After the termination or expiration of a Christian Brothers Automotive franchise, for how long is the franchisee subject to non-competition covenants?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
ubstantially all of its revenue from the sale of Services or other products and
services similar to the Services or those offered in the Franchised Business or a
franchisee of Franchisor under the System.
16.03 After the Agreement and After a Transfer. Franchisee covenants that, except as otherwise
approved in writing by Franchisor, for a continuous uninterrupted period of three (3) years
commencing upon the date of: (i) a transfer permitted under Section 13 of this Agreement;
(ii) expiration or termination of this Agreement for any reason; or (iii) a final order of a
duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after
all appeals have been taken) with respect to any of the foregoing or with respect to
enforcement of this Section 16.03:
(a) Franchisee shall not directly or indirectly, for itself, or through, on behalf of, or in
conjunction with any person, partnership, joint venture, organization or legal entity,
own, maintain, operate, engage in, be employed by, provide assistance to, or have
any interest in (as owner or otherwise) any Competitive Business that is, or is
intended to be, located (i) at the premises of the Franchised Business, (ii) within a
radius of ten (10) miles of the Franchised Business, or (iii) within a radius of ten
(10) miles of any other franchisee of Franchisor or any business owned or operated
by Franchisor. This provision shall not apply to the operation by Franchisee or any
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
principal of Franchisee of any business under the System pursuant to a valid
franchise agreement with Franchisor;
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 59–62)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, franchisees are subject to a non-compete covenant for three years after the transfer, expiration, or termination of their franchise agreement. This restriction begins from the date of the event or from a final order by an arbitrator or court.
During this three-year period, the franchisee is prohibited from owning, maintaining, operating, or being involved in any Competitive Business. This includes businesses located at the former franchise premises, within a 10-mile radius of the former franchise, or within a 10-mile radius of any other Christian Brothers Automotive franchise or business owned by the franchisor. However, this restriction does not prevent a franchisee from operating another business under the Christian Brothers Automotive system, provided they have a valid franchise agreement.
Furthermore, if a franchisee breaches the non-compete covenants, the duration of the non-compete period will be extended by the length of time the franchisee is in violation. This means that any breach effectively pauses the clock on the three-year restriction, prolonging the period during which the franchisee must avoid competitive activities. This provision aims to protect Christian Brothers Automotive's interests and maintain the integrity of its franchise system by preventing former franchisees from using their knowledge and experience to unfairly compete with existing franchisees.