FDD Talk: What You Need to Know About the Christian Brothers Automotive Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Christian Brothers Automotive franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Christian Brothers Automotive franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Christian Brothers Automotive franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Christian Brothers Automotive’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average gross sales for the 151 CBA franchisee-owned stores that were open for the entire year of 2016, based upon the following indicated sales ranges:  greater than $3M, $2.5M to $3M, $2.25M to $2.5M, $2M to $2.25M, $1.75M to $2M, $1.5M to $1.75M, $1.25M to $1.5M, $1M to $1.25M, and less than $1M

• average gross sales, cost of goods sold, gross profit, general and administrative expenses, net operating income, and total owner benefit for the 1st year, 2nd year, 3rd year, 4th year, and 5th+ year CBA franchisee-owned stores that were open for the entire year of 2016

• 2016 low, high, and average total owner benefit for the top 20% total owner benefit performers (30 stores), based on the 151 CBA franchisee-owned stores that were open for the entire year of 2016

• 2016 low, high, and average shop labor rate for the 151 CBA franchisee-owned stores that were open for the entire year of 2016

• 2016 low, high, and average annual car count for the 151 CBA franchisee-owned stores that were open for the entire year of 2016

Section I – Background Information

8 Things You Need to Know About the Christian Brothers Automotive Franchise

Celebrates Top Franchisees at Annual Convention

1.  In early April, Christian Brothers Automotive held its annual convention in Scottsdale, Arizona to celebrate another year of growth and to honor some of its most outstanding franchisees. Mark Carr, founder, CEO, and president of Christian Brothers Automotive, said, “Choosing who to honor for this year’s awards was more difficult than ever before, because we had so many amazing examples of dedicated, driven franchisees to choose from.”

2.  The top awards included:

• The Founders Award presented to Woodway, Texas Christian Brothers owners Sterling and Leigh Woody. This award recognizes the franchisee that best exemplifies the founding principles of Christian Brothers Automotive and is chosen solely by Carr.

• Rookies of the Year given to Lafayette, Colorado Christian Brothers owners Richard and Holly Welty, for achieving the highest percentage of growth over the previous year.

• Franchise of the Year awarded to Highlands Ranch, Colorado Christian Brothers owners Greg and Tina Joseph. This award recognizes a franchise that has performed exceptionally well in all facets of business operation.

• Lighthouse Award presented to Jack Moore, a franchise owner who embodied the spirit of the brand. Nominees for the Lighthouse Award are suggested and voted on by fellow franchisees, and this year’s award was given posthumously to Moore, former owner of Jones Bridge Christian Brothers in Alpharetta, Georgia. Moore passed away in 2015 and is survived by his wife, Darla, and their three children, Dylan, Taylor, and Madison.

3.  In addition to the annual convention, Christian Brothers Automotive had its annual outreach mission event. Last year, the brand helped create new shoes for children in Jinja, Uganda. The company created the shoe patterns, which were sent to Uganda to be sewn by local tailors who are paid fair wages, and finished by the Sole Hope Shoemakers. Christian Brothers also donated money, which will aid Sole Hope in offering medical treatment, feet washing, and education on sanitizing and preventing the spread of diseases across the region.

Offering Automotive Services on European Vehicles

4.  Christian Brothers Automotive stands out from its competitors because it offers maintenance and servicing on European vehicles, which the brand says not many U.S. auto repair shops know how to properly service. The company also says that most people in the U.S. drive American and Japanese cars, so most repair shops focus on servicing these cars and not ones from Europe.

5.  Christian Brothers Automotive’s franchisees are able to service a wide range of European vehicles with a “level of expertise and accuracy” above competing technicians. Christian Brothers CEO Mark Carr said, “The ability of our franchises to service and repair European vehicles is a really important aspect of the services we offer. Franchise owners are able to increase customer traffic and frequency while capitalizing on the financial upturn that comes with servicing a larger number of vehicles.”

Company History

6.  Christian Brothers Automotive was founded in 1982 in Mission Bend, Texas by Mark Carr and his business partner, an automotive technician that Carr met at a church function. Initially, Carr was an offsite owner and his partner handled the daily operations. After a few years, Carr eventually bought out his partner and became the full-time owner and operator of the business.

7.  Around 1996, Carr helped a friend start his own automotive repair shop, which within a year surpassed Carr’s original location in annual gross revenue. Carr was inspired to start franchising and he began expanding throughout Texas. Today, there are over 165 Christian Brothers Automotive locations around the U.S.

Entrepreneur’s Franchise 500

8.  In the past ten years, Christian Brothers Automotive appeared on Entrepreneur’s annual Franchise 500 list from 2011 to 2016. The company’s highest rank during that period was No. 226 in 2013, while its lowest rank was No. 267 in 2014.

Section II – Estimated Costs

• Please click here for detailed estimates of Christian Brothers Automotive franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Christian Brothers Automotive’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

• The following tables and figures relate to the 151 CBA Stores that are franchisee-owned and that were open and operating for the entire 2016 year. This does not include the 6 CBA Stores that were opened in 2016.

Part 1 – Average Gross Sales, by Sales Range

• Set forth in this Part 1 are the average Gross Sales for the year ending December 31, 2016 for the 151 CBA Stores that are franchisee-owned and that were open for the entire year of 2016, based upon the below indicated sales ranges.

• This table includes all Stores that were open by January 1, 2016, and does not include any of the 6 Stores that were opened in 2016.

Sales Range:  Greater Than $3M