How is the liquidated damages fee calculated for Christian Brothers Automotive?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages | An amount equal to the average of the monthly Royalty Fees paid (or payable) over the past 12 months times the lesser of 48 months or the number of full calendar months remaining in the term of the Franchise Agreement at the time of termination. | Upon demand at time of termination of your Franchise Agreement. | Payable if we terminate your Franchise Agreement for violation of your confidentiality or non compete obligations. See Section 15.09 of the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 17–25)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, the liquidated damages fee is calculated based on the average monthly Royalty Fees paid (or payable) over the past 12 months. This average is then multiplied by the lesser of 48 months or the number of full calendar months remaining in the franchise term at the time of termination.
This fee is payable if Christian Brothers Automotive terminates the Franchise Agreement due to a franchisee's violation of confidentiality or non-compete obligations. The purpose of liquidated damages is to compensate the franchisor for losses resulting from the early termination, especially when it's due to a breach of critical terms like confidentiality or non-competition. These terms are vital to protecting the Christian Brothers Automotive brand and business model.
For a prospective franchisee, this means that violating confidentiality or non-compete clauses could result in a significant financial penalty. The amount will depend on the royalty fees paid over the previous year and the remaining term of the franchise. It is important for franchisees to fully understand and adhere to these obligations to avoid potential termination and the associated liquidated damages. Franchisees should consult Section 15.09 of the Franchise Agreement for further details.