How is the 'gross value of the business transaction' defined for a Christian Brothers Automotive franchise resale?

According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, the "gross value of the business transaction" in a franchise resale is defined as the gross value of the tangible and intangible assets acquired by the buyer. This definition is important because Christian Brothers Automotive collects a transaction fee based on this gross value when a franchisee sells their business.

Specifically, the transaction fee is calculated as a percentage of this gross value, with a minimum dollar amount. The exact percentage depends on whether Christian Brothers Automotive located the buyer. If Christian Brothers Automotive located the buyer, the franchisee pays a transaction fee equal to the greater of 7% of the gross value of the business transaction or $50,000. If Christian Brothers Automotive is not able to locate a suitable candidate, the franchisee pays a transaction fee of the greater of 3.5% of the gross value of the business transaction or $25,000.

For a prospective franchisee, understanding this definition is crucial for estimating potential resale costs. When planning to sell their Christian Brothers Automotive franchise, the franchisee needs to consider the value of all assets—both physical (tangible) and non-physical (intangible)—that the buyer will acquire. This includes equipment, inventory, goodwill, and any other elements that contribute to the business's overall value. This gross value directly impacts the transaction fee owed to Christian Brothers Automotive, affecting the net proceeds from the sale.