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 2021 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 2021 FDD
- Section IV – Number of franchised and company-owned Christian Brothers Automotive outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
- Section V – Presentation and analysis of Christian Brothers Automotive’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
- 2020 average gross sales for the 210 CBA franchisee-owned stores that were open for the entire year of 2020, 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 1 year old, 2 year old, 3 year old, 4 year old, and 5+ year old CBA franchisee-owned stores for the year ending December 31, 2020
- 2020 average, median, low, and high total owner benefit for the top 20% (42 stores) and bottom 20% (42 stores) total owner benefit performers, based on the 210 CBA franchisee-owned stores that were open for the entire year of 2020
- 2020 average, median, low, and high shop labor rate for the 210 CBA franchisee-owned stores that were open for the entire year of 2020
- 2020 average, median, low, and high annual car count for the 210 CBA franchisee-owned stores that were open for the entire year of 2020
Section I – Background Information
20 Things You Need to Know About the Christian Brothers Automotive Franchise
Ramps Up Development Efforts Following Milestone Success in 2020
1. In mid-January 2021, Christian Brothers Automotive reflected back on 2020 and outlined projections for the year ahead. It’s abundantly clear that the investment into new technology prior to the pandemic, along with the brand’s efficient operations model, positioned the franchise system to be agile and set record-breaking sales growth during a turbulent year full of uncertainty.
2. With the tried and tested operating principles in the driver’s seat leading the way, the brand’s 2020 performance metrics indicate the brand’s strength and yield for strong growth potential in the year ahead:
- 10.5% systemwide sales growth
- 19 new store openings
- 20 new construction projects completed
- 0 locations closed
3. Donnie Carr, president of Christian Brothers Automotive, said, “Our faith-based approach to automotive repair has buoyed business for many of our franchisees and we pride ourselves on always supporting our franchise family through every challenge and the pandemic has been no exception. Without our incredible franchisees and their teams, our growth and success this year and every year wouldn’t have been possible. We look forward to keeping up the momentum and exceeding our goals for 2021.”
4. Long distinguished as the most trustworthy auto repair company, Christian Brothers Automotive’s 2021 expansion plan aims for more than 23 additional locations and 35 new and multi-unit franchise licenses combined by the end of 2021. With over 230 locations in more than 30 states currently, Christian Brothers’ development efforts will be focused on new sites in West Philadelphia; Santa Fe, N.M.; Richmond, Va.; Lake Jackson, Texas; Winston-Salem, N.C.; as well as several Florida sites in Melbourne, Orlando, Bradenton, and Sarasota.
5. Carr added, “Our success in 2020 laid the groundwork to build out our presence in existing markets in 2021, and that’s really where our developments efforts are going to be focused over the next 12 months. We’re excited for what the future holds for Christian Brothers.”
Appoints New Director of Franchise Development
6. In mid-April 2021, Christian Brothers Automotive continued to accelerate the brand’s long-term growth with the announcement of Missy Wright’s promotion to director of franchise development. Wright, who has been with Christian Brothers for more than four years, will now be responsible for leading the team’s franchise development managers and lead qualifier.
7. In her role as director of franchise development, she will now be in charge of onboarding for the franchise development team and equipping them with the resources, support, and industry knowledge needed to help sell the Christian Brothers Automotive franchise opportunity.
8. Donnie Carr, president of Christian Brothers Automotive, said, “Missy’s dynamic leadership style immediately sets her apart, and her understanding of the Christian Brothers brand and intricacies of the franchising industry make her an excellent fit for the role and an invaluable asset to our team. Missy will be key in training and managing the team as we propel our franchise development efforts forward and we look forward to growing as a franchise system under her leadership.”
9. Before her promotion to director of franchise development, Wright worked as a franchise development manager for Christian Brothers and gained valuable insight on the automotive industry. Prior to joining the Christian Brothers team, she launched her franchising industry career with Pinot’s Palette.
10. Wright said, “I’m looking forward to upholding the expansive growth standards that Christian Brothers is known for while adding new energy and drive to the system. The talent within the brand is unparalleled – from the corporate team to the extremely passionate and happy franchisees. I look forward to being part of the continual success with this incredible brand.”
Promotes Donnie Carr to CEO
11. In early October 2021, Christian Brothers Automotive announced the retirement of founder and CEO Mark Carr, and the appointment of his son and longtime company executive, Donnie Carr, to the role. Mark leaves the company’s operations after a strategic transitional phase, where he worked closely with Donnie to continue the brand’s tenured success and growth.
12. For nearly 40 years under Mark Carr’s leadership, Christian Brothers Automotive has expanded from a single location in Houston to more than 240 locations. Donnie has served the company in leadership roles for more than a decade, most recently as president, which he will continue to serve as in addition to CEO. In more recent years, Donnie and Mark have worked together to co-lead the company, setting revenue and profitability records and expanding to new geographic markets across the United States.
