factual

Which sections of the Christian Brothers Automotive Franchise Agreement outline the franchisee's fee obligations?

Christian_Brothers_Automotive Franchise · 2025 FDD

Answer from 2025 FDD Document

9.03 of this Agreement.

Franchise Agreement (Ver 04-14-2025)

Franchisee: ___________

Franchisor: Christian Brothers Automotive Corporation

(b) Administrative Fees. Franchisee agrees to pay fees to Franchisor for financial and

administrative services provided by Franchisor. The amount of the administrative

fees will be set out in the Confidential Operations Manual.

(c) IT Support Fee. Franchisor may provide Franchisee with information technology

("IT") support such as web hosting and software/hardware support in return for a

fee paid by Franchisee to Franchisor equal to an amount determined from time to

time by Franchisor, in its sole discretion, and set forth in the Confidential

Operations Manual. All fees paid in accordance with this Section are non-

refundable, and subject to change in Franchisor's sole discretion. Franchisor may

modify the IT support services it provides or discontinue the provision of such

services at any time.

(d) Software Fees. Franchisor may provide Franchisee with certain software, including,

without limitation, point-of-sale software, accounting software, and internet

failover software, in return for fees to be established in Franchisor's discretion and

set forth in the Confidential Operations Manual or otherwise in writing, and payable

by Franchisee. Related to the foregoing, Franchisor may further charge Franchisee

for annual licensing or maintenance fees established in Franchisor's discretion and

set forth in the Confidential Operations Manual or otherwise in writing, and payable

by Franchisee. All fees and charges paid in accordance with this Section 4.03(d)

are non-refundable, and subject to change in Franchisor's sole discretion.

Franchisor may modify any such software it provides or discontinue the provision

of such software at any time.

Franchise Agreement (Ver 04-14-2025)

Franchisee: ___________

Franchisor: Christian Brothers Automotive Corporation

4.04 Application of Funds. If Franchisee is delinquent in the payment of any obligation to

Franchisor, its subsidiaries, affiliates or designees, then Franchisor (or such subsidiaries,

affiliates or designees), will have the right to apply any payment from Franchisee to any

obligation due, including the oldest obligation due, whether under this Agreement or

otherwise, notwithstanding any contrary designation by Franchisee as to such application.

4.05 Continuing Royalty. During the one-year period immediately following the Opening Date

(the "Split Profits Review Period"), Franchisor and Franchisee will review the financial

condition of the Franchisee at the end of each three-month period commencing on the

Opening Date and determine whether any royalty payment shall be made to Franchisor

from the Split Profits. No distribution or bonus from Split Profits shall be made to

Franchisee without the prior written approval of Franchisor. After the end of the Split

Profits Review Period, Franchisee must pay Franchisor a royalty fee each month calculated

as follows:

(a) From the date of this Agreement until the end of the Initial Term and each

subsequent term thereafter, an amount equal to fifty percent (50%)

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 37–39)

What This Means (2025 FDD)

According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, several sections within the Franchise Agreement outline the franchisee's fee obligations. These include fees for administrative services, IT support, and software. The specific amounts for administrative fees and IT support fees are detailed in the Confidential Operations Manual, and are subject to change at the franchisor's discretion.

The fees for software, including point-of-sale, accounting, and internet failover software, are also determined by the franchisor and set forth in the Confidential Operations Manual or in writing. These may include annual licensing or maintenance fees, which are also non-refundable and subject to change. The franchisor retains the right to modify or discontinue any of the provided software or IT support services at any time.

Additionally, the Franchise Agreement specifies a transfer fee of $30,000 in the event of an assignment of the agreement, sale of the franchised business, or a change of control. A non-refundable $10,000 is due upon the franchisor's approval of a term sheet or letter of intent, with the remaining $20,000 due at the closing of the transaction. If the franchisee authorizes the franchisor to find an assignee who is not an existing franchisee, the franchisee may be responsible for a transaction fee as per the Transaction Fee Agreement.

These fee structures and obligations are critical for prospective franchisees to understand, as they represent ongoing costs and potential expenses associated with operating a Christian Brothers Automotive franchise. Franchisees should carefully review the Confidential Operations Manual and related agreements to fully grasp the financial commitments involved.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.