What portion of the down payment for the Christian Brothers Automotive franchise fee is non-refundable?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
The first installment or Down Payment is in the amount of $85,000 and is due at the earlier of your signing the Franchise Agreement or your signing the Letter Agreement. The second installment is in the amount of $50,000 and is due 30 days prior to receiving your Certificate of Occupancy, which is generally assumed to be approximately six weeks prior to store opening. If you are allowed to finance the second installment, depending on your personal circumstances and credit worthiness, it will be paid to CBAC from your business loan proceeds upon the receipt of an invoice, typically delivered within 30 days of opening. $13,500 of the Down Payment will be 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.
Within 30 days of execution of the Letter Agreement, and before you sign the Franchise Agreement, CBAC will provide you with a Non-Use, Non-Disclosure and Non-Competition Agreement for execution. After you have signed the Non-Use, Non-Disclosure and Non-Competition Agreement, CBAC will provide you with credentials to access CBAC's proprietary and confidential training materials and Confidential Operations Manual.
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.
Source: Item 7 — INITIAL INVESTMENT (FDD pages 26–32)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, $13,500 of the initial $85,000 down payment for the franchise fee is non-refundable. This non-refundable portion is considered fully earned by Christian Brothers Automotive upon payment to cover administrative and other expenses, as well as lost or deferred opportunities to enter into franchise agreements with other potential franchisees.
If a Termination Event occurs before Christian Brothers Automotive executes a contract for land acquisition, the company will deduct the $13,500 non-refundable portion from the down payment. They will also deduct reasonable costs incurred in selecting the site and preparing for the franchise relationship, but these deductions will not exceed $38,500 in total. The remaining balance, if any, will be returned to the franchisee. However, if a Termination Event occurs after Christian Brothers Automotive has executed a land acquisition contract, the entire $85,000 down payment will be retained and considered non-refundable.
Christian Brothers Automotive will identify land for purchase and begin negotiating a letter of intent within one year of the Letter Agreement. If they fail to meet this deadline, the franchisee has a 30-day option to terminate the relationship and receive the down payment back, 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.
Prospective franchisees should carefully consider these conditions and the potential circumstances under which the down payment or portions thereof may not be refundable. Understanding these terms is crucial before signing any agreements or making payments to Christian Brothers Automotive.