In the Big O Tires consolidated financial statements, what happens to intercompany transactions and balances?

According to Big O Tires' 2025 Franchise Disclosure Document, the company's consolidated financial statements include the accounts of TBC Holdings, LLC and its wholly-owned subsidiaries. In the consolidation process, all transactions and balances between these related companies are eliminated.

This means that any financial activity, such as sales, loans, or payments, that occurs between Big O Tires and its subsidiaries is removed from the overall financial picture presented in the consolidated statements. This is a standard accounting practice to avoid inflating the financial results of the parent company by counting the same transactions multiple times.

For a prospective Big O Tires franchisee, this information is relevant because it provides insight into how the financial performance of the entire Big O Tires organization is presented. By eliminating intercompany transactions, the consolidated financial statements offer a clearer view of the company's financial health and performance from an external perspective. This can help franchisees assess the stability and potential of the Big O Tires franchise system.