What responsibility does the Assignee assume regarding the 'Assumed Liabilities' in the Christian Brothers Automotive agreement?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
ption. Assignor does hereby SELL, ASSIGN, TRANSFER and DELIVER to, and vest in, Assignee, to the extent permitted by law, all its right, title and interest in and to the Assigned Interest. Assignee hereby assumes complete and absolute responsibility and liability for all the Assumed Liabilities (as defined below). All Assignor's liabilities, duties and obligations arising directly or indirectly in connection with and/or related to the Assigned Interest will be collectively referred to from time to time as the "Assumed Liabilities." All Assignor's rights, titles and interests in and under the Franchise Agreement and/or the other documents and agreements entered into or to be entered into in connection with the Franchise Agreement will be collectively referred to from time to time as the "Assigned Interest." This assignment is made for good and valuable consideration, is coupled with an interest, and is therefore irrevocable.
Assignor and Assignee acknowledge and agree that CBAC would not consent to this assignment of the Assigned Interest unless and until the Assignee assumes all of the Assumed Liabilities without any reservation or limitation. Assignor hereby represents and warrants that it
| Franchise Agreement (Ver 04-14-2025) | |
|---|---|
| Franchisee: | |
| Franchisor: Christian Brothers Automotive Corporation | |
| Property: | E-8 |
is the owner of the Assigned Interests, free and clear of all liens and encumbrances. Assignee hereby assumes complete and absolute responsibility for the payment, performance and satisfaction of the Assumed Liabilities.
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- Consent by CBAC. CBAC hereby consents to the assignment from Assignor to Assignee as provided in this Agreement contingent upon the Assignor's and Assignee's execution and delivery of this Agreement together with any other documents or agreements requested by CBAC in connection with this Assignment, the Franchise Agreement and/or CBAC's relationship with Assignor and Assignee.
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- Release of Assignor and CBAC. Upon the assignment of the Franchise Agreement, CBAC and Assignor will be released from their obligations and duties under the Franchise Agreement except for any Continuing Obligations.
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, an Assignee in the context of a franchise agreement assumes significant responsibility for the 'Assumed Liabilities'. Specifically, the Assignee takes on "complete and absolute responsibility and liability" for all of the Assignor's liabilities, duties, and obligations that arise directly or indirectly from or are related to the Assigned Interest. This means the new franchisee is fully accountable for all existing debts, responsibilities, and legal obligations tied to the franchise being transferred.
This assumption is a critical component of the assignment process, as Christian Brothers Automotive requires the Assignee to accept all Assumed Liabilities without any limitations or reservations. This condition ensures that Christian Brothers Automotive is protected from potential disputes or liabilities arising from the previous franchisee's operations. The Assignor, the original franchisee, also represents and warrants that they own the Assigned Interests free and clear of all liens and encumbrances, further solidifying the Assignee's responsibility.
Furthermore, upon the assignment of the Franchise Agreement, Christian Brothers Automotive and the Assignor are generally released from their obligations and duties under the Franchise Agreement, except for any Continuing Obligations as defined in specific articles of the agreement. This release underscores the importance of the Assignee's complete assumption of liabilities, as they become the primary party responsible for all aspects of the franchise's operations and obligations moving forward. A prospective franchisee should carefully evaluate all potential liabilities before agreeing to the assignment to avoid future financial or legal issues.