What happens if a Christian Brothers Automotive franchisee incurs an 'Unapproved Expense Item'?

According to the 2025 Franchise Disclosure Document, Christian Brothers Automotive franchisees must pay an additional royalty fee if they incur an 'Unapproved Expense Item'.

Specifically, any expense that is not an 'Approved Expense Item' requires the franchisee to pay Christian Brothers Automotive an additional royalty fee equal to the amount of the unapproved expense. This additional royalty payment is required regardless of the 'Split Profits' calculation and is due at the same time as the payment of the 'Unapproved Expense Item'.

'Approved Expense Items' are defined as those expense items calculated under Generally Accepted Accounting Principles (GAAP) and approved by Christian Brothers Automotive as set forth in the Confidential Operations Manual, all subsequent written budget adjustments approved in writing by Christian Brothers Automotive, and all adjustments defined in the Confidential Operations Manual. Approved Expense Items can include approved expenses, debt service, and/or other capital expenditures, which are approved in advance. Christian Brothers Automotive also agrees 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, contingent upon the business making enough profit to pay such salary or wage.