Event, but Christian Brothers Automotive can terminate the agreements and refund the down payment less the $13,500 non-refundable portion.