What is the obligation of Christian Brothers Automotive regarding identifying land for purchase?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
CBAC agrees to identify Land (as defined below) for purchase and begin the process of negotiating a letter of intent for such purchase no later than one year following the date of the Letter Agreement. In the event CBAC fails to meet this deadline, you will have a thirty (30) day option to terminate your relationship with CBAC and have your Down Payment (minus the $13,500 non-refundable portion) returned. If you choose not to terminate your relationship with CBAC within this thirty (30) day period, your Franchise relationship with CBAC will continue, subject to the terms of the Letter Agreement. "Land" means the land that will be purchased or leased for the construction of a building and other improvements that will be used for the operation of your franchise.
CBAC may not be able to purchase Land that you approve and CBAC has agreed to attempt to acquire. CBAC has the right to decline to purchase any Land for any reason whatsoever. CBAC agrees to notify you in writing if it determines, for any reason, that it will not purchase the Land. CBAC will then give you the option of either (a) choosing another location where CBAC is willing to attempt to acquire Land where your franchise will operate, or (b) terminating your relationship with CBAC and having your Down Payment (minus the $13,500 portion which is non-refundable) refunded to you.
In the event a Termination Event (as defined below) occurs prior to CBAC executing a Contract (as defined below) for the acquisition of Land, then CBAC will deduct the $13,500 nonrefundable portion of the Down Payment and also deduct the reasonable costs that it incurs in selecting the site for Land and preparing to enter into the franchise relationship with you, and return any remainder of the Down Payment to you, provided that such deductions will not exceed $38,500. Any amount not refunded shall be deemed fully earned when paid and non-refundable
in consideration of administrative and other expenses CBAC incurs and for lost or deferred opportunities to enter into the Franchise Agreement with others. "Contract" means a contract for (a) the acquisition of land in the general area of the Location, (b) the lease of land in the general area of the location, or (c) a contract for the acquisition of an existing business.
Source: Item 5 — INITIAL FEES (FDD pages 14–17)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, Christian Brothers Automotive agrees to identify land for purchase and begin negotiating a letter of intent within one year of the Letter Agreement. If Christian Brothers Automotive fails to meet this deadline, the franchisee has a 30-day option to terminate the relationship and receive a refund of their down payment, minus the $13,500 non-refundable portion. If the franchisee chooses not to terminate within this period, the franchise relationship continues under the terms of the Letter Agreement. The term 'Land' refers to the land intended for purchase or lease for constructing the franchise location.
However, Christian Brothers Automotive does not guarantee the purchase of approved land and retains the right to decline any land purchase for any reason. If Christian Brothers Automotive decides not to purchase the land, they must notify the franchisee in writing, offering the option to either choose another location where Christian Brothers Automotive is willing to attempt land acquisition or terminate the relationship for a refund of the down payment, less the $13,500 non-refundable portion.
If a 'Termination Event' occurs before Christian Brothers Automotive executes a contract for land acquisition, Christian Brothers Automotive will deduct the $13,500 nonrefundable portion of the down payment, along with reasonable costs incurred in site selection and franchise preparation, refunding any remaining amount of the down payment, provided that such deductions will not exceed $38,500. Any amount not refunded is considered fully earned by Christian Brothers Automotive. A 'Contract' refers to a contract for acquiring or leasing land in the general area of the location, or a contract for acquiring an existing business.