Are changes to Big O Tires standards applied in a discriminatory manner?

You must establish and operate your Big O Store in compliance with your Franchise Agreement and the standards and specifications contained in our confidential operating manual ("Manual"). Our Manual consists of various written, electronic, audio, video, and Internet instructions, including our Franchise Policies & Standards Manual, consisting of our policies and standards on various matters. The Manual also includes any training materials, including the online Learning Management System, or any other proprietary information and other materials stating Big O's standards, policies, procedures, technical bulletins or other information, including any information posted on the Big O Tires Website Business Center. The Manual is designed to protect our reputation and the goodwill of the Licensed Marks, it is not designed to control the day-to-day operations of your Big O Store. Our Manual may be modified by us periodically to reflect changes in authorized products and services, standards or service quality, and the operations of Big O Stores. It is your responsibility to maintain an updated Manual, or if provided electronically, to regularly check for updates to the Manual and maintain compliance with the current Manual. In the event of a dispute as to the contents of the Manual, the most recent revision made and issued by us shall control.

We have standards and specifications for your Store, the premises where your Store is located, equipment, signage, furniture, fixtures, wearables, supplies, forms, inventory, advertising materials, computer software and hardware, and most products and other items used in or sold through your Big O Store. Standards and specifications include standards for delivery, performance, warranties, signage, fixtures, design, appearance, quality and other matters. You must purchase or lease all products,

equipment, supplies, and services used in or sold through your Big O Store in accordance with our standards and specifications only from us or other sources approved by us. When you sign the Franchise Agreement, we will grant you online access to the Manual. Included in the Manual is a list of our approved suppliers. We have the right to change the standards and specifications included in the Manual, including the list of approved suppliers. You must comply with all standards and changes which are deemed, by their terms, to be mandatory; provided that the changes are applied in a reasonable and nondiscriminatory manner among comparable Big O franchisees. The Franchise Agreement also provides that you must comply with Big O's national fleet account policies and must participate in Big O's national fleet account programs, which are described in Item 11 (see paragraph 7 under "Continuing Obligations"). Also, periodically, we may institute pricing or discount programs in which the availability of lower prices or of discounts may depend, in whole or in part, on your meeting certain requirements established by us.

Tires. We sell lines of private label tires to Big O Tire Stores. These private label tires may be manufactured by Sumitomo Corporation, which holds a partial indirect ownership interest in us, or unaffiliated manufacturers. We may look to other manufacturers to produce tire products in the future. We do not manufacture tires. Most products are delivered to franchisees from the RDC servicing their area at a minimum of twice weekly. We commit to supply you with the Big O branded tire lines but we do not guarantee to supply you with any specific numbers or sizes of tires or with any other specific tire brands. However, we do have a fill rate policy which is described in Item 6, Note 2.

We are the only approved supplier of Big O private brand tires and other private brand products which are manufactured exclusively for us or TBC.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)