What agreement must the assignee execute with Big O Tires as part of the transfer process?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
. If Franchisee or any Owner desires to make a Transfer, such person or Entity must comply with the following terms, conditions, and procedures to effectuate a valid Transfer:
- (a) If any proposed assignment of any rights under this Agreement, or if any other Transfer would in the reasonable opinion of Big O result in a Change of Control:
- (i) The transferee must apply for a Big O franchise and must meet all of Big O's then current standards and requirements for becoming a Big O franchisee, which standards and requirements need not be written and which standards may vary with the circumstances (such as past or anticipated sales volume or real estate value of a particular Store).
- (ii) The transferee or Franchisee shall, at Big O's election, execute the then current form of Franchise Agreement generally being offered to franchisees in the State in which the Big O Store is located. Such agreement shall generally provide for a new term equal to the term of the standard Big O franchise agreement then being offered, and may include, among other matters, a different fee structure, increased fees, different terms and conditions, a modified Trade Area and different purchase requirements;
- (iii) The transferee, Franchisee, and Big O shall execute an Agreement and Consent to Assignment of Big O Tires Store in the form then in use by Big O;
- (iv) Notwithstanding the foregoing, Big O or its assignee may, within thirty (30) days after receipt of notice as provided in Section 18.04(b)(i), below, elect the Option to purchase the interest being offered by Franchisee or any Owner at the same terms, conditions and fees set forth in such notice; and
- (v) The transferee or Franchisee shall, at Big O's election, have obtained prior to the Transfer a surety bond or letter of credit in an amount specified by Big O or a Local Group designated by Big O from time to time for each Big O Store of Franchisee issued by a
surety company or bank reasonably acceptable to Big O in favor of Big O or, at Big O's election, to the Local Group, which surety bond or letter of credit may not be revoked, terminated or modified until two years (or such other time period as designated by Big O from time to time) after the date of the Transfer. Such bond or letter of credit shall be payable to the order of Big O or the Local Group, as the case may be, for any nonpayment by the transferee or Franchisee of contributions due to the National Marketing Program or the Local Fund pursuant to the Franchise Agreement to which the transferee or Franchisee is a party;
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, if a franchisee desires to transfer their franchise, the transferee must apply for a Big O Tires franchise and meet all of Big O's current standards. The transferee or franchisee will need to execute the current form of the Franchise Agreement generally offered to franchisees in the state where the Big O Tires store is located. This new agreement will have a term equal to the standard Big O Tires franchise agreement and may include different fee structures, increased fees, different terms and conditions, a modified Trade Area, and different purchase requirements. Additionally, the transferee, franchisee, and Big O Tires must execute an Agreement and Consent to Assignment of Big O Tires Store in the form then in use by Big O.
Furthermore, the assignee, by executing the Agreement and Consent to Assignment, expressly agrees to execute a new Franchise Agreement with Big O Tires. The assignee also represents that they have received a copy of Big O Tires’ Franchise Disclosure Document, along with exhibits, at least seven business days prior to executing the agreement. As of the closing date, the Franchise Agreement between the assignor and Big O Tires will terminate and have no further effect.
Big O Tires will only consent to the transfer if the assignor and/or assignee fulfill certain conditions. Big O Tires must receive all amounts due and owing from the Big O Tires store under the Franchise Agreement or any other agreement the assignor or guarantors have with Big O Tires relating to the store. If the amount escrowed is insufficient and the assignor fails to pay the shortfall, Big O Tires can withdraw its consent to the assignment. Big O Tires also reserves the right to collect any amounts due from the assignor after a final reconciliation of the assignor's accounts, which may occur after the effective date. The assignor and guarantors must pay any such amounts upon demand, and failure to do so allows Big O Tires to withdraw its consent to the assignment.