What credit does Big O Tires offer to existing franchisees who refer a prospective franchisee?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise Referral Program. We encourage referrals from our existing franchisees of a prospective franchisee to us. Our referral program offers a $10,000 referral fee to the person who refers to us a franchisee prospect that we are not currently in discussions with and have not previously contacted. The referral fee is payable only if the referred prospect becomes a Big O franchisee. The referral fee is applied as a credit against an existing franchisee's trade account 30 days after the opening of the new Big O Store. The incoming prospective franchisee must have signed a Franchise Agreement and the initial franchise fee must have been paid to us before we will apply the credit. We reserve the right at any time to cancel, modify, amend, or terminate our referral program. If a franchisee wants to benefit from the referral program, the referring franchisee must be in good standing.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 9–12)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the company offers a referral program to incentivize existing franchisees to recommend prospective franchisees. Under this program, a referring franchisee can receive a $10,000 referral fee if they introduce a prospect to Big O Tires that the company isn't already in contact with, and that prospect ultimately becomes a franchisee.
However, there are specific conditions that must be met before the referral fee is paid out. The referred prospect must sign a Franchise Agreement and pay the initial franchise fee to Big O Tires. Only then will the $10,000 referral fee be applied as a credit to the existing franchisee's trade account. This credit is applied approximately 30 days after the new Big O Tires store opens.
Big O Tires retains the right to modify or terminate the referral program at any time, so franchisees should confirm the program's current terms before relying on it. Additionally, the referring franchisee must be in good standing with Big O Tires to be eligible for the referral fee. This likely means the franchisee must be current on all payments and in compliance with the franchise agreement. This type of referral program is not uncommon in the franchise industry, as it helps franchisors grow their network through trusted recommendations.