What is the purpose of Christian Brothers Automotive purchasing equipment for franchisees?

Prior to opening, you must purchase certain equipment, furniture and software from CBAC that will be used to operate the franchise. This will include the equipment listed in our Confidential Operations Manual and the software described below, at a current total cost of approximately $255,000 to $280,000. The equipment is purchased by us in order to obtain better pricing than individual purchasers could obtain, mitigate supply chain risk, and coincide with construction

timelines. All equipment purchases will be rebilled to you at our cost, including any associated fees from the vendor.

The software that will be provided by CBAC and used to operate your CBA franchise include a shop management system, an accounting software suite, associated middleware, a client communication system, an automotive animations library, an online training platform with relevant content, website hosting, SEO management, a phone call tracking platform, email accounts and cloud document suite, network equipment updates and warranty services, PCI compliance services, an antivirus protection software, remote support agents, and required client access licenses at the approximate upfront cost of $1,650 and the approximate ongoing cost of $10,500 annually, plus data overages. Costs are subject to change and will vary depending on the underlying vendors' current prices. The fees for software purchases are refundable prior to store opening. See Item 5 and Item 7 for more information about the equipment, furniture and software that will be needed to operate the franchise.

If you elect to utilize CBAC's in-house loan administration services, a $2,500 loan administration fee will be payable to CBAC upon the closing and funding of your startup loan, which generally occurs upon receiving your Certificate of Occupancy. If you elect to obtain and facilitate your own startup financing, you will be charged a $4,000 loan administration fee due to the increased administrative burden. If you elect to utilize CBAC's in-house loan administration services in order to refinance your loan, you will be subject to the $2,500 fee payable to CBAC at the close of that transaction.

We may add or delete items which must be purchased through us, or vendors from whom they must be purchased at any time, including once the site for your CBA franchise has been selected, and all costs are subject to change.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 33–36)