When does a Christian Brothers Automotive franchisee pay the Down Payment?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
ation. In order to proceed, CBAC and you have agreed that you will pay $85,000 (the "Down Payment") of the initial Franchise Fee under the Franchise Agreement upon the execution of this Letter Agreement. You hereby acknowledge and agree that $13,500 of the Down Payment is non-refundable in consideration of administrative and other expenses CBAC incurs and for lost or deferred opportunities to enter into a franchise agreement with
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, a prospective franchisee must pay the $85,000 down payment upon the execution of the Receipt and Acknowledgement Letter Agreement. This agreement documents the understanding between the franchisee and Christian Brothers Automotive as the franchisee moves towards signing the Franchise Agreement.
The purpose of this down payment is to allow Christian Brothers Automotive to proceed with identifying and purchasing land or acquiring an existing business for the franchisee's location. The FDD specifies that $13,500 of this down payment is non-refundable. This portion covers Christian Brothers Automotive's administrative and other expenses, as well as compensation for lost or deferred opportunities to enter into franchise agreements with other potential franchisees.
This arrangement means that a significant portion of the initial franchise fee is paid relatively early in the process, before the Franchise Agreement is even signed. Prospective franchisees should carefully consider the implications of the non-refundable portion of the down payment and ensure they are comfortable with Christian Brothers Automotive's site selection process before executing the Receipt and Acknowledgement Letter Agreement.