What conditions must a Big O Tires licensee meet to terminate the agreement after March 1, 2023?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Upon the expiration or earlier termination of each Franchise Agreement subject to this Agreement, and during the Restrictive Period, Big O agrees not to market to any Local Customer of the Authorized Location subject to the terminated Franchise Agreement, provided that (i) at the time of the expiration or termination of the Franchise Agreement, and at all times during the Restrictive Period, Franchisee is in full compliance with all of the termination provisions of the Franchise Agreement, including all on-going post termination provisions (ii) Franchisee provides Big O with written notice of such affirmative compliance within thirty (30) days of the expiration or termination of the Franchise Agreement, and at such other times as Big O may reasonably request; and (iii) Big O does not dispute such affirmative compliance in writing within fifteen (15) days of receipt of said written notice.
However, should Big O dispute the affirmative compliance within the fifteen (15) day time frame provided in this subsection, then the parties acknowledge and agree that the dispute shall be submitted to the Franchise Advisory Council to resolve.
The Franchise Advisory Council shall have sixty (60) days in which to render its decision, which decision shall be binding on Big O and Franchisee.
Until the Franchise Advisory Council has rendered its decision, Big O agrees that it will not market to any Local Customer of the Authorized Location.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to the 2025 Big O Tires Franchise Disclosure Document, a franchisee seeking to terminate their agreement must comply with all termination provisions of the Franchise Agreement, including all on-going post termination provisions. The franchisee must provide Big O Tires with written notice of such affirmative compliance within thirty (30) days of the expiration or termination of the Franchise Agreement, and at such other times as Big O Tires may reasonably request.
Big O Tires has fifteen (15) days from receipt of the franchisee's written notice to dispute the affirmative compliance in writing. If Big O Tires disputes the compliance, the dispute will be submitted to the Franchise Advisory Council for resolution. The Franchise Advisory Council has sixty (60) days to render a decision, which is binding on both Big O Tires and the franchisee. Until the Franchise Advisory Council makes its decision, Big O Tires agrees not to market to any Local Customer of the Authorized Location.
This clause protects the franchisor from franchisees who might try to leave the system without fulfilling their contractual obligations, and it protects the franchisee by ensuring that the franchisor cannot unfairly prevent them from leaving the system and competing fairly. The involvement of the Franchise Advisory Council provides a mechanism for resolving disputes in a way that is intended to be fair to both parties.