Christian Brothers Automotive Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$550,250 - $680,400
Franchise Fee
$121,500
Total US Locations
302
Business Summary
Christian Brothers Automotive Corporation establishes and operates a system of franchises that provide automotive repair and maintenance services to customers. Franchisees operate a business focused on repairing and servicing various automotive vehicles.
Corporate History
Christian Brothers Automotive Corporation was incorporated in Texas on March 25, 1982, and began providing automotive repair and maintenance services in August 1982. The company initially operated its own locations, selling its original business to a franchisee in December 1998. It later reacquired that original location in January 2012 and refranchised it in 2013. Christian Brothers Automotive Corporation has been offering franchises in the automotive repair and service business since January 1996 and has not offered franchises in any other line of business.
Financial Overview
Investment Range
$550,250 - $680,400
Franchise Fee (Low)
$121,500
Franchise Fee (High)
$135,000
Royalty %
50%
Marketing %
3%
Equipment Costs (Low)
$255,000
Equipment Costs (High)
$280,000
Working Capital
$35,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Christian Brothers Automotive Corporation's financial statements show negative working capital, with current liabilities exceeding current assets by approximately $25 million in 2024. However, the independent auditors have issued an unqualified opinion on the financial statements, indicating that they are presented fairly, and did not raise any substantial doubt about Christian Brothers Automotive Corporation's ability to continue as a going concern. This suggests that Christian Brothers Automotive Corporation's management has adequate plans to manage its cash flow and meet its obligations despite the current liability structure, which includes significant operating lease liabilities and contract liabilities for franchise fees received prior to store opening.
Financing Details
Christian Brothers Automotive Corporation offers unsecured financing for loans to cover remodels and renovations required by the franchise agreement. Christian Brothers Automotive Corporation provides 100% financing for these loans. Franchisees must sign a promissory note, but Christian Brothers Automotive Corporation does not require collateral, personal guarantees, or third-party guarantees. The repayment period varies, and the interest rate is based on the secured overnight financing rate. Christian Brothers Automotive Corporation does not offer other direct or indirect financing for initial investments or guarantee other franchisee obligations.
Performance Metrics
Total US Locations
302
Franchised Units
302
Corporate Units
0
Franchising Since
1996
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Christian Brothers Automotive Corporation has disclosed two litigation cases. The first case, Evan Domanic v. Christian Brothers Automotive Corporation, was filed on February 7, 2022, in a Texas federal court. The plaintiff alleges that Christian Brothers Automotive Corporation violated his rights and the Texas Deceptive Trade Practices Act by denying him the opportunity to purchase a franchise. Christian Brothers Automotive Corporation successfully had the Texas Deceptive Trade Practices Act claims dismissed and is vigorously defending against the remaining ongoing allegations. The second case, Christian Brothers Automotive Corporation v. Seek 1st LLC, involved an arbitration proceeding filed on February 3, 2022. Christian Brothers Automotive Corporation claimed the franchisee violated their agreement by secretly acquiring and operating a competing business. On January 17, 2023, the arbitration panel ruled that Christian Brothers Automotive Corporation properly terminated the franchise agreement due to the franchisee's conduct, and Christian Brothers Automotive Corporation subsequently took over the franchise on February 1, 2023.
Bankruptcy History
Christian Brothers Automotive Corporation has no bankruptcy history to report in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
15 years
Renewal Term
5 years
Renewal Conditions
To renew, Christian Brothers Automotive Corporation franchisees must have fully complied with all obligations under their current Franchise Agreement and other related agreements. They are also required to refurbish, redesign, or remodel their franchised business to meet Christian Brothers Automotive Corporation's latest brand standards and specifications before the renewal term begins. Additionally, franchisees must sign a general release of past claims against Christian Brothers Automotive Corporation, but this release will not cover future claims arising from the new renewal agreement.
Training & Support Program
Franchisor Assistance
Christian Brothers Automotive Corporation offers comprehensive assistance to its franchisees. Before opening, Christian Brothers Automotive Corporation helps with site selection, constructs the building, advises on equipment and decorations, and assists with pre-opening publicity. It provides access to its confidential training materials and operations manual, and conducts an initial training program for the principal operator and service manager. After opening, Christian Brothers Automotive Corporation continues to assist with pricing, parts ordering, supplier relationships, and improving operational procedures. It also provides on-site training during the initial weeks, ongoing coaching from a Performance Consultant, and personnel support for operational problems. Further support includes a telephone helpline, sales/service materials, product updates, and coordinating telephone and internet services for new buildings.
Initial Training Hours
545
Training Location
Houston, TX, certified training locations, and franchisee's designated location, with online components
Ongoing Support
Christian Brothers Automotive Corporation provides ongoing support to its franchisees through continuous improvement of its operating procedures and systems, offering information and training on new developments. Franchisees receive regular coaching from a designated Performance Consultant during their first year and potentially throughout the life of the franchise. Additional ongoing support includes a telephone helpline during business hours, sales and service support materials, product and service updates, general guidance, troubleshooting assistance, and timely progress reports.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Full-Time
Territory Type
exclusive
Staff Count
4
Territory Size Requirements
Christian Brothers Automotive Corporation typically grants a territory similar to an area with an approximate 3-mile radius around the franchise location. The exact size and shape of the territory are defined in Exhibit A of the Franchise Agreement and can vary based on several factors.
Staffing Notes
Christian Brothers Automotive Corporation assists franchisees in recruiting and training a minimum staff of one Service Manager and three technicians, although franchisees are solely responsible for all hiring decisions. The Principal Operator must personally supervise the business, and the Service Manager must also oversee daily operations. The Service Manager is prohibited from having ties to competitors and may be required to sign confidentiality and non-compete agreements. The Confidential Operations Manual provides extensive guidance on human resources, including job responsibilities, ideal employee profiles, recruitment, hiring, new employee paperwork, orientation, training, dress codes, grooming standards, personnel policies, wages, benefits, performance reviews, and employee discipline.