For Christian Brothers Automotive, what is the franchisee required to do if they answer 'no' to understanding the Disclosure Document?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
As you know, Christian Brothers Automotive Corporation (the "Franchisor") and you are preparing to enter into a franchise agreement (the "Franchise Agreement") for the establishment and operation of a Christian Brothers Automotive Corporation franchise ("CBAC franchise"). The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor ("Broker") that have not been authorized, or that were not disclosed in the Franchise Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor. This acknowledgment does not waive any liability the franchisor may have under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.
In the event that you are intending to purchase an existing CBAC franchise from an existing Franchisee, you may have received information from the transferring Franchisee, who is not an employee or representative of the Franchisor. The questions below do not apply to any communications that you had with the transferring Franchisee. Please review each of the following questions and statements carefully and provide honest and complete responses to each.
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
Based on the 2025 Christian Brothers Automotive Franchise Disclosure Document, there is no explicit instruction detailing required actions if a franchisee does not understand the Disclosure Document. However, the document emphasizes the importance of understanding the franchise agreement and associated risks. Christian Brothers Automotive uses a Franchisee Disclosure Acknowledgment Statement to ascertain that the franchisee understands that purchasing a franchise is a business decision with associated risks and that they are not relying on unauthorized oral statements.
Prospective franchisees are advised to carefully review each question and statement within the Acknowledgment Statement and provide honest and complete responses. The FDD also includes receipts that summarize provisions of the franchise agreement in plain language, advising candidates to read the Disclosure Document and all agreements carefully.
Given the lack of a specific procedure for disagreeing with or not understanding the disclosure, it is crucial for potential Christian Brothers Automotive franchisees to seek clarification on any unclear aspects of the Disclosure Document before signing any agreements. They should consult with legal and financial advisors to ensure they fully comprehend the terms and conditions of the franchise agreement and are comfortable with the associated risks.