How often are estimated payments for Split Profits due to Christian Brothers Automotive?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
You will pay a "Royalty Fee" of 50% of monthly "Split Profits" (as defined below) to CBAC each month during the initial term of your Franchise Agreement and during the remainder of all terms of your Franchise Agreement, including all extension and renewal periods. This payment is due on the last day of each succeeding month, and is based on the "Split Profits" estimated for the preceding month. Estimated payments will be due monthly and a final reconciliation will be calculated at each year end for a "true up" on the annual "Split Profits". "Split Profits" shall mean all monies, revenues and items of value from all sources generated in connection with and/or in any way related to the Franchised Business minus the Approved Expense Items.
Source: Item 6 — OTHER FEES (FDD pages 17–25)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, franchisees are required to pay a "Royalty Fee" of 50% of monthly "Split Profits" to Christian Brothers Automotive each month. These estimated payments are due on the last day of each succeeding month and are based on the "Split Profits" estimated for the preceding month.
Christian Brothers Automotive requires these estimated payments monthly, with a final reconciliation calculated at the end of each year to ensure accuracy. This reconciliation serves as a "true up" on the annual "Split Profits", meaning any overpayments or underpayments are adjusted at year-end.
This monthly payment structure means franchisees must consistently manage their cash flow to meet this obligation. The annual reconciliation provides an opportunity to correct any discrepancies, but franchisees should maintain accurate records throughout the year to avoid surprises during the reconciliation process. Understanding the definition of "Split Profits" and "Approved Expense Items" is crucial for accurate calculation and payment of these royalty fees.