For Christian Brothers Automotive, what is the purpose of the Franchisee Disclosure Acknowledgment Statement?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
As you know, Christian Brothers Automotive Corporation (the "Franchisor") and you are preparing to enter into a franchise agreement (the "Franchise Agreement") for the establishment and operation of a Christian Brothers Automotive Corporation franchise ("CBAC franchise"). The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor ("Broker") that have not been authorized, or that were not disclosed in the Franchise Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor. This acknowledgment does not waive any liability the franchisor may have under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.
In the event that you are intending to purchase an existing CBAC franchise from an existing Franchisee, you may have received information from the transferring Franchisee, who is not an employee or representative of the Franchisor. The questions below do not apply to any communications that you had with the transferring Franchisee. Please review each of the following questions and statements carefully and provide honest and complete responses to each.
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, the Franchisee Disclosure Acknowledgment Statement is used by Christian Brothers Automotive to confirm that the prospective franchisee understands that buying a franchise is a business decision with associated risks. Christian Brothers Automotive wants to ensure the franchisee isn't relying on unauthorized oral statements or promises made during negotiations that weren't included in the Franchise Disclosure Document. This helps Christian Brothers Automotive determine if any unauthorized or misleading statements were made by their employees, representatives, or brokers.
However, the FDD also states that in certain states, such as Washington, this acknowledgment does not waive any liability the franchisor may have under the Washington Franchise Investment Protection Act. Furthermore, amendments to the disclosure document for states like Maryland, Minnesota, Indiana, and Virginia clarify that no statement, questionnaire, or acknowledgment can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by the franchisor or its representatives. These amendments supersede any conflicting terms in other documents.
Notably, the FDD instructs prospective franchisees residing in California, Maryland, or Washington, or planning to operate their business in those states, not to sign the Acknowledgment Statement. This suggests that the standard acknowledgment may not be compliant with the franchise laws of those states without the additional protections afforded by the state-specific amendments. Prospective franchisees should carefully review these amendments and seek legal counsel to understand their rights and obligations fully, especially concerning waivers and disclaimers.