Are franchisees allowed to make derogatory statements about Christian Brothers Automotive's employees?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) Franchisee makes any material misrepresentation relating to the acquisition of the Franchised Business or engages in conduct which, in the exercise of Franchisor's sole and exclusive business judgment, reflects materially and unfavorably upon the operation and reputation of the Franchised Business, Franchisor's reputation, the Marks, the System, services and/or products.
(j) Franchisee hereby irrevocably acknowledges, affirms, attests and covenants that Franchisee's employees are employed exclusively by Franchisee and in no fashion are any such employees employed, jointly employed or co-employed by Franchisor. Franchisee further acknowledges, affirms and attests that each of Franchisee's employees is under Franchisee's exclusive dominion and control and never under Franchisor's direct or indirect control in any fashion whatsoever. Franchisee alone hires each of Franchisee's employees; sets their schedules; establishes their compensation rates; and pays all salaries, wages, benefits and employment-related liabilities (such as workers' compensation insurance premiums/payroll taxes/Social Security contributions/unemployment insurance premiums). Franchisee alone has
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not directly address whether a Christian Brothers Automotive franchisee can make derogatory statements about employees. However, it does state that if a franchisee engages in conduct that "reflects materially and unfavorably upon the operation and reputation of the Franchised Business, Franchisor's reputation, the Marks, the System, services and/or products," Christian Brothers Automotive has the right to terminate the agreement without an opportunity to cure the issue.
This clause could potentially be interpreted to include derogatory statements made by a franchisee about Christian Brothers Automotive employees, especially if those statements become public or otherwise damage the brand's reputation. The FDD emphasizes that the franchisee is responsible for managing their employees and acknowledges that the employees are under the franchisee's "exclusive dominion and control and never under Franchisor's direct or indirect control in any fashion whatsoever."
Given the lack of specific guidance on this issue in the FDD, a prospective franchisee should seek clarification from Christian Brothers Automotive regarding what types of statements or actions would be considered detrimental to the brand's reputation and potentially lead to termination of the franchise agreement. Understanding the franchisor's expectations in this area is crucial for maintaining a positive relationship and avoiding potential conflicts.