Under what circumstance would a Christian Brothers Automotive franchisee NOT owe the transaction fee?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
However, if you recommended the buyer contact us about the opportunity to purchase your business, you would not owe the Transaction Fee.
If there is any dispute as to whether or not (i) we were responsible for locating a buyer, or (ii) that the assistance we provided to you resulted in you locating a buyer, there shall be a rebuttable presumption that we did locate the buyer or our assistance did result in you locating the buyer, as the case may be.
The burden will then be yours to demonstrate our efforts did not result in the location of the buyer.
Source: Item 22 — CONTRACTS (FDD page 76)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive FDD, a franchisee would not owe a transaction fee if they recommended the buyer to contact Christian Brothers Automotive about purchasing their business. However, the FDD states that if Christian Brothers Automotive located the buyer or assisted the franchisee in locating a buyer, there is a presumption that Christian Brothers Automotive was responsible for locating the buyer. The franchisee would then have the burden to prove that Christian Brothers Automotive's efforts did not result in locating the buyer.
Christian Brothers Automotive considers that they located or assisted in locating a buyer if the buyer resulted from a lead generated directly or indirectly by them or by anyone other than the franchisee. This includes a buyer already engaged or intending to be engaged in the franchisee application or discovery process for a different Christian Brothers Automotive location, or a candidate introduced to them by another franchisee or anyone other than the seller.
The transaction fee is equal to the greater of 7% of the gross value of the business transaction or $50,000. The gross value of the business transaction is the gross value of the tangible and intangible assets acquired by the buyer. The franchisee also has to pay a non-refundable deposit of the greater of $10,000 or 1% of the listed price of the business at the time of signing the Transaction Fee Agreement.