13. Mark Carr said, “Donnie brings the leadership qualities that Christian Brothers Automotive needs as it enters its next phase in business. He is a visionary who sets compelling goals that are quickly embraced by the home office team and franchisees, and he does so with humility and intense personal accountability. After witnessing Donnie launch major profit-focused initiatives as he took on new leadership roles over the past 14 years, I have no doubt that his innovative mindset will steer CBA to new heights.”
14. The announcement comes as the company celebrates two and a half decades of franchising and nears its 40th anniversary in 2022. Acknowledging that it has taken immeasurable employee contributions over the years to reach where the company is today, Christian Brothers Automotive also announced the launch of an employee stock ownership plan (ESOP), which collectively gives employees the chance to take ownership of a substantial portion of the company.
15. Donnie Carr added, “I’m so thankful for the unrelenting effort of our team, many of whom have been with the company for years. Their loyalty and commitment to CBA’s values are a true source of pride for me and the entire organization. It’s because of their dedication that we’ve launched the ESOP. It’s a way of showing our thanks and allegiance to them. Plus, it’s an incredible legacy for my father, whose generosity and passion inspire me every day.”
Company History
16. Christian Brothers Automotive was founded in 1982 by Mark Carr and his business partner, who was a friend from church, in Mission Bend, Texas. Prior to starting Christian Brothers Automotive, Carr had been working as a graphic arts salesman for a photographic mural company, but wanted to do something different.
17. Carr prayed to God to provide him a new business and the next day his friend approached him with a business opportunity. They were encouraged by their Sunday school class to call it Christian Brothers Automotive, as they were two brothers in Christ. Initially, Carr and his partner ran the day-to-day operations together, but after a few years, Carr bought out his partner.
18. Under Carr’s leadership, Christian Brothers Automotive began to thrive. After seeing his success, one of Carr’s friends asked how he could open his own auto repair shop. Carr helped this friend set up his shop and within a year, he was outperforming Carr’s original shop. Carr realized that his friend’s business was outperforming his because of the fast track training, robust systems and procedures, and a demographically better location. This was around 1996 and Carr decided to start franchising Christian Brothers Automotive.
19. Over the next few decades, Christian Brothers Automotive continued to grow around the Southern and Southwestern United States. In 2019, the brand reached its goal of opening 200 locations.
Entrepreneur’s Franchise 500
20. Christian Brothers Automotive ranked No. 301 on Entrepreneur’s 2021 Franchise 500 list.
Section II – Estimated Costs
- Detailed estimates of Christian Brothers Automotive franchise costs, based on Item 7 of the company’s 2021 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- 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 2021 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
Franchised
2018
- Outlets at the Start of the Year: 172
- Outlets at the End of the Year: 193
- Net Change: +21
2019
- Outlets at the Start of the Year: 193
- Outlets at the End of the Year: 210
- Net Change: +17
2020
- Outlets at the Start of the Year: 210
- Outlets at the End of the Year: 227
- Net Change: +17
Company-Owned
2018
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
2019
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 3
- Net Change: +2
2020
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 4
- Net Change: +1
Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis
- The following tables and figures relate to the 210 CBA Stores that are franchisee-owned and that were open for the entire year of 2020. This does not include the 3 CBA Stores operated by CBA, and the 18 CBA Stores that were opened in 2020.
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, 2020 for the 210 CBA Stores that are franchisee-owned and that were open for the entire year of 2020, based upon the below indicated sales ranges.
- This table includes all Stores that were open before January 1, 2020, and does not include any of the 18 Stores that were opened in 2020.
Sales Range: Greater Than $3M
- Number of Stores Included: 4
- Average Sales: $3,903,850
Sales Range: $2.5M to $3M
- Number of Stores Included: 7
- Average Sales: $2,645,167
Sales Range: $2.25M to $2.5M
- Number of Stores Included: 11
- Average Sales: $2,311,446
Sales Range: $2M to $2.25M
- Number of Stores Included: 15
- Average Sales: $2,112,786
Sales Range: $1.75M to $2M
- Number of Stores Included: 35
- Average Sales: $1,859,560
Sales Range: $1.5M to $1.75M
- Number of Stores Included: 55
- Average Sales: $1,641,063
Sales Range: $1.25M to $1.5M
- Number of Stores Included: 51
- Average Sales: $1,380,414
Sales Range: $1M to $1.25M
- Number of Stores Included: 21
- Average Sales: $1,141,297
Sales Range: Less Than $1M
- Number of Stores Included: 11
- Average Sales: $879,673
Average Unit Volume
- Number of Stores Included: 210
- Average Sales: $1,669,700
Part 2 – Average Gross Sales, Cost of Goods Sold, Gross Profit, General and Administrative Expenses, Net Operating Income, and Total Owner Benefit, by Number of Years in Operation
- Included in this Part 2 are 210 CBA Stores that are franchisee-owned and that were open for the entire year of 2020. This table does not include any of the 18 Stores that were opened in 2020.
- Set forth in this Part 2 is a comparison table of Gross Sales and certain expenses for 1 year old, 2 year old, 3 year old, 4 year old, and 5+ year old CBA Stores for the year ending December 31, 2020.
