Can Big O Tires conduct inspections and audits after the termination of the Franchise Agreement?

According to Big O Tires' 2025 Franchise Disclosure Document, Big O Tires retains the right to conduct inspections and audits even after the Franchise Agreement has been terminated, regardless of the reason for termination. This means that even after a franchisee's relationship with Big O Tires ends, the company can still examine their records and business practices related to the period they were operating as a franchisee.

This provision allows Big O Tires to ensure compliance with the Franchise Agreement terms, even after the agreement is no longer in effect. For instance, if there are suspicions of underreported sales or other financial discrepancies during the franchise term, Big O Tires can investigate these issues post-termination. The audit can cover the entire period from when the franchisee first acquired the franchised business until the audit's conclusion date.

If an audit reveals that a franchisee has understated any amounts owed to Big O Tires or any local group or fund, the franchisee is obligated to pay the outstanding amount within ten days of receiving the auditor's report. This payment will also include interest, calculated at the lower of 18% per annum or the highest rate permitted by law. Furthermore, if the audit uncovers that the franchisee understated gross sales by more than 2% or if the franchisee obstructs or fails to cooperate with the audit, the franchisee will be responsible for reimbursing Big O Tires for the audit's costs and expenses.

This post-termination audit provision is a significant aspect of the Big O Tires franchise agreement. Prospective franchisees should be aware that their financial records and business operations may be subject to scrutiny even after they cease to be a part of the Big O Tires system. This underscores the importance of maintaining accurate records and adhering to the terms of the Franchise Agreement throughout the duration of the franchise relationship.