When is the Royalty Fee payment due to Christian Brothers Automotive?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Continuing Royalty Fees (Note 2) | 50% of monthly “Split Profits” during the initial franchise term and during all extensions and renewals. | Estimated monthly amount due on the last day of each succeeding month. | The Royalty Fee is based on the “Split Profits” for the previous month. “Split Profits” are defined below in Note 2. |
Source: Item 6 — OTHER FEES (FDD pages 17–25)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, the Royalty Fee is paid monthly. The estimated monthly royalty fee payment is due on the last day of each succeeding month. This fee is based on the "Split Profits" estimated for the preceding month.
Christian Brothers Automotive calculates a final reconciliation at each year-end for a "true up" on the annual "Split Profits". This means that while franchisees make estimated payments throughout the year, the actual royalty owed is determined at the end of the year based on the final profit figures. This true-up could result in either an additional payment to Christian Brothers Automotive or a credit to the franchisee, depending on whether the estimated payments accurately reflected the actual profits.
In addition to the standard royalty fee, Christian Brothers Automotive franchisees must also pay a royalty fee equal to the amount of any "Unapproved Expense Item". This additional royalty payment is due at the same time as the payment for the Unapproved Expense Item. This policy incentivizes franchisees to adhere to the franchisor's approved expense guidelines, as incurring unapproved expenses effectively increases the royalty burden for the franchisee.