What is an 'Interim Manager' in the context of Christian Brothers Automotive's Step-In Rights?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
In order to prevent any interruption of the operations which would cause harm to the Franchised Business, we have the right, but not the obligation, to step-in and designate an individual of our choosing (an "Interim Manager") to temporarily manage the Franchised Business until such time as the Franchised Business is transitioned to a new franchisee or we determine you can resume operation of the Franchised Business (the "Step-In Rights"). We may elect to exercise these Step-In Rights if: (i) you commit a non-curable default; (ii) you commit a default and fail to cure such default within the applicable cure period; (iii) we determine that you have materially failed to operate the Franchised Business in compliance with the standards, procedures and policies set forth in our Confidential Operations Manual or the Franchise Agreement, such that the operational deficiencies require that we assume management of the Franchised Business; (iv) you abandon or fail to actively operate the Franchised Business; or (v) the Principal Operator dies or is temporarily or permanently disabled or incapacitated. If we exercise our Step-In Rights, then: (a) we will keep in a separate account all monies generated by the operation of the Franchised
Business, less the expenses of the Franchised Business, including reasonable compensation and expenses for our representatives (including an Interim Manager) as well as our other expenses; (b) you must agree to hold harmless us and our representatives for all actions occurring during the course of such temporary management of the Franchised Business and acknowledge that the Interim Manager and such representatives will have no liability to you except to the extent directly caused by the gross negligence or willful misconduct of us or the Interim Manager; (c) you agree to pay us a monthly management fee of $5,000.00 per month; (d) you agree to pay us (in addition to the management fee) all of our reasonable costs and expenses, including, but not limited to, attorneys' fees incurred as a consequence of exercising our Step-In Rights; and (e) you must acknowledge that we and our representatives (including an Interim Manager) will have a duty to utilize only commercially reasonable efforts in the operation of the Franchised Business and will not be liable for any debts, losses, damages, or obligations you or the Franchised Business incurs, or to any of your or the Franchised Business's suppliers, vendors or creditors for any supplies, products, or other assets or services you or the Franchised Business purchases, while managed by us or an Interim Manager. This remedy is in addition to other remedies available to us.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, an "Interim Manager" is an individual designated by Christian Brothers Automotive to temporarily manage a franchised business under specific circumstances. This occurs when Christian Brothers Automotive exercises its "Step-In Rights," which are invoked to prevent interruption of operations that could harm the business.
Christian Brothers Automotive may appoint an Interim Manager if a franchisee commits a non-curable default, fails to cure a default within the given timeframe, materially fails to operate the franchise according to standards, abandons the business, or if the Principal Operator dies or becomes incapacitated. During the period when Step-In Rights are exercised, all monies generated by the business, less expenses, are kept in a separate account. These expenses include reasonable compensation and expenses for representatives, including the Interim Manager, and other costs incurred by Christian Brothers Automotive.
The franchisee is responsible for a monthly management fee of $5,000.00, in addition to all reasonable costs and expenses, including attorneys' fees, that Christian Brothers Automotive incurs while exercising its Step-In Rights. While Christian Brothers Automotive and the Interim Manager are required to utilize commercially reasonable efforts in operating the franchise, they are not liable for any debts, losses, damages, or obligations incurred by the franchisee or the business, except in cases of gross negligence or willful misconduct. This remedy is in addition to other remedies available to Christian Brothers Automotive.