When will the non-refundable portion of the Christian Brothers Automotive down payment be fully earned?

According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, $13,500 of the down payment is considered fully earned and non-refundable upon payment. This portion covers Christian Brothers Automotive's administrative and other expenses, as well as lost or deferred opportunities to enter into franchise agreements with other potential franchisees. The total initial franchise fee is $135,000, with the down payment being $85,000, and a second installment of $50,000 due later.

This means that once a prospective franchisee pays the initial down payment, $13,500 of that amount is immediately non-refundable, regardless of whether the franchise ever opens. This is a standard practice in franchising, as it compensates the franchisor for the initial work involved in evaluating and onboarding a new franchisee. The remaining portion of the down payment may be refundable under certain conditions, such as if Christian Brothers Automotive fails to identify suitable land within a specified timeframe or if a Termination Event occurs before a contract for land acquisition is executed.

However, if a Termination Event occurs after Christian Brothers Automotive has executed a contract for land acquisition, the entire $85,000 down payment becomes non-refundable. A Termination Event includes situations where the franchisee does not qualify for financing, chooses not to proceed with opening a franchise on the designated land, or is unable to fulfill other obligations necessary for owning and operating the franchise. This highlights the importance of carefully considering all aspects of the franchise agreement and ensuring financial readiness before signing any agreements or making payments to Christian Brothers Automotive.

Prospective franchisees should be aware of these conditions and understand the circumstances under which they may lose a significant portion of their initial investment. It is advisable to seek legal and financial counsel to fully understand the terms of the franchise agreement and assess the risks involved before making any commitments.