What conditions must a Big O Tires tenant meet to exercise the renewal option for the lease?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.3. Renewal Option. Provided that at the time of the giving of Tenant's renewal notice and at the end of the term hereof Tenant is not in default of any of the terms, conditions or covenants contained herein and provided, further, that the Franchise Agreement (as defined in Section 4) has been renewed by Tenant and Big O Tires, LLC, a Nevada limited liability company ("Big O"), Tenant (including any approved assignee or subtenant) is hereby granted the option to extend this Lease for two (2) successive additional terms of five (5) years each (the "Extended Terms") upon Tenant's notifying Landlord in writing of its election to extend at least one hundred eighty (180) days prior to expiration of this Lease. During such Extended Terms, if exercised, this Lease shall be on the same terms and conditions contained herein except: (a) the Extended Terms shall contain no further extension options unless expressly granted by Landlord in writing; and (b) Tenant agrees to pay to Landlord during said
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to the 2025 Big O Tires Franchise Disclosure Document, a tenant can extend their lease for two additional five-year terms if they meet certain conditions. To exercise the renewal option, the tenant must not be in default of any terms, conditions, or covenants at the time of giving the renewal notice and at the end of the current lease term. Additionally, the Franchise Agreement between the tenant and Big O Tires must also be renewed.
If these conditions are met, the tenant can extend the lease by notifying the landlord in writing at least 180 days before the lease expires. During the extended terms, the lease remains under the same terms and conditions, except for two key changes. First, there are no further extension options unless the landlord expressly grants them in writing. Second, the tenant must pay an annual base rent during the extended term, which will be set and adjusted according to the lease agreement.
This means that a Big O Tires franchisee needs to maintain a good standing under both the lease agreement and the franchise agreement to be eligible for lease renewal. Failing to meet these conditions could result in losing the option to extend the lease, which could significantly impact the franchisee's business operations and location security. Therefore, franchisees should prioritize compliance with all lease terms and ensure timely renewal of their franchise agreement to secure their long-term business location.