What conditions must a Big O Tires franchisee meet to exercise their first option rights?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
First Option Rights. Subject to certain exceptions generally described in this paragraph or Item 12, each franchisee is granted an option to apply for any new Big O franchise to be located within five miles of the franchisee's existing Big O Store, determined as a radius of five miles from the geographic center of your location. You must meet certain conditions to exercise your First Option Rights, including that you are in compliance with your Franchise Agreement, as determined solely by Big O. If you apply for a Big O franchise using your first option rights, the franchise deposit of $10,000 must be paid with your application to exercise your first option rights. The balance of the initial franchise fee must be paid to us at the time specified by us in our notice of the right to exercise first option rights, but in no event later than the earlier of: (a) date you sign the new Franchise Agreement, or (b) 120 days from the deadline for submitting an application to Big O to exercise your first option rights (this deadline is 30 days after Big O gives notice that the franchisee may exercise its first option rights). The franchise deposit becomes nonrefundable upon our approval of your franchise application. See Item 12 for a more detailed discussion on your First Option rights.
Source: Item 5 — INITIAL FEES (FDD pages 14–21)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, a franchisee has the first option to apply for a new Big O Tires franchise within a five-mile radius of their existing store. To exercise these rights, the franchisee must be in compliance with their current Franchise Agreement, as determined solely by Big O Tires.
When applying for a new franchise under the first option rights, the franchisee must include a $10,000 franchise deposit with their application. The remaining balance of the initial franchise fee is due as specified in the notice of the right to exercise the first option, but no later than the earlier of the date the new Franchise Agreement is signed, or 120 days from the application deadline. The application deadline is 30 days after Big O Tires gives notice that the franchisee may exercise its first option rights.
It's important to note that the franchise deposit becomes nonrefundable once Big O Tires approves the franchise application. Prospective franchisees should carefully review Item 12 of the FDD for a more detailed discussion of the first option rights, including any exceptions or limitations that may apply.