Is Christian Brothers Automotive required to purchase the site for my franchise, or can they lease from a third party?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
CBAC will select a site for your franchise business and present it to you for your approval. In selecting the site, CBAC considers such factors as demographics, access, traffic, competition, visibility, natural and man-made boundaries and existing customer base. CBAC or an entity affiliated with CBAC will purchase the site and construct the building to be leased to your franchise. If an affiliate of CBAC purchases the site and constructs the building that will be used for your franchise, CBAC will lease the site and building from that affiliate and will sublease the site and building to you. If CBAC purchases the site and constructs the building, CBAC will lease the building and land to you. You will have options to extend the lease for three consecutive five-year periods subject to the conditions referred to in Item 17 and contained in the Franchise Agreement. If you finance any acquisition or operational aspect of your franchise business you will incur application fees, loan fees, closing costs and other related financing costs. CBAC may alternately lease the facility from an unaffiliated third party instead of purchasing directly, as mentioned in Note 2 to Item 7. (Section 9.05).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 40–52)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, Christian Brothers Automotive will select a site for the franchise, considering factors like demographics, traffic, and competition. Typically, Christian Brothers Automotive or an affiliated entity will purchase the site and construct the building, which is then leased to the franchisee. If an affiliate makes the purchase and construction, Christian Brothers Automotive will lease from the affiliate and sublease to the franchisee. If Christian Brothers Automotive purchases the site and constructs the building, Christian Brothers Automotive will lease the building and land to you. The franchisee has options to extend the lease for three consecutive five-year periods.
However, Christian Brothers Automotive has the option to lease the facility from an unaffiliated third party instead of purchasing the site directly. This alternative leasing arrangement is mentioned in Note 2 to Item 7 of the FDD.
For a prospective franchisee, this means that while Christian Brothers Automotive typically purchases the site, they retain the flexibility to lease from a third party. Franchisees should inquire about the specific arrangement for their location and understand the terms of the lease, including extension options and potential financing costs.