What is the required action by Christian Brothers Automotive after determining it will not purchase the Land?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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 5 — INITIAL FEES (FDD pages 14–17)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, if Christian Brothers Automotive decides not to purchase land that a franchisee has approved, they must notify the franchisee in writing. Following this notification, the franchisee has two options: they can either choose another location where Christian Brothers Automotive is willing to attempt to acquire land, or they can terminate their relationship with Christian Brothers Automotive. If the franchisee chooses to terminate the agreement, Christian Brothers Automotive will refund the franchisee's down payment, minus the $13,500 that is non-refundable.
This process is important for prospective franchisees to understand, as it outlines the steps taken if the initial land acquisition falls through. The franchisee has the option to continue pursuing a franchise with Christian Brothers Automotive at a different location, or to exit the agreement with a partial refund of their down payment. This provides some level of protection for the franchisee's investment, although the $13,500 non-refundable portion covers Christian Brothers Automotive's initial administrative expenses and opportunity costs.
It's worth noting that the refund process and amounts can vary depending on when the termination event occurs. If termination happens after Christian Brothers Automotive has executed a contract for land acquisition, the entire $85,000 down payment is non-refundable. Therefore, franchisees should carefully consider the implications of each stage of the process and understand the conditions under which they can receive a refund of their down payment.