Does Big O Tires always require the Guaranty of Franchisee's Agreement to be signed?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
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GUARANTY OF FRANCHISEE'S AGREEMENT
In consideration of, and as an inducement to, the execution of the foregoing Franchise Agreement by Big O Tires, LLC ("Big O"), the undersigned hereby jointly and severally guarantee unto Big O that _________________________ ("Franchisee") will perform and/or pay each and every covenant, payment, agreement, obligation, liability and undertaking on the part of Franchisee contained and set forth in or arising out of such Franchise Agreement, and every other agreement signed by the Franchisee with Big O (the "Obligations").
Big O, its successors and assigns, may from time to time, without notice to the undersigned (a) resort to the undersigned for payment of any or all of the Obligations of the Franchisee to Big O, whether or not Big O or its successors have resorted to any property securing any of the Obligations or proceeded against any of the undersigned or any party primarily or secondarily liable on any of the Obligations; (b) release or compromise any Obligation of the Franchisee or of any of the undersigned hereunder or any Obligations of any party or parties primarily or secondarily liable on any of the Obligations; and (c) extend, renew or credit any of the Obligations of the Franchisee to Big O for any period (whether or not longer than the original period), alter, amend or exchange any of the Obligations, or give any other form of indulgence, whether under the Franchise Agreement or not.
Each of the undersigned further waives presentment, demand, notice of dishonor, protest, nonpayment and all other notices whatsoever, including without limitation: notice of acceptance hereof; notice of all contracts and commitments; notice of the existence or creation of any liabilities under the foregoing Franchise Agreement and other agreements and of the amount and terms thereof; and notice of all defaults, disputes or controversies between Franchisee and Big O resulting from such Franchise Agreement, other agreements or otherwise, and the settlement, compromise or adjustment thereof.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 77–78)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the "Guaranty of Franchisee's Agreement" is used in conjunction with the Franchise Agreement. This agreement ensures that the Franchisee will perform and fulfill all obligations, payments, and agreements outlined in the Franchise Agreement and any other agreements signed with Big O Tires.
Big O Tires retains the right to seek payment from the guarantor without first pursuing the franchisee or any secured property. Additionally, Big O Tires can release or compromise any obligation of the franchisee or extend/renew the franchisee's obligations without notifying the guarantor. The guarantor also waives certain rights, including notices of acceptance, liabilities, defaults, and disputes.
In practical terms, this means that if you are a Big O Tires franchisee, you may be required to have a guarantor sign this agreement, making that person or entity responsible for your financial and contractual obligations to Big O Tires. This could be a significant consideration for prospective franchisees, as it involves another party taking on risk related to the franchise's performance.