Does the non-disparagement clause in the Christian Brothers Automotive agreement apply to the Franchisor?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
16.01 Best Efforts. During the term of this Agreement, Franchisee covenants and agrees to
expend its best efforts in the operation of the Franchised Business, and shall not engage in
any directly or indirectly conflicting or competing enterprises or any other activities which
would be detrimental to or interfere with the operation, reputation or goodwill of the
Franchised Business, the Franchisor, the System or any other of Franchisor's franchisees.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the provided excerpts do not contain a specific non-disparagement clause that explicitly applies to Christian Brothers Automotive. However, the agreement does include sections that address the franchisee's obligations regarding the brand's reputation and goodwill.
Section 16.01 requires the franchisee to expend their best efforts in operating the franchised business and prohibits them from engaging in activities detrimental to the operation, reputation, or goodwill of the franchised business, Christian Brothers Automotive, the System, or any other of Christian Brothers Automotive's franchisees. This clause focuses on protecting the brand's reputation but does not explicitly state that Christian Brothers Automotive is also restricted from making disparaging remarks about the franchisee.
While the agreement outlines the franchisee's responsibilities to protect the brand's image, it remains unclear whether Christian Brothers Automotive has a reciprocal obligation. A prospective franchisee should seek clarification from Christian Brothers Automotive regarding whether there are any implicit or explicit restrictions on the franchisor's ability to make disparaging remarks about franchisees.