Is the goodwill arising from the Christian Brothers Automotive franchise acquisition deductible for tax purposes?

The 2025 Franchise Disclosure Document for Christian Brothers Automotive states that franchisees will not attribute any monetary amount to any goodwill associated with the franchisee's use of the Marks or any other property owned by Christian Brothers Automotive following the expiration or termination of the agreement for whatever reason. This suggests that any goodwill developed through the operation of the franchise remains the property of Christian Brothers Automotive.

This clause protects Christian Brothers Automotive's brand and reputation. It prevents a former franchisee from claiming that their efforts contributed to the brand's goodwill and then trying to capitalize on that perceived contribution after the franchise agreement ends. This is a common practice in franchising, as the franchisor invests heavily in building a consistent brand image and customer experience across all locations.

However, the FDD does not explicitly address whether the goodwill arising from the Christian Brothers Automotive franchise acquisition is deductible for tax purposes. Prospective franchisees should consult with a qualified tax advisor to determine the tax implications of the franchise acquisition, including the deductibility of goodwill or other intangible assets.