What is the 'Franchise Agreement' referring to in the Christian Brothers Automotive Transaction Fee Agreement?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS TRANSACTION FEE AGREEMENT (this "Agreement") is made and entered into as of (the "Effective Date"), by and among (hereinafter "you" or "Franchisee") and Christian Brothers Automotive Corporation, a Texas corporation (hereinafter "we," "us," or "CBAC"). |
|---|
| INTRODUCTION |
| WHEREAS, we and you are parties to that certain "Franchise Agreement" dated on or |
| about ("Franchise Agreement"), pursuant to which you were granted the |
| license to develop and operate a |
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, the 'Franchise Agreement' in the context of the Transaction Fee Agreement refers to the agreement between Christian Brothers Automotive Corporation and the franchisee. This agreement grants the franchisee the license to develop and operate a Christian Brothers Automotive business at a specific location. The Transaction Fee Agreement is relevant when a franchisee wishes to sell their business to a buyer approved by Christian Brothers Automotive, and it outlines the assistance Christian Brothers Automotive will provide in locating a potential buyer.
Specifically, the Franchise Agreement establishes the foundational relationship, granting the franchisee the right to operate under the Christian Brothers Automotive brand. The Transaction Fee Agreement then comes into play as a separate, subsequent agreement if the franchisee decides to sell their existing business. It outlines the terms and conditions under which Christian Brothers Automotive will assist in the sale process.
In essence, the Franchise Agreement defines the initial terms of the franchise operation, while the Transaction Fee Agreement addresses a specific scenario: the sale of the franchise. Understanding the interplay between these agreements is crucial for franchisees, especially when considering their exit strategy and the potential involvement of Christian Brothers Automotive in facilitating the sale of their business.