What is the standard assurance warranty offered by Christian Brothers Automotive, and is there an additional cost?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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In March 2024, CBAC formed Nice Difference Care+ (Care+) to provide extended warranty services for repairs, maintenance and vehicle care at Christian Brothers Automotive franchise locations. Care+ is wholly owned by CBAC and have been consolidated within the financial statements of CBAC.
In August 2024, the Company entered a transaction to acquire a 44% ownership stake in Foedus Sui, LLC (Foedus), which is classified as a variable-interest entity. The Company holds a controlling interest in Foedus via its financial and contractual arrangements. As the primary beneficiary of Foedus, the Company consolidates Foedus in its consolidated financial statements.
Between January and October 2024, the Company and Foedus Sui, LLC, a consolidated variable-interest entity, entered into four transactions to acquire assets from the Company's franchise operators.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
Based on the 2025 Christian Brothers Automotive Franchise Disclosure Document, the details of the standard assurance warranty and whether there is an additional cost are not explicitly detailed in the provided excerpts. However, the document does mention the formation of Nice Difference Care+ (Care+) in March 2024, which provides extended warranty services for repairs, maintenance, and vehicle care at Christian Brothers Automotive franchise locations. Care+ is wholly owned by Christian Brothers Automotive Corporation. Also, in September 2023, Christian Brothers Automotive acquired 100% ownership of WWK Warranty and Administration LLC, which works with dealerships to provide vehicle service contracts and maintenance coverage for their customers.
While the excerpts highlight Christian Brothers Automotive's involvement in warranty services through its subsidiaries, it does not specify the terms of the standard assurance warranty that franchisees are required to offer. The excerpts also do not mention whether franchisees must participate in the Care+ program or if there are associated costs. The franchise agreement states that franchisees must offer and sell all services and products that are part of the Christian Brothers Automotive system, as amended or supplemented from time to time.
A prospective franchisee should inquire with Christian Brothers Automotive about the specifics of the standard assurance warranty, including its coverage terms, duration, and any associated costs. It would also be beneficial to understand the relationship between the standard warranty and the extended warranty services offered through Care+ and WWK Warranty and Administration LLC. Understanding these aspects is crucial for assessing the potential liabilities and revenue streams associated with warranty services.