If Christian Brothers Automotive receives payments from suppliers, how may they use those amounts?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
We and/or our affiliates may receive payments, such as rebates, or other compensation from suppliers on account of the suppliers' dealings with us, you, or other franchisees. If we do receive such payments from suppliers, we may use the amounts that we receive for any purpose that we deem appropriate.
Prior to opening, you must purchase certain equipment, furniture and software from CBAC that will be used to operate the franchise. This will include the equipment listed in our Confidential Operations Manual and the software described below, at a current total cost of approximately $255,000 to $280,000. The equipment is purchased by us in order to obtain better pricing than individual purchasers could obtain, mitigate supply chain risk, and coincide with construction
timelines.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 33–36)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, Christian Brothers Automotive and/or its affiliates may receive payments, such as rebates, or other compensation from suppliers due to the suppliers' dealings with Christian Brothers Automotive, its franchisees, or other franchisees. The document specifies that if Christian Brothers Automotive receives such payments from suppliers, it has the discretion to use those amounts for any purpose it deems appropriate. This means Christian Brothers Automotive is not obligated to pass these payments or rebates on to franchisees.
For the year ended December 31, 2024, Christian Brothers Automotive received rebates from approved vendors totaling $1,477,407. These rebates are generally used to fund the costs of the Annual Franchise Convention/Meeting for franchisees, "Mastering the Difference" workshop for service managers and technicians, meetings of the Franchise Exchange Committee (including costs incurred in connection with cancelling, postponing or holding any of the foregoing), and the costs to administer the purchasing program.
This arrangement is fairly common in franchising, where franchisors negotiate with suppliers and may receive compensation for directing business to them. While Christian Brothers Automotive retains the right to use these funds as they see fit, they have historically used a portion of these rebates to benefit franchisees through training programs, meetings, and administrative support for the purchasing program. Prospective franchisees should inquire about the specific allocation of these funds and how they directly benefit franchisees.