For Christian Brothers Automotive, what is the franchisee required to do if they answer 'no' to understanding the Franchise Agreement?
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)
The 2025 Franchise Disclosure Document (FDD) for Christian Brothers Automotive includes a Franchisee Disclosure Acknowledgment Statement. This statement aims to confirm that the prospective franchisee understands that buying a franchise is a business decision with risks and that they are not relying on unauthorized oral statements made during negotiations. The FDD states that franchisees in California, Maryland, or Washington, or those intending to operate in those states, should not sign the Acknowledgment Statement.
However, the excerpts from the 2025 FDD do not explicitly state what actions a prospective franchisee must take if they do not understand the Franchise Agreement or answer 'no' to understanding it. The document focuses more on disclaimers and acknowledgments related to the understanding of the agreement and the risks involved.
To gain clarity, a prospective Christian Brothers Automotive franchisee should ask the franchisor directly about the specific steps to take if they find themselves not understanding the Franchise Agreement. This could involve seeking legal counsel, requesting further clarification from the franchisor, or potentially reconsidering the franchise investment until they fully comprehend the terms and conditions.