Does Christian Brothers Automotive guarantee salary or wage payments to the franchisee or their spouse?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Any salary or wage that your business pays to you and/or your spouse, as an employee of the franchise, is contingent upon the business making enough profit to pay such salary or wage and is not a guarantee of payment by CBAC. CBAC agrees to allow up to $60,000 combined salary or wage to you or split between you, your spouse and any of your household dependents to be an Approved Expense Item. Any expense that is not an Approved Expense Item (each an "Unapproved Expense Item"), will require an equal amount of royalty fee to CBAC, regardless of the Split Profits calculation, payable at the same time as the payment of the Unapproved Expense Item.
Source: Item 6 — OTHER FEES (FDD pages 17–25)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive FDD, any salary or wage that the business pays to the franchisee and/or their spouse, as an employee of the franchise, is contingent upon the business making enough profit to pay such salary or wage. Christian Brothers Automotive does not guarantee payment of a salary or wage.
Christian Brothers Automotive does, however, agree to allow up to $60,000 combined salary or wage to the franchisee or split between the franchisee, their spouse, and any of their household dependents to be an Approved Expense Item.
Any expense that is not an Approved Expense Item requires an equal amount of royalty fee to Christian Brothers Automotive, regardless of the Split Profits calculation, payable at the same time as the payment of the Unapproved Expense Item. This means that while a franchisee and their spouse can draw a salary from the business, that salary is only guaranteed if the business is profitable enough to support it, and the franchisor does not backstop those payments.