What is a 'Termination Event' in the context of a Christian Brothers Automotive franchise?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
EXHIBIT I GENERAL RELEASE
The following is Christian Brothers Automotive Corporation current general release agreement that Christian Brothers Automotive Corporation may require a Franchisee and/or transferor to sign as part of a renewal, an approved transfer or a termination.
THIS RELEASE AGREEMENT (this "Agreement") is made and entered into as of the day of, 20 (the "Effective Date"), by and between Christian Brothers Automotive Corporation, a Texas corporation ("CBAC") and, a ("Franchisee").
RECITALS
WHEREAS, Franchisee is a party to that certain Franchise Agreement executed between Franchisee and Franchisor, dated on or about ____________________ (such Franchise Agreement, together with all exhibits, amendments and addendums thereto, being collectively referred to in this Agreement as the "Franchise Agreement"), pursuant to which Franchisee was granted the right to operate a Christian Brothers Automotive business at __________________________________________.
NOW, THEREFORE, for and in consideration of the premises and the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
Based on the 2025 Christian Brothers Automotive Franchise Disclosure Document, a 'Termination Event' necessitates the signing of a general release agreement. This agreement is required from a franchisee as part of the termination process. The agreement involves Christian Brothers Automotive Corporation (CBAC) and the franchisee, and it references the original Franchise Agreement under which the franchisee operated their Christian Brothers Automotive business.
The release agreement includes recitals that acknowledge the existence of the Franchise Agreement between the franchisee and franchisor, specifying that the franchisee was granted the right to operate a Christian Brothers Automotive business at a particular location. The agreement emphasizes that it is made in consideration of the promises and covenants outlined within it, as well as other valuable considerations, with both parties intending to be legally bound by its terms.
This implies that upon termination of the franchise agreement, Christian Brothers Automotive requires franchisees to sign a release, likely to prevent future legal claims or disputes. Prospective franchisees should carefully review the standard release agreement (Exhibit I) to understand the full scope of their obligations and rights upon termination. Understanding the conditions under which a release is required is crucial for any franchisee to avoid potential legal complications at the end of their franchise term.