Does Christian Brothers Automotive have the right to terminate the franchise agreement without cause?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
eement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
nature incapable of being cured, this Agreement may be immediately terminated by
Franchisor.
14.02 Termination Without Right to Cure. Notwithstanding anything to the contrary contained
herein, Franchisee understands and agrees that the occurrence of any of the following
events, circumstances, or courses of conduct constitutes a material default under this
Agreement, and Franchisor will have the right, but not the obligation, to immediately
terminate this Agreement without giving any notice or opportunity to cure to the
Franchisee, except as specifically provided in the respective subsection:
(a) Franchisee or the Franchised Business is declared bankrupt or becomes insolvent;
or all or a substantial part of the assets thereof are assigned to or for the benefit of
any creditor; or Franchisee admits its inability to pay its debts as they become due;
or a petition in bankruptcy is filed against Franchisee which is not immediately
contested or which is not dismissed within 120 days from its filing.
(b) Franchisee fails to operate the business for five (5) consecutive days during which
the Franchisee is required to operate the business under the terms of this
Agreement.
(c) Franchisee fails to meet any Minimum Performance Requirement set forth in
Section 10.17 of this Agreement.
(d) Franchisor and the Franchisee agree in writing to terminate the Agreement.
(e) Franchisee makes any material misrepresentation relating to the acquisition of the
Franchised Business or engages in conduct which, in the exercise of Franchisor's
sole and exclusive business judgment, reflects materially and unfavorably upon the
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
operation and reputation of the Franchised Business, Franchisor's reputation, the
Marks, the System, services and/or products.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 59–62)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, Christian Brothers Automotive has the right to terminate the franchise agreement without an opportunity to cure under specific circumstances. These circumstances include if the franchisee declares bankruptcy or becomes insolvent, fails to operate the business for five consecutive days when required, fails to meet Minimum Performance Requirements, agrees in writing to terminate the agreement, makes material misrepresentations relating to the acquisition of the franchised business, or engages in conduct that reflects unfavorably upon the operation and reputation of the franchised business, Christian Brothers Automotive's reputation, the Marks, the System, services and/or products.
Christian Brothers Automotive can also terminate the agreement without an opportunity to cure if the franchisee knowingly makes a material misrepresentation relating to the operation of the Franchised Business, knowingly maintains false books or records, or knowingly submits any false statements or reports to Christian Brothers Automotive.
These termination rights are significant for a prospective franchisee because they outline specific behaviors or events that could lead to the immediate termination of their franchise agreement without any chance to correct the issue. This differs from terminations 'with cause' where a franchisee is typically given a notice and an opportunity to remedy the situation. Franchisees should carefully consider these conditions and ensure they understand their obligations to avoid such defaults.