What is the Christian Brothers Automotive tenant's obligation regarding the adjustment of automatic payments?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Christian Brothers Automotive Franchise Disclosure Document, if the lessor of the property notifies the tenant (franchisee) of a change in the rent payment amount during the lease term or any renewals, the tenant must execute and deliver any authorizations and agreements necessary to adjust the amount of such automatic payment, if needed.
This means that if Christian Brothers Automotive, as the lessor, informs a franchisee that the rent has changed (likely due to the annual increase of one and one-half percent), the franchisee is obligated to complete the paperwork required to update the automatic payment system with the new amount. This ensures that rent payments remain current and accurate throughout the lease term.
This requirement is fairly standard in commercial leases, especially where automatic payments are involved. It protects the lessor by ensuring timely and correct payments, while also requiring the tenant to stay proactive in managing their financial obligations under the lease agreement. Failing to comply could potentially lead to late fees or other penalties as outlined in the lease agreement.