What obligations does Christian Brothers Automotive have to franchisees in exchange for royalty payments?

According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, Christian Brothers Automotive agrees to provide support, training, and guidance to assist franchisees in meeting the Minimum Performance Requirement during the term of the Franchise Agreement. This support is intended to help the franchisee operate the business effectively and achieve the required performance levels.

This obligation is tied to the franchisee's payment of royalty fees, which are calculated as a percentage of the "Split Profits." Split Profits are defined as all revenues generated by the franchised business minus approved expense items. These approved expenses are calculated under Generally Accepted Accounting Principles (GAAP) and approved by Christian Brothers Automotive, as detailed in the Confidential Operations Manual, including any subsequent written budget adjustments approved by Christian Brothers Automotive.

For a prospective franchisee, this means that in exchange for paying royalties based on a share of the profits, Christian Brothers Automotive commits to providing ongoing support and training. The specifics of this support, training, and guidance would be detailed in the Confidential Operations Manual. The franchisee's ability to access this support is contingent upon adhering to the operational standards and financial reporting requirements set by Christian Brothers Automotive, as these determine the royalty payments and the assessment of the franchisee's performance.