What is the Christian Brothers Automotive tenant's obligation regarding the condition of rent being paid on time?

According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, the tenant's rights and the landlord's obligations under the lease are both contingent upon the timely payment of rent. Specifically, the tenant's right to possess the property and the landlord's obligations are expressly conditioned upon the prompt payment of rent. Furthermore, the tenant's use of the premises is also conditional on the prompt payment of rent. This means that if rent is not paid on time, the Christian Brothers Automotive franchisee could face consequences such as losing the right to occupy and use the premises, and the landlord may not be obligated to fulfill certain duties outlined in the lease.

Christian Brothers Automotive requires rent to be paid in advance and without demand at the lessor's offices located at 17725 Katy Freeway, Houston, Texas 77094, on or before the 1st day of each month commencing on the Commencement Date, without a grace period, although subsection (e) may provide some exceptions. If rent is not paid by the 10th day of the month, a late charge of $200.00 plus $10 per day will be assessed until all past due rent is paid. The tenant is also responsible for any late fees incurred by the lessor under the Master Lease if the tenant's delinquency causes the lessor to be late on their payments.

Additionally, a $20.00 charge will be applied for each rent check returned unpaid, and delinquent charges will accrue as if no check had been given until the check is made good. Payments made by the tenant will be applied first to non-rent items due, if any, and then to rent, regardless of any notations on the check. The lessor may also require all sums due under the lease to be paid in cash, money order, cashier's check, or by automatic payment from the tenant's account. If automatic payments are requested, the tenant agrees to provide the necessary authorizations and agreements. If the rent payment amount changes, the lessor will notify the tenant, and the tenant must adjust the automatic payment accordingly.

This clause underscores the importance of managing cash flow effectively to ensure timely rent payments. Franchisees should be aware of these conditions and penalties to avoid any disruptions to their business operations and maintain a positive relationship with the lessor. Failing to meet these obligations could lead to significant financial penalties and potential legal issues, ultimately impacting the franchisee's ability to operate their Christian Brothers Automotive location successfully.