What is the Christian Brothers Automotive tenant's obligation regarding the timing of rent payments?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
n. Tenant will take possession of the Premises within five days of receiving notice that the Premises are Substantially Completed (as such term is defined in the Master Lease).
5. Payment of Rent.
- a. Tenant will pay Lessor the following amounts during the following periods: (a) $22,000- $36,000 per month for the first one year period of this Lease (the exact amount will be as Lessor notifies Tenant in the Lease Term Letter) commencing on the Commencement Date (subject to the provisions of subsection (e), below) and on the first day of each calendar month thereafter; and (b) on each one year anniversary of this Lease, the rent for the next one year period of this Lease will be established by increasing the amount of the rent that was paid for the previous one year period by one and one-half percent. For example, at the end of the first year of the Lease, the rent paid for the initial one year period will be multiplied by one hundred and one and one-half percent and the product will become the rent for the next one year period (x multiplied by 101.5% = y; where x = rent for previous one year period and y = rent for subsequent one year period); at the end of the second one year period, the rent for that period will be multiplied by one hundred and one and one-half percent and the product will become the rent for the third one year period. This process will be continued at the end of each one year period of the Lease (including all renewals and extensions) to establish the rent for the next one year period.
- b. Rent is payable in advance and without demand at 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 (subject, however, to the provisions of subsection (e), below). If the Commencement Date occurs on a date other than the 1st day of a calendar month, then the first installment of rent shall be due on the Commencement Date (subject to the provisions of subsection (e), below), and shall be prorated for the actual number of days in such calendar month following the Commencement Date. If all rent is not paid on or before the 10th day of each month thereafter, Tenant must pay a late charge of $200.00 plus $10 per day until all past due rent is paid, and for the avoidance of doubt, Tenant shall be responsible for any late fees due under the Master Lease, to the extent that Tenant's delinquency causes Lessor to be delinquent in payment of rent under the Master Lease. Tenant further agrees to pay a $20.00 charge for each rent check returned unpaid, and delinquent charges will accrue as if no check had been given until such check is made good. Notwithstanding any notations on a check, all payments by Tenant will be applied first to non-rent items due, if any, and then to rent.
- c. 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.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, the tenant's (franchisee's) rent obligations are explicitly defined. Rent payments are due in advance, without demand, at the lessor's (Christian Brothers Automotive's) offices located at 17725 Katy Freeway, Houston, Texas 77094. These payments must be made on or before the 1st day of each month, commencing on the Commencement Date, without any grace period. However, these terms are subject to the provisions outlined in subsection (e) of the lease agreement.
If the Commencement Date falls on a day other than the first of the month, the initial rent installment is due on the Commencement Date itself. This first payment will be prorated to cover the actual number of days remaining in that calendar month after the Commencement Date, again subject to subsection (e).
Furthermore, if rent is not paid by the 10th day of the month, the tenant incurs a late charge. This charge consists of a $200.00 fee, plus an additional $10 per day until the outstanding rent is fully paid. The tenant is also responsible for any late fees that the lessor incurs under the Master Lease, but only to the extent that the tenant's late payment caused the lessor to be delinquent. Additionally, a $20.00 charge is applied for each returned rent check, with delinquency charges accruing as if the check had not been issued until it is made good. Christian Brothers Automotive may also require all payments to be made via cash, money order, cashier's check, or automatic payment from the tenant's account.
Christian Brothers Automotive also stipulates that all tenant rights and lessor obligations are conditional upon timely rent payment. The tenant's right to possess the premises and the lessor's obligations are expressly dependent on the prompt payment of rent. The use of the premises by the tenant is also contingent upon the timely payment of rent.