Average Gross Sales
- 1st year (18 Stores): $1,209,010
- 2nd year (21 Stores): $1,598,707
- 3rd year (15 Stores): $1,579,525
- 4th year (6 Stores): $1,605,646
- 5th year+ (150 Stores): $1,746,502
- Average (210 Stores): $1,669,700 (100.0%)
Average Cost of Goods Sold
- 1st year (18 Stores): $549,165
- 2nd year (21 Stores): $698,327
- 3rd year (15 Stores): $688,457
- 4th year (6 Stores): $705,333
- 5th year+ (150 Stores): $761,026
- Average (210 Stores): $729,822 (43.7%)
Average Gross Profit
- 1st year (18 Stores): $659,845
- 2nd year (21 Stores): $900,380
- 3rd year (15 Stores): $891,067
- 4th year (6 Stores): $900,313
- 5th year+ (150 Stores): $985,476
- Average (210 Stores): $939,878 (56.3%)
Average General and Administrative Expenses
- 1st year (18 Stores): $600,332
- 2nd year (21 Stores): $699,282
- 3rd year (15 Stores): $668,794
- 4th year (6 Stores): $710,818
- 5th year+ (150 Stores): $726,742
- Average (210 Stores): $708,567 (42.4%)
Average Net Operating Income
- 1st year (18 Stores): $58,458
- 2nd year (21 Stores): $201,636
- 3rd year (15 Stores): $219,942
- 4th year (6 Stores): $188,923
- 5th year+ (150 Stores): $259,206
- Average (210 Stores): $231,429 (13.9%)
Average Total Owner Benefit
- 1st year (18 Stores): $118,055
- 2nd year (21 Stores): $174,772
- 3rd year (15 Stores): $175,641
- 4th year (6 Stores): $193,887
- 5th year+ (150 Stores): $208,658
- Average (210 Stores): $194,723 (11.7%)
- Gross Sales is defined as all gross revenue derived from labor, parts, and sub-contracted labor/parts and supplies.
- Cost of Goods Sold is defined as all technician labor, part costs, and all sub-contracted labor/parts associated with Gross Sales.
- Gross Profit is defined as profit after Cost of Goods Sold are paid, but before General & Administrative expenses are paid.
- General & Administrative Expenses is defined as general overhead expenses for the business including, but not limited to: rent, utilities, office salaries, taxes, etc.
- Net Operating Income is defined as income (earnings) before depreciation, amortization, interest, royalty expenses, and expenses for franchisee bonuses (profit splits).
- Total Owner Benefit is defined as the sum of the owner’s salary and any cash distribution or bonus the owner took during the calendar year. It does not, however, include the owner’s benefit of major medical health insurance premiums valued at up to approximately $13,000 per year for a married couple with dependent children nor does it include the owner’s benefit of principal reduction on any commercial debt service the owner has from the original business loan valued at approximately $25,000 per year.
Part 3 – Total Owner Benefit of Top 20% and Bottom 20% Performers
- Set forth in Part 3 is the Total Owner Benefit of the top and bottom 20% Total Owner Benefit performers (42 Stores) for the year ending December 31, 2020 based on the 210 CBA franchisee-owned Stores that were opened for the entire year of 2020. This table includes all Stores that were open by January 1, 2020, and does not include any of the 18 Stores opened in 2020.
Total Owner Benefit for Top 42 (Out of 210 Franchisee-Owned Locations)
- Low Total Owner Benefit for Top 42: $257,711
- Median Total Owner Benefit for Top 42: $330,212
- High Total Owner Benefit for Top 42: $965,462
- Average Total Owner Benefit for Top 42: $364,891
Total Owner Benefit for Bottom 42 (Out of 210 Franchisee-Owned Locations)
- Low Total Owner Benefit for Bottom 42: $5,000
- Median Total Owner Benefit for Bottom 42: $66,367
- High Total Owner Benefit for Bottom 42: $95,462
- Average Total Owner Benefit for Bottom 42: $66,338
Part 4 – Shop Labor Rate
- Set forth in Part 4 is the Shop Labor Rate range and average for the year ending December 31, 2020 for the 210 CBA franchisee-owned Stores that were open for the entire year of 2020. This table includes all Stores that were open by January 1, 2020, and does not include any of the 18 Stores opened in 2020.
Shop Labor Rate
- Low Shop Labor Rate: $106.00/hour
- Median Shop Labor Rate: $125.00/hour
- High Shop Labor Rate: $149.50/hour
- Average Shop Labor Rate: $125.55/hour
Part 5 – Annual Car Count
- Set forth in Part 5 is the Annual Car Count (customer count) range and average for the year ending December 31, 2020 for the 210 CBA franchisee-owned Stores that were open for the entire year of 2020. This table includes all Stores that were open by January 1, 2020, and does not include any of the 18 Stores opened in 2020.
Annual Car Count:
- Low Annual Car Count: 1,971
- Median Annual Car Count: 3,946
- High Annual Car Count: 17,693
- Average Annual Car Count: 4,069
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