What is the Christian Brothers Automotive tenant's obligation to provide authorizations for automatic payments?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Lessor may require that all sums due under this Lease be paid in cash, money order, cashier's check or by automatic payment from Tenant's account.
If requested by Lessor, Tenant agrees to execute and deliver to Lessor the authorizations, agreements and other documents and instructions necessary or appropriate to authorize automatic payment from Tenant's bank account of the rent due under this Lease each month.
If the amount of the rent payment changes at any time during the term of this Lease or renewals, Lessor agrees to notify Tenant of the change and the amount of the new payment, and Tenant agrees to execute and deliver to Lessor any and all authorizations and agreements necessary to adjust the amount of such automatic payment, if needed.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, if requested by the lessor, the tenant (franchisee) agrees to execute and deliver authorizations, agreements, and other documents to authorize automatic rent payments from the tenant's bank account each month. If the rent payment changes, the lessor will notify the tenant of the change and new amount. The tenant then agrees to provide any necessary authorizations and agreements to adjust the automatic payment accordingly.
This clause ensures that Christian Brothers Automotive franchisees, as tenants, are obligated to comply with the lessor's requirements for automatic rent payments. This can streamline the payment process and reduce the risk of late payments, which are critical since the tenant's right of possession and the lessor's obligations are expressly conditioned on prompt rent payment.
Failure to comply with the automatic payment authorization requests could potentially lead to a breach of the lease agreement, impacting the franchisee's right to operate at the premises. This requirement is fairly standard in commercial leases, as it provides security and predictability for the lessor regarding rental income.